The Mandatory Provident Fund Schemes (General) (Amendment) Regulation 2022 (Amendment Regulation) was approved by the Legislative Council today (June 1) to facilitate Mandatory Provident Fund (MPF) investment in debt securities issued or unconditionally guaranteed by the Central People's Government (CPG), its central bank and the three Mainland policy banks.

     Pursuant to the amended Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A), the CPG, the People's Bank of China, the Agricultural Development Bank of China, the China Development Bank and The Export-Import Bank of China would become an "exempt authority" under the Regulation. An MPF constituent fund could invest up to 30 per cent of its total funds in debt securities of the same issue issued or unconditionally guaranteed by an exempt authority. Separately, all of the funds of the MPF constituent fund could also be invested in debt securities comprising at least six different issues issued or unconditionally guaranteed by the same exempt authority.

     The Secretary for Financial Services and the Treasury, Mr Christopher Hui, welcomed the approval of the Amendment Regulation. He said, "The Amendment Regulation was made in response to demands from both MPF scheme members and the industry. Mainland government debt securities present great investment potential and have the benefit of risk diversification.  The legislative proposal would provide MPF scheme members with more diversified options of investment and enable them to leverage the opportunities brought by the development of the Mainland bond market."

     Mr Hui added, "The Mainland bond market is now the largest in Asia and the second-largest in the world. The facilitation measure also helps promote mutual access between the Mainland and Hong Kong financial markets, further strengthens Hong Kong's status as a global offshore Renminbi business hub, and supports Hong Kong's integration into the overall development of the country."

     The Amendment Regulation will take effect upon gazettal on June 2.

Ends/Wednesday, June 1, 2022
Issued at HKT 14:35

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