Cap. 485 sub. leg. A

Mandatory Provident Fund Schemes (General) Regulation(Cap. 485, section 46)(Enacting provision omitted—E.R. 1 of 2013) [24 July 1998] L.N. 294 of 1998(Format changes—E.R. 1 of 2013) Part 1 Preliminary 1. (Omitted as spent—E.R. 1 of 2013) 2. Interpretation In this Regulation, unless the context otherwise requires—account number (帳戶號碼) includes a reference to a combination of numbers, letters or other symbols that identifies a member’s account with a registered scheme;accounting practice unit (會計執業單位) means a practice unit as defined by section 2(1) of the Accounting and Financial Reporting Council Ordinance (Cap. 588);(L.N. 66 of 2022)actuary (精算師) has the same meaning as in section 2 of the Occupational Retirement Schemes Ordinance (Cap. 426);adequate insurance (足夠保險) has the meaning given by section 8; applicable accounting guideline (適用的會計指引) means— (a) the industry accounting guideline, issued by the Hong Kong Institute of Certified Public Accountants, called the “Financial Statements of Retirement Schemes”, or that guideline as amended from time to time; or (b) if the Hong Kong Institute of Certified Public Accountants issues an accounting guideline in respect of registered schemes, that guideline, or that guideline as amended from time to time; (23 of 2004 s. 56) approved credit rating agency (核准信貸評級機構) means a credit rating agency approved by the Authority for the purposes of this Regulation; approved futures exchange (核准期貨交易所) means— (a) a recognized futures market; or (b) any futures exchange established in a place outside Hong Kong that is declared by the Authority by notice published in the Gazette to be an approved futures exchange for the purposes of this Regulation; (5 of 2002 s. 407) approved overseas bank (核准海外銀行) has the meaning given by section 3;approved overseas insurer (核准海外保險人) has the meaning given by section 4;approved overseas trust company (核准海外信託公司) has the meaning given by section 5;approved pooled investment fund (核准匯集投資基金) has the meaning given by section 6; approved stock exchange (核准證券交易所) means— (a) a recognized stock market; or (b) any stock exchange established in a place outside Hong Kong that is declared by the Authority by notice published in the Gazette to be an approved stock exchange for the purposes of this Regulation; (5 of 2002 s. 407) assets held in Hong Kong (在香港持有的資產) has the meaning given by section 10;authorized insurer (獲授權保險人) means an insurer authorized under section 8 of the Insurance Ordinance (Cap. 41); (12 of 2015 s. 129)authorized mutual fund (認可互惠基金) means a mutual fund authorized as a collective investment scheme by the Securities and Futures Commission under section 104 of the Securities and Futures Ordinance (Cap. 571); (5 of 2002 s. 407)authorized unit trust (認可單位信託) means a unit trust authorized as a collective investment scheme by the Securities and Futures Commission under section 104 of the Securities and Futures Ordinance (Cap. 571); (5 of 2002 s. 407)central securities depository (中央證券寄存處) means a depository in Hong Kong, or a depository or a clearing agency outside Hong Kong that is approved by the Authority for the purposes of this Regulation;consolidated report (綜合報告) means a report published in accordance with section 89;continuous financial support (持續財政支援), in relation to a company that applies to be or is an approved trustee, has the meaning given by section 12; contribution account (供款帳戶), in relation to a member of a registered scheme, means an account with the scheme into which— (a) mandatory contributions and voluntary contributions (if any) are paid in respect of any current employment or current self-employment of the member; and (b) special contributions (if any) are paid in respect of the member; (30 of 2008 s. 7) contribution day (供款日)— (a) in relation to a self-employed person—see section 131(3) and (4); and (b) in relation to a participating employer—see section 122(1); (1 of 2015 s. 21) control objectives (控制目標), in relation to a registered scheme, means the control objectives for the time being applicable to the scheme because of section 39;currency forward contract (貨幣遠期合約) means a contract for the purchase or sale of a specific quantity of foreign currency, with delivery and settlement at a specified future date;custodian (保管人), in relation to the assets of a registered scheme, includes the approved trustee of the scheme if acting as the custodian of those assets in accordance with section 50(2); (L.N. 223 of 2000)deadline (最後期限), in relation to the financial period of a registered scheme, means the end of the day that falls 6 months after the end of that period; debt security (債務證券) means— (a) any debenture or other document issued by a person as evidence of a debt owed by the person or as security for the repayment of a loan (whether with or without interest); or (b) debenture stock and bonds issued by a company (whether constituting a charge on the assets of the company or not); or (c) convertible loan stock; delegate (獲轉授人), in relation to a custodian, means a person to whom the custodian has delegated the custodian’s function as a custodian; (L.N. 223 of 2000)eligible overseas bank (合資格海外銀行) has the meaning given by section 13;encumbrance (產權負擔) includes a charge, pledge, lien and mortgage;Fees Regulation (《費用規例》) means the regulation (if any) made under section 46 of the Ordinance prescribing fees for the purposes of this Regulation; financial futures contract (財務期貨合約) means a contract under which— (5 of 2002 s. 407; L.N. 145 of 2006) (a) a party to the contract agrees to deliver to the other party to the contract at an agreed future time a specified security, or an agreed quantity of specified securities, at an agreed price; or (b) the parties agree to make an adjustment between themselves at an agreed future time according to whether at that time—(i) a specified security, or an agreed quantity of specified securities, is worth more or less than a value agreed at the time when the contract is entered into; or(ii) a number of an index of securities stands at a higher or lower level than a level agreed at the time when the contract is entered into; (L.N. 145 of 2006) financial option contract (財務期權合約) means a contract under which a party to the contract acquires from the other party to the contract an option or right, exercisable at or before a specified time, to be paid by that other party an amount of money to be determined by reference to the amount by which a number specified in the contract is more or less than the number of a specified index of securities as at the time when the option or right is exercised; (5 of 2002 s. 407; L.N. 145 of 2006)financial period (財政期), in relation to a registered scheme, has the meaning given by section 79;financial statements (財務報表), in relation to a registered scheme, means a balance sheet and statement of account prepared or to be prepared in respect of the scheme;independent director (獨立董事) means a director having the qualifications prescribed by section 9;Insurance Authority (保監局) means the Insurance Authority established under section 4AAA of the Insurance Ordinance (Cap. 41); (12 of 2015 s. 129)insurer (保險人), when it is not qualified by the word “authorized”, means a person who is carrying on insurance business;market value (市值), in relation to any property, means the price that can reasonably be expected to be paid for the property if it were sold by a willing seller to a willing buyer on the open market, with both parties acting at arms length;Monetary Authority (金融管理專員) means the Monetary Authority appointed under section 5A of the Exchange Fund Ordinance (Cap. 66); (L.N. 223 of 2000)net assets (淨資產), in relation to a company or corporation, means the amount by which the company’s or corporation’s, as the case may be, total tangible assets exceed its total liabilities; (L.N. 223 of 2000) offering document (要約文件), in relation to a registered scheme, means a document— (a) inviting participation in the scheme by prospective participating employers or prospective members of the scheme; and (b) containing information relating to the establishment or administration of the scheme; (2 of 2002 s. 21) ORSO exempted scheme (職業退休豁免計劃) has the same meaning as in section 2(1) of the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B); (2 of 2002 s. 21)ORSO registered scheme (職業退休註冊計劃) has the same meaning as in section 2(1) of the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B); (2 of 2002 s. 21)overseas (海外), in relation to Hong Kong, means outside Hong Kong; participation agreement (參與協議), in relation to a registered scheme, means an agreement— (a) between a participating employer and the approved trustee of the scheme for the employer and his employees to participate in the scheme; (b) between a self-employed person and the approved trustee of the scheme for the self-employed person to participate in the scheme; (7 of 2019 s. 16) (c) between a person intending to maintain a personal account in the scheme and the approved trustee of the scheme; or (2 of 2002 s. 21; 11 of 2009 s. 11; 7 of 2019 s. 16) (d) between a person intending to maintain a TVC account in the scheme and the approved trustee of the scheme; (7 of 2019 s. 16) personal account (個人帳戶), in relation to a member of a master trust scheme or an industry scheme, means an account (other than a contribution account) within the scheme— (a) into which special contributions (if any) are paid in respect of the member; (b) in which the member’s accrued benefits (if any) in respect of any former employment or former self-employment of the member are held; (c) in which the member’s accrued benefits (if any) in respect of any current employment of the member are held; and (d) in which the member’s benefits (if any) transferred to the scheme from an ORSO exempted scheme or an ORSO registered scheme are held, and includes a former contribution account (if any) of the member in which accrued benefits retained under section 147(6) are held; (11 of 2009 s. 11) prescribed capital adequacy requirements (訂明資本充裕程度規定), in relation to a company that applies to be or is an approved trustee, has the meaning given by section 11;re-domiciled entity (經遷冊實體) has the meaning given by section 2(1) of the Banking Ordinance (Cap. 155); (14 of 2025 s. 231)recognized futures market (認可期貨市場) has the same meaning as in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571); (5 of 2002 s. 407)recognized stock market (認可證券市場) has the same meaning as in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571); (5 of 2002 s. 407)registered trust company (註冊信託公司) means a trust company registered under Part 8 of the Trustee Ordinance (Cap. 29);remittance statement (付款結算書) means a remittance statement required by section 123; (18 of 2008 s. 15) scheme assets (計劃資產) means securities and other assets acquired and held for the purposes of a registered scheme, and includes— (a) income derived from the investment of those securities or other assets; and (b) money payable to the scheme; securities (證券) has the same meaning as in section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap. 571); (5 of 2002 s. 407)special contribution (特別供款) means a contribution paid by the Authority under Part 3A of the Ordinance; (30 of 2008 s. 7) specified working day (指明工作日) means any day other than— (a) a public holiday; (b) a Saturday; or (c) a gale warning day or black rainstorm warning day as defined by section 71(2) of Cap. 1; (9 of 2016 s. 12; 40 of 2021 s. 49) substantial financial institution (具規模財務機構) has the meaning given by section 7.(2 of 2002 s. 21; 5 of 2002 s. 407; 1 of 2008 s. 61; 11 of 2009 s. 11; 16 of 2012 s. 24; E.R. 1 of 2013; E.R. 2 of 2014; 1 of 2015 s. 21) 3. What is an approved overseas bank for the purposes of this Regulation (E.R. 4 of 2019)A bank incorporated outside Hong Kong is an approved overseas bank for the purposes of this Regulation if the bank has satisfied the Authority that it is authorized by the law of a place outside Hong Kong to carry on the business of a bank and the Authority has notified the bank in writing that it has approved the bank as an overseas bank for those purposes. 4. What is an approved overseas insurer for the purposes of this Regulation (E.R. 4 of 2019)An insurer incorporated outside Hong Kong that is not a re-domiciled insurer (as defined by section 2(1) of the Insurance Ordinance (Cap. 41)) is an approved overseas insurer for the purposes of this Regulation if the insurer has satisfied the Authority that it is authorized by the law of a place outside Hong Kong to carry on the business of an insurer and the Authority has notified the insurer in writing that it has approved the insurer as an overseas insurer for those purposes.(14 of 2025 s. 232) 5. What is an approved overseas trust company for the purposes of this Regulation (E.R. 4 of 2019)A trust company incorporated outside Hong Kong that is not a re-domiciled company is an approved overseas trust company for the purposes of this Regulation if the company has satisfied the Authority that it is authorized by the law of a place outside Hong Kong to carry on the business of a trust company and the Authority has notified the company in writing that it has approved the company as an overseas trust company for those purposes.(14 of 2025 s. 233) 6. What is an approved pooled investment fund for the purposes of this Regulation (E.R. 4 of 2019)(1) An investment fund is an approved pooled investment fund for the purposes of this Regulation if it is an insurance policy, authorized unit trust or authorized mutual fund that—(a) complies with the requirements set out in section 17(2) of Schedule 1; and(b) is approved by the Authority. (2) The granting of an approval in respect of a pooled investment fund is subject to the payment to the Authority of such fee (if any) as may be prescribed in the Fees Regulation and to such conditions (if any) as the Authority considers appropriate. (2 of 2002 s. 21)(3) Where the Authority—(a) has decided that it is appropriate to—(i) amend any conditions imposed under subsection (2) or this subsection on an approved pooled investment fund; or(ii) impose conditions on an approved pooled investment fund; and(b) has given to the investment manager, insurer or trustee concerned—(i) not less than 30 days’ advance notice of its decision, specifying its grounds; and(ii) an opportunity to make written representations as to why the conditions should not be amended or imposed, then the Authority may, by written notice served on the investment manager, insurer or trustee—(i) amend any conditions imposed under subsection (2) or this subsection on the investment fund; or(ii) impose conditions on the investment fund. (2 of 2002 s. 21)(4) The Authority may waive a person’s compliance with a condition imposed under subsection (2) or (3)—(a) in a particular case; and(b) where the person satisfies the Authority that such compliance is not, or has not been, reasonably practicable in all the circumstances of that case. (2 of 2002 s. 21)(5) The Authority may on application made by a person specified in the guidelines cancel the approval of a pooled investment fund. (1 of 2008 s. 29)(6) An application under subsection (5) must—(a) be in a form approved by the Authority; and(b) contain such information, and be accompanied by such documents, as may be specified for the purposes of this section in the guidelines. (1 of 2008 s. 29)(7) The Authority may, by written notice, require an applicant to provide such additional information and documents as are reasonably necessary to enable it to determine the application. If such a requirement is not complied with within a reasonable time specified in the notice, the Authority may reject the application. (1 of 2008 s. 29) 7. What is a substantial financial institution for the purposes of this Regulation (E.R. 4 of 2019)(1) An institution is a substantial financial institution for the purposes of this Regulation if— (L.N. 223 of 2000)(a) it is an authorized financial institution, an authorized insurer, a registered trust company, an approved overseas bank, an approved overseas insurer or an approved overseas trust company; and(b) it has—(i) a paid up share capital of at least $150,000,000 or its equivalent in a foreign currency; and(ii) net assets of at least the same amount. (L.N. 222 of 2000; L.N. 223 of 2000)(2) The reference to “liabilities” in the determination of net assets as referred to in subsection (1)(b)(ii) may exclude in part or in whole a subordinated debt of the institution concerned where, subject to subsection (3), the Authority declares in writing that it is satisfied that under the terms of the debt instrument concerned— (L.N. 222 of 2000)(a) the claims of the lender against the institution are fully subordinated to those of all unsubordinated creditors;(b) the debt is not secured against any assets of the institution;(c) the debt has a minimum initial period to maturity of more than 5 years (and notwithstanding that the period may be reduced with the prior consent of the Authority); and(d) the debt is not repayable prior to maturity without the prior consent of the Authority. (L.N. 223 of 2000)(3) The Authority shall not make a declaration under subsection (2) in relation to an institution except after consultation with—(a) if the institution is an authorized financial institution, the Monetary Authority;(b) if the institution is an authorized insurer, the Insurance Authority. (L.N. 223 of 2000) 8. What is adequate insurance for the purposes of registered schemes (E.R. 4 of 2019)(1) For the purposes of the Ordinance, an approved trustee has adequate insurance for the registered schemes administered by the trustee if there are in force 1 or more insurance policies that—(a) are obtained from 1 or more eligible insurers; and(b) cover the total managed assets of the approved trustee and do not deal with any matter other than the assets of the schemes concerned; and(c) provide an insurance cover for not less than the amount specified in subsection (4); and(d) provide for indemnity in respect of the prescribed risks set out in subsection (5) that are attributable to the administration of the schemes by the trustee or by any service provider of the scheme (excluding losses attributable to investing the funds of the scheme in the ordinary course of business); and(e) specify a deductible amount that does not exceed the maximum amount determined under subsection (6); and(f) are governed by the law of Hong Kong.(2) For the purpose of subsection (1)(a), a person is an eligible insurer if the person’s business includes that of providing insurance and—(a) the person is specified in section 6(1) of the Insurance Ordinance (Cap. 41); or (12 of 2015 s. 131)(b) the Authority is satisfied that the person is an insurer that is able to meet its liabilities.(3) Before determining whether an insurer is able to meet its liabilities, the Authority must—(a) take into account the credit rating of the insurer as determined by an approved credit rating agency; and (b) consult the Insurance Authority.(4) For the purpose of subsection (1)(c), the amount of insurance cover is to be obtained in respect of the total managed assets of an approved trustee as follows—(a) if the market value of the total managed assets is not more than $100,000,000—30 per cent of that value;(b) if the market value of the total managed assets is more than $100,000,000 but not more than $300,000,000—$30,000,000 plus 20 per cent of that value that exceeds $100,000,000;(c) if the market value of the total managed assets is more than $300,000,000 but not more than $500,000,000—$70,000,000 plus 15 per cent of that value that exceeds $300,000,000;(d) if the market value of the total managed assets is more than $500,000,000 but not more than $1,000,000,000—$100,000,000 plus 10 per cent of that value that exceeds $500,000,000;(e) if the market value of the total managed assets is more than $1,000,000,000 but not more than $5,000,000,000—$150,000,000 plus 5 per cent of that value that exceeds $1,000,000,000;(f) if the market value of the total managed assets is more than $5,000,000,000 but not more than $10,000,000,000—$350,000,000 plus 3 per cent of that value that exceeds $5,000,000,000;(g) if the market value of the total managed assets is more than $10,000,000,000—$500,000,000.(5) For the purpose of subsection (1)(d), the prescribed risks are as follows—(a) the risk of loss of scheme assets attributable to fraudulent, wrongful or negligent acts done or omitted to be done by—(i) the approved trustee of the scheme; or(ii) a service provider appointed or engaged for the purposes of that scheme; or(iii) an employee or agent of the trustee or of the service provider;(b) the risk of loss of scheme assets kept on the premises of the trustee or service providers or at a central securities depository;(c) the risk of loss of scheme assets while they are being transported in the custody of the trustee or service providers, or of a central securities depository;(d) the risk of loss of scheme assets arising from relying on a cheque or other negotiable instrument that is forged, fraudulently altered, lost or stolen;(e) the risk of loss of scheme assets arising from the fraudulent use of a computer or from fraudulent instructions given for the transfer of those assets;(f) the risk of loss of scheme assets arising from indemnifying the trustee in accordance with the governing rules of the scheme as permitted by law.(6) For the purpose of subsection (1)(e), the maximum amount is to be determined in respect of the total managed assets of an approved trustee as follows—(a) if the market value of the total managed assets is not more than $1,000,000—$100,000;(b) if the market value of the total managed assets is more than $1,000,000, the smaller of the following amounts—(i) $500,000;(ii) an amount equal to 10 per cent of the market value of the scheme assets.(7) For the purpose of this section—(a) a reference to the total managed assets of an approved trustee is a reference to the aggregate of all scheme assets of all registered schemes administered by the trustee; and(b) a reference to a deductible amount, in relation to a policy of insurance under which the insurer is liable for only the part of a claim that exceeds a specified amount, is a reference to that amount.(8) (Repealed L.N. 223 of 2000) 9. Qualifications of an independent director A director is qualified as an independent director for the purposes of section 20(2) of the Ordinance and this Regulation only if the director—(a) is not an employee or partner of the applicant, or of an associate of the applicant; and(b) is not a director of an associate of the applicant; and(c) does not hold any shares of the applicant or of any associate of the applicant; and(d) satisfies the Authority that the director has no past or present association (financial or otherwise) with—(i) the applicant (otherwise than as a director or professional adviser); or(ii) any controller of the applicant; or(iii) any associate of the applicant or of any such controller, that could affect the impartiality of the director’s independent judgment; and(e) is not a controller (otherwise than by virtue of being a director), close relative, partner or employee of the applicant or of any associate of the applicant; and(f) is not an auditor or actuary of any provident fund scheme administered by the applicant. 