"Cross-boundary Wealth Management Connect 2.0" launched - Multiple banks to promote product and service upgrades

The newly revised "Implementation Rules for the Cross-boundary Wealth Management Connect Pilot in the Guangdong-Hong Kong-Macao Greater Bay Area” was officially implemented since 26th February. Optimization and adjustments have been made in terms of investor access conditions, scope of participating institutions, scope of qualified investment products, and individual investor quotas. It is reported that in order to cooperate with the implementation of "Cross-boundary Wealth Management Connect 2.0", many banks have actively promoted product and service upgrades.

Since its launch in 2021, "Cross-boundary Wealth Management Connect" has met the needs of investors to a certain extent. The newly revised "Cross-boundary Wealth Management Connect 2.0" optimises investor access conditions, adjusts the participation conditions for mainland investors in the "Southbound Connect" business, and includes new mainland investors whose "average annual income in the past three years is not less than 400,000 yuan", in order to encourage more Greater Bay Area residents to participate in the pilot. The investor individual investor quota is increased from RMB 1 million to RMB 3 million. As for the scope of participating financial institutions, securities firms will be allowed to join in addition to banks. RMB deposit products offered by Mainland banks will be listed as eligible products for "Northbound Connect". The risk level of public securities investment funds will be expanded from "R1 to R3" to "R1 to R4", excluding commodity futures funds.  Publicity and sales arrangements of participating institutions will be further refined and business development conduct of sales agencies and cooperation organisations in the Mainland will be clarified, with the aim of guiding financial institutions to provide high-quality financial services to residents of the Greater Bay Area.

The person-in-charge of the relevant department of China Construction Bank expressed that in order to be aligned with the implementation of the new regulations, China Construction Bank has completed the system function upgrade to support the adjustment of customer investment quotas, and will continue to update the system based on the investment quota of securities firms allowed by the regulator. He further stated that the bank’s Hong Kong and Macao institutions will launch a wider range of financial products in compliance with local regulatory requirements, launch strategic income funds (public funds), and launch RMB fixed-term, US dollar fixed-term and Hong Kong dollar time deposits and other products.

Standard Chartered Bank actively responded to the "Cross-boundary Wealth Management Connect 2.0" and launched a number of new products and service updates under the "Southbound Connect" and "Northbound Connect" respectively. "Since the launch of 'Cross-boundary Wealth Management Connect', our customers have responded very enthusiastically, with the number of participants and the amount of remittances increasing steadily, demonstrating the strong demand of residents in the Greater Bay Area for high-quality financial services and diversified asset allocation." Lin Yuandong, chief executive of Greater Bay Area of Standard Chartered said. He further added, “In 2023, the amount of cross-boundary wealth management "Southbound Connect" remittances by our customers has increased five times compared with 2022.”

HSBC Bank (China) has also previously stated that it will actively promote product and service upgrades. The "Northbound Connect" investment products will be expanded to provide customers with more stock and hybrid fund choices.

Wang Wei, a researcher at the Greater Bay Area Financial Research Institute of Bank of China Shenzhen Branch, said that there are many high-net-worth customers in the Guangdong-Hong Kong-Macao Greater Bay Area, and there is a strong willingness to diversify asset allocation. With the implementation of "Cross-boundary Wealth Management Connect 2.0", the product attractiveness of each participating institution will be further enhanced, and the investment customer base and business scale will reach a new level, accelerating the continuous development of financial interconnection and cross-boundary wealth management market in the Greater Bay Area.

"'Cross-boundary Wealth Management Connect' is of great significance to promoting the interconnection of the financial markets in the Greater Bay Area and promoting the two-way opening of the mainland financial market. We look forward to further promoting the growth of the wealth management business in the Greater Bay Area through 'Cross-boundary Wealth Management Connect 2.0'." Lin Yuandong said.

This article was a translation from State Administration of Foreign Exchange. If there is any inconsistency or ambiguity between the English version and Chinese version, the latter one shall prevail. The full text of the article, in Chinese, can be found below:
https://www.safe.gov.cn/shenzhen/2024/0308/1746.html