SARs monetary authorities to join People’s Bank of China in GBA financial management project

The Monetary Authority of Macau (AMCM) has announced today (Monday) that it will launch a joint cross-border financial management project together with the Hong Kong Monetary Authority and the People’s Bank of China, the country’s central bank.

According to the announcement, the project aims to ease individual cross-border investments by residents living in the Greater Bay Area in financial products provided by banks in the regions, promote the opening of the country’s financial markets, and encourage joint socio-economic development of Mainland China and both SARs.

These investments will be defined as southwards and northwards transactions, with southwards transactions representing financial investments carried out by residents of Mainland China who live in cities located in the Greater Bay Area in financial products provided by banks in Macau and Hong Kong, with northwards transactions defined by residents in the SARs opening similar investments in banks in the Guangdong Province.

This northwards and southward transaction system linking all related accounts will classify remittances based on a ‘closed circuit’ and ‘closed management’ system, with the RMB being the currency to be used to settle cross-border remittances, while fund conversion transactions are carried out in the offshore market.

Management rules based on added value and individual investor value will be used for these transactions, with the added value subject to adjustments based on macroprudential ratios.

It will be up to the People’s Bank of China, the Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange, the Hong Kong Monetary Authority, the Hong Kong Securities Regulatory Commission and the AMCM to analyze and define matters relating to the conditions that determine the qualification of investors, forms of investments, the scope of investment products, protection of investor rights and methods for conflict resolution.