The scheme will allow residents in Hong Kong, Macau and nine cities in Guangdong to invest in low-to-medium risk wealth management products.
Northbound and southbound investment will each get a quota of 150 billion yuan. Each individual investor can invest up to 100 million yuan in approved products from across the border after opening a designated account with the bank offering the products.
Financial Secretary Paul Chan said the scheme can boost Hong Kong’s position as a global offshore Renminbi business centre and an international asset management hub.
A deputy chief executive of the Monetary Authority, Edmond Lau, said he expects the first products tailored under the scheme could be available by November.
“We expect the banks will try their best to communicate with relevant regulators on their proposals and this can take place any time now… we’ll need to take some time to vet the applications and the banks also need to take some time to do their final preparations including testing,” he explained.
An associate professor of economics at Clemson University, Kevin Tsui, said he believes officials are limiting products available to low-to-medium risk given recent reforms on the mainland.
“I think both sides are a little bit cautious, I think that’s for good reason especially over the past half a year or so there’s a lot of discussions in terms of new regulations in different sectors and there’re people concerned about the performance of the stock market and things like that, so there’s general concern about the new direction of the Chinese economy,” he said.