Wealth Management Connect: HSBC, Standard Chartered among top banks eyeing Greater Bay Area sales boost with roll-out of enhancements to cross-border investment scheme

The proposed enhancements will allow more residents in the development zone to ‘have a greater variety of investment options’, HSBC executive says

Allowing securities firms to sell scheme products is a positive, Hong Kong Securities Association’s Katerine Kou says

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Hong Kong’s three note-issuing banks – HSBC, Standard Chartered and Bank of China (Hong Kong) – have all strongly welcomed the enhancements. Photo: Handout

Published: 8:30am, 2 Jan 2024

The soon-to-be-launched enhancements to the cross-border Wealth Management Connect scheme are set to boost sales and capital flows between Hong Kong, Macau and the nine mainland Chinese cities in the Greater Bay Area development zone, Hong Kong’s biggest banks said.

The People’s Bank of China’s (PBOC) Guangdong branch completed a 12-day consultation on December 12 on a wide range of relaxations to the scheme, including tripling individual quotas to 3 million yuan (US$420,745) from 1 million yuan. The new measures will also lower the threshold for mainland investors trading under the scheme, widen product choices and allow securities firms to sell products as well instead of just banks.

The new measures will also relax the sales process, allowing banks and securities firms to introduce product information to investors instead of current practice, where these firms can only execute orders and cannot introduce the products.

The city’s three note-issuing banks – HSBC, Standard Chartered and Bank of China (Hong Kong) (BOCHK) – have all strongly welcomed the enhancements, although the PBOC has not yet named a launch date.

“The proposal is expected to attract more participants to the Wealth Management Connect scheme for their cross-boundary investments, thus increasing the scale of the pilot scheme,” said David Liao, the Asia-Pacific co-CEO at HSBC. “We are studying the proposal and are getting prepared to seize potential opportunities.

“The proposed enhancements will allow more residents in the Greater Bay Area to have a greater variety of investment options. This provides investors with greater flexibility to adjust their investment portfolios in response to market conditions and their risk appetite.”