Hong Kong, mainland China regulators agree to enhance wealth management and bond connect schemes during 3-day Beijing visit, HKMA CEO says

Details about changes to the wealth management and southbound bond connect schemes to be announced ‘soon’, HKMA CEO Eddie Yue says

Mainland officials support the strengthening of Hong Kong’s international financial centre status: chairman of industry body HKAB

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Eddie Yue, the HKMA’s CEO (sixth from left), and Sun Yu, the Hong Kong Association of Banks’ chairman (seventh from left), during the visit to Beijing. Photo: Handout

Published: 6:15pm, 21 Jul 2023Updated: 6:26pm, 21 Jul 2023

Authorities in Hong Kong and mainland China are in consensus on a number of measures that will enhance the cross-border Wealth Management Connect and Bond Connect schemes, the city’s de facto central banker said in Beijing on Friday.

“New enhancements to the Wealth Management Connect scheme will include an expansion of products, the lowering of thresholds for investors buying products via the scheme, as well as the simplification of buying procedures,” said Eddie Yue Wai-man, CEO of the Hong Kong Monetary Authority (HKMA).

“There will [also] be a widening of the product ranges and investors allowed to trade via the southbound Bond Connect scheme,” Yue said, adding that regulators from both sides also discussed increasing the number of market makers for the schemes from 13 banks currently. Southbound trading refers to trading in Hong Kong shares and other financial products by mainland China-based investors.

Yue’s comments came on the last day of a three-day visit with a delegation of the Hong Kong Association of Banks (HKAB) to Beijing, where they met various top financial officials, including Pan Gongsheng, deputy governor of the People’s Bank of China.

The wealth management and southbound bond connect schemes were introduced in September 2021. Beijing first allowed the stock markets in Hong Kong and Shanghai to tie up in 2014 for cross-border trading before the addition of the Shenzhen leg in 2016. Other similar schemes allowing cross-border trading of bonds, wealth management products, ETFs and swaps have been introduced since then.

Hong Kong and mainland Chinese regulators regularly discuss ways to further enhance these connect schemes, Yue said, adding that he expected details about changes to the wealth management and southbound bond connect schemes to be announced “soon”.

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