China accelerates cross-border joint wealth management system in GBA

A memorandum of understanding (MOU) over the Wealth Management Connect (WMC) was signed on Friday, according to the People's Bank of China (PBOC), accelerating the pace to integrate wealth management system in the Greater Bay Area (GBA).

The MOU covers areas including supervisory information exchange, law enforcement cooperation, investor protection, and liaison and consultation.

Financial regulators, including the PBOC, China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commission (CSRC), State Administration of Foreign Exchange (SAFE), Hong Kong Monetary Authority, Hong Kong Securities and Futures Commission, and Monetary Authority of Macao, agreed to supervise and cooperate with each other over the pilot in the GBA within the perimeter of their duties.

The WMC intends to reduce cross-boundary restrictions for nearly 70 million residents in the GBA to access wealth products.

Though details of the implementation have not been made public, it is a two-way scheme enabling residents of Hong Kong and Macao to invest in wealth management products distributed by mainland banks in the GBA, and residents of mainland cities in the GBA to invest in wealth management products distributed by Hong Kong and Macao's local banks.

In May 2020, China's financial regulators issued a plan unveiling several measures to promote an integrated financial services market within the GBA, which included the WMC initiative.