REGULATORS set an initial quota of 150 billion yuan (US$23.2 billion) for transactions under the wealth management connect program that links southern Guangdong Province with offshore centers Hong Kong and Macao, according to draft rules published last week.

The pilot program, announc- ed a year ago, allows residents of the two offshore centers and those in nine cities in Guangdong to buy financial products in the other markets.

Net cash flows in either direction must not exceed 150 billion yuan and the individual investment quota is 1 million yuan, according to draft rules published by China’s central bank.

The program is part of China’s plan to build a Greater Bay Area economic powerhouse in southern China, by further integrating Hong Kong and Macao with the mainland. The wealth management connect program facilitates investment in the area.

The initiative is also part of China’s drive to open up its capital account and financial markets, the Shenzhen central sub-branch of the People’s Bank of China said.

China has launched similar initiatives in the past, including the stock connect and bond connect programs.

Investors in Hong Kong and Macao can buy mainland wealth management products and mutual funds under the program, according to the draft rules. The rules did not detail which products mainland investors could purchase in the two offshore centers.

The rules, which were posted to solicit a public response, were drafted jointly by the central bank, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission.

The launch of the wealth management connect program will have to wait until cross border travel restrictions are relaxed, Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority (HKMA), said in March.

“As the travel restrictions remain in place, it would be hard to launch the wealth management connect at the moment as investors will need to cross the border to open a bank account,” South China Morning Post quoted Yue as saying in a report March 15.

“It is a national requirement for investors to open an investment account in person at financial firms to allow bank staff to explain the products and risks to the investors,” Yue said. (SD-Agencies)