10. What are assets held in Hong Kong for the purposes of this Regulation (E.R. 4 of 2019)Any of the following are assets held in Hong Kong for the purposes of this Regulation—(a) real property, including a leasehold interest in real property, located in Hong Kong; (b) computer equipment, office machinery, furniture, motor vehicles and other equipment located in Hong Kong;(c) deposits (in any currency or monetary unit) held with a Hong Kong branch of an authorized financial institution;(d) debt securities issued in Hong Kong, but only if they are transferable and registrable in a register in Hong Kong and, in the case of debt securities that are in the form of certificates, the certificates are kept in Hong Kong;(e) debt securities issued outside Hong Kong, but only if their certificates are kept in Hong Kong and are transferable by delivery (with or without endorsement);(f) negotiable instruments (including bills of exchange within the meaning of the Bills of Exchange Ordinance (Cap. 19)) that are kept in Hong Kong;(g) shares of a company, wherever incorporated and whether or not a company as defined by section 2(1) of the Companies Ordinance (Cap. 622) or a non-Hong Kong company, being shares that— (30 of 2004 s. 3; 28 of 2012 ss. 912 & 920)(i) are transferable and registrable only in a register kept in Hong Kong; or(ii) are, in the ordinary course of business, transferable and registrable in a register kept in Hong Kong and their certificates (if any) are kept in Hong Kong;(h) debts that may be enforced only by legal proceedings brought in a Hong Kong court;(i) an interest in an authorized unit trust that is realizable in Hong Kong, but only if the governing law of the trust is the law of Hong Kong. 11. Prescribed capital adequacy requirements (1) The requirements set out in this section are the prescribed capital requirements that have to be complied with by a company that applies to be or is an approved trustee of a registered scheme.(2) The prescribed capital adequacy requirements are complied with if the company—(a) has a paid up share capital of at least $150,000,000; and(b) owns net assets of at least the same amount; and(c) owns assets held in Hong Kong to the value of at least $15,000,000.(3) The prescribed capital adequacy requirements are also complied with if the company—(a) is an associate of—(i) a company or corporation that is a substantial financial institution and provides continuous financial support to the first-mentioned company; or(ii) a company or corporation having a subsidiary that is a substantial financial institution and provides continuous financial support to the first-mentioned company; and (L.N. 223 of 2000)(b) has a paid up share capital of at least $30,000,000 and owns net assets of at least the same amount; and(c) owns assets held in Hong Kong to the value of at least $15,000,000. 12. What is continuous financial support for the purposes of this Regulation (E.R. 4 of 2019)For the purposes of this Regulation, a substantial financial institution provides continuous financial support to a company that applies to be or is an approved trustee if the institution gives an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority, that the institution— (L.N. 223 of 2000; 1 of 2008 s. 3)(a) will, if so required by the Authority, subscribe sufficient additional capital of not more than $30,000,000 when the paid up share capital or net assets of the trustee or the applicant becomes less than that amount; and(b) will not, without the approval of the Authority, do any act to dispose of, or authorize the disposal or issue of, any part of the share capital or assets of the trustee or the applicant as a result of which the trustee or the applicant ceases to be an associate of the institution. (L.N. 223 of 2000) 13. What is an eligible overseas bank for the purposes of this Regulation (E.R. 4 of 2019)A bank is an eligible overseas bank for the purposes of this Regulation if—(a) it is a bank incorporated outside Hong Kong and not holding a valid banking licence under the Banking Ordinance (Cap. 155); and (5 of 2002 s. 407)(b) it satisfies a minimum credit rating set by the Authority, based on the credit rating of the bank as determined by an approved credit rating agency. Part 2 Application for Approval as Trustee 14. Definition In this Part, applicant (申請人) means an applicant for approval under section 20 of the Ordinance. 15. Eligibility for approval as trustee The Authority may approve an applicant under section 20 of the Ordinance only if the applicant satisfies the requirements of section 16, 17 or 19, as the case requires. 16. Eligibility requirements for company incorporated in Hong Kong and re-domiciled company (14 of 2025 s. 234)(1) If an applicant is a company incorporated in Hong Kong or a re-domiciled company— (14 of 2025 s. 234)(a) the applicant must be a registered trust company whose name includes the word “trust” or “trustee” if the name is in English, or the words “信託” or “受託人” if the name is in Chinese; and(b) the company must have at least 5 directors; and (c) all of the directors of the company must be natural persons; and(d) the business of the applicant must be limited to trust business.(2) The applicant must satisfy the Authority—(a) that all of the controllers of the applicant are persons of good reputation and character and, in particular, have not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty; and (b) that the chief executive officer and a majority of the directors (which must include an independent director) of the applicant have the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for the successful administration of provident fund schemes.(3) The applicant must comply with the prescribed capital adequacy requirements.(4) The applicant must have sufficient presence and control in Hong Kong.(5) An applicant has sufficient presence and control in Hong Kong if—(a) the applicant complies with subsection (6); and(b) it has sufficient expertise and management resources in Hong Kong to conduct its business operations effectively; and(c) the chief executive officer of the applicant ordinarily resides in Hong Kong.(6) An applicant complies with this subsection if—(a) the applicant’s day to day business activities relating to the applicant’s business in Hong Kong (including the keeping of its records relating to those activities) are conducted wholly in Hong Kong; or(b) where those activities are not conducted wholly in Hong Kong—(i) those activities are adequately supervised by the applicant from within Hong Kong; and(ii) sufficient records of those activities are kept at a place or places so that those records can be readily accessible in Hong Kong to enable an audit of them to be carried out. (7) The applicant must satisfy the Authority that it is capable of carrying on a business of administering registered schemes.(8) For the purpose of subsection (7), the Authority may enter and inspect the premises intended to be used by the applicant for carrying on the business of administering registered schemes.(9) The Authority may refuse the application of an applicant who fails to allow the Authority to enter and inspect the premises referred to in subsection (8). 17. Eligibility requirements for company incorporated outside Hong Kong (1) If an applicant is a company incorporated outside Hong Kong—(a) the applicant must be a non-Hong Kong company as defined by section 2(1) of the Companies Ordinance (Cap. 622), and whose name includes the word “trust” or “trustee” if the name is in English, or the words “信託” or “受託人” if the name is in Chinese; and (28 of 2012 ss. 912 & 920)(b) the objects of the company must contain some of, but not more than, those specified in section 81 of the Trustee Ordinance (Cap. 29); and (c) the company must have at least 5 directors and all of the directors of the company must be natural persons; and(d) the applicant must satisfy the Authority as to the matters specified in subsection (2).(2) The following matters are specified for the purposes of subsection (1)(d)—(a) the applicant is incorporated or registered in a jurisdiction where there are in force laws relating to corporations and trusts and that those laws are comparable to those of Hong Kong; (b) the applicant is adequately regulated under those laws and is adequately supervised by an authority established in that jurisdiction that is acceptable to the Authority;(c) that authority certifies to the Authority that the applicant is in good standing and has not contravened any requirement under the laws relating to corporations or trusts in force in that jurisdiction;(d) the business of the applicant is limited to trust business;(e) the applicant has experience in conducting business internationally, and standing as an international financial institution, that are acceptable to the Authority.(3) The applicant must designate one of its controllers to be its Hong Kong chief executive officer. The Hong Kong chief executive officer—(a) must be a natural person; and(b) must, either alone or with others, be immediately responsible to the directors of the company for the conduct of the whole of the applicant’s business in Hong Kong.(4) The applicant must satisfy the Authority—(a) that all of the controllers of the applicant are persons of good reputation and character and, in particular, have not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty; and(b) that the chief executive officer, the Hong Kong chief executive officer and a majority of the directors (which must include an independent director) of the applicant have the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for the successful administration of provident fund schemes.(5) The applicant must comply with the prescribed capital adequacy requirements.(6) The applicant must have sufficient presence and control in Hong Kong.(7) An applicant has sufficient presence and control in Hong Kong if—(a) the applicant complies with subsection (8); and (b) it has sufficient expertise and management resources in Hong Kong to conduct its business operations effectively; and(c) the Hong Kong chief executive officer of the applicant ordinarily resides in Hong Kong.(8) An applicant complies with this subsection if—(a) the applicant’s day to day business activities relating to the applicant’s business in Hong Kong (including the keeping of its records relating to those activities) are conducted wholly in Hong Kong; or(b) where those activities are not conducted wholly in Hong Kong—(i) those activities are adequately supervised by the applicant from within Hong Kong; and(ii) sufficient records of those activities are kept at a place or places so that those records can be readily accessible in Hong Kong to enable an audit of them to be carried out.(9) The applicant must satisfy the Authority that it is capable of carrying on a business of administering registered schemes.(10) For the purpose of subsection (9), the Authority may enter and inspect the premises intended to be used by the applicant for carrying on the business of administering registered schemes.(11) The Authority may refuse the application of an applicant who fails to allow the Authority to enter and inspect the premises referred to in subsection (10).(12) The applicant must give an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority, that the applicant, and all transactions relating to the administration by the applicant in Hong Kong of provident fund schemes and all disputes arising out of those transactions, will be governed by the law of Hong Kong. (1 of 2008 s. 4) 18. Auditor’s report on prescribed capital adequacy requirements (1) An applicant under section 16 or 17 must submit to the Authority, on or before such date as the Authority may specify, a written report prepared by an auditor appointed by the applicant and addressed to the applicant.(2) The report must state, in the opinion of the auditor, whether or not the applicant, as at a date agreed between the applicant and the Authority subject to subsection (3), complies with the prescribed capital adequacy requirements.(3) The date referred to in subsection (2) must be on or before the date on which the Authority approves the applicant’s application.(4) The report may include such observations, elaborations, qualifications or explanations as the auditor considers necessary.(5) If the Authority requires an applicant to rectify a matter relating to any of those observations, elaborations, qualifications or explanations, the applicant must submit to the Authority, before the end of the period within which the Authority has allowed for the matter to be rectified, a second report prepared by the same auditor who prepared the report referred to in subsection (1).(6) The second report must state whether or not, in the opinion of the auditor, the matter relating to the observations, elaborations, qualifications or explanations included by the auditor in the written report has been rectified. 19. Eligibility requirements for natural persons An applicant who is a natural person must—(a) ordinarily reside in Hong Kong; and(b) satisfy the Authority that the applicant is a person of good reputation and character and, in particular, has not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty. 20. Applicant’s other business compatible with interests of scheme members (1) The Authority may approve the application of an applicant only if it is of the opinion that all businesses carried on by the applicant (other than the business of administering provident fund schemes) are compatible with the interests of members of provident fund schemes administered by the applicant.(2) Subsection (1) applies even though the applicant is able to comply with the other provisions of this Part and with the requirements of the Authority made under this Part. Part 3 Registration of Schemes 21. Definitions (1) In this Part—applicant (申請人), in relation to a provident fund scheme, means the applicant for the scheme to be registered in accordance with section 21 or 21A of the Ordinance and, if an application is made by 2 or more trustees, means those trustees jointly;the scheme (計劃), in relation to the application made by an applicant, means the provident fund scheme to which the application relates.(2) A reference to an approved trustee, in relation to an application to register a provident fund scheme other than as an industry scheme, includes a reference to a natural person or company that has applied for approval as an approved trustee under section 20 of the Ordinance. 22. Undertaking to comply with requirements and standards An applicant must give an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority, that the applicant will ensure that, as far as reasonably practicable, the requirements and standards prescribed in Part 4 will be complied with in relation to the provident fund scheme concerned if it is registered.(1 of 2008 s. 5; E.R. 1 of 2013) 23. Application requirements (1) An application for registration of a provident fund scheme must be signed—(a) if the applicant is or includes a company, by at least 2 directors of the company; and(b) if the applicant consists wholly of natural persons, by at least 2 of those persons, including the independent trustee.(2) If an application is made by persons all of whom are natural persons, each of those persons (other than an independent trustee) must be a member or prospective member of the scheme.(3) If an application is made by persons of whom one or more are companies and the others are natural persons, each of those natural persons must be a member or prospective member of the scheme.(4) An application to register a provident fund scheme as an employer sponsored scheme must include particulars of the employer sponsoring the scheme.(5) A person is an independent trustee for the purposes of section 21(3) of the Ordinance if the person—(a) is not a controller, close relative, partner or employee of the employer sponsoring the scheme or of an associate of that employer; and(b) where the employer sponsoring the scheme is a company, does not hold any shares of the company or of an associate of the company; and(c) satisfies the Authority that the person has the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for a person to administer provident fund schemes; and(d) satisfies the Authority that the person has no past or present association (financial or otherwise) with—(i) the employer sponsoring the scheme; or(ii) a controller of that employer; or(iii) an associate of that employer or of such a controller, that could affect the impartiality of the person’s independent judgment; and(e) is not an auditor or actuary of the scheme.(6) If an application is made by persons any of whom are natural persons, each of those natural persons must produce to the Authority a performance guarantee or satisfy the Authority that the trustee will have entered into such a guarantee before the scheme begins to operate.(7) A performance guarantee relating to a person—(a) must be issued in writing by an authorized financial institution or authorized insurer; and(b) must impose a continuing obligation on the authorized financial institution or authorized insurer to indemnify the scheme against any loss sustained by the scheme or the scheme members as a result of—(i) a failure by the person concerned to perform a duty imposed on approved trustees by or under the Ordinance; or(ii) a breach of any fiduciary duties on the part of the person concerned; and (c) must be governed by the law of Hong Kong; and(d) may allow the guarantor to terminate its obligation under the guarantee only by giving not less than 30 days’ written notice in advance to the Authority and to the person concerned.(8) The liability of the authorized financial institution or authorized insurer under the obligation referred to in subsection (7)(b) must be at least $10,000,000 or an amount equivalent to 10 per cent of the net asset value of the scheme, whichever is the less.(9) The applicant must also ensure there is in force, or arrangements have been made to enter into, adequate insurance that will indemnify scheme members against losses that the members could incur as a result of the administration of the scheme by the applicant or by any service provider appointed or engaged to provide services for the purposes of the scheme. 24. Application to include statement of investment policy (1) An application must include a statement setting out the investment policy (including the investment objectives) of the scheme.(2) The statement of investment policy must include sufficient information to enable scheme members to ascertain in relation to each constituent fund of the scheme—(a) the investment objectives of the fund; and(b) the policy as to the kinds of securities and other assets in which the fund may be invested; and(c) the policy as to the balance between different kinds of securities and other assets of the fund; and(d) the policy regarding the acquisition, holding and disposal of financial futures contracts and financial option contracts for the purposes of the fund; and(e) the risks inherent in implementing the policies referred to in paragraphs (b), (c) and (d) and the return expected to result from giving effect to those policies. 25. Notice of registration of industry scheme (1) The Authority must publish in the Gazette, within 7 days after an industry scheme is registered under section 21A of the Ordinance, a notice of that registration.(2) For the purposes of section 21A(11) of the Ordinance, the notice referred to in subsection (1) must contain the following particulars—(a) the name of the scheme;(b) the name and address of the approved trustee of the scheme;(c) the type of industry to which the scheme relates;(d) the documents to be provided by an employer who applies to participate in the scheme; (e) the documents to be provided by a self-employed person who applies to become a member of the scheme. Part 4 Requirements and Standards for Registered Schemes 26. Operation of this Part The requirements and standards set out in sections 27 to 41 are the requirements and standards prescribed for the purposes of section 21C of the Ordinance. 27. Eligibility of approved trustees of employer sponsored scheme (1) If all the approved trustees of an employer sponsored scheme are natural persons, at least one of those trustees must be an independent trustee and the others must be members of the scheme.(2) If one or more of the approved trustees of an employer sponsored scheme are companies and the others are natural persons, each of the natural persons must either be an independent trustee or a member of the scheme.(3) A person is an independent trustee for the purposes of this Part only if the person continues to satisfy the requirements set out in section 23(5). 28. (Repealed 18 of 2008 s. 32) 29. Maintenance of adequate insurance (1) There must be in force in respect of a registered scheme adequate insurance that will indemnify scheme members against losses that the members could incur as a result of the administration of the scheme by the trustee or by any service provider appointed or engaged to provide services for the purposes of the scheme.(2) The insurance relating to the scheme must provide that it may be terminated by the insurer only if the insurer gives not less than 30 days’ written notice in advance to the trustee or the service provider by whom the insurance was entered into. 30. Maintenance of valid performance guarantee (1) A valid performance guarantee of a kind referred to in section 23(6) must be maintained in respect of an approved trustee of a registered scheme who is a natural person.(2) On receipt of a notice referred to in section 23(7)(d), another performance guarantee that complies with section 23(7) and (8) must be obtained before the current guarantee terminates. 31. Non-refusal of scheme applicants and notice of participation (1 of 2015 s. 22)(1) An application for membership of a registered scheme that is made by or on behalf of a relevant employee of a participating employer, or by a self-employed person who is 18 years of age or over and below retirement age, must not be refused if that employee or person— (2 of 2002 s. 21)(a) provides or is willing to provide the information required by the approved trustee with respect to such applications for membership of the scheme; and (L.N. 223 of 2000)(b) agrees in writing to comply with the governing rules of the scheme.(1A) An application for participation in a registered scheme that is made by or on behalf of an employer must not be refused if that employer—(a) provides or is willing to provide the information required by the approved trustee with respect to applications for participation; and(b) agrees in writing to comply with the governing rules of the scheme. (L.N. 223 of 2000)(1B) An application for membership of a registered scheme that is made by a person only for the purpose of maintaining a personal account within the scheme must not be refused if that person— (11 of 2009 s. 12)(a) provides or is willing to provide the information required by the approved trustee with respect to such applications for membership of the scheme; and(b) agrees in writing to comply with the governing rules of the scheme. (L.N. 223 of 2000)(2) The following information must be disclosed to a person who is considering making an application to become a scheme member or participating employer— (L.N. 223 of 2000)(a) the requirements and information required for application for membership of or participation in the scheme; (L.N. 223 of 2000)(b) the governing rules of the scheme;

