Private-wealth investments between Hong Kong and the mainland will face a 150 billion yuan ($23 billion) cap in each direction, the Hong Kong Monetary Authority says.
A launch date has not yet been established for the Wealth Management Connect program, which will take "an incremental approach starting with a smooth launch with possibilities for enhancements down the road," an HKMA representative shared.
When operational, the scheme will enable Greater Bay Area residents to make cross-border investments worth up to 1 million yuan per person. The Guangdong-Hong Kong-Macao city cluster is home to nine large urban centers and two Special Administrative Regions with a total population of 70 million and a combined gross domestic product of $1.6 trillion.
"Hong Kong is well positioned to capture this potential growth," Edmond Lau, executive director of the Hong Kong Monetary Authority, said at an event in early October.
The Wealth Connect scheme was first introduced in June when the HKMA chairperson at the time, Eddie Yue, shared how the authority will be taking an "incremental approach" to design a simple and low risk method for investors in the region to take advantage of opportunities across borders.
"A major breakthrough of the scheme is the considerable degree of flexibility given to individual retail investors to open and operate cross-boundary investment accounts directly," Yue noted.
At more than RMB600 billion, Hong Kong has the world's deepest RMB liquidity pool outside of mainland China - a status maintained by a series of initiatives to strengthen business ties between the two regions, including the latest Wealth Connect program.
In 2002, the Qualified Foreign Institutional Investor scheme launched, allowing licensed foreign investors to participate in mainland stock exchanges. This was extended in 2011 to allow overseas investment via offshore renminbi accounts.
The Hong Kong-Shanghai Stock Connect was established in 2014 and a similar venture between the SAR and Shenzhen launched two years later.