An Asian securities association has called for further relaxation of the cross-border «Wealth Management Connect» scheme between Hong Kong and 10 other Chinese cities.
In January, Chinese authorities upgraded the «Wealth Management Connect» scheme – an initiative that allows residents of Hong Kong, Macau and nine mainland cities to invest directly in approved wealth management products across borders. The revised arrangements included increased individual investment quotas and an expanded product scope.
According to an «SCMP» report citing the Asian Securities Industry & Financial Markets Association (ASIFMA), more relaxation is needed to encourage mainland investments into Hong Kong.
Investment Quota, Product Access
Under the latest arrangement, the investment quota has been increased from 1 million Chinese yuan ($139,000) to 3 million yuan. According to ASIFMA CEO Peter Stein, the scheme should further raise the quota to 8 million yuan to meet the threshold for classification as «professional investors», enabling access to a wider range of products.
ASIFMA’s head of asset management group Eugenie Shen added that the scheme should also allow mainland investors to access more products, such as those managed by the subsidiaries of Hong Kong-domiciled funds that primarily invest in global markets like the US and Europe.
Advisory Services, Information Sharing
In addition, Shen suggested that asset managers should be allowed to provide advisory services to support investor education and cross-border information sharing should also be relaxed as the current guidance, which highlighted scrutiny due to national security concerns, remains «somewhat unclear».
«At least for the time being, the economic outlook in mainland China is still unclear and our members, some of the largest global financial institutions, tend to be more conservative,» she said. «So it’s good timing to implement further reforms, attract more foreign investors and shore up confidence.»
