Since 2014, the Hong Kong and mainland China financial markets have started integrating significantly, as exemplified by the launch and growth of the Stock Connect and the Bond Connect. By end of June 2020, regulators newly announced a Wealth Management Connect Scheme “WMC”1. The new scheme is expected to create a new channel for Chinese and Hong Kong financial institutions to seek growth with the expansions of cross-border trading and broader capital markets.
New Business Model for WMC has four key components (Figure 1):
Figure 1: Wealth Management Connect Key Factors2
WMC will be governed by respective laws and regulations on selling and trading Retail Wealth Management products applicable in the three places. Key aspects of regulatory requirements are listed below:
We anticipate that less complex products with lower risks are likely to be available in the WMC earlier, with the overall estimated trajectory outlined in Figure 2.
Synpulse is committed to the financial services industry and private banks. Many of our clients are major retail and wealth management banks in the Asia-Pacific region, and we focus particularly on Regulatory Compliance and Risk expertise across the Mainland and Hong Kong. Our expertise includes defining and implementing Target Operating Model, which ensures financial services processes control and risk management is compliant. We look forward to speaking with you about the cross-border framework that can support Wealth Management Connect's expansion into the strategic market.
Kindly reach out to Mike Choi (Associate Partner, Operational Excellence and Technology Greater China Competence Centre Lead) at firstname.lastname@example.org, and Gregory Achache (Associate Partner, Regulatory Compliance and Risk Greater China Competence Centre Lead) at gregory.achache@ synpulse.com.