A top central banker in China said that a new cross-border wealth management and bond investment channel will launch in a matter of days.

The Wealth Management Connect scheme and the southbound leg of the Bond Connect scheme will «start operating within the next few days», according to Pan Gongsheng, deputy governor of the People’s Bank of China and the head of the State Administration of Foreign Exchange. 

«The country will introduce the Wealth Management Connect and the southbound Bond Connect schemes to further develop the connection and cross-border trading between the markets in the mainland and Hong Kong,» Pan said during a briefing in Beijing.

The Hong Kong Monetary Authority said «implementation details» on the wealth connect scheme will be unveiled at a press conference later today. 

Wealth Connect Scheme

The Wealth Connect scheme is a cross-border link that allows Hong Kong and Macau residents to buy mainland Chinese investment products sold by banks within the 11-city cluster Greater Bay Area.

Likewise, mainland residents from the nine other cities will be able to buy investment products sold by banks in Hong Kong and Macau.

An aggregate quota of 300 billion yuan ($46.5 billion) has been set for fund movements in either direction with a limit of up to one million yuan per individual investor. 

Fee Opportunity Projections

Numerous banks have prepared for the long-awaited cross-border wealth management link, including HSBC, Standard Chartered, Citi are more, in the hopes to capture a share of the 11-city market which boasts a total population of over 80 million. 

Reported projections for fee-based income per year range from $500 million, according to «Bloomberg» estimates, to $700 million, according to an «SCMP» report citing a Bank of China (Hong Kong) estimate.

Bond Connect Scheme

Lastly, the upcoming southbound Bond Connect scheme launch follows the 2017 introduction of the northbound link to mainland China’s $17.5 trillion domestic bond market. 

The southbound leg will create a new route for mainland investors to access Hong Kong’s bond market.