The Northbound Scheme

  • Operational arrangements
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    Eligible investors in Hong Kong and Macao may invest in eligible investment products distributed by Mainland banks via the designated channel under the Northbound Scheme. Cross-boundary fund remittances are mainly undertaken by banks in Hong Kong and Macao and distribution of investment products on the Mainland is undertaken by banks in the Mainland.

    Each investor should open only one Hong Kong bank account with cross-boundary remittance function (“dedicated remittance account”) and one Mainland bank account with investment function (“dedicated investment account”) at all times. The relevant banks in the two places will pair the two accounts with each other, and the flow of funds between the accounts will be subject to closed-loop management.

    For eligible banks in Hong Kong, they may partner with one or more Mainland banks to embark on Northbound Scheme activities. However, Hong Kong investors should choose only one Mainland partner bank to open a dedicated investment account. (If investors already maintain an account with investment function with the Mainland partner bank, they may designate the account as the dedicated investment account).

    All cross-boundary remittances between the dedicated remittance account and the dedicated investment account should be conducted in renminbi via the Cross-border Interbank Payment System (CIPS) and subject to quota management. The funds will also be subject to closed-loop funds flow management, that is, to ensure that the dedicated remittance account is the only source of investment principal and the only account to which funds are remitted back via the same route under the Northbound Scheme. In addition, dedicated remittance accounts should only be used for remittance purpose under the Northbound Scheme and should not be used for the provision of any other services of the Hong Kong banks. If investors would like to withdraw their principal and investment proceeds, they can remit such funds from the dedicated investment account to the dedicated remittance account according to the arrangements above.

    Operational arrangements of the Northbound Scheme:

    Operational arrangements of the Northbound Scheme

  • Account opening and investment process
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    Eligible Hong Kong investors who are interested in participating in the Northbound Scheme are required to:

    1. Open a new bank account with remittance function with an eligible Hong Kong bank as the “dedicated remittance account”;
    2. Open an account with investment function with one of the Mainland banks partnering with the eligible Hong Kong bank as the “dedicated investment account”. If the investor already has an account with investment function with the Mainland partner bank, the investor may instead designate the relevant account as the “dedicated investment account” under the Northbound Scheme;
    3. The relevant banks in both places will pair the dedicated remittance account in Hong Kong with the dedicated investment account on the Mainland;
    4. Remit renminbi funds to the dedicated investment account on the Mainland via the dedicated remittance account in Hong Kong. The investor may use his/her own renminbi funds to invest or exchange for renminbi funds in Hong Kong’s offshore market;
    5. Purchase eligible investment products distributed by the Mainland partner bank via the dedicated investment account.

    Account opening and investment process of Northbound Scheme

    Investors may apply for a new dedicated remittance account with a Hong Kong bank under the Northbound Scheme according to the prevailing arrangements. For dedicated investment accounts with Mainland banks, investors may open a new dedicated investment account with a Mainland bank according to prevailing Mainland regulations or designate an existing renminbi account as the dedicated investment account under the Northbound Scheme. If an investor chooses to open a dedicated investment account with the relevant Mainland partner bank in person, he/she may submit information via the online channels provided by the relevant Mainland partner bank, or be assisted by the relevant Hong Kong bank to fill in and transfer the required account opening documents to the relevant Mainland partner bank beforehand. The investor can then travel to the Mainland to complete the account opening procedures after preliminary approval by the relevant Mainland partner bank.

    After the successful opening of a dedicated remittance account and a dedicated investment account, investors may exchange for renminbi in Hong Kong (or use their own renminbi funds) for remittance to the dedicated investment account via the dedicated remittance account for investment purpose. Hong Kong investors may seek further information from participating Hong Kong and Mainland banks of the Northbound Scheme on the operation of the Northbound Scheme and the products and/or services offered by individual banks under the Northbound Scheme. In general, Hong Kong investors may log onto the online or mobile platform of the Mainland partner banks to browse further product information under the Northbound Scheme and give instructions to trade eligible investment products.

    Investors should be aware that they may maintain only one dedicated remittance account in Hong Kong and one dedicated investment account on the Mainland at all times. If a Hong Kong bank or a Mainland partner bank becomes aware that an investor has more than one dedicated remittance or more than one investment account, the banks will take follow-up actions regarding the non-compliance, including but not limited to suspension of the investor from engaging in the Northbound Scheme; disposal of the products held by the investor and termination of his/her dedicated investment account and dedicated remittance account; or allowing the investor to hold the products until redemption at maturity while forbidding investment in any new products.

  • Eligible investors and investment products
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    Eligible investors in Hong Kong under the Northbound Scheme should:

    • Hold a Hong Kong Identity Card (including both permanent and non-permanent residents;
    • Invest in their personal capacity (but not as joint-name or corporate customers); and
    • Be assessed by Hong Kong banks as not being a vulnerable customer1.

    Eligible investment products under the Northbound Scheme include:

    • Public fixed income wealth management products (which primarily invest in bonds and deposits) and equity wealth management products (which primarily invest in equities) issued by Mainland wealth management firms and being assessed by the issuers as products with risk rating of “R1” to “R3” (excluding wealth management products for the purpose of cash management);
    • Public securities investment funds (excluding listed funds) being assessed by Mainland public fund managers and Mainland distributing banks as products with risk rating of “R1” to “R3”

    For reference:

     


    1 Vulnerable customer refers to a customer whose ability to understand the associated risks of his/her investment and withstand the potential losses of the investment is limited. In determining whether a customer is a vulnerable customer, banks will take a holistic view of the circumstances of the customer, including the level of financial sophistication (e.g. investment experience), the state of mind (e.g. ability to make investment decision) and the level of wealth.

