GBA regulators advance policy work on cross-border mortgages

12 Oct, 2020 11:15
source: Singularity Financial

Singularity Financial Hong Kong October 10, 2020 – GBA Regulators Advance Policy Work on Cross-border Mortgages (Source: Regulation Asia)

The HKMA’ Edmond Lau says encouraging progress has been made to allow Hong Kong banks to provide cross-border mortgage services in the Greater Bay Area.

Hong Kong banks will be allowed to provide cross-border mortgage services in GBA (Greater Bay Area) cities in the mainland, HKMA (Hong Kong Monetary Authority) senior executive director Edmond Lau confirmed on Friday (9 October).

Speaking at a Bloomberg webinar, Lau said the HKMA is in discussion with mainland authorities to provide “policy headroom” for Hong Kong banks to provide cross-border mortgage services, in order to facilitate the purchase of property in the GBA by Hong Kong residents.

“There has already been encouraging progress – the Guangdong authorities have recently streamlined registration procedures for Hong Kong and Macao banks in mortgage registration of property in the province,” he said.

From 1 September, banks in Macau and Hong Kong banks were allowed to apply for real estate mortgage registration in Guangdong’s nine main cities. To date, Hong Kong banks have had to establish branches or representative offices in the mainland to apply for real estate mortgage registration.

“We will continue our efforts in ensuring the smooth operation of cross-border mortgage services,” Lau said.

In August it was also reported that nine Macau banks had signed a cooperation agreement with the Zhuhai Real Estate Registration allowing Macau residents and companies to register and mortgage real estate in Zhuhai directly through their own Macau banks.

The move to enable cross-border mortgage services follows the release of a policy blueprint for financial market development in the GBA by mainland authorities earlier this year. Among the 30 policy initiatives contained in the blueprint was a proposal to establish a cross-border real property mortgage registration system for the region.

It also contained a plan to establish a mechanism for cross-border wealth management services. Hong Kong and mainland regulators have since announced additional details on how the Wealth Management Connect scheme will operate, initially covering simple investment products of relatively low risk.

“One of our priorities is the Wealth Management Connect pilot scheme in the GBA,” Lau said on Friday. “This new initiative will allow Hong Kong and international investors to better access investment opportunities in the Mainland. It also brings GBA customers to our wealth management industry.”

“That not only marks a big step towards closer financial cooperation in the region but also promotes the further opening-up of the Mainland’s financial markets,” he said.

According to Lau, industry feedback on the initiative has so far been supportive, and the HKMA is working with both mainland and Hong Kong regulators to “thrash out” the implementation details of the Wealth Management Connect pilot scheme.

“We hope to be able to consult the industry on these implementation details soon and to roll out the scheme as soon as practical.”

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