Introduction: The design of Wealth Management Connect is to allow investors to have greater freedom to make investment decisions. For many investors, this will be their first "cross-border test". The protection of investors is particularly important.
Source丨21st Century Business Herald
Reporters丨Gu Yue, Xin Jizhao, Zhu Lina
On the afternoon of June 29, the People’s Bank of China, the Hong Kong Monetary Authority and Macau The Hong Kong Monetary Authority announced the content of the pilot framework for the "Cross-border Wealth Management Connect" business in the Guangdong-Hong Kong-Macao Greater Bay Area. Residents of the Guangdong-Hong Kong-Macao Greater Bay Area can individually invest cross-border in financial products sold by banks in the area.
The statement pointed out that cross-border capital flows will be managed by a total quota and a single investor quota. The total quota is dynamically adjusted through the macro-prudential coefficient, but it did not announce the 150 billion yuan quota for each of the north and south that was previously rumored in the market. .
Previously, on May 14, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange issued the "Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area", starting from promoting the cross-border development of the Guangdong-Hong Kong-Macao Greater Bay Area. 26 specific measures were proposed in five aspects: facilitating cross-border trade and investment and financing, expanding the opening of the financial industry, promoting the interconnection of financial markets and financial infrastructure, improving the level of financial service innovation in the Guangdong-Hong Kong-Macao Greater Bay Area, and effectively preventing cross-border financial risks. This "Cross-border Wealth Management Connect" business pilot is based on Article 26 of "Supporting mainland residents in the Guangdong-Hong Kong-Macao Greater Bay Area to purchase financial products sold by Hong Kong and Macao banks through Hong Kong and Macao banks, and Hong Kong and Macao residents to purchase mainland China-based financial products through mainland banks in the Guangdong-Hong Kong-Macao Greater Bay Area." The specific implementation method of "financial management products sold by banks".
The specific content is as follows:
1. "Cross-border Financial Management Connect" refers to the cross-border investment by individual residents of the Guangdong-Hong Kong-Macao Greater Bay Area in financial products sold by banks in the Guangdong-Hong Kong-Macao Greater Bay Area. The subject identity can be divided into "southbound access" and "northbound access". "Southbound Connect" means that mainland residents of the Guangdong-Hong Kong-Macao Greater Bay Area can purchase eligible investment products sold by banks in Hong Kong and Macao by opening special investment accounts in banks in Hong Kong and Macao; A bank (hereinafter referred to as a mainland bank) opens a special investment account to purchase eligible financial products sold by mainland banks.
2. "Cross-border Wealth Management Connect" is an important measure taken by the state to support the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and promote financial cooperation between the mainland and Hong Kong and Macao. It is conducive to creating a high-quality living circle in Guangdong, Hong Kong and Macao, and is conducive to promoting Guangdong, Hong Kong and Macao. Facilitating cross-border investment by individuals in the Greater Bay Area will help promote the opening up of my country's financial market and promote the coordinated social and economic development of the mainland, Hong Kong and Macao.
3. "Cross-border Financial Management Connect" follows the relevant laws and regulations on the management of personal financial products in the three places, while respecting international practices. "Northbound Trading" and "Southbound Trading" investor qualifications, investment methods, investment product scope, investor rights protection and dispute resolution are determined by the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the Foreign Exchange Administration, the Hong Kong Monetary Authority, and the Hong Kong Securities Regulatory Commission. , the Macau Monetary Authority discussed and determined. "Northbound Trading" and "Southbound Trading" business funds are bound one by one through accounts to achieve closed-loop transfers and closed management, and the scope of use is limited to the purchase of qualified investment products. Fund remittances are settled cross-border in RMB, and fund exchanges are completed in the offshore market. The total quota and individual investor quota management are implemented for the cross-border capital flows of "Northbound" and "Southbound", and the total quota is dynamically adjusted through the macro-prudential coefficient.
4. The relevant regulatory agencies in Hong Kong, Macao and the Mainland will each take all necessary measures to ensure that both parties establish an effective mechanism under the "Cross-border Wealth Management Connect" for the purpose of protecting the interests of investors, and respond in a timely manner in accordance with the principles of territorial management. Violations that occur. Relevant regulatory agencies in Hong Kong, Macao and the Mainland will sign a regulatory cooperation memorandum to establish and improve regulatory cooperation arrangements and liaison and consultation mechanisms to protect the interests of investors and establish a fair trading order.
5. Mainland infrastructure institutions should actively promote the preparations for the "Cross-border Wealth Management Connect" in accordance with the principles of prudent order and controllable risks, and officially launch it after completing the construction of relevant rules and systems. "Cross-border Wealth Management Connect" pilot business.
