The Southbound Scheme

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

    Each investor should open only one Mainland bank account with cross-boundary remittance function (“dedicated remittance account”) (if investors already maintain an account with investment function with the Mainland bank, they may designate the account as the dedicated investment account), and only one Hong Kong 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.

    Mainland banks may partner with one or more banks in Hong Kong and Macao to embark on the Southbound Scheme activities. However, Mainland investors who intend to open an account with Hong Kong banks should choose only one partnering Hong Kong bank to open a 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 Southbound Scheme. In addition, dedicated investment accounts should only be used for investment purpose under the Southbound Scheme and should not be used for the provision of any other services of the relevant 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 Southbound Scheme:

    Operational arrangements of the Southbound Scheme

  • Account opening and investment process
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    Eligible Mainland investors who intend to open an account with Hong Kong banks are required to:

    1. Open a new bank account with remittance function with an eligible Mainland bank as the “dedicated remittance account”. If the investor already has an account with remittance function with the bank, he/she may instead designate the account as the “dedicated remittance account” under the Southbound Scheme;
    2. Open a new bank account with investment function with one of the Hong Kong banks that are partnering with the Mainland bank in person or by attestation as the “dedicated investment account”;
    3. The relevant banks in both places will pair the dedicated remittance account on the Mainland with the dedicated investment account in Hong Kong;
    4. Remit renminbi funds to the dedicated investment account in Hong Kong via the dedicated remittance account on the Mainland;
    5. Purchase eligible wealth management products distributed by the Hong Kong bank via the dedicated investment account. If the Mainland investor is interested in investing in products denominated in other currencies, he/she may convert his/her renminbi funds into the relevant currency in Hong Kong’s offshore market.

    Account opening and investment process of Southbound Scheme

    Investors may apply for a new dedicated remittance account with a relevant Mainland bank under the Southbound Scheme according to the prevailing requirements or designate a renminbi account with remittance function as the dedicated remittance account. For dedicated investment accounts with Hong Kong banks, investors may open a dedicated investment account in Hong Kong via the relevant Mainland banks by attestation without visiting the relevant Hong Kong banks in person. If an investor chooses to open an investment account with the relevant Hong Kong bank in person, he/she may submit information via the online channels provided by the relevant Hong Kong bank or be assisted by the relevant Mainland bank to fill in and transfer the required account opening documents to the relevant Hong Kong bank beforehand. The investor can then travel to Hong Kong to complete the account opening procedures after preliminary approval by the relevant Hong Kong bank. The prevailing requirement for Mainland visitors who intend to open an account in Hong Kong to hold a three-month valid exit-entry permit for travelling to and from Hong Kong is not applicable to the opening of a dedicated investment account in Hong Kong under the Southbound Scheme.

    After the successful opening of a dedicated remittance account and a dedicated investment account, Mainland investors may seek further information from Mainland and Hong Kong banks participating in the Southbound Scheme on the operation of the Southbound Scheme and the products and/or services offered by individual banks under the Southbound Scheme. In general, Mainland investors may log onto the online or mobile platform of the Hong Kong banks to browse further product information under the Southbound Scheme, give instructions to trade eligible wealth management products, fund remittances, or convert currency via the channels provided by the Hong Kong banks.

    Investors should be aware that they may maintain only one dedicated remittance account on the Mainland and one dedicated investment account in Hong Kong at all times. If a Mainland bank or a Hong Kong bank becomes aware that an investor has more than one dedicated remittance account or more than one Hong Kong dedicated 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 Southbound 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 wealth management products
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    Eligible investors under the Southbound Scheme should:

    Eligible wealth management products under the Southbound Scheme include:

    • Investment products (excluding listed products traded and settled on the Hong Kong Exchanges and Clearing Limited)
      The following products which are assessed as low- to medium-risk and non-complex by the distributing Hong Kong banks:
      (i) Hong Kong domiciled funds authorized by the SFC;
      (ii) Bonds;
    • Deposits
      Renminbi, Hong Kong dollar and foreign currency deposits.
    • For details of wealth management products offered by individual banks, please contact the relevant participating banks.

     


    1 The nine Mainland cities in the GBA are Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoxing.

    2 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 Southbound 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 Southbound Scheme = Cumulative remittances from the Mainland under the Southbound Scheme - Cumulative remittances to the Mainland under the Southbound Scheme
    • For example, a “Southbound Scheme” investor remits RMB 0.8 million to Hong Kong to purchase wealth management 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 Southbound Scheme reaches its upper limit, the investor will no longer be able to remit funds to Hong Kong from the Mainland under the Southbound Scheme. However, remittances from Hong Kong back to the Mainland will not be affected, and investors can continue to invest with funds already remitted to the dedicated investment account.

    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.

