Wealth Management Connect: 20 banks seek approval for over 100 investment funds, says HKMA

20 banks in Hong Kong submit applications to sell wealth products via the US$46.5 billion Wealth Management Connect

The Hong Kong Monetary Authority also presented its findings on a digital currency project involving three other central banks

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Hong Kong banks are gearing up to launch products to tap mainland investors through the Wealth Management Connect. Photo: Reuters

Published: 7:30pm, 28 Sep 2021Updated: 9:15pm, 28 Sep 2021

The Hong Kong Monetary Authority (HKMA) said it has received 20 applications from banks interested in selling more than 100 different types of investment funds to mainland investors through the US$46.5 billion Wealth Management Connect scheme, taking them a step closer to the products’ launch.

The Wealth Management Connect links up Hong Kong, Macau and nine cities in Guangdong – known collectively as the Greater Bay Area (GBA) – and represents regulators’ efforts to promote capital flow across the region with 70 million inhabitants and a gross domestic product of US$1.7 trillion in 2020.

Banks interested in taking part in the scheme, which is likely to generate US$700 million a year in fee-based income for financial institutions, have to show the HKMA the readiness of their systems, products and manpower. An initial target of 300 billion yuan (US$46.5 billion), half going in each direction, has been set by authorities on both sides of the border. Each mainland investor can invest up to 1 million yuan worth of investment products offered by Hong Kong banks.

Arthur Yuen Kwok-hang, deputy chief executive of HKMA, says Hong Kong banks are eager to take part in the Wealth Management Connect. Ohoto: Jonathan Wong

“Banks are responding very quickly to our questions,” said Arthur Yuen Kwok-hang, deputy chief executive of HKMA. “We are on target to launch the connect scheme in terms of business flow around October and November.”

Major players such as HSBC, Citi, Standard Chartered and Bank of China (Hong Kong) have all said they will participate.

Balanced funds, money market funds, equity and bond funds, which use different strategies, are among the more than 100 types of investment funds awaiting the HKMA’s approval.

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