GBA Wealth Management Connect scheme starts with seven local banks

Seven local banks have already completed procedures to provide services under the new Wealth Management Connect scheme for the Greater Bay Area, the Monetary Authority of Macau (AMCM) announced.

Starting from today (Tuesday) the following banks will be authorised to provide services under the scheme: Bank of China, Macau Branch, Bank of Communication, China Guangfa Bank Co Ltd Macau Branch, CMB Wing Lung Bank, Industrial and Commercial Bank of China (Macau) and Luso International Banking.

The scheme was officially launched by Beijing a month ago allows Hong Kong and Macau residents to invest in onshore Chinese investment products through banks in the Greater Bay Area, while residents of nine cities in Guangdong province can invest in Hong Kong and Macau wealth products through local lenders.

With the purpose of supporting the start of activities within the scope of the new scheme, the AMCM published last month the required regulations and established the supervision requirements of the respective activities to be carried out by the banks.

Under the scheme, Macau residents can open a funds transfer account for “Northbound Transactions” with the approved local banks and an RMB investment account with cooperating banks in Mainland China of these Macau banks in order to purchase products low to medium risk financials marketed by Mainland banks, such as fixed income public offering financial products, bonds, as well as public offering securities investment funds.

In situations where Macau residents have an individual account in RMB with a cooperating bank in Mainland China, they can directly indicate the account in question as an investment account for “Northbound Transactions”.

In cases where they do not have an account, they must go to cooperating banks in Mainland China for the purpose of opening an account.

At the same time, Mainland Chinese residents can open an investment account for “Southbound Transactions”, through the testimony of the cooperating banks in Mainland China, in the form of an agency, or in person at the banks of Macau.

Macau banks will also provide Mainland Chinese residents with financial products of their choice, including term deposits, bonds and investment funds.

According to the Monetary Authority of Macao, the scheme will create more investment demand in Macau and promote the development of more diversified investment products by the Macau financial institutions, while broadening the investment options of local residents.

Supervisory bodies in the mainland, the Macau SAR and the Hong Kong SAR have already established mechanisms for coordinating their work and communication to ensure smooth operation of the WMC pilot scheme.

The scheme was also initiated in Hong Kong with a total of 19 banking groups involved including HSBC, Standard Chartered and Bank of East Asia, Industrial and Commercial Bank of China and Bank of China.

Consultancy Deloitte recently stated in a new white paper, that there is a need for improved connectivity and deeper financial cooperation among Mainland China, Hong Kong SAR, and Macau SAR as more and more international financial institutions looking to establish or expand businesses in the Greater Bay Area.