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Date: 25/08/2020

Title: Cross-boundary Wealth Management Connect (WMC): What you need to know

Teaser: The new WMC 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.

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Cross-boundary Wealth Management Connect (WMC): What you need to know

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): 

  • Currency and Exchange: Cross-border remittance will be carried out in RMB (or CNY) and currency will be converted in offshore market to comply with exchange control in mainland China.
  • Closed-loop Fund Management: The remittance will be bundled up under a closed-loop to ensure the fund is used only for investment purpose, as to manage the cross-border capital flows in mainland China.
  • Eligible Products: The retail wealth management products available will be governed by respective laws and regulation, the scrutiny of products should comply with the strictest scrutiny in the region.
  • Eligible Investors: The WMC will open to residents in Hong Kong, Macao and Greater Bay Area, investors will be admitted via a series of checking on KYC for AML purpose and eligibility of investment products for suitability.
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Figure 1: Wealth Management Connect Key Factors2

Risk Management and Regulatory Focus

WMC will be governed by respective laws & regulations on selling and trading Retail Wealth Management products applicable in the three places. Key aspects for regulatory requirements are listed below:

  • Eligible Investor Definition: Know-your-customer including source of wealth check; investor profiling including risk tolerance, risk preference, knowledge & experience.
  • Eligible Investment Product Definition: Product Due Diligence including risk level, nature of the product, disclosure of pricing and monetary benefit.
  • Money Flow Management: Source of fund tracing and checking, Cross-boundary remittance , Foreign exchange management, post-trade monitoring.
  • Sales Governance: Voice/video recording, Risk disclosure, Trade surveillance, and complaint and dispute handling.

Product & Service Value Chain and Offerings

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.

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Figure 2: Anticipated evolving offerings to the Market
What you need to know

Cross-boundary Wealth Management Connect

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How can Synpulse Help

Synpulse is dedicated to financial services and private banks, with many of our clients being major Retail and Wealth Management banks in the Asia-Pacific region, especially on Regulatory Compliance and Risk expertise across Mainland and Hong Kong (thought leadership article published last year). Our expertise includes defining and implementing Target Operating Model, which ensure financial services processes control and risk management is compliant. We will be pleased to discuss with you on your cross-border framework that can support your expansion to the strategic market from Wealth Management Connect.

We would be most pleased to share industry best practices and provide you with further information on how this risk topics may impact your organization.

Kindly reach out to Mike Choi (Associate Partner, Operational Excellence & Technology Greater China Competence Centre Lead) at, and Gregory Achache (Associate Partner, Regulatory Compliance & Risk Greater China Competence Centre Lead) at gregory.achache@

1 Launch of the Cross-boundary Wealth Management Connect Pilot Scheme ― June 2020
2 Hong Kong vs. mainland China: A series of framework comparison



Mike Choi


Gregory Achache

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