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The MPFA welcomes the Legislative Council’s approval of the Mandatory Provident Fund Schemes (General) (Amendment) Regulation 2022 (the Amendment Regulation) introduced by the Secretary for Financial Services and the Treasury today (1 June) to facilitate investment by MPF funds in debt securities issued or unconditionally guaranteed by the Central People’s Government (CPG), the People’s Bank of China (PBOC) and the three Mainland policy banks (the Agricultural Development Bank of China, the China Development Bank and The Export-Import Bank of China). The Amendment Regulation will take effect upon gazettal on 10 June.

Mrs Ayesha Macpherson Lau, Chairman of the MPFA, said, “With the aim of protecting the interests of MPF scheme members while balancing investment returns and risks, the MPFA has been reviewing MPF permissible investments from time to time in light of market developments.  In recent years, there has been growing demand from both MPF scheme members and the industry for more investment choices that could yield stable return and enable the development of retirement solutions tailored to the investment appetite of scheme members approaching retirement or in the post-retirement phase.”

Mrs Lau added that in light of the continuous development of the Mainland bond market, the legislative amendment has responded to demands from MPF scheme members and the industry.  Debt securities issued or unconditionally guaranteed by the CPG, the PBOC and the three Mainland policy banks present diversification opportunities conducive to enhancing retirement protection of the working population through MPF.

Under the Amendment Regulation, the CPG, the PBOC, and the three Mainland policy banks will be added to the “exempt authority” list. An MPF constituent fund may invest up to 30% of its funds in debt securities of the same issue that are issued or unconditionally guaranteed by an exempt authority. It may also choose to invest all of its funds in debt securities of the same issuer comprising at least six different issues that are issued or unconditionally guaranteed by an exempt authority.

After the approval of the Amendment Regulation, the MPFA will continue to communicate with the MPF industry to help the industry formulate appropriate investment solutions to enhance the diversity of investment choice for scheme members.

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1 June 2022

Note:

Subsequent to the issuance of the press release, the Mandatory Provident Fund Schemes (General) (Amendment) Regulation 2022 took effect upon gazettal on 2 June 2022.