Hong Kong, China financial watchdogs to give Wealth Management Connect more muscle by adding products, increasing participation: Eddie Yue

Expansion and enhancement of connect schemes crucial to promoting cross-border use of the yuan, HKMA CEO tells summit

Possible new measures could include improved sales arrangements, expansion of product range and participation of more financial institutions

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Hong Kong’s Central business district. Photo: Jonathan Wong

Published: 3:00pm, 16 Sep 2022Updated: 3:32pm, 16 Sep 2022

Hong Kong is working with mainland Chinese authorities to enhance the one-year-old Wealth Management Connect scheme, the Hong Kong Monetary Authority’s (HKMA) CEO said on Friday.

Possible new measures could include improving sales arrangements, expanding the product scope and allowing more financial institutions to participate, Eddie Yue Wai-man, who leads the city’s de facto central bank, said in a pre-recorded online speech delivered at the annual summit of the Treasury Markets Association.

“The expansion and enhancement of the connect schemes to promote the cross-boundary use of the yuan is crucial,” he said. Yue did not provide a timeline for the new measures, but said the enhancements were important for Hong Kong’s role as a leading offshore yuan trading centre.

The cross-border Wealth Management Connect scheme was introduced on September 10 last year, as Beijing’s first plan tailor-made for the 11 cities of the Greater Bay Area. It allows 24 Hong Kong banks, including HSBC, Standard Chartered and Bank of China (Hong Kong), to sell Hong Kong investment fund products to the residents of Greater Bay Area cities through their mainland banking partners. Mainland investors can also trade Hong Kong and Macau investment fund products through these banks.

The scheme had attracted about 24,000 investors as of the end of February, who had made investments worth 670 million yuan (US$95.6 million), according to People’s Bank of China (PBOC) data.

A lack of knowledge might have held back some investors, according to industry body Hong Kong Investment Funds Association. Sally Wong, the association’s CEO, said more investor education and enhancement of sales arrangements would be helpful.