    Southbound Scheme quota

  • Investor protection
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    The transactions carried out by Southbound Scheme investors via their dedicated investment accounts with Hong Kong banks are subject to the protection of the Hong Kong 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:
      • Ensure that they understand the rules and procedures relevant to the Hong Kong wealth management product market, nature and risks of the investment and have the ability to bear potential losses
      • Ask questions and seek clarifications from the banks if in doubt and make sure that they fully understand the features and risks of the wealth management products; and
      • Select products that suit their personal circumstances.
    • For the initial stage, the product scope under the Southbound Scheme mainly covers relatively simple wealth management products of low- to-medium risk. In order to strengthen information disclosure to investors, the relevant Hong Kong banks will:
      • Conduct due diligence on the wealth management products they distribute under the Southbound Scheme and assess the risk ratings and complexity of these wealth management products according to the relevant supervisory requirements;
      • Provide adequate product information to potential investors to enable them to make informed investment decisions; and
      • Assess the risk tolerance level of investors. If the risk rating of a product is higher than the assessment result of the investor’s risk profile, the relevant Hong Kong bank will remind the investor of the risk mismatch of the transaction and the investor should consider whether the product is suitable and confirm whether he/she will proceed with the transaction.
    • In general, Hong Kong banks will only conduct Southbound Scheme transactions for investors on an “execution-only” basis. That is, Hong Kong banks will not proactively conduct cross-boundary solicitation or make cross-boundary recommendation in respect of wealth management products. Investors may make enquiries about the investment services and individual wealth management products to a Hong Kong bank directly or request the Hong Kong bank to provide them with related information in order to enable them to make informed investment decisions.

    • If an investor visits a Hong Kong bank in person to make an investment, the Hong Kong bank concerned will provide services to the investor according to the prevailing laws and regulations as well as supervisory guidelines in Hong Kong. (For example, the Hong Kong bank concerned may conduct solicitation or make recommendation. However, it should ensure that the solicitation or recommendation is reasonable in all circumstances.)

  • Complaint handling mechanism
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    Complaints about wealth management products and selling process

    • Investors may lodge complaints about Southbound Scheme wealth management products and services with the relevant Hong Kong banks via the cross-boundary complaint channels provided by the relevant Hong Kong banks.

    Complaints about cross-boundary fund remittances

    • For complaints about cross-boundary fund remittances, investors may lodge the complaint with the relevant Mainland banks. Hong Kong banks will also assist investors in referring such complaints to their Mainland partner banks for follow-up.

    Should 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 account opening with Mainland banks, cross-boundary remittances, quota management, etc., they may be filed to the Guangzhou branch or Shenzhen Central Sub-branch of the PBoC according to the principle of territorial administration.

    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 Mainland and Hong Kong banks participating in the Southbound Scheme
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    Eligible Mainland banks under the Southbound Scheme are financial institutions of the Mainland’s banking industry in the GBA which meet the criteria set by Mainland regulatory authorities (available in Chinese only). Eligible Hong Kong banks 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.

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

    As at 18 October 2021, there are a total of 19 Hong Kong banks which can launch the Southbound Scheme services. The list of eligible Hong Kong banks and their Mainland partner banks which can launch the Southbound Scheme services is as follows:

    Hong Kong bank

    (in Alphabetical order)

    Mainland partner bank(s) (Note)

    AGRICULTURAL BANK OF CHINA LIMITED

    AGRICULTURAL BANK OF CHINA LIMITED

    BANK OF CHINA (HONG KONG) LIMITED

    BANK OF CHINA LIMITED

    BANK OF COMMUNICATIONS (HONG KONG) LIMITED

    BANK OF COMMUNICATIONS CO., LTD.

    BANK OF EAST ASIA, LIMITED (THE)

    THE BANK OF EAST ASIA (CHINA) LIMITED

    CHINA CITIC BANK INTERNATIONAL LIMITED

    CHINA CITIC BANK CORPORATION LIMITED

    CHINA CONSTRUCTION BANK (ASIA) CORPORATION LIMITED

    CHINA CONSTRUCTION BANK CORPORATION

    CHINA MINSHENG BANKING CORP., LTD.

    CHINA MINSHENG BANKING CORP., LTD.

    CITIBANK (HONG KONG) LIMITED

    CHINA GUANGFA BANK CO., LTD.

    CMB WING LUNG BANK LIMITED

    CHINA MERCHANTS BANK CO., LTD.

    DAH SING BANK, LIMITED

    DAH SING BANK (CHINA) LIMITED

    DBS BANK (HONG KONG) LIMITED

    DBS BANK (CHINA) LIMITED

    POSTAL SAVINGS BANK OF CHINA CO., LTD

    HANG SENG BANK, LIMITED

    HANG SENG BANK (CHINA) LIMITED

    HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED (THE)

    HSBC BANK (CHINA) COMPANY LIMITED

    INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ASIA) LIMITED

    INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED

    INDUSTRIAL BANK CO., LTD.

    INDUSTRIAL BANK CO., LTD.

    NANYANG COMMERCIAL BANK, LIMITED

    NANYANG COMMERCIAL BANK (CHINA), LIMITED

    OCBC WING HANG BANK LIMITED

    PING AN BANK CO., LTD

    SHANGHAI PUDONG DEVELOPMENT BANK CO., LTD.

    SHANGHAI PUDONG DEVELOPMENT BANK CO., LTD.

    STANDARD CHARTERED BANK (HONG KONG) LIMITED

    STANDARD CHARTERED BANK (CHINA) LTD

    For enquiries about the services or products offered by the banks, please contact the banks directly.

     

    Note:

    The lists of eligible Mainland banks are announced by the relevant Mainland regulatory authorities.  For details of the eligible Mainland banks, please refer to the relevant webpage of the Mainland regulatory authorities at: Guangzhou Branch of the People’s Bank of China and Shenzhen Central Sub-branch of the People’s Bank of China (available in Chinese only).

Last revision date : 18 October 2021