Wealth Management Connect scheme

The first cross-border investment scheme in the Greater Bay Area is due to be launched this month.

Aiming to promote economic integration a combined quota of 150 billion yuan (US$23 billion) has been set for the southbound and northbound movements of funds under the pilot programme. In the northbound route Hong Kong and Macau residents can invest in wealth products offered by mainland banks with few restrictions.

Southbound investors should be residents registered in one of the nine mainland cities comprising the GBA (Guangzhou, Shenzhen, Zhuhai, Foshan, Dongguan, Zhongshan, Jiangmen, Huizhou, and Zhaoqing) via the household registration system (the hukou system). They should have more than two years experience in investment and the net financial assets of the family should exceed 1 million Yuan over the past three months, or financial assets with a monthly balance of more than 2 million Yuan.

The scheme only allows banks to sell the products and they will need to work with a partner bank across the border to handle account openings, client background checks, fund transfer, investor education and customer complaints. Each customer can only sign up with one institution.

Investors can redeem the funds or sell the wealth products whenever they want to, however, they cannot invest the redeemed funds in other products or equities.

Managing director of ILS Fiduciaries in Hong Kong, Lilian Cheung said: "This move reinforces Hong Kong's status as an international financial centre and allows Hong Kong and Macau residents to buy mainland investment products sold by banks in the Greater Bay Area. Likewise, residents of the nine Guangdong cities will be able to buy investment products sold by banks in Hong Kong and Macau. We expect the growth in funds to be gradual and steady."

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Lilian Cheung
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