The launch of the cross-boundary wealth management business within securities brokerages will help strengthen their financial services capabilities and enhance the overall competitiveness of the industry in the Guangdong-Hong Kong-Macao Greater Bay Area and, experts said.
The first batch of 14 securities brokerages started their pilot operation on the Cross-boundary Wealth Management Connect Scheme on Wednesday.
The program enables residents in the nine mainland cities of the GBA to invest in financial products in Hong Kong and Macao through securities firms, while investors from the two special administrative regions can do the same on the Chinese mainland.
The development marks a step forward in deepening financial connectivity between Hong Kong, Macao and the mainland. Previously, residents in the region could only make such investments through commercial banks.
ALSO READ: Cross-boundary wealth management: HK welcomes first batch of brokers
The inclusion of securities brokerages in conducing cross-boundary wealth management business has opened up new development opportunities for Citic Securities, the company told China Daily.
Securities firms can now provide more diversified financial services and reach out to a greater number of high-net-worth individuals in the GBA, which will help strengthen their financial services capabilities and expand their business scale, the brokerage said.
However, as cross-boundary investment involves different market environments, laws and regulations, as well as fluctuating exchange rates, investment uncertainty and risk may increase, the company cautioned.
Wang Jianli, member of CICC Management Committee and president of CICC Wealth Management, said the two-way opening of financial markets in the GBA is of great significance as it means a broader international market and more international resources and opportunities.
READ MORE: He: SAR must deepen innovation, cooperation as global financial hub
Deepening financial connectivity will enhance the overall competitiveness of the wealth management industry in the GBA, attracting more domestic and foreign financial institutions and capital, and promoting the healthy development of the industry, he added.
More than 120,000 individual investors had participated in the WMC program as of the end of October, including 73,200 from the mainland and 52,200 from Hong Kong and Macao. Over 95 billion yuan ($13.08 billion) in cross-boundary funds had been processed by mainland banks under the standardized management system.
In January, a series of measures aimed at improving the program were announced, including optimizing the eligibility criteria of mainland investors, expanding the scope of participating institutions to include eligible securities brokerages, expanding the scope of eligible products, increasing the individual investor quota, and further enhancing the promotion and sales arrangements.
