The People's Bank of China ("PBC"), in concert with the Hong Kong Monetary Authority ("HKMA") and the Monetary Authority of Macao ("AMCM"), has recently issued the Joint Announcement on the Launch of the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area (the "Announcement").
According to the Announcement, "Cross-boundary Wealth Management Connect" refers to the arrangement under which individual residents in the Guangdong-Hong Kong-Macao Greater Bay Area ("Greater Bay Area") carry out cross-boundary investment in wealth management products distributed by banks in the Greater Bay Area, and the scheme has a southbound and a northbound components, depending on the residency of the investors. The PBC and other related authorities will discuss and determine the implementation details, including investor eligibility, mode of investment, scope of eligible investment products, protection of investors' rights and interests, handling of disputes, etc. under the Northbound and Southbound Wealth Management Connect. The Announcement further clarifies that cross-boundary remittance under the scheme will be conducted and managed in a closed-loop through the bundling of designated remittance and investment accounts to ensure that the relevant funds will only be used to invest in eligible investment products. Cross-boundary remittance will be carried out in Renminbi, with currency conversion conducted in the offshore markets. Cross-boundary fund flows under Northbound and Southbound Wealth Management Connect will be subject to aggregate and individual investor quota management, and the aggregate quota will be dynamically adjusted through a macro-prudential coefficient. Additionally, the Announcement expressly states that the date of formal launch of Cross-boundary Wealth Management Connect and implementation details will be separately specified.