Financial Services & the Treasury Bureau to review MPF regulations

The proposals are aimed  to  establish a statutory regulatory regime for MPF intermediaries to better protect the 2.5mn MPF scheme members.

The Financial Services & the Treasury Bureau has submitted a Legislative Council paper on enhancing the regulation of Mandatory Provident Fund intermediaries' sales and marketing activities.

The bureau will table a bill at the Legislative Council this year, aiming to complete legislative amendments by mid-2012.

The legislative proposals will establish a statutory regulatory regime for MPF intermediaries before the implementation of the Employee Choice Arrangement to better protect the interests of more than 2.5 million MPF scheme members.

The legislation will include prohibitions against engaging in regulated MPF sales and marketing activities other than by registered MPF intermediaries; a registration regime for MPF intermediaries; and powers for relevant regulators to enforce conduct requirements on MPF intermediaries. It is proposed there should be a two-year transitional period for pre-existing MPF intermediaries, according to a Financial Services & the Treasury Bureau report.

The proposed regulatory regime for MPF intermediaries is modelled on the existing administrative arrangements, with modifications and enhancement as appropriate. The Mandatory Provident Fund Schemes Authority will continue to be responsible for setting the standards for the industry and remain as the registration authority, while the Hong Kong Monetary Authority, Insurance Authority, and Securities & Futures Commission will be the frontline regulators.

The bureau said this approach will minimise disruption to the existing regulatory arrangements and facilitate early implementation of the Employee Choice Arrangement.