“The launch of this cross-border wealth management link shows that China has further opened up on capital account convertibility.
From the perspective of specific operation methods, it specifically mentions the implementation of quota management and closed management, fund exchange is completed in the offshore market, and restrictions are imposed on investment products. It is also hoped that these methods can prevent large-scale fluctuations in cross-border capital flows. , to prevent exchange rate and foreign exchange market fluctuation risks. Judging from the current scale of Hong Kong’s offshore market, it is expected that the total amount of Wealth Management Connect in the early stage will not be too large. "An analyst in the foreign exchange field of a securities firm in Beijing said.
"Among the 26 previously announced measures, the cross-border wealth management business has attracted particular market attention. It is a measure that benefits the people and is beneficial to the financial industry. Institutions open up the financial product market, giving citizens more choices in financial products and optimizing asset allocation. "Zhang Guangnan, a professor at the Guangdong-Hong Kong-Macao Development Institute of Sun Yat-sen University, said, "In addition, the financial openness of the Greater Bay Area, including cross-border financial management, has been designed with both market development and regulatory safety and prudence in mind, and the next step needs to be solved. The first issue is the alignment of industry standards, the second is the coordinated interpretation of financial-related regulatory laws, and the third is the coordinated development of local governments based on the respective characteristics of the Guangdong-Hong Kong-Macao Greater Bay Area. "
On the same day, the Hong Kong Monetary Authority issued a press release on its official website. The Macau Monetary Authority also issued a press release stating that it welcomed the launch of the "Cross-border Wealth Management Connect" business pilot in the Guangdong-Hong Kong-Macao Greater Bay Area and believed that it will It brings new development opportunities to Macao's financial industry and provides more choices for Macao residents' financial investment service needs. The Wealth Management Connect mechanism allows residents to purchase cross-border financial products through the banking system, broadening the scope of the Bay Area including Macao. Financial management channels for residents will facilitate individual cross-border investment activities, help increase the cross-border flow and use of RMB, and bring new business opportunities to banks.
The Monetary Authority of Macau will follow up on various relevant preparations. The work includes negotiating with mainland regulatory authorities on the specific implementation details and arrangements of the "Cross-border Wealth Management Connect", establishing a regulatory coordination and communication mechanism to effectively prevent risks by signing a regulatory cooperation memorandum, and working with the industry to promote the early implementation of this new business.
Image source/Macau Monetary Authority
It is reported that "Wealth Management Connect" will operate through a closed channel, and funds will be returned in the same way. The setting may not affect the daily remittance limit on the current product. In terms of types, the early stage of the financial management products will focus on simple financial products. The HKMA’s early research hopes that the products will be low-risk and issued by local banks, rather than third-party financial products. ”
On June 29, Hong Kong Monetary Authority President Yu Weiman said that the preliminary work of the exploration and research in the three places has been roughly completed, and Wealth Management Connect has entered the stage of formulating implementation details, taking a big step towards its official launch.
Following the experience of Stock Connect and Bond Connect in the past, in the initial stage of Wealth Management Connect, the regulatory agencies of the three places will adopt a pragmatic and prudent attitude in designing all aspects of Wealth Management Connect. This is reflected in the implementation framework of Wealth Management Connect, including. The product range mainly covers low-risk, relatively simple investment products; investors open remittance and investment accounts in banks in the two places and implement one-to-one binding; RMB cross-border funds implement closed-loop transfer and quota management.
“Just like other interconnection mechanisms, we strive to take the first step in Wealth Management Connect as soon as possible and steadily, rather than pursuing one step. After all, the regulatory systems of the three places are different, and it is difficult for most participating institutions and investors to They are all new attempts. "Yu Weiwen said.
He said, "In the next few months, we will discuss the implementation details with the regulatory agencies of the two places and listen to the opinions of the industry, hoping to launch Wealth Management Connect as soon as possible. ”
In addition, Wealth Management Connect is designed to allow investors to have greater freedom to make investment decisions. For many investors, this will be their first “cross-border test.” It is particularly important to protect investors well.
Wealth Management Connect will open up huge customer sources and business development space for the Hong Kong financial industry, promote the organic growth of the local wealth management business market, and drive product sales and assets. The development of the entire financial industry chain, including management and product development, will also benefit related professional service sectors.
Furthermore, Wealth Management Connect expands the hinterland of Hong Kong’s wealth management industry, provides international financial institutions with more incentives to set up offices and invest more resources in Hong Kong, serves mainland investors, and further consolidates Hong Kong’s international financial center and global offshore RMB business hub status.
