Regulators from China’s two special administrative regions have entered into a memorandum of understanding with mainland regulators with regards to the upcoming Wealth Management Connect scheme for the Greater Bay Area.
The Hong Kong Monetary Authority, the Securities and Futures Commission and the Monetary Authority of Macao have entered into the agreement with mainland regulators.
The latter includes the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange.
Wealth Connect Scheme
Similar to the Stock Connect schemes or the Bond Connect scheme which creates regulated channels for north and southbound flows between mainland China and Hong Kong, the Wealth Management Connect scheme will look to enable investment flows across the borders between Hong Kong, Macau and major cities in southern China’s Guangdong province – an 11-city cluster called the Greater Bay Area (GBA).
The memorandum of understanding (MoU) includes Hong Kong and Macau regulators' agreement to supervisory principles under the Wealth Management scheme.
According to MoU, regulators are to issue guidance to banks on areas such as product due diligence, investor protection, anti-money laundering or counter financing of terrorism and personal data protection.
Greater Bay Area Dive
Hong Kong-focused banks are readying for the scheme with players like HSBC, Standard Chartered and Bank of East Asia recently naming their GBA chiefs. Lenders also have mass recruitment plans, with Bank of China (Hong Kong) said it would fund various charitable organizations with the aim of offering over 110,000 positions.
«The GBA economy was worth $1.7 trillion in 2019 and it’s expected to reach $4.6 trillion by 2030,» said HSBC’s APAC chief Peter Wong in a statement supporting the newly signed MoU.
«For financial services, we expect the region will become the world’s largest banking revenue pool, reaching $185 billion by 2025.»
