China has set initial quotas for total and individual investments, further unveiling plans for Greater Bay Area integration and cross-border business for financial firms in offshore centers.
An initial quota of 150 billion yuan ($23.2 billion) has been established for transactions under the ‘Wealth Management Connect’ scheme, according to draft rules issued by the People’s Bank of China, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission.
The quota caps net cash flows in either direction and a quota for the investments of each individual has also been set at 1 million yuan.
Northbound Product Access
As per initial plans, the draft rules state that investors in Hong Kong and Macau can buy Chinese wealth management products and mutual funds under the scheme.
Details about southbound product access were not available.
Digital Boost
Under the current rules, investors seeking wealth management products must physically open an investment account in person for financial firms to share relevant information and risks.
But under the new regime, there is potential for more contactless business with the Hong Kong Monetary Authority previously discussing easier means for opening accounts such as the introduction of a one-time cross-border travel requirement.
«Wealth Management Connect is a significant breakthrough for the financial sector as it offers a new channel for Greater Bay Area (GBA) residents to capture cross-boundary and new investment opportunities to diversify and enhance their portfolios,» said HSBC’s GBA head Daniel Chan in a separate statement. «We aspire to offer customers a full-fledged, cross-boundary private wealth experience that is digitally enabled, bridging the Greater Bay with global opportunities.»
