8 October 2021
On 10 September 2021, the Hong Kong Monetary Authority (“HKMA”) and the People’s Bank of China (“PBoC”) released a joint announcement (the “Announcement”) on the implementation arrangements for the cross-boundary wealth management connect pilot scheme (“Cross-boundary WMC”) in the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”). The purpose of the Cross-boundary WMC is to facilitate Hong Kong residents to develop, work and reside in the Mainland cities of the GBA, as well as to strengthen the convenient flow of people, goods and funds within the GBA.
The Cross-boundary WMC consists of the Southbound Scheme and Northbound Scheme. The Southbound Scheme refers to eligible residents in the Mainland cities in the GBA investing in wealth management products distributed by banks in Hong Kong (“Hong Kong banks”) via designated channels, whereas the Northbound Scheme refers to eligible residents in Hong Kong investing in wealth management products distributed by banks in the Mainland cities in the GBA.
Hong Kong banks must ensure that their business activities under the Cross-boundary WMC comply with the requirements on investor eligibility, account opening, cross-boundary remittance, quota management, product due diligence, promotion and sale, controls and supervision, staff knowledge and training, complaint handling mechanism, reporting obligations and other requirements set out in the Announcement. Hong Kong banks must also comply with all the relevant prevailing regulatory requirements, including those issued by the HKMA and the Securities and Futures Commission.
Eligible banks in Hong Kong which intend to embark on Cross-boundary WMC activities are required to put in place systems, internal control measures and operating procedures and submit a self-assessment to the HKMA at least one month prior to the launch of such activities. Hong Kong banks may only embark on Southbound Scheme and/or Northbound Scheme activities upon receiving a “no objection” notification from the HKMA.
