GBA Wealth Management Connect 2.0 – Securities Firms, Welcome!

On 24 January 2024, the People’s Bank of China (“PBoC”) published the revised Implementation Arrangements for the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”) (the “WMC Scheme”), accompanied by guidance issued by the Securities and Futures Commission (“SFC”) and updated guidance from the Hong Kong Monetary Authority (“HKMA”) (collectively referred to as the “Rules”). 

The Rules provide detailed guidance by which Hong Kong and Mainland banks and securities firms must abide in order to ensure that the services provided under the WMC Scheme are within the permissible parameters. The most substantive change is that GBA securities firms may now participate in the WMC Scheme. Further, the individual quota has been increased, and the scope of eligible wealth management products has also been expanded. 

We have therefore set out some key updates in the revised Rules for Hong Kong and Mainland banks which are existing participants in the WMC Scheme, and some key considerations for Hong Kong and Mainland securities firms which are minded to participate in the WMC Scheme.

It appears that, following the launch of the WMC Scheme for banks in 2021, the regulators and market see promising growth and investors’ interest in the WMC Scheme, sparking an expansion of the scope of the WMC Scheme. The inclusion of securities firms as eligible market participants, and the expansion of eligible wealth management products will undoubtedly make the WMC Scheme more attractive. The WMC Scheme will certainly continue to be reviewed by the regulators from time to time for further developments.