(c) scheme information, including all of the fees and charges payable under the scheme.(3) The information referred to in subsection (2)(c) must include (but is not limited to) the actual amounts of the annual fees payable in respect of—(a) scheme members of the different income levels prescribed by the guidelines; and(b) participating employers of the different scales of operation prescribed by the guidelines.(4) An applicant for membership of or participation in a registered scheme must be given a notice of participation that complies with subsection (4A) within 30 days after whichever is the later of the following dates—(a) the date on which all the information required for the application is submitted;(b) the date on which the applicant agrees to comply with the governing rules of the scheme. (1 of 2015 s. 22)(4A) A notice of participation must specify—(a) the name of the scheme;(b) the name of the approved trustee of the scheme;(c) either—(i) if the trustee is a natural person who does not have a place of business in Hong Kong, the trustee’s residential address; or(ii) in any other case, the address of the trustee’s principal place of business in Hong Kong;(d) the name of the scheme member or the participating employer (as the case may be); and(e) the date of issue of the notice. (1 of 2015 s. 22)(5) The membership of a scheme member may be terminated by the approved trustee only in accordance with the governing rules of the scheme and—(a) in the case of a scheme member who is a relevant employee, with the written agreement of that member or the participating employer of that member given not earlier than 60 days before the termination; (7 of 2019 s. 17)(b) in the case of a scheme member who is a self-employed person or former self-employed person, and who is 18 years of age or over and below retirement age, with the written agreement of that member given not earlier than 60 days before the termination; or (L.N. 223 of 2000; 2 of 2002 s. 21; 7 of 2019 s. 17)(c) in the case of a scheme member with a TVC account, with the written agreement of that member given not earlier than 60 days before the termination. (7 of 2019 s. 17)(5A) Subsection (5)(c) does not apply in relation to termination by the approved trustee if at termination the TVC account—(a) has no accrued benefits; and(b) has had no activity for 365 days. (7 of 2019 s. 17)(6) The participation of an employer may be terminated by the approved trustee only in accordance with the governing rules of the scheme and with the written agreement of the participating employer given not earlier than 60 days before the termination. (L.N. 223 of 2000)(7) In respect of a scheme member whose accrued benefits are being or have been transferred pursuant to Part 12, no fees may be charged and, subject to section 34, no financial penalties may be imposed and no other restrictions or requirements shall be applied to prevent or to hinder the relevant participating employer or the scheme member from terminating his participation in the registered scheme of the transferor trustee or the liability to contribute to that registered scheme. (L.N. 223 of 2000; 11 of 2009 s. 12)(E.R. 1 of 2013) 32. Acceptance of contributions etc. (18 of 2008 s. 16)(1) All contributions and contribution surcharges paid to the approved trustee of a registered scheme in accordance with the Ordinance or a court order made under section 43BA of the Ordinance must be accepted by the trustee. (18 of 2008 s. 16)(2) Accrued benefits transferred to the scheme from another registered scheme in accordance with this Regulation, or benefits transferred to the scheme from an occupational retirement scheme exempted under section 5 of the Ordinance, must also be accepted. (18 of 2008 s. 16) 33. Requirements with respect to voluntary contributions (1) Accrued benefits derived from the voluntary contributions must not be paid by the approved trustee of a registered scheme otherwise than by reference to those contributions and the income or profits derived from their investment.(2) The governing rules of the scheme must provide—(a) that participating employers are obliged, on request by any of their employees who are members of the scheme, to pay to the trustee of the scheme any voluntary contribution made by those employees; and(b) if a participating employer elects to make voluntary contributions in respect of any employees who are members of the scheme, that those contributions will become vested in those employees as accrued benefits in accordance with the governing rules of the scheme; and(c) if an employee or a self-employed person who is a member of a registered scheme elects to make voluntary contributions, that those contributions will become vested in full as accrued benefits in that employee or self-employed person when the contributions are received by the approved trustee of the scheme.(3) If a member of the scheme so requests, accrued benefits derived from voluntary contributions made by or in respect of the member must be paid to the member as provided by the governing rules of the scheme. Where any of those voluntary contributions are required to be made by the scheme member’s employer, then the governing rules of the scheme must, not later than 6 months after the commencement* of this subsection, provide for the payment of any accrued benefits derived from voluntary contributions if the employer has failed to make such a required voluntary contribution to the scheme within 6 months after—(a) if the amount of the voluntary contributions required to be made by the employer is determined by reference to the income derived from the employee’s employment with the employer, the end of the period covered by the payment of such income;(b) if the amount of the relevant contributions required to be made by the employer is determined by reference to a period of employment of the employee with the employer, the end of such period. (2 of 2002 s. 21) Editorial Note: * Commencement date: 1 December 2000. 34. No fees etc. for transfer of accrued benefits other than necessary transaction costs (11 of 2009 s. 13)(1) No fees or financial penalties may be charged to or imposed on a scheme member, or deducted from the member’s account, for transferring accrued benefits— (11 of 2009 s. 13; 1 of 2015 s. 23; 40 of 2021 s. 51)(a) from a registered scheme to another registered scheme;(b) from an account within a registered scheme to another account within the same registered scheme; or(c) in the same account within a registered scheme, from a constituent fund to another constituent fund,other than an amount representing the necessary transaction costs that are incurred, or reasonably likely to be incurred, by the approved trustee in selling or purchasing investments in order to give effect to the transfer and are payable to a party other than that approved trustee. (11 of 2009 s. 13)(2) Subsection (1) applies subject to section 35. (40 of 2021 s. 51) 35. No fees etc. for transfer of accrued benefits in certain circumstances (1) If contributions have ceased to be paid to a registered scheme by or on behalf of a scheme member, no fees or financial penalties (other than the amount described in subsection (1A)) may be charged to or imposed on the member, or deducted from the member’s account, for the transfer of the member’s accrued benefits to another scheme or from one account to another account within the scheme. (1 of 2015 s. 24)(1A) The amount is an amount representing the necessary transaction costs that—(a) are incurred, or reasonably likely to be incurred, by the approved trustee in selling or purchasing investments in order to give effect to the transfer; and(b) are payable to a party other than that approved trustee. (1 of 2015 s. 24)(2) Subsection (1) applies only to the first transfer of those benefits made in respect of the member and only if—(a) that transfer is made within not more than 12 months after the date on which the contributions ceased to be paid; and(b) the amount of those benefits, at the time of the transfer, does not exceed $5,000. 35A. No fees etc. for payment of accrued benefits in lump sum other than necessary transaction costs (1) No fees or financial penalties (other than the amount described in subsection (2)) may be charged to or imposed on a scheme member, or deducted from the member’s account, for the payment of the member’s accrued benefits in a lump sum.(2) The amount is an amount representing the necessary transaction costs that—(a) are incurred, or reasonably likely to be incurred, by the approved trustee in selling or purchasing investments in order to give effect to the payment; and(b) are payable to a party other than that approved trustee.(1 of 2015 s. 25) 35B. Payment of accrued benefits by instalments (1) This section applies if a scheme member is entitled to be paid the accrued benefits by instalments.(2) The approved trustee of the scheme must act according to any written instructions regarding the time, frequency or amount of payment of the member’s accrued benefits by instalments that the member may give under the governing rules of the scheme if—(a) the instructions are given in a form specified or approved by the Authority; and(b) 30 days have passed since the member gave those instructions to the approved trustee.(3) No fees or financial penalties (other than the amount described in subsection (4)) may be charged to or imposed on the member, or deducted from the member’s account, for the payment of the member’s accrued benefits by instalments in any year for the first 4 instalments of that year.(4) The amount is an amount representing the necessary transaction costs that—(a) are incurred, or reasonably likely to be incurred, by the approved trustee in selling or purchasing investments in order to give effect to the payment; and(b) are payable to a party other than that approved trustee.(1 of 2015 s. 25) 36. Scheme may consist of 3 or more constituent funds (9 of 2016 s. 13)(1) A registered scheme may consist of 3 or more constituent funds. (9 of 2016 s. 13)(2)-(7) (Repealed 1 of 2015 s. 26) 37. Provisions relating to capital preservation fund (1) At least one of the constituent funds of a registered scheme must be a capital preservation fund.(2) A capital preservation fund—(a) may be invested only—(i) by placing it on deposit in accordance with section 11 of Schedule 1, but only for a term not exceeding 12 months; or(ii) in debt securities with a remaining maturity period of 2 years or less and of a kind referred to in section 7(2)(a) or (b) of Schedule 1; or(iii) in debt securities with a remaining maturity period of 1 year or less and that satisfy the minimum credit rating set by the Authority, based on the credit rating of the securities as determined by an approved credit rating agency; and (1 of 2008 s. 49)(b) must have an average portfolio remaining maturity period of not more than 90 days; and(c) must have a total value of Hong Kong dollar currency investments equal to the total market value of the fund, as measured by the effective currency exposure, in accordance with section 16 of Schedule 1; and(d) must operate as a unit trust, or as a unitized insurance policy issued by an authorized insurer.(3) After taking into account any losses arising from the investment of the funds comprising a capital preservation fund, all income and profits derived from the investment of those funds must be credited to the scheme members concerned at least once each month.(4) Amounts may be deducted from the account of a scheme member whose accrued benefits form part of a capital preservation fund only as provided by subsections (5) to (7).(5) If the approved trustee of a registered scheme some or all of the funds of which comprise a capital preservation fund is required to pay a levy under section 17(3) of the Ordinance, such amount as may be necessary to enable the trustee to pay the levy may be deducted from the account of each scheme member whose accrued benefits form part of that fund. The amount is to be calculated as follows— A = L × MAB CPA where— A represents the amount to be calculated; L represents the amount of the levy; MAB represents the member’s accrued benefits that form part of the capital preservation fund; CPA represents the total funds comprising the capital preservation fund. (6) If—(a) funds attributable to a scheme member form part of a capital preservation fund; and(b) the amount of the income and profits derived from the investment of those funds for a particular month exceeds the amount of interest that would be earned if those funds had been placed on deposit in a Hong Kong dollar savings account at the prescribed savings rate, an amount not exceeding the excess may be deducted from the member’s accrued benefits as scheme administrative expenses for that month.(7) However, if for a particular month no amount is deducted as administrative expenses under subsection (6), or the amount of administrative expenses that is deducted under that subsection is less than the amount of administrative expenses for the month, the deficiency may be deducted from the amount of any excess that may remain in respect of any of the following 12 months after deducting the administrative expenses applicable to that following month.(8) In this section—authorized financial institution (認可財務機構) means an authorized financial institution belonging to a class specified by the Authority from time to time for the purposes of this subsection by notice published in the Gazette; (L.N. 223 of 2000)Hong Kong dollar savings account (港元儲蓄帳戶) means a Hong Kong dollar savings account established by an authorized financial institution;prescribed savings rate (訂明儲蓄利率) means the rate prescribed by the Authority for the purposes of this subsection by notice published in a manner that the Authority considers appropriate as— (9 of 2016 s. 14)(a) the rate at which interest is for the time being payable in respect of a Hong Kong dollar savings account; or(b) if different authorized financial institutions pay interest on Hong Kong dollar savings accounts at different rates, the rate determined by the Authority as the average of those rates. 38. Statement of investment policy to be maintained in respect of each registered scheme (1) A statement of investment policy must be prepared and maintained in respect of each registered scheme.(2) The statement of investment policy must include sufficient information to enable scheme members to ascertain in relation to each constituent fund of the scheme—(a) the investment objectives of the fund; and(b) the policy as to the kinds of securities and other assets in which the fund may be invested; and(c) the policy as to the balance between different kinds of securities and other assets of the fund; and(d) the policy regarding the acquisition, holding and disposal of financial futures contracts and financial option contracts for the purposes of the fund; and(e) the risks inherent in implementing the policies referred to in paragraphs (b), (c) and (d) and the return expected to result from giving effect to those policies. 39. Control objectives and internal control procedures to be maintained for each registered scheme (1) Control objectives that comply with subsection (2) must be established for each registered scheme and be maintained at all times while the scheme is registered.(2) For the purposes of subsection (1), the control objectives of a registered scheme must include (but are not limited to) the following—(a) ensuring that the scheme assets are safeguarded in the interests of scheme members;(b) ensuring that the guidelines made by the Authority under section 28 of the Ordinance with respect to forbidden investment practices are not contravened;(c) ensuring that the limitations and prohibitions imposed under this Regulation with respect to the investment of the funds of the scheme in restricted investments are complied with;(ca) ensuring that the following provisions of the Ordinance are complied with in relation to the scheme—(i) section 27(2A);(ii) section 34DB(1)(a), (b), (c) and (d);(iii) (Repealed 40 of 2021 s. 52)(iv) section 34DD(1) and (4);(v) section 34DH(1) or (2);(vi) section 34DI(1) and (2);(vii) section 34DJ(2), (3), (4) and (5);(viii) section 34DK(2);(ix) section 34DM; (9 of 2016 s. 15)(d) ensuring that the requirements of sections 37(2), 51 and 52 and Schedule 1 with respect to permissible investments are complied with in relation to the scheme;(e) ensuring that the funds of the scheme and the scheme assets are, except as permitted by this Regulation, kept separate from those of the participating employers and of the approved trustee of the scheme and of the service providers and other persons appointed or engaged for the purposes of the scheme.(3) Internal control measures for achieving the control objectives of each registered scheme must be established for the scheme and must be maintained and complied with at all times while the scheme is registered.(4) Those internal control measures must include procedures for—(a) monitoring investments to ensure that the control objectives referred to in subsection (2)(b), (c) and (d) are achieved; and(b) monitoring the assets and liabilities of the scheme to ensure the objective referred to in subsection (2)(e) is achieved, so that the funds of the scheme and the scheme assets are kept separate from those of the participating employers, the trustee and any other persons (such as service providers); and(c) ensuring the accuracy of statements, returns and reports required to be lodged with the Authority.(5) The control objectives and internal control measures established and maintained for the scheme may be amended, and fresh control objectives or internal control measures may be substituted, as and when necessary.(6) This section is not required to be complied with during a financial period of an employer sponsored scheme if—(a) it has no more than 1 000 members throughout the immediately preceding financial period of the scheme; or(b) is exempted by the Authority under subsection (7).(7) The Authority may grant an exemption for the purposes of subsection (6) if satisfied that—(a) for a substantial portion of the immediately preceding financial period of the scheme, the scheme had no more than 1 000 members; or(b) the scheme will not have, or is unlikely to have, more than 1 000 members during the current financial period of the scheme. 40. Investment standards to be complied with (1) The funds of a registered scheme may be invested only—(a) in the investments permitted under Part 5 and Schedule 1; and(b) in accordance with that Part and that Schedule.(2) An investment manager appointed in relation to the scheme by the approved trustee of the scheme is required to comply with Part 5 and Schedule 1.(E.R. 1 of 2013) 41. Requirements with respect to particulars specified in application for registering industry scheme In the case of an industry scheme, the particulars of the scheme that were specified in the application under section 21A of the Ordinance and approved or modified by the Authority must be complied with after the scheme has been registered. 42. Offence for approved trustee who fails to ensure compliance with certain requirements and standards An approved trustee of a registered scheme who fails to comply with section 38, 39 or 40 commits an offence and is liable on conviction to a fine at level 5. 42AA. Transitional provisions for Part 4—Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1) Section 31(4) applies in relation to an application for membership of, or participation in, a registered scheme with a relevant date that is before the commencement date if, on the commencement date—(a) the period of 30 days from the relevant date has yet to expire; and(b) the applicant has not been given a notice of acceptance under section 31(4) of the pre-amended Regulation.(2) In this section—*commencement date (生效日期) means the date on which section 22 of the Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1 of 2015) comes into operation;pre-amended Regulation (《未修訂規例》) means this Regulation as in force immediately before the commencement date; relevant date (有關日期), in relation to an application for membership of, or participation in, a registered scheme, means whichever is the later of the following dates— (a) the date on which all the information required for the application is submitted; (b) the date on which the applicant agrees to observe and accept the governing rules of the scheme. (1 of 2015 s. 27) Editorial Note: * Commencement date: 1 August 2015. Part 4A Provisions Relating to Controllers of Approved Trustees (Part 4A added 18 of 2008 s. 33) 42A. Application and interpretation (1) This Part applies in relation to an approved trustee that is a company.(2) In this Part—relevant date (有關日期) means the date of commencement* of this Part;shadow director (幕後董事), in relation to an approved trustee that is a company, means a person described in paragraph (b) of the definition of controller in section 2(1) of the Ordinance;substantial shareholder (大股東), in relation to an approved trustee that is a company, means a person described in paragraph (d) or (e) of the definition of controller in section 2(1) of the Ordinance.Editorial Note:* Commencement date: 1 December 2008. 42B. Authority’s consent required in respect of appointment of officers (1) An approved trustee must not, on or after the relevant date, appoint a person to be an officer of the trustee unless the Authority has, on the application of the trustee, given prior written consent to the person’s becoming such an officer.(2) An application for the consent of the Authority under this section must—(a) be in a form approved by the Authority; and(b) contain such information, and be accompanied by such documents, as are specified in the form.(3) The Authority may only give consent if it is satisfied as to the following—(a) that the person in relation to whom the application is made is of good reputation and character and, in particular, has not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty;(b) where the person proposes to become a chief executive officer or a Hong Kong chief executive officer, that the person has the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for the successful administration of provident fund schemes;(c) where the person proposes to become a director, if consent is given, that a majority of the directors (which must include an independent director) of the approved trustee have the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for the successful administration of provident fund schemes.