Cross-boundary Wealth Management Connect: A Game-Changer for GBA's Financial Sector
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is witnessing a transformative leap in cross-border financial integration with the launch of securities brokerages in the Cross-boundary Wealth Management Connect (WMC) Scheme. On December 4, 14 securities companies officially began offering cross-boundary wealth management services, marking a significant milestone in the region's financial innovation.
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Expanding Investment Horizons
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Previously limited to bank channels, individual investors in the GBA can now access a broader array of financial products through securities companies. These include equity-focused investments and other higher-risk fund products, catering to sophisticated investor preferences. According to Pan Helin, a member of the Expert Committee for the Information and Communication Economy under the Ministry of Industry and Information Technology, the inclusion of securities brokerages enhances product diversity and enriches investment options under the scheme.
Yang Delong, Chief Economist at First Seafront Fund, noted that this shift simplifies cross-border investment, attracts more investors, and accelerates the internationalization of the Chinese yuan, positioning the GBA as a vital nexus of global financial flows.
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Key Features of the Cross-boundary WMC
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The WMC operates under a closed-loop fund flow system and employs the yuan as the settlement currency. It offers two pathways: the Southbound Scheme, targeting mainland investors seeking access to Hong Kong and Macao markets, and the Northbound Scheme, enabling SAR residents to invest in mainland financial products.
Eligible Southbound investments include non-complex funds registered in Hong Kong, such as low- to medium-risk equity and bond funds, while Northbound options include fixed-income and equity public funds rated R1 to R4 by mainland institutions.
The program imposes a quota of RMB 3 million per individual, split equally between bank and securities channels. This cap ensures balanced participation while safeguarding market stability.
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Milestones and Impacts
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By October 2024, over 120,000 investors had participated in the WMC, channeling more than RMB 95 billion ($13.07 billion) across borders. Enhancements introduced earlier this year expanded eligibility criteria, increased individual quotas, and broadened product scope. These developments have energized the wealth management landscape, attracting international financial institutions to the GBA.
According to CITIC Securities, the program's breakthrough lies in granting retail investors direct access to cross-border accounts, enabling greater autonomy in product selection and boosting the efficiency of yuan-denominated transactions. Guangfa Securities, one of the first to process WMC transactions, emphasized the role of the scheme in fostering RMB liquidity and spurring regional economic growth.
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A Catalyst for Regional Financial Growth
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Industry leaders such as CITIC Securities and Wanhe Securities anticipate that the WMC will catalyze the development of the GBA's wealth management industry. By drawing global financial institutions into the region, the scheme is poised to establish the GBA as an international wealth management hub, advancing its integration into global financial networks.
As the pilot phase unfolds, the Cross-boundary WMC exemplifies the GBA's commitment to financial innovation and integration, offering a blueprint for cross-border wealth management in the broader Asia-Pacific region.
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