More than 70,000 people have participated in the cross-border wealth management connect!

Source: Brokerage China

The number of participating institutions in the Cross-boundary Wealth Management Connect has been expanded, and securities firms have been included in the pilot.

Securities Times Brokerage China reporter interviewed and learned that at present, many brokerages are actively applying for business qualifications. Some brokerages said they had submitted materials, some said they were steadily advancing the pilot application, some had already launched cross-boundary wealth management connect products, and some small and medium-sized brokerages were also participating in the process and actively researching and preparing. It is expected that it will take several months for the service to be officially launched.

Previously, the business could only be participated by banks. According to the data of the People's Bank of China, as of 24:00 on April 17, the net outflow of the Southbound Cross-boundary Wealth Management Connect was 29.941 billion yuan, and the used quota was 29.941 billion yuan (accounting for 19.96%), and the net inflow of the Northbound Cross-boundary Wealth Management Connect was 241 million yuan, and the used quota was 241 million yuan (accounting for 0.16%).

Steadily advance the pilot application

In January this year, the regulator issued the Implementation Rules for the Cross-boundary Wealth Management Connect Pilot Program in the Guangdong-Hong Kong-Macao Greater Bay Area (the "Rules"). The policy expands the scope of pilot institutions and adds new securities companies to participate in the pilot.

Securities Times Brokerage China reporter learned that a number of brokerages are currently preparing to apply for pilot qualifications, these brokerages not only have traditional large brokers, but also small and medium-sized brokerages. The progress of various brokerages varies, some brokerages have submitted application materials, and some are still in the research stage.

As for the final launch time of the business, a brokerage person told the Securities Times and Brokerage China reporter: "The preparations are complicated, and it is expected that it will take a few months to go online, and then wait." ”

On April 16, Guosen Securities stated in the "2023 Annual Report on the Work of the Board of Directors" that "the pilot application for cross-border wealth management connect business is progressing steadily. ”

On March 28, GF Securities stated in the "Internal Control Self-Evaluation Report" that in 2023, the company revised the "Detailed Rules for the Administration of Securities Custody Business", "Regulations on the Management of GF Tong Account Business", "Operational Guidelines for Securities Inquiry Business", "Guidelines for the Standardization of Unqualified Accounts" and other systems, and actively explored and promoted innovative businesses such as cross-border wealth management connect.

At the end of March, CITIC Securities said in its annual report that its overseas assets under management had steadily increased, and it had successfully issued two public funds and launched cross-border wealth management connect products.

In addition to the layout of the head brokers, small and medium-sized brokerages are not far behind and are actively preparing.

The Securities Times Brokerage China reporter learned from a small and medium-sized brokerage in North China that they are also very interested in this business and are currently actively organizing research to understand the situation. It is reported that brokerages can apply as long as they have branches in the Greater Bay Area.

On March 20, Zhang Tieqiang, member of the Party Committee and Chairman of the Board of Supervisors of Guangzhou Financial Holding Group, said at a cross-border wealth management connect 2.0 policy interpretation event that cross-border wealth management connect 2.0 has added securities firms to participate in the pilot, and Guangzhou Financial Holding Group will actively seize policy opportunities and accelerate business layout in this field to better meet the cross-border wealth management needs of mainland investors. It is reported that Guangzhou Financial Holding Group has Wanlian Securities and so on.

In addition, Guangzhou has recently launched the "Ten Measures for Investment Advisory" to encourage mutual empowerment between investment advisory business and cross-border wealth management connect business: that is, to explore the inclusion of commercial banks and securities companies that meet the conditions of the cross-border wealth management connect pilot into the scope of investment advisory business, and to support investment advisory institutions to provide cross-border wealth management services to qualified investors.

Previously, there was news in the market that there may be 6-7 brokerages in the first batch of cross-border wealth management connect, but this news has not yet been confirmed.

In early March, Gao Juan, chairman of the Hong Kong Securities Association, revealed that 10 brokerages have submitted applications to the Hong Kong Securities and Futures Commission for cross-boundary wealth management connect 2.0, and most of them may be Chinese-funded brokers.

There is a certain threshold for participation

According to the Detailed Rules, securities firms that want to participate in the development of the Cross-boundary Wealth Management Connect need to meet certain conditions.

First of all, it is necessary to register a legal person financial institution or set up a branch in the nine mainland cities of the Guangdong-Hong Kong-Macao Greater Bay Area. "The headquarters is not in the Greater Bay Area, but the branch is also here, and this is the case for us. A brokerage person told the Securities Times and Brokerage China reporters.

Second, there must be a complete mechanism. For example, the internal control system, operating procedures, account management and risk control measures have been established to ensure that there are professionals, business processing systems, accounting systems and management information systems necessary to engage in the cross-boundary wealth management connect business and its risk management. Another example is the establishment of a mechanism for the protection of investors' rights and interests and the resolution of complaints and disputes under the Cross-boundary Wealth Management Connect.

In terms of technology, financial institutions also need to have the technical conditions to control the cross-border flow of funds and ensure the closed-loop remittance of funds, and the mainland sales agencies also need to have the technical conditions to ensure the closed management of funds, so as to ensure that the investment products sold under the Northbound Scheme meet the relevant requirements of the financial authorities. In addition, there have been no serious violations of laws and regulations within three years.

More than 70,000 people participated

According to the latest information released by the Guangdong Branch of the People's Bank of China, in February 2024, 20 of the 32 pilot banks in the nine mainland cities of the Greater Bay Area have handled cross-boundary wealth management connect fund remittance and transfer business for individual investors.

As of the end of February 2024, 73,400 individual investors in the Guangdong-Hong Kong-Macao Greater Bay Area have participated in the Cross-boundary Wealth Management Connect, including 46,300 investors from Hong Kong and Macao, and 27,100 investors from the Mainland, involving 49,200 cross-border remittances of related funds, amounting to RMB15.283 billion.

As of the end of February 2024, the market value of investment products purchased by individual investors participating in the Cross-boundary Wealth Management Connect was RMB5.839 billion. Under the Northbound Scheme, the market value of domestic investment products held by Hong Kong and Macao individual investors is RMB198 million, including RMB122 million of wealth management products and RMB76 million of fund products. Under the Southbound Scheme, the market value of Hong Kong and Macao investment products held by mainland individual investors amounted to RMB5.641 billion, including RMB52 million in investment funds, RMB08 million in bonds and RMB5.581 billion in deposits.

Editor-in-charge: Wan Jianyi

Proofreading: Peng Qihua

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