(4) The Authority may give its consent subject to such reasonable conditions as the Authority may impose on the approved trustee, and may at any time by notice in writing served on the trustee, amend or revoke any such conditions or impose new conditions as may be reasonable in the circumstances.(5) An approved trustee must, on becoming aware that an appointment has been made in contravention of subsection (1), terminate the appointment.(6) Where the office of a director of an approved trustee becomes vacant with the result that—(a) the number of directors falls below the minimum number prescribed in section 16(1)(b) or 17(1)(c), as appropriate; or(b) the number of directors (which must include an independent director) who have satisfied the Authority that they have the skill, knowledge, experience and qualifications that are, in the opinion of the Authority, necessary for the successful administration of provident fund schemes does not exceed half of the total number of directors, the trustee must apply to the Authority for its consent to the appointment of a replacement director within 30 days after the vacancy arises.(7) Where an approved trustee has only one chief executive officer or Hong Kong chief executive officer and the office of the chief executive officer or Hong Kong chief executive officer becomes vacant, the trustee must apply to the Authority for its consent to the appointment of a replacement chief executive officer or Hong Kong chief executive officer, as appropriate, within 30 days after the vacancy arises. 42C. Authority’s consent required in respect of persons proposing to become shadow directors (1) A person must not, on or after the relevant date, become a shadow director of an approved trustee unless the Authority has, on the application of the trustee, given prior written consent to the person’s becoming such a shadow director.(2) An application for the consent of the Authority under this section must—(a) be in a form approved by the Authority; and(b) contain such information, and be accompanied by such documents, as are specified in the form.(3) The Authority may only give consent if it is satisfied that the person in relation to whom the application is made is of good reputation and character and, in particular, has not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty.(4) The Authority may give its consent subject to such reasonable conditions as the Authority may impose on the approved trustee and the person proposing to become a shadow director of the approved trustee, and may at any time by notice in writing served on the trustee or shadow director, amend or revoke any such conditions or impose new conditions as may be reasonable in the circumstances.(5) A person who becomes a shadow director of an approved trustee in contravention of subsection (1) must not give instructions to any director of the trustee.(6) If a person gives instructions to a director of an approved trustee in contravention of subsection (5), the director must, within 3 specified working days after receiving the instructions, by notice in writing inform the Authority. (9 of 2016 s. 16) 42D. Authority’s consent required in respect of persons proposing to become substantial shareholders (1) A person must not, on or after the relevant date, become a substantial shareholder of an approved trustee unless the Authority has, on the application of the trustee, given prior written consent to the person’s becoming such a substantial shareholder.(2) Where a person—(a) becomes a substantial shareholder of an approved trustee in contravention of subsection (1);(b) did not know the act or circumstances by virtue of which he became such a substantial shareholder were such as to have that effect; and(c) subsequently becomes aware of the fact that he has become such a shareholder, he must, within 3 specified working days after becoming aware of that fact, serve a notice in writing on the trustee and the Authority stating that he has become such a shareholder. (9 of 2016 s. 17)(3) An approved trustee must, within 3 specified working days after becoming aware that a person has become its substantial shareholder in contravention of subsection (1), apply to the Authority for its consent to the person’s continuing to be its substantial shareholder. (9 of 2016 s. 17)(4) An application for the consent of the Authority under this section must—(a) be in a form approved by the Authority; and(b) contain such information, and be accompanied by such documents, as are specified in the form.(5) The Authority may only give consent if it is satisfied that the person in relation to whom the application is made is of good reputation and character and, in particular, has not been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty.(6) The Authority may give its consent subject to such reasonable conditions as the Authority may impose on the approved trustee and the person who has become or is proposing to become a substantial shareholder of the approved trustee, and may at any time by notice in writing served on the trustee or substantial shareholder, amend or revoke any such conditions or impose new conditions as may be reasonable in the circumstances.(7) Subject to subsection (9), a person who becomes a substantial shareholder of an approved trustee in contravention of subsection (1) must not exercise or purport to exercise any voting rights in respect of the person’s shares specified in subsection (8).(8) The shares referred to in subsection (7) are—(a) where the person concerned is a natural person, all the shares in the trustee that are held by the person or his associate, close relative or employee, or by a company of which the person is a director, or by his nominee, and by virtue of which the person is a substantial shareholder of the trustee, but does not include any such shares so held immediately before the person became such a shareholder; or(b) where the person concerned is a company, all the shares in the trustee that are held by the company, its associate or an employee of its associate, or by its nominee, and by virtue of which the company is a substantial shareholder of the trustee, but does not include any such shares so held immediately before the person became such a shareholder.(9) Subsection (7) ceases to apply in relation to the shares of a substantial shareholder if an application made in relation to him under subsection (3) is approved by the Authority. 42E. Authority may object to existing controllers (1) The Authority may serve a notice on a controller of an approved trustee, other than a person who has become such a controller in contravention of this Part, objecting to his continuing to be a controller of the trustee on the ground that—(a) he—(i) is no longer a person of good reputation and character; or(ii) has been found guilty, whether in Hong Kong or elsewhere, of an offence involving fraud or dishonesty; and(b) his continuing to be a controller of the trustee is not in the interests of the members of the scheme administered by the trustee.(2) The Authority must, before serving a notice of objection on a controller, serve a preliminary notice in writing on him stating—(a) that the Authority intends to serve a notice of objection on him;(b) the ground on which the Authority intends to serve the notice; and(c) that he may make representations in writing to the Authority within 1 month from the date of service of the preliminary notice.(3) The Authority must take into consideration any representations made in the manner specified in subsection (2)(c) before serving a notice of objection.(4) The Authority is not obliged to disclose to the controller or approved trustee any particulars of the ground on which the Authority intends to serve, or serves, a notice of objection on the controller.(5) The Authority must—(a) include in the notice of objection the ground on which the Authority serves the notice; and(b) specify in the notice the date from which the controller is to cease to be a controller of the approved trustee (specified date).(6) When the Authority serves a notice of objection, the Authority must also serve a copy of the notice on the approved trustee concerned.(7) Where a notice of objection is served on an officer of an approved trustee, the trustee must, not later than the specified date, terminate his appointment with effect from the specified date.(8) An approved trustee is not required to comply with subsection (7) if the officer has tendered his resignation and the resignation takes effect on or before the specified date.(9) Where a notice of objection is served on a shadow director of an approved trustee, the shadow director must not give instructions to any director of the trustee from the specified date.(10) If a person gives instructions to a director of an approved trustee in contravention of subsection (9), the director must, within 3 specified working days after receiving the instructions, by notice in writing inform the Authority. (9 of 2016 s. 18) 42F. Authority’s power to give directions in relation to substantial shareholders (1) The power under subsection (2) is exercisable where—(a) a person has become a substantial shareholder of an approved trustee in contravention of section 42D;(b) a notice of objection is served on a substantial shareholder of an approved trustee under section 42E; or(c) a person continues to be a substantial shareholder of an approved trustee despite a notice of objection served on him under section 42E.(2) The Authority may by notice in writing direct the approved trustee to do any one or more of the following—(a) not to permit or acquiesce in the involvement of the substantial shareholder concerned in the management of the business of the trustee;(b) to deem void and of no effect any votes cast by the substantial shareholder concerned and any of the persons specified in subsection (3) at any meeting of the trustee;(c) to reconvene any such meeting for voting anew on the business on which the votes were cast;(d) to take such other reasonable steps as it may specify in the notice.(3) The persons referred to in subsection (2)(b) are—(a) a person who is a connected person of the substantial shareholder concerned and who, together with the shareholder, controls at least 15% of the voting shares of the approved trustee; and(b) a person who is a nominee of the substantial shareholder concerned and through whom the shareholder controls at least 15% of the voting shares of the approved trustee.(4) For the purposes of subsection (3)(a), connected person (有關連者)—(a) in relation to a substantial shareholder who is a natural person, means his associate, close relative or employee or a company of which he is a director; and(b) in relation to a substantial shareholder who is a company, means its associate or an employee of its associate.(5) Without prejudice to the operation of subsection (2), where a person has become a substantial shareholder of an approved trustee in contravention of section 42D, the Authority may by notice in writing direct the substantial shareholder—(a) to reduce, within such reasonable time as the Authority may require, the interest in shares by virtue of which he became a substantial shareholder of the trustee to the extent that he is no longer a substantial shareholder of the trustee; and(b) to take such other reasonable steps as the Authority may specify in the notice.(6) Without prejudice to the operation of subsection (2), where the Authority serves a notice of objection on a substantial shareholder of an approved trustee under section 42E, the Authority may by notice in writing, given at the same time as the notice of objection is served or at a later date, direct the substantial shareholder—(a) to reduce, within such reasonable time as the Authority may require, the interest in shares by virtue of which he is a substantial shareholder of the trustee to the extent that he is no longer a substantial shareholder of the trustee; and(b) to take such other reasonable steps as the Authority may specify in the notice.(7) If a person fails to comply with any direction under subsection (2), (5) or (6), the Authority may, by originating summons or originating motion, make an application to the Court in respect of the failure, and the Court may inquire into the case and—(a) if the Court is satisfied that there is no reasonable excuse for the person not to comply with the direction, order the person to comply with the direction within the period specified by the Court; and(b) if the Court is satisfied that the failure was without reasonable excuse, punish the person, and any other person knowingly involved in the failure, in the same manner as if he and, where applicable, that other person had been guilty of contempt of court.(8) An originating summons under subsection (7) must be in Form No. 10 in Appendix A to the Rules of the High Court (Cap. 4 sub. leg. A). Part 5 Functions of Approved Trustees 43. Approved trustee’s general duties with respect to administration of scheme The approved trustee of a registered scheme must perform the following duties with respect to the administration of the scheme—(a) the duty to exercise a level of care, skill, diligence and prudence that may reasonably be expected of a prudent person who is acting in a similar capacity and who is familiar with the operation of registered schemes;(b) the duty to make use of all relevant knowledge and skill that the trustee may be reasonably expected to have because of the trustee’s business or occupation;(c) the duty to ensure that the funds of the scheme are invested in different investments so as to minimize the risk of losses of those funds, unless in particular circumstances it is prudent not to do so;(d) the duty to act in the interest of the scheme members and not in the trustee’s own interest;(e) the duty to act in accordance with the governing rules of the scheme;(f) the duty to supervise and exercise proper control over all service providers appointed or engaged for the purposes of the scheme. 44. Approved trustee to appoint investment manager (1) The approved trustee of a registered scheme must ensure that—(a) an investment manager is appointed to manage the investment of the funds of the scheme; and(b) the contract for the appointment of the investment manager complies with Schedule 2.(2) The trustee does not have to comply with subsection (1) in relation to a constituent fund of the scheme if—(a) the accrued benefits of the constituent fund are invested only in a single approved pooled investment fund, or in a single approved index-tracking collective investment scheme, that is specified in the offering document; or(b) the trustee has obtained the prior approval of the Authority that compliance with subsection (1) is not required in relation to the fund. (1 of 2008 s. 35)(3) A person is eligible to be appointed as an investment manager only if the person—(a) is a company incorporated in Hong Kong or a re-domiciled company; and (14 of 2025 s. 235)(b) has a paid up share capital of not less than $10,000,000 and net assets of at least the same amount; and(c) is a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in asset management under Part V of the Securities and Futures Ordinance (Cap. 571). (5 of 2002 s. 407)(4) In appointing an investment manager, the trustee must ensure that—(a) the selection and appointment of the investment manager is recorded in writing; and(b) there is no conflict of interest between the investment manager and other persons who have a contractual relationship with the trustee, or any other trustee, that could prejudice the interests of scheme members; and(c) the investment manager has the resources (including human resources) necessary to carry on business as an investment manager; and(d) the investment manager has in place adequate controls and safeguards with respect to the investment of funds of the scheme so as to ensure that the interests of scheme members will be properly protected.(5) The trustee may appoint a person as an investment manager in respect of the scheme only if the person is independent of the trustee and of the custodian of the scheme assets and of any delegate of the custodian. (L.N. 223 of 2000)(6) In subsection (2), approved index-tracking collective investment scheme (核准緊貼指數集體投資計劃) means an index-tracking collective investment scheme within the meaning of section 1 of Schedule 1 that is approved by the Authority for the purposes of section 6A of that Schedule. (1 of 2008 s. 35) 45. Delegation of investment management functions (1) The approved trustee of a registered scheme must ensure that the contract for the appointment of an investment manager prohibits the manager from delegating the management of the investment of the funds of the scheme to a person other than to a company or corporation or partnership of companies or corporations that is solvent and complies with subsection (3) or (4).(2) If the contract allows the investment manager to delegate its functions with respect to managing the investment of the funds of the scheme, the trustee must ensure that—(a) a delegation of any of those functions can be made only with the approval of the trustee; and(b) the delegation is in writing; and(c) the delegate is a company or corporation or partnership of companies or corporations that is solvent and complies with subsection (3) or (4); and(d) the manager will continue to be bound by the contract between the trustee and the manager and to be responsible for the proper supervision and control of the delegate and the management of the investment of the funds of the scheme.(3) A company or corporation or partnership of companies or corporations complies with this subsection if it is—(a) an associate of the investment manager of the scheme; and(b) a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in asset management under Part V of the Securities and Futures Ordinance (Cap. 571). (5 of 2002 s. 407)(4) A company or corporation or partnership of companies or corporations complies with this subsection if it is authorized, by a regulatory authority recognized by the Authority, to carry on business as an investment adviser under the law of a place other than Hong Kong and—(a) is an associate of the investment manager of the scheme; or (b) is an associate of a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in asset management under Part V of the Securities and Futures Ordinance (Cap. 571); or (5 of 2002 s. 407)(c) is a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in asset management under Part V of the Securities and Futures Ordinance (Cap. 571) and maintains an office in Hong Kong. (5 of 2002 s. 407)(5) If an investment manager appointed in respect of a registered scheme is allowed to delegate the manager’s functions in relation to the scheme, the approved trustee of the scheme must ensure that the functions are delegated only to a person who is independent of the trustee and of the custodian of the scheme assets and of any delegate of the custodian.(L.N. 223 of 2000) 46. Independence of investment manager (1) For the purposes of sections 44 and 45, an investment manager, or the delegate of an investment manager, is independent of the approved trustee of the relevant scheme and of the custodian of the scheme assets and a delegate of the custodian of the scheme assets only if— (L.N. 223 of 2000)(a) the manager or delegate is not an associate of the trustee or custodian or the delegate of the custodian; and(b) no person is a controller of both the manager or delegate and the trustee or custodian or the delegate of the custodian or any associate of the trustee or custodian or the delegate of the custodian; and(c) the manager or delegate acts independently of the trustee and custodian and the delegate of the custodian in their dealings with the scheme.(2) If an investment manager, or a delegate of an investment manager, and the approved trustee, or the custodian of the scheme assets or the delegate of the custodian of the scheme assets, are subsidiaries of— (L.N. 223 of 2000)(a) a substantial financial institution; or(b) a holding company of a substantial financial institution, they may nevertheless be regarded as being independent of each other if they comply with subsection (3).(3) An investment manager, or a delegate of an investment manager, and the approved trustee, or the custodian of the scheme assets or the delegate of the custodian of the scheme assets, comply with this subsection if— (L.N. 223 of 2000)(a) neither of them is a subsidiary of the other; and (b) no person is a director of both of them; and(c) both of them give an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority, to act independently of each other in their dealings with the scheme. (1 of 2008 s. 6)(L.N. 223 of 2000) 47. Investment management contract (1) The approved trustee of a registered scheme must ensure that there is in force between the trustee and the investment manager appointed in respect of the scheme an investment management contract that specifies the obligations of that manager with respect to the investment of funds of the scheme.(2) The contract must comply with Schedule 2.(3) The approved trustee of a registered scheme must not appoint an investment manager in respect of the scheme unless—(a) the trustee has given an undertaking by deed, or by a document of like effect, to notify in writing the manager of any matters that the trustee regards as pertinent to the manager’s appointment; and(b) the manager has given an undertaking by deed, or by a document of like effect, to notify in writing the trustee of any changes to matters referred to in paragraph (a) within 30 days after those changes have occurred. (1 of 2008 s. 7)(4) Despite anything in the governing rules of the scheme, any provision of an investment management contract relating to the scheme that purports to exempt the investment manager from liability for negligence or fraud, or to limit that liability, is void.(5) An investment management contract may permit the investment manager to engage an associate of that manager or an associate of the approved trustee as an agent for the purpose of acquiring or disposing of securities for or in relation to the scheme, but, if it does so, the contract must provide that no more than half of the total value of the commissions or other agency rewards paid for those transactions is to be paid to the associate, or the associate together with other associates of that manager or associates of the approved trustee, during a financial period of the scheme. (L.N. 223 of 2000) 48. Approved trustee to ensure compliance with prescribed capital adequacy requirements A company must ensure that the prescribed capital adequacy requirements are complied with at all times while it is an approved trustee. 49.

