SFC issues guidance to eligible licensed corporations on participation in Wealth Management Connect scheme

The Securities and Futures Commission (SFC) issued a circular today setting out the eligibility criteria and guidance for licensed corporations (LCs) to participate in the Cross-boundary Wealth Management Connect Pilot Scheme (WMC Scheme) in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

Eligible brokers’ participation in the WMC Scheme was made possible by the revised Implementation Arrangements published also today by the People’s Bank of China for the Cross-boundary WMC Pilot Scheme in the GBA (Implementation Rules) (《粵港澳大灣區“跨境理財通”業務試點實施細則》) . The other revised arrangements cover increasing the individual investment quota to RMB 3 million; expanding the product scope to include, amongst others, funds with higher risk ratings; and enhancing the promotion and sales arrangements. The revised Implementation Rules will take effect on 26 February 2024 (Note 1).

LCs interested in participating in the WMC Scheme should submit applications to the SFC. They should be licensed for Type 1 regulated activity, have paid-up capital and shareholders’ funds of not less than HK$100 million, have at least three years of experience in distributing funds and/or bonds and transaction volume of not less than HK$500 million during any 12-month period in the past three years and adequate systems of control. In addition, similar to the current arrangement for banks, LCs should partner with one or more eligible Mainland broker when providing services under the WMC Scheme.

“The enhancements mark a major milestone in the expansion of the WMC Scheme to deepen and broaden Hong Kong’s financial integration with the Greater Bay Area,” said Ms Julia Leung, Chief Executive Officer of the SFC. “In particular, eligible brokers’ participation in the Scheme does not only open up new opportunities to the industry, but also broaden the reach of the Scheme to new customer base.”   

The SFC will stay in close touch with the industry to ensure the smooth implementation of the WMC Scheme and enhance it further where appropriate.

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Note:

1. The revised Implementation Rules were published following the completion of the consultation on the draft rules (關於《粵港澳大灣區“跨境理財通”業務試點實施細則（修訂稿徵求意見稿）》公開徵求意見的通知) by relevant authorities and financial regulators of the Mainland issued on 1 December 2023.