HSBC, Stanchart banks can sell investment products in Greater Bay Area

The HSBC Holdings Plc constructing, left, and the Commonplace Chartered Plc constructing stand in Hong Kong, China, on Thursday, June 4, 2020.

Roy Liu | Bloomberg | Getty Pictures

HSBC and Standard Chartered Bank are amongst greater than a dozen lenders that may begin promoting funding merchandise from Tuesday, underneath a brand new cross-border funding scheme that connects capital markets within the Better Bay Space.

It comes as China continues to reform the mainland’s capital markets and lift their accessibility to worldwide traders.

The Hong Kong Financial Authority has accepted 19 Hong Kong lenders underneath the Wealth Administration Join Scheme (WMC), which permits them to promote funding merchandise within the Better Bay Space — comprising of Guangdong province in addition to the particular administrative areas of Hong Kong and Macao.

It will mark the primary time retail traders can interact in cross-boundary investments, in line with Eddie Yue, chief govt of the HKMA.

Sixteen banks will probably be allowed to promote wealth administration merchandise in each Hong Kong and mainland China, whereas three lenders — Financial institution of East Asia, Dah Sing Financial institution, DBS Financial institution — can solely promote merchandise to mainland traders through the “Southbound Scheme.”

“We’ll carefully monitor the operation of the Cross-boundary WMC and step up investor schooling and investor safety work along with the business,” Yue mentioned in a Monday launch. He mentioned the purpose was to offer “extra development alternatives for Hong Kong’s banking and wealth administration business.”

Hong Kong-listed shares of HSBC slipped 0.11% whereas Standard Chartered closed flat on Tuesday following the announcement. Different banks that additionally acquired approval, corresponding to Bank of China and China Construction Bank, rose 1.47% and 0.74% respectively.

On Monday, the Hong Kong Exchanges and Clearing launched its first A-share spinoff product, the MSCI China A 50 Join Index futures contract. A-shares discuss with shares of mainland China-based companies listed on the Shanghai Inventory Alternate or Shenzhen Inventory Alternate.

“Worldwide traders’ curiosity in China A-shares has been rising,” Wilfred Yiu, co-head of markets at Hong Kong Exchanges and Clearing, informed CNBC’s “Squawk Field Asia” on Monday. He mentioned the futures contract launch marked “a brand new chapter for Hong Kong,” and that world allocation to China’s markets is “nonetheless at a really, very early stage.”

“With the launch of the Join A50 contract, which is a good index by MSCI, it may assist tremendously from the danger administration perspective to worldwide investor – and that can add on when it comes to the curiosity of coming into the China market,” Yiu mentioned.

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