Duties of approved trustee with respect to investment of scheme funds (1) The approved trustee of a registered scheme must ensure that any investment manager appointed in respect of the scheme, and any delegate of that manager, act in the interests of the scheme members and do not collude with other persons as regards any transaction relating to the investment of the funds for the scheme.(2) The trustee must ensure that, if a transaction involving the acquisition of an asset for or in relation to the scheme is entered into between relevant persons, the consideration to be paid for the asset is not greater than the prevailing market price.(3) The trustee must ensure that, if a transaction involving the disposal or lending of an asset for or in relation to the scheme is entered into between relevant persons, the consideration to be paid for the asset is not less than the prevailing market price.(4) For the purposes of subsections (2) and (3), the following persons are relevant persons—(a) the approved trustee and any service provider appointed or engaged for the purposes of the scheme;(b) the participating employers of scheme members;(c) all associates of any of those participating employers, of any scheme member, or of any service provider appointed or engaged for the purposes of the scheme.(5) The trustee must also ensure that service providers appointed or engaged for the purposes of the scheme and their associates do not retain any payment or benefit from a third party, either directly or indirectly, derived from the acquisition or disposal or lending of scheme assets.(6) Subsection (5) does not prevent the third party from providing the service providers and their associates with goods or services that are of demonstrable benefit to the scheme or scheme members.(7) The trustee must also ensure that—(a) any investment manager appointed for the purposes of the scheme, and any delegate of that manager, do not acquire or dispose of securities for those purposes at brokerage rates that exceed the customary institutional full-service brokerage rates generally applicable to the acquisition and disposal of securities; and(b) the acquisition or disposal of securities for those purposes is effected in accordance with the best commercial practice applicable to the preparation and execution of financial transactions. 50. Approved trustee to appoint custodian of scheme assets (1) Subject to subsection (2), the approved trustee of a registered scheme must—(a) appoint an eligible person to be the custodian of the scheme assets; and (b) ensure that the scheme assets are kept by, or are under the control of, such a person.(2) The trustee is not required to comply with subsection (1) if the trustee is an eligible person. In that case, the trustee may undertake the functions of custodian of the scheme assets itself.(3) If the trustee appoints a custodian in respect of the scheme, it must enter into a custodial agreement with the custodian setting out the functions of the custodian with respect to the scheme’s assets. The agreement must comply with the requirements with respect to custodial agreements in Part 6.(4) For the purposes of this section, a person is an eligible person if the person satisfies the eligibility requirements for a custodian of scheme assets specified in Part 6.(E.R. 1 of 2013) 51. Restrictions on entering into repurchase agreements (1) The approved trustee of a registered scheme must ensure that the funds of the scheme are not applied for the purpose of entering into a repurchase agreement unless the agreement is entered into by the custodian of the scheme assets.(2) If the authority to enter into repurchase agreements in respect of a registered scheme is to be delegated to a custodian appointed in respect of the scheme, that authority must be included in the custodial agreement entered into with the custodian in accordance with section 50.(3) The trustee must ensure that, in relation to each constituent fund of the scheme—(a) a repurchase agreement relating to assets of the fund is entered into only if the amount of the consideration (including the value of any collateral security) given for the relevant security exceeds the value of the security; and(b) no more than 10 per cent of the assets of the fund are the subject of repurchase agreements at any one time; and(c) no more than 50 per cent of the securities of the same issue held among the assets of the fund are the subject of repurchase agreements at any one time.(4) The trustee must ensure that the scheme assets are not the subject of a reverse repurchase agreement.(5) For the purposes of this section—(a) a repurchase agreement, in relation to the approved trustee of a registered scheme, is an agreement under which the trustee agrees to sell a debt security to a person and to repurchase it from that person at a specified date in the future for an agreed price, subject to the amount of consideration (including the value of any collateral security) provided by that person during the period of the agreement; and(b) a reverse repurchase agreement, in relation to the approved trustee of a registered scheme, is an agreement under which the trustee agrees to buy a debt security from a person and to resell it to that person at a specified date in the future for an agreed price. 52. Restrictions on lending of scheme securities (1) The approved trustee of a registered scheme must ensure that no securities held in respect of the scheme are lent (whether with or without consideration) except in accordance with an agreement entered into by the custodian of the scheme assets and the borrower of the securities.(2) If the authority to enter into security lending agreements in respect of a registered scheme is to be delegated to a custodian appointed in respect of the scheme, that authority must be included in the custodial agreement entered into with the custodian in accordance with section 50.(3) The trustee must ensure that, in relation to each constituent fund of the scheme—(a) a security lending agreement relating to securities held in respect of the fund is entered into only if the amount of the consideration (including the value of any collateral security) given for the securities exceeds the value of those securities; and(b) no more than 10 per cent of the assets of the fund are the subject of security lending agreements at any one time; and(c) no more than 50 per cent of securities of the same issue, or of the same kind, held in respect of the fund are the subject of security lending agreements at any one time.(4) For the purposes of this section, a security lending agreement is an agreement under which one party to the agreement agrees to lend a security to another party to the agreement in consideration for the payment of a fee and a collateral security. 53. Duty of approved trustee with respect to investing in financial futures contracts and financial option contracts (1) The approved trustee of a registered scheme must ensure that the funds of the scheme are not applied for the acquisition of financial futures contracts or financial option contracts, unless there is established and maintained in respect of the scheme an effective system for monitoring the risks inherent in dealing in contracts of those kinds.(2) If financial futures contracts or financial option contracts are acquired for the purposes of the scheme and an investment manager has been appointed in respect of the scheme, the trustee must ensure that the investment manager, and, where the investment manager has delegated any of that manager’s functions, the delegate, provide written reports to the trustee at regular intervals with respect to the performance of those contracts. Those reports must include particulars as to the extent to which the funds of the scheme are exposed to the risk of incurring losses because of the holding of those contracts. 54. Approved trustee to provide information to scheme members (1) The approved trustee of a registered scheme must ensure that, within 60 days after a person becomes a scheme member, the person is provided with a document containing information relating to the scheme.(2) The document must—(a) include a general description of the scheme, including its terms and the fees and charges payable under the scheme; and(b) if the scheme comprises 2 or more constituent funds, specify particulars of those funds; and(c) specify the person (if any) designated by the trustee as the scheme contact person, either by name or by reference to the person’s position or job description, and the means by which the person can be contacted.(3) (Repealed 40 of 2021 s. 53) 55. (Repealed 1 of 2015 s. 28) 56. Approved trustee to provide scheme members with annual benefit statements (1) The approved trustee of a registered scheme must ensure that— (40 of 2021 s. 54)(a) within 3 months after each financial period of the scheme, each scheme member is provided with a benefit statement setting out the member’s position with respect to the scheme as at the end of that period, whether or not the auditing of the financial statements of the scheme for that period has been completed then; and(b) if there are any subsequent audit adjustments made to a benefit statement affecting the member’s balance, the member is notified in writing within 30 days after the trustee becomes aware of those audit adjustments.(2) If a financial period of a registered scheme is extended to more than 12 months, the approved trustee of the scheme must also ensure that within 3 months after the end of the first 12 months of the financial period, each scheme member is provided with a benefit statement setting out the member’s position with respect to the scheme as at the end of that first 12-month period (first 12-month period). (3) A scheme member’s benefit statement must—(a) specify the name of the member, the name of the scheme and the name of the approved trustee of the scheme; and(b) specify the total contributions that have been paid to the scheme in respect of the member during the prescribed period and specify, in so far as it is within the knowledge of the trustee, any contribution periods for which contributions that were required to be paid in respect of the member have not been paid; and(c) specify the value of accrued benefits of the member as at the beginning of the prescribed period and also the value of accrued benefits of the member as at the end of that period; and(d) if the member is a self-employed person, specify the total contributions paid to the trustee by the scheme member during the prescribed period; and(e) if the member is not a self-employed person, specify the total contributions paid to the trustee by the member’s employer during the prescribed period; and(f) give particulars of amounts transferred to or from the scheme during the prescribed period; and(faa) give an estimate of the return on the member’s investments in each account in the scheme over the prescribed period; and (40 of 2021 s. 54)(faab) give an estimate of the cumulative return on the member’s investments in each account in the scheme over the period that begins on the account opening date and ends on the last day of the prescribed period (entire period); and (40 of 2021 s. 54)(faac) give an estimate of the annualized return on the member’s investments in each account in the scheme over the entire period; and (40 of 2021 s. 54)(fa) contain the information specified by the Authority; and (1 of 2008 s. 50)(g) subject to subsection (4), be printed in both the Chinese language and the English language; and(h) be prepared on an accrual basis, except that contributions and items relating to contributions not yet received by the approved trustee of the scheme may be included on a cash basis.(3AA) Without affecting subsection (3), a benefit statement required to be provided under subsection (1)(a) to a member of a registered scheme for a financial period of the scheme must also—(a) specify the applicable FER for the relevant corresponding period of each relevant fund in which the member invested at any time during the financial period; and(b) give an estimate of the fees charged in respect of each account in the scheme during the financial period, including an estimate of the fee charged under each type of fee specified by the Authority. (40 of 2021 s. 54)(3AAB) An estimate required to be given under subsection (3)(faa) or (faab) or (3AA)(b) is to be—(a) determined in the manner specified by the Authority; and(b) expressed both in Hong Kong dollars and as a percentage. (40 of 2021 s. 54)(3AAC) An estimate required to be given under subsection (3)(faac) is to be—(a) determined in the manner specified by the Authority; and(b) expressed as a percentage. (40 of 2021 s. 54)(3A) For the purposes of subsection (3)(b), (c) and (f), the benefit statement of a scheme member with a TVC account must provide separate information with respect to—(a) the tax deductible voluntary contributions paid by the member into the account; and(b) all accrued benefits—(i) derived from those contributions; and(ii) transferred to the account in accordance with Part 12. (7 of 2019 s. 18)(4) The name of the member may be printed on the benefit statement in either the Chinese language or the English language, unless the member, by written notice, requires the trustee to print that name in both of those languages.(5) If voluntary contributions to a registered scheme are paid by or in respect of a scheme member, subsection (3) is not complied with unless, in relation to the matters referred to in paragraphs (b), (c), (d), (e), (f) and (fa) of that subsection, the statement provides separate information with respect to— (1 of 2008 s. 50; 40 of 2021 s. 54)(a) the mandatory contributions paid by or in respect of the member, and the accrued benefits derived from those mandatory contributions; and (b) the voluntary contributions paid by or in respect of the member, and the accrued benefits derived from those voluntary contributions.(6) (Repealed 40 of 2021 s. 54)(7) The approved trustee of a registered scheme is not required to comply with subsection (1) or (2) in relation to a person who has ceased to be a scheme member during the period specified in subsection (8) and whose accrued benefits have been transferred to another registered scheme in accordance with Part 12 of this Regulation or have been paid in accordance with section 15 of the Ordinance.(8) The period specified for subsection (7) is—(a) in relation to the compliance with subsection (1)—the period of 3 months after a financial period of the registered scheme; and(b) in relation to the compliance with subsection (2)—the period of 3 months after the end of the first 12 months of a financial period of the registered scheme. (40 of 2021 s. 54)(9) Subsection (3)(faa), (faab) and (faac) only applies to a benefit statement that sets out a scheme member’s position as at the end of a financial period, or the first 12 months of a financial period, of the registered scheme that begins on or after the commencement of section 19S of the Ordinance. (40 of 2021 s. 54)(10) Subsection (3AA) only applies to a benefit statement that sets out a scheme member’s position as at the end of a financial period of the registered scheme that begins on or after the commencement mentioned in subsection (9). (40 of 2021 s. 54)(11) For a scheme member’s benefit statement that relates to a financial period mentioned in subsection (10)—(a) subsection (3AA)(a) does not apply to a relevant fund in which the member invested at any time during the financial period if the relevant corresponding period of the relevant fund begins on the inception date of that fund; and(b) any fees incurred in the investment of the member in a relevant fund to which paragraph (a) applies are not to be taken into account when determining an estimate under subsection (3AA)(b) for the benefit statement. (40 of 2021 s. 54)(12) In this section—applicable FER (適用FER), in relation to a relevant corresponding period of a relevant fund in which a member of a registered scheme has invested, means—(a) the audited fund expense ratio submitted to the Authority under section 19Y of the Ordinance (audited FER) for the relevant corresponding period of the relevant fund; or(b) (if at the time of preparing the benefit statement, the audited FER for the relevant corresponding period of the relevant fund is not available) the most recently available fund expense ratio determined by the approved trustee of the scheme in accordance with Schedule 13 to the Ordinance for the relevant corresponding period;corresponding period (相應期間) has the meaning given by section 19T(1) of the Ordinance;fees (費用) include charges;inception date (成立日) has the meaning given by section 19T(1) of the Ordinance;prescribed period (訂明期間)—(a) for the purposes of a benefit statement mentioned in subsection (1)(a), means the financial period to which the benefit statement relates; and(b) for the purposes of a benefit statement mentioned in subsection (2), means the first 12-month period to which the benefit statement relates;relevant corresponding period (相關相應期間), in relation to a relevant fund in which a member of a registered scheme has invested, means the corresponding period, or the part of the corresponding period, of the relevant fund that coincides with a financial period of the scheme;relevant fund (相關基金), in relation to a member of a registered scheme, means a constituent fund of the scheme in which the member has invested. (40 of 2021 s. 54)(E.R. 1 of 2013; 40 of 2021 s. 54) 56A. (Repealed 40 of 2021 s. 55) 57. Approved trustee to assist participating employers and scheme members (1) The approved trustee of a registered scheme must, as far as reasonably practicable, provide all assistance necessary to ensure that scheme members and participating employers are able to participate effectively in the operation of the scheme.(2) For the purposes of subsection (1), the trustee may designate a person as a scheme contact person, either by name or by reference to the person’s position or job description, and specify the means by which the person can be contacted.(3) The assistance referred to in subsection (1) means assistance—(a) in answering inquires in respect of the scheme, including those relating to—(i) the total amount of the contributions received by the trustee in respect of a scheme member and the dates on which those contributions were received or the date on which a contribution was last received; and(ii) any information contained in any document that the trustee has given to scheme members or participating employers; and(b) in dealing with complaints from scheme members or participating employers. 58. Approved trustee to inform scheme members etc. of changes of business particulars (1) As soon as practicable and in any case not later than 7 days after a change occurs to the business name, address, telephone number or facsimile number of the approved trustee of a registered scheme, the trustee must, by written notice, inform the scheme members and participating employers of the change.(2) (Repealed 40 of 2021 s. 56) 59. (Repealed 40 of 2021 s. 57) 60. Approved trustee to ensure presence of independent trustee at meetings The approved trustee of an employer sponsored scheme must ensure—(a) that the independent trustee of the scheme is, as far as reasonably practicable, present at all meetings of the trustees; and(b) that any decision taken at a meeting of the trustees at which the independent trustee is absent does not have effect until it is acknowledged in writing by that trustee. 61. Disclosure of conflicts of interests (1) As soon as practicable after a natural person who is an approved trustee of a registered scheme becomes aware of any matter that gives rise or is likely to give rise—(a) to a conflict of interest between the person’s duties as a trustee of the scheme and either the person’s other duties as a trustee or the person’s personal interests; or(b) if the person is an independent trustee, to the suspension or revocation by the Authority of the person’s approval as a trustee, the person must disclose the matter by giving written notice of the matter to each of the other persons who are approved trustees of the scheme.(2) As soon as practicable after a person who is an officer of a company that is an approved trustee of a registered scheme becomes aware of any matter that gives rise or is likely to give rise—(a) to a conflict of interest between the person’s duties in relation to the scheme as an officer of the company and either the person’s other duties as an officer of the company or the person’s personal interests; or(b) if the officer is an independent director, to the suspension or revocation by the Authority of the company’s approval as a trustee, the person must disclose the matter by giving written notice of the matter to the company and to each of the other officers of the company and, if the trustee includes natural person, to each of those persons.(3) An approved trustee to or in relation to which a disclosure is made under this section must—(a) record the disclosure in a record kept for the purpose; and(b) ensure that the record is kept available at all reasonable hours for inspection by the Authority or any scheme member on request.(4) A failure to comply with this section does not invalidate any decision of the approved trustee concerned.(5) This section does not apply to or in respect of an interest of a person in a matter or thing which arises merely because the person is a contributor to a provident fund scheme.(6) If a person has disclosed the nature of a conflict of interest concerning a matter in accordance with subsection (1), the person must not, unless the other trustees agree—(a) be present during any deliberation of those persons or the company with respect to the matter; or(b) take part in any decision of the approved trustee with respect to the matter.(7) If an officer of a company has disclosed the nature of a conflict of interest concerning a matter in accordance with subsection (2), the officer must not, unless the directors of the company agree—(a) be present during any deliberation of the company with respect to the matter; or(b) take part in any decision of the company with respect to the matter.(8) For the purposes of this section, a person has a personal interest in a matter if, because of the matter or circumstances relating to the matter—(a) the person has obtained or is able to obtain, whether directly or indirectly, a pecuniary or other advantage; or(b) the person has conferred or is able to confer a benefit on—(i) a relative or friend; or(ii) a body of which the person is a member or with which the person has a close connection; or(iii) any other person to whom the person is under an obligation, whether legal or moral. 62. Approved trustee to notify Authority of events of significant nature (1) If the approved trustee of a registered scheme becomes aware of the occurrence of an event of significant nature, the trustee must—(a) not later than the third specified working day after becoming aware of the event, give written notice to the Authority setting out particulars of the event (except an event specified in the guidelines as an event to which this paragraph shall not apply); (9 of 2016 s. 19)(b) keep a record of particulars of the event;(c) permit the Authority to inspect the record at any reasonable time during ordinary business hours; and(d) give written notice to the Authority—(i) setting out such further or better particulars of the event as the Authority requires; and(ii) as soon as is practicable after the Authority makes that requirement. (29 of 2002 s. 14)(2) The reference in subsection (1) to an event of significant nature includes (but is not limited to) the following—(a) any event that causes the approved trustee to contravene the Ordinance, the governing rules of the scheme or a condition to which the approval of the approved trustee as such is subject; and(b) any material change to the approved trustee’s capacity or ability to act as an approved trustee, including—(i) a systems failure which may affect the approved trustee’s ability to perform its duties; and(ii) if the approved trustee is or includes a company, any of the matters specified in subsection (3); and(iii) if the approved trustee is or includes a natural person, any of the matters specified in subsection (4); and(iv) the cancellation, expiry or other termination of the insurance in respect of the scheme.(3) For the purposes of subsection (2)(b)(ii), the matters to be specified are—(a) the winding-up of the approved trustee, or the appointment of a receiver or manager of the assets of the approved trustee; (b) the discontinuation of continuous financial support provided to the approved trustee; (c) any change or proposed change of any controller of the approved trustee; (14 of 2025 s. 236)(d) any change or proposed change in the approved trustee’s domicile. (14 of 2025 s. 236)(4) For the purposes of subsection (2)(b)(iii), the matters to be specified are—(a) the death or incapacity of the person or circumstances affecting the ability to carry out the person’s duties; (b) the cancellation, expiry or other termination of the performance guarantee in respect of the person. 