Banks looking to capitalize on wealth management opportunities from the Greater Bay Area will have to wait until travel bans are lifted, according to the Hong Kong Monetary Authority.
HKMA chief executive Eddie Yue said that the existing travel bans make it difficult to launch the ‘Wealth Management Connect’ scheme – a cross-border channel that will allow mainland residents of the 11-city cluster to invest in Hong Kong and Macau-based wealth management products.
Under the current rules, investors seeking such products must physically open an investment account in person for the financial firm to share relevant information and risks.
The overall scheme allows an individual investor quota of 1 million yuan ($150,000) each and an aggregate quota of 300 billion yuan (US$45 billion) for north and southbound fund movements.
Quicker Turnaround
While it remains to be seen when travel restrictions will be removed – Hong Kong recently recorded another wave of coronavirus cases that led multiple banks to advise employees to work from home – HKMA is actively working with Beijing to simply the process for cross-border account opening.
According to Yue, a simpler process could be introduced which would require only one-time cross-border travel, compared to the current practice which requires a plethora of documents and often multiple visits.
Other cross-border initiatives that the HKMA is focused on include the southbound segment of the bond connect scheme which is planned for a launch in the second half of 2020 after the northbound segment was introduced in 2017. Unlike the wealth management connect scheme, cross-border trading does not require physical travel.
