No launch date in sight for wealth management connect as it depends on resumption of cross-border travel, HKMA chief says

Beijing requires all investors to be present in person when opening an investment account

Cross-border travel restrictions caused insurance sales to mainland buyers to plummet 84 per cent last year

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The launch of the proposed wealth management connect has been delayed by the pandemic. Photo: Bloomberg

Published: 10:30am, 15 Mar 2021Updated: 11:25am, 15 Mar 2021

The launch of the wealth management connect will have to wait until cross-border travel restrictions are relaxed, but the Hong Kong Monetary Authority is working with mainland authorities to get it off the ground as quickly as possible, according to the head of the de facto central bank.

“As the travel restrictions remain in place, it would be hard to launch the wealth management connect at the moment as investors will need to cross the border to open a bank account,” said Eddie Yue Wai-man, chief executive of HKMA. “It is a national requirement for investors to open an investment account in person at financial firms to allow bank staff to explain the products and risks to the investors.”

The wealth management connect scheme was announced by Beijing in June but no launch date has been fixed. It will allow Greater Bay Area’s over 64 million mainland residents to invest in wealth management products through banks in Hong Kong and Macau. Likewise, the combined 8 million residents from Hong Kong and Macau will be able to invest in wealth products offered by mainland Chinese banks.

The scheme, which will have an aggregate quota of 300 billion yuan (US$45 billion) for fund movement in both directions under the connect scheme, will allow each investor to invest up to 1 million yuan each.

Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, said the authority will focus on connect schemes, fintech and green finance over the next few years. Photo: Winson Wong

Yue said that the HKMA was working with the mainland authorities to simplify the process, which would require just one cross-border travel to open a bank account. Usually opening an account requires a lot of documents and the process sometimes requires multiple visits to the bank.

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