63. Amendments to governing rules of registered scheme not to take effect without Authority’s approval (1) Subject to subsection (2A), an approved trustee of a registered scheme must notify the Authority in writing of any amendment proposed to be made to the governing rules of the scheme and lodge with the Authority a copy of the proposed amendment. (2) Subject to subsection (2A), an amendment to the governing rules of the scheme does not take effect until the Authority has given written notice to the trustee that the Authority has approved it.(2A) In respect of an amendment proposed to be made or made to the governing rules in respect of or by a participation agreement of a registered scheme—(a) subject to paragraph (b), subsections (1) and (2) shall not apply unless the amendment relates to mandatory contributions or voluntary contributions;(b) subsections (1) and (2) shall not apply if the amendment is in a form approved by the Authority for the purposes of this section. (2 of 2002 s. 21)(3) In this section, a reference to an amendment to the governing rules of a registered scheme includes a reference to addition of new provisions, or substitution or omission of existing provisions, of those rules. (2 of 2002 s. 21) 63A. Amendments to offering documents require Authority’s approval (1) An approved trustee of a registered scheme must notify the Authority in writing of any amendment proposed to be made to the offering document of the scheme and lodge with the Authority a copy of the proposed amendment.(2) Any amendment to the offering document of the scheme shall not be made available to scheme members, prospective scheme members, participating employers or prospective participating employers until the Authority has given written notice to the trustee that the Authority has approved it.(3) In this section, a reference to an amendment to the offering document of a registered scheme includes a reference to addition of new provisions, or substitution or omission of existing provisions, of the document.(2 of 2002 s. 21) 64. Approved trustee to ensure separation of scheme assets (1) The approved trustee of a registered scheme must ensure that the scheme assets—(a) are administered and dealt with as trust property by service providers appointed or engaged by the trustee for the purposes of the scheme; and(b) are held, recorded or otherwise controlled in accordance with the market practices that are currently prevailing in the place where the scheme assets are held, recorded or otherwise controlled, and in such manner as is prudent in the circumstances; and(c) are applied only for the purposes of the scheme.(2) Subsection (1) has effect irrespective of whether or not the trustee has appointed a custodian or other service provider to perform functions with respect to the scheme assets.(3) The trustee must also ensure that the scheme assets are separately recorded in the records required to be kept in respect of the scheme and, in particular, are distinguished—(a) from the trustee’s personal assets; and (b) from any assets held by the trustee for the benefit of a participating employer or any other person. 65. Approved trustee to ensure that scheme assets are not improperly encumbered (1) The approved trustee of a registered scheme must ensure that the scheme assets are not subject to any encumbrance, other than an encumbrance to which this subsection does not apply.(2) Subsection (1) does not apply to an encumbrance that—(a) is created for the purpose of securing an amount borrowed to enable accrued benefits to be paid to or in respect of scheme members, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of the borrowing would exceed 90 days; or (L.N. 222 of 2000; L.N. 223 of 2000)(b) is created for the purpose of securing an amount borrowed to settle a transaction relating to the acquisition of scheme assets, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of the borrowing would exceed 7 working days; and (L.N. 222 of 2000; L.N. 223 of 2000)(iv) at the time the decision to enter into the transaction was made, it was unlikely that the borrowing would be necessary; or (L.N. 222 of 2000; L.N. 223 of 2000)(c) is created for the purpose of securing a claim for payment of fees for the safe custody or administration of the scheme assets by a central securities depository or a delegate of a custodian; or (L.N. 222 of 2000; L.N. 223 of 2000; 1 of 2008 s. 11)(d) is created for the purpose of acquiring a financial futures contract pursuant to section 14 of Schedule 1 or a currency forward contract pursuant to section 15 of Schedule 1; or (L.N. 222 of 2000; L.N. 223 of 2000)(e) is created by the operation of law in Hong Kong or in a place outside Hong Kong. (L.N. 222 of 2000; L.N. 223 of 2000)(3) Any encumbrance created over scheme assets of a registered scheme is void to the extent that it is inconsistent with subsection (2).(4) For the avoidance of doubt, it is hereby declared that any encumbrance created over the scheme assets of a registered scheme that is, at the time of creation, consistent with the exception under subsection (2) shall remain valid throughout the period for which the borrowing concerned remains outstanding. (L.N. 222 of 2000; L.N. 223 of 2000) 66. Approved trustee permitted to deduct from scheme members’ accounts amount in respect of administrative expenses (1) Subject to this Regulation and section 34DD of the Ordinance, the approved trustee of a registered scheme may periodically deduct from each scheme member’s account with the scheme fees for administrative expenses. (9 of 2016 s. 20; 40 of 2021 s. 58)(2) Subsection (1) applies subject to sections 19U and 19Z of the Ordinance. (40 of 2021 s. 58) 66A. Interest to be received where a scheme’s assets are placed on deposit Where a scheme’s assets are placed on deposit, then the approved trustee must ensure that the rate of interest received for the deposit is reasonable in all the circumstances of the case taking into account the rate of interest available in the relevant market—(a) at the time of the deposit; and(b) for deposits of like amount and nature.(L.N. 223 of 2000) 67. Offences A person who, without reasonable excuse, fails to comply with a requirement or duty imposed on that person by section 43, 44, 45, 46, 47, 49, 50, 51, 52, 53(1), 64 or 65 commits an offence and is liable on conviction to a fine at level 5.(L.N. 222 of 2000; L.N. 223 of 2000) 67A. Transitional provisions for Part 5—Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1) Subsection (2) applies if—(a) a relevant employee of a participating employer becomes a member of a registered scheme before the commencement date; and(b) on the commencement date—(i) the period of 60 days after the employee becomes such a member has yet to expire; and(ii) the employee has not been given a membership certificate under section 55 of the pre-amended Regulation.(2) The employee must be given a notice of participation that complies with section 31(4A) within the 60-day period.(3) Subsection (2) does not apply in relation to a casual employee who is a member of an industry scheme.(4) In this section—*commencement date (生效日期) means the date on which section 28 of the Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1 of 2015) comes into operation;pre-amended Regulation (《未修訂規例》) means this Regulation as in force immediately before the commencement date.(1 of 2015 s. 29) Editorial Note: * Commencement date: 1 August 2015. Part 6 Functions of Service Providers Division 1 Custodians of Scheme Assets 68. Eligibility for appointment as custodian (1) A person is eligible to be a custodian of scheme assets only if the person is one of the following—(a) an authorized financial institution;(b) a registered trust company that has a paid up share capital of not less than $150,000,000 and net assets of not less than the same amount; (14 of 2025 s. 237)(c) a registered trust company that complies with subsection (2). (14 of 2025 s. 237)(2) A registered trust company complies with this subsection if it—(a) has a paid up share capital of not less than $50,000,000 and net assets of not less than the same amount; and(b) is an associate of either—(i) a company or corporation that complies with subsection (3) and provides continuous financial support to the registered trust company; or(ii) a company or corporation having a subsidiary that complies with subsection (3) and provides continuous financial support to the registered trust company. (L.N. 223 of 2000)(3) A company or corporation complies with this subsection if it is— (L.N. 223 of 2000)(a) an authorized financial institution; or(b) a registered trust company that has a paid up share capital of not less than $150,000,000 and net assets of not less than the same amount; or (14 of 2025 s. 237)(c) an authorized insurer that has a paid up share capital of not less than $150,000,000 and net assets of not less than the same amount; or(d) an approved overseas bank, an approved overseas insurer or an approved overseas trust company that complies with subsection (4).(4) An approved overseas bank, an approved overseas insurer or an approved overseas trust company complies with this subsection if—(a) it has a paid up capital of at least US$200,000,000 or an amount in another foreign currency equivalent to that amount; and (b) it satisfies a minimum credit rating set by the Authority, based on the credit rating as determined by an approved credit rating agency.(5) A company or corporation or a subsidiary of a company or corporation provides continuous financial support to a registered trust company for the purposes of subsection (2)(b)(i) and (ii) if it gives an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority, that it— (L.N. 223 of 2000; 1 of 2008 s. 8)(a) will, if so required by the Authority, subscribe sufficient additional capital of not more than $50,000,000 when the paid up share capital or net assets of the trust company become less than that amount; and(b) will not, without the approval of the Authority, do any act to dispose of, or authorize the disposal or issue of, any part of the share capital or assets of the trust company as a result of which the trust company ceases to be its associate. (L.N. 223 of 2000)(6) A person is not eligible to be a custodian of scheme assets unless the person has a sufficient presence and control in Hong Kong.(7) (Repealed L.N. 223 of 2000)(8) A person has a sufficient presence and control in Hong Kong if—(a) the person complies with subsection (9); and(b) the person has sufficient expertise and management resources in Hong Kong to conduct its business operations effectively; and(c) the Hong Kong chief executive officer of the person ordinarily resides in Hong Kong. (32 of 2000 s. 48)(9) A person complies with this subsection if—(a) the person’s day-to-day business activities relating to the person’s business in Hong Kong (including the keeping of its records relating to those activities) are conducted wholly in Hong Kong; or(b) in the case where those activities are not conducted wholly in Hong Kong—(i) they are conducted under the person’s supervision and control in Hong Kong; and(ii) sufficient records of those activities are kept at a place or places so that those records can be readily accessible in Hong Kong to enable an audit of them to be carried out.(10) A person is not eligible to be a custodian of scheme assets unless the person and all delegates of the person are independent of each investment manager appointed in respect of the scheme and of all delegates of the investment manager.(11) Nothing in this section requires the approved trustee of a registered scheme to appoint a person to be a custodian of the scheme assets if the trustee satisfies the eligibility requirements of this section. 69. Custodial agreement (1) If the approved trustee of a registered scheme appoints a custodian to administer the scheme assets, the trustee must ensure that the contract for the appointment of the custodian incorporates a custodial agreement that complies with Schedule 3.(2) If the approved trustee of a registered scheme does not appoint a custodian to administer the scheme assets, the trustee must give an undertaking to the Authority by deed, or by a document of like effect acceptable to the Authority. The undertaking must incorporate the terms of a custodial agreement that complies with Schedule 3. (1 of 2008 s. 9)(3) If the approved trustee of a registered scheme has appointed a custodian of the scheme assets, that trustee must take all reasonable steps to ensure that the custodian complies with the terms of the relevant custodial agreement.(4) An approved trustee who, without reasonable excuse, fails to comply with this section commits an offence and is liable on conviction to a fine at level 5. 70. Temporary custodian (1) The approved trustee of a registered scheme may act as a temporary custodian of scheme assets even though the trustee would not, apart from this section, be eligible to be a custodian of scheme assets, or has appointed an eligible person to be a custodian of the scheme assets, but only for the sole purpose of temporarily keeping—(a) contributions and other payments received for the purposes of the scheme; or(b) payments required or permitted to be made from the funds of the scheme.(2) When acting as a temporary custodian of scheme assets, an approved trustee must—(a) comply with the requirements set out in subsection (4);(b) as soon as practicable after receiving contributions and other amounts from an employer or any other person for the purposes of the scheme, pay them to the custodian; and(c) as soon as practicable after receiving the payments from a custodian of the scheme assets for the purpose of paying accrued benefits or other amounts of money, pay them to the persons entitled to receive them.(3) In so acting, the trustee must apply the same care, skill, diligence and prudence as may be reasonably expected of a prudent person who has custody of scheme assets.(4) The requirements referred to in subsection (2)(a) are as follows—(a) the scheme assets must be—(i) administered and dealt with as trust property; and(ii) recorded and controlled in such manner as may be customary and prudent in the circumstances;(b) records of the scheme assets must be kept separate from all other assets of the trustee, including any assets held by the trustee for the benefit of a participating employer or any other person;(c) the scheme assets must not be subject to an encumbrance, except in any of the circumstances set out in subsection (5); (1 of 2008 s. 12)(d) the scheme assets must be applied only for the purpose of the registered scheme.(5) The circumstances referred to in subsection (4)(c) are as follows—(a) where the encumbrance is created for the purpose of securing an amount borrowed to enable accrued benefits to be paid to or in respect of scheme members, but only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of borrowing would exceed 90 days;(b) where the encumbrance is created for the purpose of securing an amount borrowed to settle a transaction relating to the acquisition of scheme assets, but only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of borrowing would exceed 7 working days; and(iv) at the time the decision to enter into the transaction was made, it was unlikely that the borrowing would be necessary;(c) where the encumbrance is created for the purpose of securing a claim for payment of fees for the safe custody or administration of the scheme assets by a central securities depository or a delegate of a custodian;(d) where the encumbrance is created for the purpose of acquiring a financial futures contract pursuant to section 14 of Schedule 1 or a currency forward contract pursuant to section 15 of Schedule 1;(e) where the encumbrance is created by operation of law (whether the law of Hong Kong or of a place outside Hong Kong). (1 of 2008 s. 12)(6) (Repealed 1 of 2008 s. 12)(7) An encumbrance created over scheme assets is void to the extent to which it is inconsistent with this section.(8) An approved trustee who, without reasonable excuse, fails to comply with subsection (2) or (3) commits an offence and is liable on conviction to a fine at level 5. 71. Eligibility of delegate of custodian (1) A person is not eligible to be a delegate of a custodian of scheme assets unless the person— (2 of 2002 s. 21)(a) would be eligible to be a custodian of scheme assets;(b) is an approved overseas bank or approved overseas trust company which complies with section 68(4); or(c) is an overseas bank or overseas trust company that is a subsidiary or related company of an entity described in subsection (1A). (1 of 2008 s. 53)(1A) The entity referred to in subsection (1)(c) is an approved overseas bank, an approved overseas trust company, an authorized financial institution or a registered trust company, that— (14 of 2025 s. 238)(a) has a paid up capital of not less than US$200,000,000 or an equivalent amount in another currency; and(b) satisfies a minimum credit rating set by the Authority based on a credit rating determined by an approved credit rating agency. (1 of 2008 s. 53)(2) The approved trustee of a registered scheme must ensure that—(a) if the custodian of scheme assets is appointed under section 50(1), the contract for the appointment prohibits the custodian from delegating the custodian’s function as a custodian to a person who is not eligible under subsection (1) to be a delegate of the custodian;(b) if the trustee is the custodian of the scheme assets in accordance with section 50(2), the trustee does not delegate the trustee’s function as a custodian to a person who is not eligible under subsection (1) to be a delegate of the custodian. (2 of 2002 s. 21)(3) The approved trustee of a registered scheme who, without reasonable excuse, fails to comply with a requirement imposed on the trustee by subsection (2) commits an offence and is liable on conviction to a fine at level 5. (2 of 2002 s. 21)(4) For the purposes of subsection (1)(c), a company is a related company of another company if both are subsidiaries of a third company. (1 of 2008 s. 53)(L.N. 223 of 2000) 72. Subcustodial agreement (1) Any agreement entered into between a custodian of scheme assets and another person providing for any of the custodian’s functions to be delegated to that other person must include the same requirements as those specified in Schedule 3. For the purpose of applying Schedule 3 to the agreement, references to the trustee are to be construed as references to the custodian and references to the custodian are to be construed as references to the delegate. (2 of 2002 s. 21)(2) The approved trustee of a registered scheme must ensure that—(a) if the custodian of scheme assets is appointed under section 50(1), the contract for the appointment prohibits the custodian from entering into an agreement with a person providing for any of the custodian’s functions to be delegated to that person unless the agreement complies with subsection (1);(b) if the trustee is the custodian of the scheme assets in accordance with section 50(2), the trustee does not enter into an agreement with a person providing for any of the custodian’s functions to be delegated to that person unless the agreement complies with subsection (1). (2 of 2002 s. 21)(3) The approved trustee of a registered scheme who, without reasonable excuse, fails to comply with a requirement imposed on the trustee by subsection (2) commits an offence and is liable on conviction to a fine at level 5. (2 of 2002 s. 21) 73. Use of central securities depository (1) An agreement entered into between the approved trustee of a registered scheme and a custodian of scheme assets or between the custodian and a delegate of the custodian may provide for scheme assets to be held in a central securities depository.(2) A central securities depository is not to be regarded as a custodian carrying on business in Hong Kong or its delegates for the purpose of this section. Division 2 Provisions Applicable to Service Providers Generally 74. Approved trustee to review service providers’ reports (1) The approved trustee of a registered scheme must require each service provider appointed or engaged by the trustee to submit to the trustee such reports as will enable the trustee to perform the trustee’s duties under the Ordinance.(2) The reports that the trustee must require include (but are not limited to)—(a) a report of any material event ; and(b) an annual report that complies with subsection (5).(3) An event is a material event for the purposes of subsection (2)(a) if it involves—(a) a material change, or a proposal for a material change, relating to the eligibility of the service provider; or(b) a material breach of the obligations of the service provider.(4) The trustee must require a service provider to submit a report of a material event—(a) as soon as practicable after the event occurs;

or(b) if it involves a proposal for a material change relating to the eligibility of the service provider, as soon as practicable after the service provider becomes aware of the event.(5) An annual report complies with this subsection if it—(a) contains a copy of the audited profit and loss account and of the balance sheet for the financial year of the service provider that ends on or before the relevant financial period of the scheme, together with a copy of the auditor’s report on those documents and the directors’ report for that year; and(b) is accompanied by a report by the auditor of the service provider stating whether or not, in the auditor’s normal course of duties, the auditor had become aware of—(i) any failure of the service provider to comply with the service provider’s obligations under the contract of appointment or engagement entered into between the trustee and the service provider; and(ii) any false declaration made by the service provider to the trustee or any other person, and if so, give particulars of the failure or false declaration.(6) The trustee must require a service provider to submit an annual report at least 2 months before the deadline after each financial period relating to the scheme.(7) The trustee must carefully review the reports submitted to the trustee by the service provider.(8) If the trustee doubts the truth or accuracy of a report submitted by a service provider in accordance with a requirement made under this section, the trustee must make such inquiries as may be necessary to ascertain whether or not the service provider has properly performed the obligations that it owes to the trustee.(9) If, after inquiry, the trustee is not satisfied that the service provider has performed the obligations owed to the trustee, the trustee must either—(a) terminate the appointment or engagement of the service provider; or(b) take such steps as are necessary to ensure that the failure of the service provider to perform those obligations is rectified (in so far as it can be rectified) and, as far as practicable, does not recur. 75. Service suppliers to report certain matters to Authority (40 of 2021 s. 59)(1) If, in the course of performing its obligations relating to a registered scheme, a service supplier— (40 of 2021 s. 59)(aa) becomes aware that the approved trustee of the scheme is not complying with any of the following provisions of the Ordinance—(i) section 27(2A);(ii) section 34DB(1)(a), (b), (c) or (d);(iii) (Repealed 40 of 2021 s. 59)(iv) section 34DD(1) or (4);(v) section 34DH(1) or (2);(vi) section 34DI(1) or (2);(vii) section 34DJ(2), (3), (4) or (5);(viii) section 34DK(2);(ix) section 34DM; or (9 of 2016 s. 21)(a) becomes aware that the approved trustee of the scheme is not complying with section 77 or 78; or(b) identifies any transaction that, in the service supplier’s opinion, is or has resulted in a misappropriation of the funds of the scheme or the scheme assets; or(c) (if the service supplier is a service provider) identifies any payment from the funds of the scheme that, in the service supplier’s opinion, is materially prejudicial to the interests of scheme members or is in contravention of section 14 or 15 of the Ordinance or of a regulation made for the purposes of either of those sections; or(d) except in the circumstances specified in subsection (3), becomes aware that the scheme assets are or have been mixed with the funds of the trustee (otherwise than in accordance with the Ordinance) or the assets of any other person; or(e) (if the service supplier is a service provider) identifies any matter that causes the service supplier to form an opinion that the requirements specified in the guidelines (if any) made by the Authority under section 28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part 10 of, and Schedule 1 to, this Regulation have not been complied with in all material respects,(f) (Repealed 40 of 2021 s. 59) except as permitted by subsection (4), it is the duty of the service supplier to report the matter immediately to the Authority by written notice.(2) A service provider is not required to comply with subsection (1) with respect to a payment referred to in paragraph (c) of that subsection if the trustee has fully reimbursed the scheme as soon as practicable after the payment was brought to the trustee’s notice.(3) The circumstances referred to in subsection (1)(d) arise when a custodian of the scheme assets—(a) is also the holder of assets of one or more other registered schemes or other financial schemes or undertakings; and (b) mixes scheme assets with those other assets; and(c) keeps a separate account of the scheme assets and those other assets in such a way as to enable them to be separately identified.