Positive response from all walks of life in Hong Kong
The Hong Kong SAR government welcomes the launch of a two-way cross-border financial management pilot business in the Guangdong-Hong Kong-Macao Greater Bay Area, including Hong Kong, Macau and nine cities in Guangdong Province Residents can invest cross-border in financial products sold by banks in the zone.
The Chief Executive of the Hong Kong Special Administrative Region, Carrie Lam, said that the launch of Wealth Management Connect fully demonstrates the central government’s great importance and support for the financial development of the Greater Bay Area and highlights the country’s solid backing for Hong Kong. Hong Kong continues to play an important role in the national economic development and financial market. Play a leading role in opening up to the outside world.
She pointed out that national security legislation will restore stability, rule of law and a good business environment to Hong Kong, ensure investor confidence, and further consolidate and enhance Hong Kong’s status as an international financial center.
Hong Kong Financial Secretary Paul Chan Mo-po pointed out that Wealth Management Connect brings huge business opportunities to the entire financial industry chain in Hong Kong and other professional service areas, opens up a broader market for the financial industry in the three places, and also provides residents in the Greater Bay Area Provide more financial product choices, promote the cross-border circulation and use of RMB, and further consolidate Hong Kong’s position as a global offshore RMB business hub.
He said that Wealth Management Connect provides greater incentives for international financial institutions to establish a foothold in Hong Kong and invest more resources to serve a large number of investors in the Greater Bay Area cities, strengthen Hong Kong as an international asset management center, and It plays an important role as a bridge for funds flowing in and out of the mainland.
Waiman Yu, President of the Hong Kong Monetary Authority, said: "The two-way cross-border wealth management link is another important milestone in the opening of the mainland's capital accounts after the stock connect and bond connect between the two places. It is an important step in promoting the development of Hong Kong's offshore RMB business. A major breakthrough is also a highlight of deepening financial cooperation in the Greater Bay Area. Residents in the Greater Bay Area have increasingly strong demands for cross-border financial investment. The financial industry in both places has great expectations for Wealth Management Connect, which proves that Hong Kong financial institutions are in the process of doing so. We will work closely with the Hong Kong Securities and Futures Commission and relevant mainland authorities to finalize the implementation details as soon as possible based on the framework announced today and strive to launch Wealth Management Connect as soon as possible. . ”
At the same time, Hong Kong’s banking industry welcomes the progress of Wealth Management Connect. Zhuo Chengwen, risk director of BOC Hong Kong, told the media on June 29 that the bank has been following up on Wealth Management Connect and believes it will bring great opportunities to the banking industry in both places and provide customers in both places with more investment and financial management opportunities.
He revealed that the Bank of China Group has also made a lot of discussions to promote related businesses, especially in terms of business models, risk compliance and investor protection. It has also put forward many opinions to regulatory agencies and hopes to launch them as soon as possible.
Hong Pizheng, Chief Executive Officer of Standard Chartered Greater China and North Asia and Chief Executive Officer of the Group’s Retail Banking and Wealth Management Business, said:
“Cross-border Wealth Management Connect is an important step in promoting financial market interconnection in the Greater Bay Area. It is a major milestone in providing residents in mainland China and Hong Kong with more choices in financial products. With the gradual introduction of relevant policies in the Greater Bay Area, the further opening up of the financial market in the area will effectively attract foreign investment and enhance regional competitiveness. It is expected that the Greater Bay Area will The region will become one of the main growth drivers of China’s economy in the future.
Greg Hingston, head of wealth management and personal banking for HSBC Asia Pacific, said:
“The cross-border wealth management link mechanism. The implementation of this is undoubtedly great news for investors in the Guangdong-Hong Kong-Macao Greater Bay Area who intend to expand their investment scope and further diversify their investments. 'Cross-border Wealth Management Connect' will further consolidate Hong Kong's position as Asia's largest international asset management center. The successful launch of 'Shanghai-Shenzhen-Hong Kong Stock Connect' and 'Bond Connect' have proven that the interconnection mechanism can help increase the overall liquidity of the financial markets of the two places. HSBC has been actively participating in various measures to promote market opening. We are confident that the 'Cross-border Wealth Management Connect' will become a milestone in the opening of China's financial market and bring more development opportunities to the financial services industry.
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“The Greater Bay Area is the richest urban agglomeration in China and is expected to become one of the world’s largest financial markets. It is expected that by 2025, banking business revenue will reach US$185 billion, with a compound annual average Growth rate (CAGR) reached 10.3. As the leading international bank in the Greater Bay Area and one of the largest banks in Hong Kong, HSBC will actively assist customers in the Greater Bay Area to fully seize this historic opportunity with its diversified wealth management solutions, leading digital services and excellent service team . We are working hard to prepare for the upcoming opportunities with our strongest service capabilities. ”