China has officially launched the Wealth Management Connect (WMC) with Hong Kong and Macau to carry out cross-boundary investment in wealth management products distributed by banks in the area.
The Wealth Management Connect trading scheme will initially handle a total fund flow of 300 billion yuan (US$46.5 billion).
The Hong Kong government said that the WMC is the is the first mutual market access mechanism for individual investors who will be able to invest up to 1 million Yuan.
Under the scheme, Hong Kong investors will have to open a designated remittance account at an eligible bank of their own choice in Hong Kong and a designated investment account with its mainland partner bank.
The Hong Kong Monetary Authority (HKMA) added that banks may start offering cross-boundary WMC services upon completion of the relevant preparatory work.
According to a report by the South China Morning Post, HSBC will be among the first to submit its application to the HKMA who had started accepting applications when the announcement was made on Friday while mainland regulators will begin accepting applications next month.
Carrie Lam, Chief Executive of Hong Kong said,
“Wealth Management Connect is a milestone in the financial development of the Greater Bay Area and an important measure that deepens and widens mutual access between the financial markets of the Mainland and Hong Kong.
It underlines the unique advantages of Hong Kong’s financial system under the ‘One Country, Two Systems’ principle, contributes to the high-quality development of the Greater Bay Area and facilitates the financial development and further opening-up of our country.”
Paul Chan, Financial Secretary of Hong Kong said,
“Wealth Management Connect will expand the cross-boundary investment channel and asset allocation choices for residents in the area and opens up a broader market for the financial and relevant professional sectors, bringing enormous business opportunities.
It will also attract more international financial institutions to have a foothold in Hong Kong to expand their Mainland businesses, reinforcing further Hong Kong’s role as an important gateway for capital flowing into and out of the Mainland, as well as its position as the global offshore Renminbi business hub and an international asset management center.”
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