(4) Before reporting a matter to the Authority in accordance with subsection (1), the service supplier may, by written notice given to the trustee— (40 of 2021 s. 59)(a) bring the matter to the trustee’s attention; and(b) request the trustee to provide the service supplier with an explanation of the matter and the related circumstances; and(c) require the trustee to rectify the matter within such period as the service supplier considers to be reasonable.The service supplier is not required to report the matter to the Authority if the trustee complies with the request and requirement in the notice.(5) The service supplier must not give a notice under subsection (4)— (40 of 2021 s. 59)(a) if the matter concerned relates to a transaction that, in the service supplier’s opinion is or has resulted in a material misappropriation of the funds of the scheme or the scheme assets; or(b) if bringing the matter to the attention of the trustee could reasonably be expected to affect the interests of scheme members detrimentally.(6) In this section— service supplier (服務供應者), in relation to a registered scheme, means— (a) a service provider; or (b) the system operator of an electronic MPF system. (40 of 2021 s. 59) (E.R. 1 of 2013; 40 of 2021 s. 59) 76. Power of Authority on becoming aware of matters reported under section 75 (1) If, on receiving a report under section 75 or otherwise becoming aware of a matter referred to in that section, the Authority is of the opinion that the matter is capable of being rectified, the Authority may, by written notice given to the trustee concerned, direct the trustee to rectify the matter at the trustee’s own expense within such period as is specified in the notice.(2) After giving a direction under subsection (1), the Authority may—(a) by written notice given to the auditor of the scheme, request the auditor, as soon as practicable after the end of the period specified in the notice and at the expense of the trustee, to provide the Authority with a report as to whether or not the trustee has rectified the matter; and(b) attach to that notice a copy of the notice given to the trustee containing the direction.(3) An approved trustee who, without reasonable excuse, fails to comply with a direction given by the Authority under subsection (1) commits an offence and is liable on conviction to a fine at level 6. Part 7 Accounting and Other Records 77. Proper accounting records to be kept (1) The approved trustee of a registered scheme must ensure that—(a) such accounting records are kept so as to correctly record and explain all transactions concerning the scheme and the financial position of the scheme; and (b) those records are so kept that—(i) financial statements showing a true and fair view of the financial transactions of the scheme during each financial period and of the disposition of its assets and liabilities at the end of each financial period can be prepared from time to time; and(ii) those financial statements can be conveniently and properly audited in accordance with this Regulation.(2) The approved trustee of a registered scheme must ensure that the accounting records of the scheme are kept in writing in either the Chinese language or the English language or, if not kept in either of those languages, in a form that is readily accessible and readily convertible to writing in either of those languages.(3) The approved trustee of a registered scheme must ensure that the accounting records of the scheme are kept at a place or places so that those records can be readily accessible in Hong Kong for the purpose of enabling the Authority to discharge its duties from time to time.(4) The approved trustee of a registered scheme must ensure that, at all reasonable times and without charge, the accounting records of the scheme are made available for inspection by the Authority, either in writing in the Chinese language or the English language or in a form readily convertible to writing in either of those languages. 78. Separate accounts for each scheme member (1) An approved trustee of a registered scheme must ensure that, as part of its accounting records, a separate account is established and maintained for each scheme member specifying the member’s accrued benefits.(2) The trustee must ensure that a scheme member’s accrued benefits specified in the member’s account reflect the difference between—(a) the aggregate amount of all the items listed in subsection (3); and(b) the aggregate amount of all the items listed in subsection (4).(3) The items referred to in subsection (2)(a) are as follows—(a) in the case of a scheme member who is a relevant employee, all contributions paid by the member’s employer to the scheme in respect of the member;(b) all contributions paid to the scheme by the member;(c) any amount transferred to the account in accordance with Part 12;(d) any investment income of the scheme that is attributable to the member’s accrued benefits;(e) any amount by which the value of the scheme investments attributable to the member’s accrued benefits has appreciated;(f) any other sums payable to the account under the Ordinance.(4) The items referred to in subsection (2)(b) are as follows—(a) accrued benefits that have been paid to or in respect of the member; (b) fees for administrative expenses deducted or deductible by the trustee from the account under this Regulation unless those expenses are waived by the trustee;(c) any amounts transferred from the account in accordance with Part 12;(d) any other amounts payable under the Ordinance from the account; (e) any amount by which the value of the scheme investments attributable to the member’s accrued benefits has depreciated.(5) The trustee must ensure that each member’s account is kept in such a manner that the market value of the accrued benefits of a member can be ascertained at least once each month.(6) In the case of a scheme member who is a relevant employee of a participating employer, the trustee must arrange for the member’s contribution account to be divided into the following sub-accounts—(a) a sub-account specifying—(i) the contributions paid in respect of the member by the member’s current employer as mandatory contributions;(ii) any contribution surcharges paid by the member’s employer on arrears if the relevant income of the employee is less than the minimum level of relevant income and there is not a sub-account as referred to in paragraph (b);(iii) the member’s minimum MPF benefits (if any), to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies, transferred to the scheme which are attributable to the current employer’s contributions;(iv) the income or profits arising from any investments of the contributions, surcharges and benefits mentioned in any of subparagraphs (i), (ii) and (iii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(b) a sub-account specifying—(i) the member’s contributions paid by the member’s current employer on behalf of the member as mandatory contributions;(ii) any contribution surcharges paid by the member’s employer on arrears if—(A) the relevant income of the employee is not less than the minimum level of relevant income;(B) the contributions have been made under subparagraph (i) in respect of the member; or(C) the minimum MPF benefits have been transferred under subparagraph (iii) in respect of the member;(iii) the member’s minimum MPF benefits (if any), to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies, transferred to the scheme which are attributable to the employee’s contributions of the current employment;(iv) the income or profits arising from any investments of the contributions, surcharges and benefits mentioned in any of subparagraphs (i), (ii) and (iii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(c) a sub-account specifying—(i) all mandatory contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments and transferred to the member’s contribution account in accordance with Part 12, and any contribution surcharges paid in respect of any such mandatory contributions; (18 of 2008 s. 17)(ii) the member’s minimum MPF benefits (if any), to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies, transferred to the scheme which are attributable to his former employments;(iia) all mandatory contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, and any contribution surcharges paid in respect of any such mandatory contributions, other than mandatory contributions or contribution surcharges mentioned in subparagraph (i) or (ii); (18 of 2008 s. 17)(iii) the income or profits arising from any investments of the contributions, surcharges and benefits mentioned in any of subparagraphs (i), (ii) and (iia), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(iv) the special contributions (if any) paid in respect of the member and the income or profits arising from any investments of those contributions, but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (30 of 2008 s. 8)(d) a sub-account specifying—(i) the voluntary contributions (if any) paid in respect of the member by the member’s current employer;(ii) the amount (other than minimum MPF benefits to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies), if any, transferred to the scheme in respect of the member from an ORSO exempted scheme or an ORSO registered scheme which are attributable to the current employer’s contributions;(iii) the income or profits arising from any investments of the contributions and amount mentioned in any of subparagraphs (i) and (ii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(e) a sub-account specifying—(i) the voluntary contributions (if any) paid by the member while employed by the member’s current employer;(ii) the amount (other than minimum MPF benefits to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies), if any, transferred to the scheme in respect of the member from an ORSO exempted scheme or an ORSO registered scheme which are attributable to the employee’s contributions of the current employment;(iii) the income or profits arising from any investments of the contributions and amount mentioned in any of subparagraphs (i) and (ii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(f) a sub-account specifying—(i) all voluntary contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments and transferred to the member’s contribution account; (18 of 2008 s. 17)(ia) all voluntary contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, other than voluntary contributions mentioned in subparagraph (i); (18 of 2008 s. 17)(ii) the amount (other than minimum MPF benefits to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies), if any, transferred to the scheme in respect of the member from an ORSO exempted scheme or an ORSO registered scheme which are attributable to the member’s former employments;(iii) the income or profits arising from any investments of the contributions and amount mentioned in any of subparagraphs (i), (ia) and (ii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member. (2 of 2002 s. 21; 18 of 2008 s. 17; 1 of 2015 s. 30)(6A) Where section 12A(6A) and (6B) of the Ordinance is applicable in the case of an employer and an employee, then, for the purposes of that case—(a) any reference to “current employer” in subsection (6)(a), (b), (d) or (e) shall include the previous employer mentioned in section 12A(6A) of the Ordinance;(b) any reference to “current employment” in subsection (6)(b) or (e) shall include employment with the previous employer mentioned in section 12A(6A) of the Ordinance;(c) any reference to “former employments” in subsection (6)(c) or (f) shall not include employment with the previous employer mentioned in section 12A(6A) of the Ordinance;(d) any reference to “former employer” in subsection (6)(c) or (f) shall not include the previous employer mentioned in section 12A(6A) of the Ordinance. (29 of 2002 s. 14)(7) In the case of a scheme member who is a self-employed person, the trustee must arrange for the member’s contribution account to be divided into the following sub-accounts—(a) a sub-account specifying the member’s mandatory contributions paid by the member while self-employed, any contribution surcharges paid by the member on arrears, and the income or profits arising from any investments of those contributions and surcharges, but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(b) a sub-account specifying—(i) all mandatory contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments and transferred to the member’s contribution account in accordance with Part 12, and any contribution surcharges paid in respect of any such mandatory contributions; (18 of 2008 s. 17)(ii) the member’s minimum MPF benefits (if any), to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies, transferred to the scheme;(iia) all mandatory contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, and any contribution surcharges paid in respect of any such mandatory contributions, other than mandatory contributions or contribution surcharges mentioned in subparagraph (i) or (ii); (18 of 2008 s. 17)(iii) the income or profits arising from any investments of the contributions, surcharges and benefits mentioned in any of subparagraphs (i), (ii) and (iia), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21; 18 of 2008 s. 17)(iv) the special contributions (if any) paid in respect of the member and the income or profits arising from any investments of those contributions, but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (30 of 2008 s. 8)(c) a sub-account specifying the voluntary contributions (if any) paid by the member while self-employed and the income or profits arising from any investments of those contributions, but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(d) a sub-account specifying—(i) all voluntary contributions paid by or in respect of the member and transferred to the member’s contribution account;(ia) all voluntary contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, other than voluntary contributions mentioned in subparagraph (i); (18 of 2008 s. 17)(ii) the amount (other than minimum MPF benefits to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies), if any, transferred to the scheme in respect of the member from an ORSO exempted scheme or an ORSO registered scheme;(iii) the member’s income or profits arising from any investments of the contributions and amount mentioned in any of subparagraphs (i), (ia) and (ii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member. (2 of 2002 s. 21; 18 of 2008 s. 17; 1 of 2015 s. 30)(8) In the case of a scheme member who holds a personal account in the scheme, the trustee must arrange for the member’s personal account to be divided into the following sub-accounts— (11 of 2009 s. 14)(a) a sub-account specifying—(i) all mandatory contributions paid by or in respect of the member that are attributable to the member’s current employments or former employments or former self-employments and transferred to the member’s personal account in accordance with Part 12, and any contribution surcharges paid in respect of any such mandatory contributions; (18 of 2008 s. 17)(ii) the member’s minimum MPF benefits (if any), to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies, transferred to the scheme;(iia) all mandatory contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, and any contribution surcharges paid in respect of any such mandatory contributions, other than mandatory contributions or contribution surcharges mentioned in subparagraph (i) or (ii); (18 of 2008 s. 17)(iii) the income or profits arising from any investments of the contributions, surcharges and benefits mentioned in any of subparagraphs (i), (ii) and (iia), but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (2 of 2002 s. 21)(iv) the special contributions (if any) paid in respect of the member and the income or profits arising from any investments of those contributions, but taking into account any losses in respect of the investments and any amounts paid in respect of the member; (30 of 2008 s. 8)(b) a sub-account specifying—(i) all voluntary contributions paid by or in respect of the member and transferred to the member’s personal account; (ia) all voluntary contributions paid by or in respect of the member that are attributable to the member’s former employments or former self-employments, other than voluntary contributions mentioned in subparagraph (i); (18 of 2008 s. 17)(ii) the amount (other than minimum MPF benefits to which section 5(1) of Schedule 2 to the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B) applies), if any, transferred to the scheme in respect of the member from an ORSO exempted scheme or an ORSO registered scheme;(iii) the member’s income or profits arising from any investments of the contributions and amount mentioned in any of subparagraphs (i), (ia) and (ii), but taking into account any losses in respect of the investments and any amounts paid in respect of the member. (2 of 2002 s. 21; 18 of 2008 s. 17; 11 of 2009 s. 14; 1 of 2015 s. 30)(8A) In the case of a scheme member who holds a TVC account in the scheme, the trustee must arrange for the account to specify—(a) all tax deductible voluntary contributions paid by the member into the account;(b) all accrued benefits—(i) derived from those contributions; and(ii) transferred to the account in accordance with Part 12; and(c) the income or profits arising from any investments of those contributions and accrued benefits, with any losses in respect of the investments and any amounts paid in respect of the member being taken into account. (7 of 2019 s. 20)(9) The trustee must ensure that each member’s account is kept in such a manner that the amounts relating to a scheme member’s account are recorded in the appropriate sub-accounts of that account.(10) For the avoidance of doubt, it is hereby declared that this section does not operate to require the trustee to divide a member’s sub-account into any further sub-accounts. (2 of 2002 s. 21)(E.R. 1 of 2013) 79. Financial period of registered scheme (1) Except as provided by subsection (2), the approved trustee of a registered scheme must ensure that the first financial period of the scheme is the period beginning with the date on which the scheme was registered under section 21 or 21A of the Ordinance and ending on a date determined by the trustee. The date so determined must be a date not more than 12 months from the date of registration of the scheme or such later date as the approved trustee, with the prior approval of the Authority, so determines. (29 of 2002 s. 14)(2) If the scheme was, immediately before it became registered under the Ordinance, an occupational retirement scheme registered under the Occupational Retirement Schemes Ordinance (Cap. 426)—(a) the first day of the first financial period of the scheme is to be determined by the approved trustee but that day must not be a date later than the day on which the scheme became registered under the Ordinance; and (b) the last day of the first financial period of the scheme is to be determined by the approved trustee but that day must be a date not more than 12 months from the first day of that period or such later date as the approved trustee, with the prior approval of the Authority, so determines. (29 of 2002 s. 14)(3) The trustee must ensure that every subsequent financial period of the scheme is to be—(a) the period ending on each anniversary of the date determined under subsection (1) or (2)(b), as the case may be; or(b) if a different date for the end of a financial period is approved under subsection (4), the period ending on that date and then on each anniversary of that date.(4) The approved trustee of a registered scheme may, with the prior approval of the Authority, determine a different date for the end of the financial period of the scheme. 80. Approved trustee to prepare statement of accounting policies (1) As soon as practicable after becoming the approved trustee of a registered scheme, the trustee must prepare a statement of accounting policies specifying the accounting policies to be followed in preparing financial statements for the scheme under section 81.(2) The statement must specify the basis on which the assets of the registered scheme are valued or are to be valued and the basis on which amounts are or are to be regarded as income from the investment of those assets.(3) The trustee may, from time to time, substitute for a statement of accounting policies a new statement of accounting policies or vary a statement so prepared or substituted. 81. Approved trustee to prepare financial statements (1) The approved trustee of a registered scheme must, before the deadline after a financial period of the scheme, cause to be made out a balance sheet as at the last day of the period that gives a true and fair view of the financial position of the scheme on that day. The balance sheet must specify the assets and liabilities of the scheme on that day. Obligations in respect of benefits that will become payable to scheme members after that day are not to be regarded as liabilities for that purpose.(2) The trustee must also, before that deadline, cause to be made out a statement of account for the relevant financial period that gives a true and fair view of the scheme’s financial transactions for that period. The statement must specify—(a) the fees for administrative expenses deducted or deductible by the trustee from scheme members’ accounts under this Regulation; and (b) the contributions and contribution surcharge (if any) paid and payable by, and recovered from, scheme members and (where appropriate) their employers; and(c) the total returns derived from investing the funds of the scheme (taking into account any capital appreciation and depreciation); and(d) the total amount of accrued benefits that were paid, and of accrued benefits that became payable but were not paid, to or in respect of scheme members; and(e) the amount of accrued benefits transferred to and from the scheme, during the financial period.(3) Before preparing the relevant financial statements, the trustee must take reasonable steps—(a) to recover all outstanding debts in relation to the scheme; and(b) to cause all known bad debts relating to the scheme to be written off and adequate provision to be made for doubtful debts.(4) If the financial statements relating to a registered scheme made out in accordance with this section would not otherwise give a true and fair view of the financial position and transactions of the scheme, the trustee must add such information and explanations as will give a true and fair view of the financial position and transactions.(5) The trustee must ensure that a statement of the accounting policies followed in preparing the financial statements is included in or attached to the statements. 82. Auditor’s report to be attached to financial statements The approved trustee of a registered scheme must take all reasonable steps to ensure that, before the deadline for each financial period of the scheme, the auditor’s report on the financial statements prepared for that period is attached to, or endorsed on, those statements. 83. Financial statements to state whether applicable accounting guideline has been complied with (1) If the financial statements for a registered scheme purport to be prepared in accordance with the applicable accounting guideline, the approved trustee of the scheme must ensure that those statements include a declaration to that effect.(2) If the financial statements relating to the scheme do not purport to be prepared in accordance with the applicable accounting guideline in any material respect, the trustee must ensure that those statements include a declaration to that effect. The declaration must specify in what respect those statements depart from that guideline. 84. Comparative amounts to be included in financial statements If a particular amount is specified in a financial statement made out for a financial period of a registered scheme, the approved trustee of the scheme must ensure—(a) that the corresponding amount for the immediately preceding financial period (if any) of the scheme is shown in the statement in such a way as to allow easy comparison between the first-mentioned amount and the corresponding amount; and(b) if the first-mentioned amount has been determined on a different basis from the corresponding amount and the different basis materially affects the determination of the corresponding amount—(i) that the corresponding amount is adjusted in such a way as to be consistent with the basis on which the first-mentioned amount is determined; and(ii) that particulars of the adjustment and the reasons for it are disclosed in a note to the financial statement. 85. Signing of financial statements The approved trustee of a registered scheme must ensure that financial statements relating to the scheme are signed—(a) if the trustee is or includes a company, by at least 2 directors of the company; and(b) if the trustee consists wholly of natural persons, by at least 2 of those persons, including the independent trustee. 86. Scheme report to be prepared (1) The approved trustee of a registered scheme must, for each financial period of the scheme, ensure that a scheme report is prepared for the scheme in accordance with this section.