     

    • The aggregate quota under the Northbound Scheme is RMB 150 billion, shared by Hong Kong and Macao. The individual investor quota is RMB 1 million.
    • The usage of both the aggregate quota and the individual investor quota is calculated on a net cross-boundary remittance basis:

      Usage of the aggregate quota under the Northbound Scheme = Cumulative remittances to the Mainland under the Northbound Scheme – Cumulative remittances from the Mainland under the Northbound Scheme
    • For example, a “Northbound Scheme” investor remits RMB 0.8 million to the Mainland to purchase investment products. Then the usage of his/her individual investor quota will be RMB 0.8 million. If the investor subsequently sells part of the investment and remits some of the gains and principal, say RMB 0.2 million, back to Hong Kong, his or her individual investor quota usage will be RMB 0.6 million (i.e. RMB 0.8 million - RMB 0.2 million = RMB 0.6 million).
    • When the usage of the aggregate quota or the individual investor quota under the Northbound Scheme reaches its upper limit, the investor will no longer be able to remit funds to the Mainland from Hong Kong under the Northbound Scheme. However, remittances from the Mainland back to Hong Kong will not be affected, and investors can continue to invest with funds already remitted to the dedicated investment account.

    Cross-boundary renminbi remittance to the Mainland under the Northbound Scheme is not subject to the daily maximum quota per person for individual Hong Kong residents’ inward remittance to bank accounts under the same name on the Mainland. For details, please refer to the Implementation Arrangements for the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong-Hong Kong-Macao Greater Bay Area announced by the HKMA.

    Northbound Scheme quota

  • Investor protection
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    The transactions carried out by Northbound Scheme investors via their dedicated investment accounts with Mainland banks are subject to the protection of the Mainland laws and regulations and regulatory regime.

    • Prior to opening the dedicated remittance/investment account, investors should have a thorough understanding of the following:
    • Prior to making an investment decision, investors should:
    • For the initial stage, the product scope under the Northbound Scheme mainly covers relatively simple investment products of low- to-medium risk. In order to strengthen information disclosure to investors, the relevant Mainland banks will:
      • Conduct due diligence on the investment products they distribute under the Northbound Scheme and assess the risk ratings of these investment products according to the relevant supervisory requirements.
      • Provide adequate product information to potential investors to enable them to make informed investment decisions.
      • Assess the risk tolerance level of investors and ensure that the risk profile of investors matches the risk ratings of investment products. Specifically, banks should only sell investment products with risk ratings that match the risk profile of investors. However, upon request by an investor, a bank may sell a public securities investment fund with a risk rating that is higher than the investor’s risk tolerance level to him/her after issuing a special warning to the investor and confirmation by the investor.
    • Generally speaking, Hong Kong banks and the Mainland partner banks will not proactively conduct cross-boundary solicitation or make cross-boundary recommendation. Investors may make enquiries about the investment services and individual investment products to a Mainland partner bank directly or request the Mainland partner bank to provide them with related information in order to enable them to make informed investment decisions. However, if an investor chooses to visit a Mainland bank in person to make an investment, the Mainland bank concerned may conduct solicitation or make recommendation.
  • Complaint handling mechanism
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    Complaints about investment products and selling process

    • Hong Kong investors may lodge complaints about Northbound Scheme investment products and services with the relevant Mainland banks. Hong Kong banks will also assist investors in referring such complaints to the Mainland partner banks for follow-up.

    Complaints about cross-boundary fund remittances

    • For complaints about cross-boundary fund remittances, Hong Kong investors may lodge the complaint with the relevant Hong Kong banks.

    Should Hong Kong investors consider that the relevant Hong Kong banks have failed to duly handle their complaints, they may lodge a complaint with the HKMA. For complaints involving Hong Kong banks, please refer to the following information: https://www.hkma.gov.hk/eng/smart-consumers/complaints/complaints-about-banks/. For complaints involving Mainland banks, Hong Kong investors may lodge their complaints with the following regulatory authorities according to the principle of territorial administration:

    • Complaints involving account opening, cross-boundary remittances, quota management may be filed to the Guangzhou branch or Shenzhen Central Sub-branch of the PBoC;
    • Complaints involving wealth management products may be filed to the China Banking and Insurance Regulatory Commission (CBIRC) Guangdong Office or Shenzhen Office;
    • Complaints involving fund products may be filed to the CSRC Guangdong Office or Shenzhen Office.

    To lodge complaints involving Mainland banks, please refer to the relevant webpage of the Guangzhou branch of the PBoC (available in Chinese only).

  • List of Hong Kong and Mainland banks participating in the Northbound Scheme
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    Eligible Hong Kong banks under the Northbound Scheme are registered institutions registered under the Securities and Futures Ordinance (“SFO”) for carrying on Type 1 regulated activity (dealing in securities), and engaging in retail banking or private banking business. Eligible Mainland banks are financial institutions of the Mainland banking industry in the GBA which meet the criteria set by the Mainland regulatory authorities (available in Chinese only).

    Banks intending to participate in the Northbound Scheme should notify and submit assessments of their business readiness to the relevant supervisory authorities in accordance with the principle of territorial administration.

    As the Cross-boundary WMC is in the initial stage of its launch, banks interested in participating in the Northbound Scheme are undertaking the related preparatory work. This webpage will be updated after the banks have formally launched their Northbound Scheme activities in collaboration with their Mainland partner banks.

Last revision date : 11 October 2021