Keywords: new regulations, Hong Kong, mandatory
The Financial Services & the Treasury Bureau has submitted a
paper to the Legislative Council to enhance the regulation of
Mandatory Provident Fund intermediaries' sales and marketing
activities and invited comments from the public on or before 30
April 2011. A bill will be put before the Legislative Council with
the aim of the legislative amendments taking effect by 30 June
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 MPF scheme members in Hong Kong, particularly in
relation to advice given to employees wishing to transfer to
another MPF scheme from the one chosen by their employer. According
to the Mandatory Provident Fund Schemes (Amendment) Ordinance 2009
which was gazetted in July 2009, the Employee Choice Arrangement
will enable employees to choose their own MPF service providers
instead of having to abide by their employer's choice.
To minimise disruption to the existing regulatory arrangements and
facilitate early implementation of the Employee Choice Arrangement,
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, the Insurance Authority and the Securities and Futures
Commission will be the "frontline regulators".
The legislation will include:
Prohibitions against engaging in regulated MPF sales and
marketing activities other than by registered MPF
A registration regime for MPF intermediaries - principal and
The regulatory scope of the frontline regulators
Conduct requirements for MPF intermediaries
Regulatory powers to enforce the conduct requirements
An appeals mechanism
Arrangements for a two-year transitional period for
pre-existing MPF intermediaries
The proposed regulatory regime for MPF intermediaries is
modelled on the existing administrative arrangements, with
modifications and enhancement as appropriate. The proposed
legislation sets out broad conduct standards with which MPF
intermediaries are obliged to comply. There will be requirements on
competence and integrity. In addition, principal intermediaries
i.e., at the entity level will be required to have a responsible
officer available to supervise the conduct of regulated MPF sales
and marketing activities carried out by sponsored intermediaries
i.e., at the individual salesperson level.
Principal intermediaries will also be required to establish and
maintain proper controls and procedures for compliance with the
legislation by themselves and by any sponsored intermediaries, to
provide their responsible officer with sufficient resources and
support to effectively supervise regulated MPF sales and marketing
activities, and to be responsible for ensuring the maintenance of
appropriate standards of conduct and adherence to proper procedures
by their sponsored intermediaries.
As there may be a substantial increase in the number of elections
by scheme members for the transfer of benefits among MPF schemes
and with the aim of ensuring the accuracy of transfers, shortening
the processing time and minimising the costs associated with
transfers, the Mandatory Provident Fund Schemes Authority proposes
to establish and operate an electronic transfer system (i.e., an
e-platform) to facilitate the processing of scheme member elections
Copyright 2011. JSM, Mayer Brown International LLP
and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a
global legal services organization comprising legal practices that
are separate entities ("Mayer Brown Practices"). The
Mayer Brown Practices are: JSM, a Hong Kong partnership, and its
associated entities in Asia; Mayer Brown International LLP, a
limited liability partnership incorporated in England and Wales;
and Mayer Brown LLP, a limited liability partnership established in
the United States. The Mayer Brown Practices are known as Mayer
Brown JSM in Asia.
This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications Disclaimer.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Following approval by Tynwald at its May 2016 sitting, the Isle of Man Government Department of Health and Social Care has issued guidance for businesses on matters to be taken into account in determining questions relating to the definition of disability.
A new law which is designed to enhance investors' trust in Dubai may also have a welcome effect in protecting employees from certain forms of whistleblowing.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).