Mainland China, Hong Kong and Macau Sign MoU for the Greater Bay Area Wealth Management Connect Scheme

On 5 February 2021, financial authorities in Mainland China, Hong Kong and Macau, including the People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission (CBIRC), the China Securities Regulatory Commission (CSRC), China’s State Administration of Foreign Exchange (SAFE), Hong Kong’s Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Macau (AMCM), jointly signed a memorandum of understanding (MoU, available here in Chinese) on the upcoming launch of the wealth management connect (WMC) pilot scheme in the Guangdong-Hong Kong-Macau Greater Bay Area.

The plan to launch the WMC scheme was announced by the PBOC, the HKMA and AMCM in June 2020 (for more details of the announcement, you may refer to our previous article here).

The MoU consists of seven chapters and 27 articles, covering regulatory information exchange, cooperation in law enforcement, investor protection, and liaison and consultation mechanisms. Key points of the MoU include the following:

The WMC scheme will no doubt strengthen the connectivity of the financial markets of Mainland China and Hong Kong. Further to the mutual recognition of funds, WMC represents a new and flexible channel for Hong Kong fund managers to tap into the opportunities presented by the Mainland market. Fund managers have started to review their existing products or plan for new fund launches to take advantage of the scheme, while bank distributors have been working on the standard terms for offering products to investors.

Please get in touch with your usual contact to discuss how Deacons can help you in connection with WMC.The MoU aims to provide the broader framework for the exchange of regulatory information and cooperation in law enforcement among the regulators in the three jurisdictions. It complements the existing regulatory cooperation among the relevant authorities for the launch of WMC. The signing of the MoU is considered to be of great significance to the implementation of the national strategic plan for the construction of the Guangdong-Hong Kong-Macau Greater Bay Area.

Source:  Deacons article