Update on enhanced regulation of MPF intermediaries

Our Financial Services newsletter of May 2011 discussed proposals by Hong Kong's Mandatory Provident Fund Authority (MPFA) to enhance the regulation and supervision of MPF intermediaries. The MPFA has subsequently published consultation conclusions on the proposals which aim to regulate MPF intermediaries' sales and marketing activities before implementation of the planned "Employee Choice Arrangement".

The proposals retain the current segmented approach to regulating MPF intermediaries through the frontline sector regulators (FRs): the Hong Kong Monetary Authority, the Insurance Authority and the Securities and Futures Commission, in addition to the MPFA. However, all disciplinary powers will be vested with the MPFA with active participation of FRs in the disciplinary process. In making any disciplinary decision, the MPFA will take into account the investigation results and recommendations of the FRs.

The MPFA aims to release a draft code of conduct for intermediaries and introduce a bill into the Legislative Council before the end of the year.