Information Centre
FAQ
Prohibition on "regulated activity"
Prohibition on "regulated activity"
Disclaimer: The information provided in the FAQs reflects the Authority’s views on the interpretation of section 34L of the MPFSO and related provisions. It is provided without considering your specific circumstances, and should not be regarded as a substitute for professional advice. Exceptions or qualifications not mentioned in the FAQs may apply in specific circumstances. Independent legal or other professional advice should be sought before taking action on any matters to which the FAQs relate or in cases of doubt. Please also refer to the “Disclaimer” section of this website.
The Mandatory Provident Fund Schemes Ordinance (Cap. 485) (MPFSO) prohibits (section 34L) persons from carrying on (or holding themselves out as carrying on) a "regulated activity" (section 34F) in the course of their business or employment, or for reward.
Barring exceptional circumstances under section 34M, any person who does the following in relations to the matters specified in section 34F(5) carries out a “regulated activity”:
a. invites or induces, or attempt to invite or induce, another person to make a material decision; or
b. gives regulated advice (by providing an opinion),
In determining whether an activity falls within the prohibition, the circumstances of each case must be considered. The following provides some examples of how this prohibition applies.
Invitation or Inducement
Where a person merely issues an advertisement, invitation or document authorized by the Securities and Futures Commission (SFC) under section 105 of the Securities and Futures Ordinance (Cap. 571) (SFO), he will not be regarded as carrying on a regulated activity by virtue of section 34F(2) MPFSO.
A person who does not give any regulated advice but provides information about MPF schemes and constituent funds may be regarded as inviting or inducing, or attempting to invite or induce, another person to make a material decision depending on the circumstances. For example, providing such information on an unsolicited or selective basis is likely to be construed as an invitation or inducement.
This depends on the circumstances of each case. If, in the course of handing out the document, the bank staff member asks the recipient of the document to consider joining that MPF scheme, he will be regarded as inviting or inducing that person to become a member of that MPF scheme.
If, in the course of handing out the document, the bank staff member uses words to the effect "This MPF scheme is the best scheme on the market", he may be regarded as inviting or inducing, or attempting to invite or induce, the recipient of the document to become a member of that MPF scheme.
Yes, because the insurance agent is inviting the client to make a decision as to whether to pay voluntary contributions to that MPF scheme (which is a material decision).
Regulated Advice
Yes, he will be giving regulated advice if he advises his client on the amount of contributions to be invested in each of those constituent funds. A licence under the SFO for the purpose of giving such advice would generally not be required if the relevant advice is limited to MPF schemes and their constituent funds only.
Scheme Administration
Many tasks associated with the administration of an MPF account do not generally constitute a regulated activity. These include providing a specified form at the request of a scheme member, receiving or passing on to another service provider a completed form, or noting or processing change of personal details of a scheme member.
Although explaining a legal or procedural requirement, prompting clients to provide missing information in order to give effect to the client's instruction or stating an objective fact does not generally fall within the section 34L prohibition, the same action may amount to a regulated activity depending on the circumstances of the case. Accordingly, unregistered staff involved in scheme administration should take care when responding to inquiries from, or communicating with, employers and scheme members. In cases of doubt, the matter should be handled by a registered intermediary.
The call centre representative may direct the member to the appropriate form and help the member to fill out the form according to the instructions of the member without being registered as an MPF intermediary.
However, if he suggests another fund choice to the member, e.g. by stating "In your case, you might like to invest in Fund A rather than Fund B", or invites him to make additional voluntary contributions to the scheme, he will be carrying on a regulated activity. In case of doubt, the call centre representative should refer the matter to a registered intermediary.
Call centre staff of MPF trustees who are not registered as an MPF intermediary should avoid responding to questions which may involve a choice between funds of an MPF scheme.
If, in response to a question, the representative refers the member to the MPF Scheme Brochure of the MPF scheme that sets out the differences between the two funds, or reads out the information available in the MPF Scheme Brochure or the fund fact sheet in response to the inquiry in an objective and non-selective manner (and without any opinions), this is not likely to constitute a regulated activity.
If, however, the representative suggests that Fund B is the better choice for the member, the representative may also be regarded as inviting or inducing, or attempting to invite or induce, the member to invest in Fund B.