Frequently Asked Questions (Applicable to banks)

No. The dedicated investment account under the Southbound Scheme may be used only for investment purposes under the Southbound Scheme, and should not be used for the provision of any other services by the Hong Kong bank.

Mainland investors can check with the relevant Hong Kong banks for these details. They can check with the relevant Mainland partner banks for the contact information of the Hong Kong banks as needed. They can also use the electronic channels provided by Hong Kong banks (e.g. on their websites, mobile platforms etc.) to search for relevant information if applicable.

Under the Cross-boundary WMC, investors wishing to undertake an investment must do so via a pair of dedicated remittance account and dedicated investment account which have been specifically matched with each other. For Southbound Scheme, investors have to maintain an account with a Mainland bank for handling remittances under the Cross-boundary WMC, (“dedicated remittance account”), and an investment account with that bank’s partnering Hong Kong bank solely for conducting investments (“dedicated investment account”) under the Cross-boundary WMC. These two accounts must be paired with each other and enter into a closed-loop funds flow relationship, so that the dedicated remittance account is the only source of investment principal remitted to the dedicated investment account under the Southbound Scheme and the only account for Southbound Scheme return remittance. To recoup the principal or proceeds in their dedicated investment account, the Southbound Scheme investors need only to remit those funds back via the same route, i.e. through the dedicated remittance account being paired with the dedicated investment account.

• Quota limits

  • The Cross-boundary WMC is subject to both the aggregate and individual quota limits. If a quota is exhausted, the bank may suspend at any time the remittance of funds from a Southbound Scheme investor’s dedicated remittance account to his dedicated investment account. (However, Southbound Scheme investors can still remit funds back to the dedicated remittance account, or remit funds in the dedicated remittance account to other local accounts where no cross-boundary remittances are involved.)

• Different market conventions and practices on the Mainland and in Hong Kong

  • The classification and naming of wealth management products in Hong Kong (including SFC-authorized funds), may differ from those on the Mainland. Southbound Scheme investors should refer to the offer documents and related disclosures of Hong Kong wealth management products for details on the features and investment strategies of the wealth management products, and may request the Hong Kong banks to introduce products which meet their risk appetite, and should not rely solely on the product name or classification in making an investment decision.

• Investment risk

  • Investment products involve investment risks. They may sometimes experience substantial price volatilities and even become valueless. Transacting in investment products may not necessarily yield a profit but incur losses instead.

• Currency risk

  • All cross-boundary remittances under the Cross-boundary WMC are conducted in renminbi. Investors holding investments denominated in currencies other than renminbi may also face currency exchange risk arising from renminbi exchange rate fluctuations. As with any other currencies, the exchange rate of renminbi may go up as well as down.

In addition to the main risks in the above, investors should refer to the offer documents and related disclosures of the Hong Kong wealth management products concerned for the information about their risks.

Each eligible investor under the Southbound Scheme should, at all times, maintain only one dedicated remittance account with a Mainland bank and at most one dedicated investment account each with a Hong Kong and Macao bank.

If you wish to open a dedicated remittance account under the Southbound Scheme with another Mainland bank, you should first terminate or cancel the designation of your existing dedicated remittance account with the first Mainland bank.

Although Mainland banks can partner with more than one Hong Kong bank in conducting their Southbound Scheme business, investors have to decide on one of these partnering Hong Kong banks to open their dedicated investment account. If you wish to choose another Hong Kong bank to open a dedicated investment account, you should first terminate your existing dedicated investment account with the first Hong Kong bank.

You can request the Hong Kong bank or Mainland partner bank concerned to terminate those dedicated accounts as appropriate.

Points to note regarding the termination of Hong Kong dedicated investment accounts:

• You must redeem the wealth management products concerned and remit all funds in the dedicated investment account back to the dedicated remittance account.

• The Hong Kong bank concerned will ensure that there are no more wealth management products or funds in your dedicated investment account. It will notify the Mainland partner bank concerned upon the successful termination of your dedicated investment account and then dismiss the pairing relationship between the dedicated remittance account and the dedicated investment account.

Points to note regarding the termination or cancellation of designation of Mainland dedicated remittance accounts:

• The Mainland partner bank must receive confirmation from the Hong Kong bank concerned that there are no more wealth management products or funds in the customer’s dedicated investment account, and ensure there are no more funds in the customer’s dedicated remittance account before terminating or cancelling the designation of the latter.

• The Mainland partner bank will notify its partnering Hong Kong bank and then dismiss the pairing relationship between the dedicated remittance account and the dedicated investment account.

The Hong Kong banks concerned will continue to be regulated in accordance with Hong Kong’s laws, regulations and supervisory regimes. Investors investing via Hong Kong banks under the Southbound Scheme will be covered by relevant investor protection measures in force in Hong Kong as usual.

For eligible wealth management products under the Southbound Scheme:

• According to the Code of Conduct for Persons Licensed by or Registered with SFC, intermediaries should keep separate accounts for each client for his/her dealings in securities.
• As a customer protection measure, the Securities & Futures Ordinance provides that client securities of an intermediary (for example a bank acting as an intermediary) are not liable to be taken in execution against the under the order or process of a court.

The Deposit Protection Scheme (DPS) provides protection for investors’ eligible deposits in banks that are DPS members in Hong Kong. Deposits mostly held in member banks (such as savings and current account deposits, and time deposits with a maturity not more than five years), regardless of their currency, are covered by the DPS.

Investors should note that the DPS provides protection to each depositor up to a limit of HK$500,000 per member bank. Deposits placed by a depositor in different accounts with the same member bank will be combined when working out the amount of deposits eligible for the protection.

In case of any enquiries, investors can contact their bank in Hong Kong concerned. They may also refer to the FAQs on the DPS on the HKMA website or visit the website of the Hong Kong Deposit Protection Board to learn more about the DPS.

In addition, general information on investor protection is available on the IFEC’s relevant webpage.