(2) The scheme report must include the following information—(a) a commentary as to the financial development of the scheme consistent with the financial statements;(b) particulars of any changes that have been made to the governing rules of the scheme since the end of the immediately preceding financial period of the scheme or, if there was no such period, since the scheme became registered;(c) such other information as is, in the trustee’s opinion, necessary to provide the scheme members with a proper understanding of the scheme and its operation.(3) The scheme report must also—(a) specify how and from whom scheme members can obtain further information about the scheme and its operation; and(b) give particulars of the auditor of the financial statements made out in respect of the scheme for the financial period and of any service provider, bank, legal adviser, broker or other agent appointed or engaged by the trustee for the purposes of the scheme during that period; and(c) if any of the particulars referred to in paragraph (b) have changed during the financial period, give particulars of the changes; and(d) if any of the persons referred to in paragraph (b) was an associate of the trustee during the financial period—(i) specify that fact; and(ii) if the trustee is or includes a company, give particulars of the persons who were controllers of that associate during that period; and(e) if the trustee is or includes a company, give—(i) particulars of the directors of the company who were holding office at the end of the financial period; and(ii) particulars of appointments and terminations of appointment of directors of the company during that period (including the dates of those appointments and terminations of appointment); and(f) if the trustee consists of or includes natural persons—(i) give particulars of those persons who were approved trustees of the scheme at the end of the financial period; and(ii) specify which of those trustees was the independent trustee of the scheme during the financial period; and(iii) give particulars of appointments and terminations of appointment of those trustees during that period (including the dates of those appointments and terminations of appointment).(4) For the purpose of subsection (3), particulars (詳情), in relation to a person, means—(a) the person’s name; and (b) the person’s business address or, if the person is a natural person and does not have a place of business in Hong Kong, the person’s residential address. 87. Investment report to be prepared (1) The approved trustee of a registered scheme must, for each financial period of the scheme, ensure that an investment report is prepared for the scheme in accordance with this section.(2) The investment report must also include the following information—(a) an analysis of the investments held by the trustee in respect of the scheme and particulars of the income derived from those investments during the financial period concerned; (b) a commentary by the trustee on the analysis;(c) particulars of the investment policy followed by the trustee during that financial period and any change in the statement of investment policy that will materially affect the risk attached to the investments of the scheme;(d) for that financial period and for each of the 2 immediately preceding financial periods (if any) of each constituent fund of the scheme—(i) the amount of net income (excluding capital appreciation or depreciation) derived from the investment of the funds of the scheme; and(ii) the amount by which the value of the scheme assets has appreciated or depreciated during the financial period; and(iii) the value of the scheme assets derived from the investment of the funds of the scheme as ascertained in accordance with the applicable accounting guideline.(3) The information referred to in subsection (2) must be adequate to ensure that scheme members are provided with a proper understanding of—(a) the investments made in respect of the scheme; and (b) the net return derived from those investments (excluding any appreciation or depreciation of the value of the scheme assets attributable to those investments); and (c) the appreciation or depreciation of the value of the scheme assets attributable to those investments. 88. Approved trustee to comply with sections 86 and 87 before deadline The approved trustee of a registered scheme must comply with sections 86 and 87 for each financial period of the scheme before the deadline after the end of that period. 89. Approved trustee to ensure preparation of consolidated report (1) As soon as practicable after the scheme report and investment report have been prepared for a financial period of a registered scheme, the approved trustee of the scheme must publish a consolidated report consisting of the following—(a) the financial statements of the scheme made up for that period;(b) the auditor’s report on those statements;(c) the scheme report prepared for that period in accordance with section 86;(d) the investment report prepared for that period in accordance with section 87.(2) A consolidated report may include such other information relating to the scheme and its administration as the trustee considers appropriate.(3) The consolidated report must be printed in a Chinese language version and an English language version. 90. Scheme members may request for copies of consolidated reports (1) A scheme member may request the approved trustee of the scheme for a copy of the consolidated report published by the trustee in respect of the scheme for any specified financial period within 7 years preceding the date of the request. The copy must be in either the Chinese language or the English language, according to the member’s election as specified in the request.(2) As soon as practicable after receiving a request under subsection (1), the trustee must arrange to give to the scheme member who made the request a copy of the consolidated report requested by that member. 91. Register of scheme members to be kept (1) The approved trustee of a registered scheme must ensure that a register of scheme members is established and kept in accordance with this section.(2) The register must specify the name of each scheme member, the member’s residential address, the member’s date of birth and whether the scheme member is a self-employed person or a relevant employee of a participating employer and, if the member is such an employee, the name and business address of the employer.(3) The register may also specify in relation to a scheme member such other particulars as the trustee thinks appropriate. 92. Other records to be kept (1) The approved trustee of a registered scheme must ensure that all records in respect of the management of the scheme (other than accounting records) are so kept as will correctly record and explain the operation of the scheme.(2) The provisions in section 77(2) to (4) apply to those records as if they were accounting records. 93. Period for which accounting and other records are to be kept The approved trustee of a registered scheme must ensure that an accounting or other record required to be kept in respect of the scheme is kept for at least 7 years after the end of the financial period in which the record is made or, if the record relates to a person’s membership of the scheme, for at least 7 years after the person ceases to be a scheme member. 94. Offences An approved trustee who fails to comply with a requirement or duty imposed on approved trustees by section 77 or 78 commits an offence and is liable on conviction to a fine at level 5. Part 8 Functions of Auditors 95. Approved trustee to ensure financial statements are audited (1) The approved trustee of a registered scheme must ensure that the scheme’s financial statements for a financial period are audited as required by this Part before the deadline after that period.(2) An approved trustee who fails to take all reasonable steps to comply with, or to secure compliance with, this section commits an offence and is liable on conviction to a fine at level 5. 96. Approved trustee to appoint auditor to audit scheme accounts (1) Within 3 months after the day on which a provident fund scheme is registered under section 21 or 21A of the Ordinance, or within such extended period as the Authority allows, the approved trustee of the scheme must appoint at least 1 person as auditor of the scheme.(2) An auditor of a registered scheme appointed under this section holds office until—(a) death (in the case of a natural person), dissolution (in the case of a firm that is not reconstituted) or commencement of winding up (in the case of a company); or (b) removal or resignation from office in accordance with section 99; or(c) if the auditor was appointed for a specified period, the expiry of that period; or (d) the auditor ceases, in accordance with this Part, to be qualified to be auditor of a registered scheme.(3) Within 30 days after a vacancy occurs in the office of auditor of a registered scheme, or within such extended period as the Authority allows, the trustee must, if there is no surviving or continuing auditor of the scheme, appoint another auditor to fill the vacancy.(4) While a vacancy in the office of auditor of the scheme continues, the surviving or continuing auditor (if any) of the scheme may act.(5) The trustee must appoint as auditor of the scheme only a person who—(a) has consented to act as auditor of the scheme by written notice given to the trustee before the appointment; and(b) has not withdrawn the consent by similar notice.(6) If the trustee appoints an auditor of the scheme in contravention of subsection (5), the purported appointment has no effect.(7) An approved trustee who fails to take all reasonable steps to comply with a requirement of this section commits an offence and is liable on conviction to a fine at level 5. 97. Functions of Authority where approved trustee fails to appoint auditor under section 96 (1) An approved trustee of a registered scheme who fails to appoint an auditor of the scheme as required by section 96 must notify the Authority in writing within 7 days after the day by which the appointment was required to be made.(2) At any time before the end of the period within which a trustee is required to appoint an auditor under section 96, the trustee may apply in writing to the Authority to extend that period on the grounds that the trustee claims to be unable to comply with the requirement within that period.(3) On receiving an application under subsection (2), the Authority may extend the period for appointment of an auditor of the scheme for a further period not exceeding 30 days, but only if satisfied that the trustee’s claim is justified.(4) On becoming aware that the approved trustee of a registered scheme has failed to appoint an auditor of the scheme as required by section 96 (whether as a result of the receipt of a notice under subsection (1) or not), the Authority may—(a) appoint as auditor of the scheme 1 or more persons who consent to be appointed; and(b) determine the fees to be paid to the auditor.(5) The approved trustee of the scheme concerned is required to pay the fees referred to in subsection (4)(b) in accordance with section 101.(6) An approved trustee who fails to take all reasonable steps to comply with a requirement of this section commits an offence and is liable on conviction to a fine at level 5. 98. Qualifications for auditor (1) Subject to subsections (5), (7) and (8), a person is qualified to be an auditor of registered schemes if the person is—(a) an accounting practice unit; or(b) recognized by the Authority as having a qualification in accounting equivalent to that of a certified public accountant (practising) as defined by section 2(1) of the Accounting and Financial Reporting Council Ordinance (Cap. 588). (23 of 2004 s. 56; L.N. 66 of 2022)(2) A person must not—(a) consent to be appointed as auditor of a registered scheme; or(b) act as auditor of the scheme; or(c) prepare a report required by this Regulation to be prepared by an auditor of a registered scheme, unless the person is qualified to be an auditor of registered schemes.(3) Subsection (2) does not prevent a person who is not qualified as an auditor from participating in the preparation of a report required by this Regulation so long as the person is under the supervision of a person who is so qualified.(4) A firm must not—(a) consent to be appointed as auditors of a registered scheme; or(b) act as auditors of such a scheme; or(c) prepare a report required by this Regulation required to be prepared by an auditor of a registered scheme, unless at least one of the partners of the firm is a person qualified to be an auditor of registered schemes.(5) If the approved trustee of a registered scheme is a company, a person is not qualified to be auditor of the scheme if the person—(a) is a controller of the company; or(b) is a partner, employer or employee of such a controller; or(c) is a partner or employee of an employee of such a controller.(6) If the approved trustee of a registered scheme is a company, then, for the purposes of this section, a person is taken to be a controller of the trustee if the person is a controller of a company that is an associate of the trustee.(7) If the approved trustee of a registered scheme consists of trustees all of whom are natural persons, a person is not qualified to be auditor of the scheme if the person is a partner, employer or employee of any of those persons.(8) If the approved trustee of a registered scheme consists of trustees one or more of whom is a company and the remainder are natural persons, a person is not qualified to be auditor of the scheme if the person—(a) is a controller of the company; or(b) is a partner, employer or employee of such a controller; or(c) is a partner or employee of an employee of such a controller; or(d) is a partner, employer or employee of any of those natural persons.(9) For the purposes of this section, a person is not a controller of an approved trustee that is a company only because the person is a liquidator of the company or of an associated company. (1 of 2008 s. 54)(10) If a person who is the auditor of a registered scheme knowingly disqualifies himself, herself or itself from acting as auditor of the scheme while the appointment continues, that person must immediately resign from the office of auditor of the scheme in accordance with section 99(4). The notice must be given within 7 days after the disqualification.(11) If a partner of a firm that is appointed auditor of a registered scheme knowingly disqualifies the firm from acting as auditor of the scheme while the appointment continues, that partner must immediately cause the firm to resign from the office of auditor of the scheme in accordance with section 99(4). The notice must be given within 7 days after the disqualification.(12) A person who, without reasonable excuse, fails to comply with this section commits an offence and is liable on conviction to a fine at level 5. 99. Removal and resignation of auditor (1) The approved trustee of a registered scheme may, subject to subsection (2), remove an auditor of the scheme from office.(2) The removal of an auditor of a registered scheme by the approved trustee of the scheme has effect only if the trustee, within 2 specified working days after the removal— (9 of 2016 s. 22)(a) informs the Authority, by written notice, of the removal and the reasons;

and(b) serves a copy of the notice on the auditor.(3) An auditor must, within 2 specified working days after receiving a copy of the notice, inform the Authority, by written notice, of the reasons as to why, in the auditor’s opinion, the auditor was removed from office. (9 of 2016 s. 22)(4) An auditor of a registered scheme may, by written notice given to the approved trustee of the scheme, resign as auditor of the scheme.(5) If an auditor of a registered scheme who has been appointed for a specified period does not wish to seek reappointment for a further period, the auditor must, by written notice given to the approved trustee of the scheme, inform the trustee of the auditor’s wish not to be reappointed.(6) A notice given for the purposes of subsection (4) or (5) must include or be accompanied by—(a) a statement to the effect that, to the best of the auditor’s knowledge and belief, there are no circumstances relating to the resignation or decision not to seek reappointment that would prejudicially affect the interests of scheme members to a material extent; or(b) if the notice does not include such a statement or if the notice includes a statement to the contrary effect, a statement specifying the circumstances that gave rise to the resignation or decision not to seek reappointment.(7) If a notice given for the purposes of subsection (4) or (5) includes a statement of the kind referred to in subsection (6)(a), the trustee must, within 7 specified working days after receiving the notice, give the Authority a copy of the notice. (9 of 2016 s. 22)(8) If a notice given for the purposes of subsection (4) or (5) includes a statement of the kind referred to in subsection (6)(b), the auditor must, within 2 specified working days after giving the notice to the trustee, give the Authority a copy of the notice. (9 of 2016 s. 22)(9) If, on the retirement or withdrawal of a partner from the firm, the firm would no longer be capable of acting as auditor of a registered scheme because of section 98(4), the firm must resign from office by written notice given to the approved trustee of the scheme in accordance with subsection (4). The notice must be given within 7 days after the retirement or withdrawal of the partner from the firm. 100. Effect of winding up on office of auditor If a registered scheme is being wound up, the auditor of the scheme ceases to hold office on the commencement of the winding up. 101. Fees and expenses of auditor The approved trustee of a registered scheme is required to pay the reasonable fees and expenses of an auditor of the scheme from the funds of the scheme. 102. Auditor to report on financial statements etc. (1) The auditor of a registered scheme must report to the approved trustee of the scheme on the financial statements of the scheme and on the scheme’s accounting records and other records relating to the scheme. The report must be given to the trustee within sufficient time to enable the trustee to comply with section 110.(2) An auditor must, in a report under this section—(a) state whether or not the financial statements relating to the scheme are in the auditor’s opinion properly drawn up—(i) so as to give a true and fair view of the matters required by section 81 to be dealt with in those statements; and(ii) in accordance with sections 80, 81, 83 and 84 in all material respects,and, if not, specify in what respects those statements are, in the auditor’s opinion, not properly drawn up; and(b) state whether or not, in the auditor’s opinion, proper accounting and other records were kept during the relevant financial period in respect of the funds of the scheme, the scheme assets and all financial transactions entered into in relation to the scheme and, if not, specify in what respects those records were, in the auditor’s opinion, not kept; and(c) state whether or not the scheme assets were at the end of that period encumbered by any encumbrance, otherwise than as permitted by this Regulation, and, if they were, give particulars of the encumbrance; and(d) state whether or not, in the auditor’s opinion, the requirements specified in the guidelines (if any) made by the Authority under section 28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part 10 of, and Schedule 1 to, this Regulation have been complied with in all material respects as at—(i) the end of that period; and(ii) 2 other dates in that period nominated by the auditor, and, if not, specify to what extent those requirements have, in the auditor’s opinion, not been complied with; and (9 of 2016 s. 23)(e) state whether or not, in the auditor’s opinion, the requirements under sections 34DB(1)(a), (b), (c) and (d), 34DD(1) and (4), 34DI(1) and (2), 34DJ(2), (3), (4) and (5) and 34DK(2) of the Ordinance have been complied with in all material respects as at— (40 of 2021 s. 60)(i) the end of that period; and(ii) 2 other dates in that period nominated by the auditor,and, if not, specify to what extent, in the auditor’s opinion, those requirements have not been complied with. (9 of 2016 s. 23)(3) The intervening period between the 2 dates referred to in subsection (2)(d)(ii) or (e)(ii) must be not less than 3 months or, if the Authority has in a particular case allowed a shorter period, not less than that period. (9 of 2016 s. 23)(4) The auditor may include in the auditor’s report such explanations and qualifications as the auditor thinks relevant.(5) The auditor’s report must be attached to, or endorsed on, the financial statements.(E.R. 1 of 2013) 103. Auditor to report certain matters to Authority (1) If, in the course of performing the auditor’s duties under this Part, the auditor of a registered scheme—(a) becomes aware of any matter that would cause the auditor to qualify the auditor’s report on financial statements made out in respect of the scheme; or(ab) becomes aware that the approved trustee of the scheme is not complying with any of the following provisions of the Ordinance—(i) section 34DB(1)(a), (b), (c) or (d);(ii) (Repealed 40 of 2021 s. 61)(iii) section 34DD(1) or (4);(iv) section 34DI(1) or (2);(v) section 34DJ(2), (3), (4) or (5);(vi) section 34DK(2); or (9 of 2016 s. 24)(b) becomes aware that the approved trustee of the scheme is not complying with section 77 or 78; or(c) identifies any transaction that, in the auditor’s opinion, is or has resulted in a misappropriation of the funds of the scheme or the scheme assets; or(d) identifies any payment from the funds of the scheme that, in the auditor’s opinion, is materially prejudicial to the interests of scheme members or is in contravention of section 14 or 15 of the Ordinance or of a regulation made for the purposes of either of those sections; or(e) except in the circumstances specified in subsection (3), becomes aware that the scheme assets are or have been mixed with the funds of the trustee (otherwise than in accordance with the Ordinance) or the assets of any other person; or(f) identifies any matter that causes the auditor to form an opinion that the requirements specified in the guidelines (if any) made by the Authority under section 28 of the Ordinance with respect to forbidden investment practices and the requirements of sections 37(2), 51 and 52 and Part 10 of, and Schedule 1 to, this Regulation have not been complied with in all material respects, (40 of 2021 s. 61)(g) (Repealed 40 of 2021 s. 61) except as permitted by subsection (4), it is the duty of the auditor to report the matter immediately to the Authority by written notice.(2) The auditor is not required to comply with subsection (1) with respect to a payment referred to in paragraph (d) of that subsection if the trustee has fully reimbursed the scheme as soon as practicable after the payment was brought to the trustee’s notice.(3) The circumstances referred to in subsection (1)(e) arise when a custodian of the scheme assets—(a) is also the holder of assets of one or more other registered schemes or other financial schemes or undertakings; and(b) mixes scheme assets with those other assets; and(c) keeps a separate account of the scheme assets and those other assets in such a way as to enable them to be separately identified.(4) Before reporting a matter to the Authority in accordance with subsection (1), the auditor may, by written notice given to the trustee—(a) bring the matter to the trustee’s attention; and(b) request the trustee to provide the auditor with an explanation of the matter and the related circumstances; and(c) require the trustee to rectify the matter within such period as the auditor considers to be reasonable. The auditor is not required to report the matter to the Authority if the trustee complies with the request and requirement in the notice.(5) The auditor must not give a notice under subsection (4)—(a) if the matter concerned relates to a transaction that, in the auditor’s opinion is or has resulted in a material misappropriation of the funds of the scheme or the scheme assets; or(b) if bringing the matter to the attention of the trustee could reasonably be expected to affect the interests of scheme members detrimentally.(E.R. 1 of 2013) 104. Power of Authority on becoming aware of matters reported under section 103 (1) If, on receiving a report made under section 103 or otherwise becoming aware of a matter referred to in that section, the Authority is of the opinion that the matter is capable of being rectified, the Authority may, by written notice given to the trustee concerned, direct the trustee to rectify the matter at the trustee’s own expense within such period as is specified in the notice.(2) As soon as practicable after giving a direction under subsection (1), the Authority must—(a) by written notice given to the auditor, request the auditor, as soon as practicable after the end of the period specified in the notice and at the expense of the trustee, to provide the Authority with a further report as to whether or not the trustee has rectified the matter; and(b) attach to that notice a copy of the notice given to the trustee containing the direction.(3) An approved trustee who, without reasonable excuse, fails to comply with a direction given by the Authority under subsection (1) commits an offence and is liable on conviction to a fine at level 6.(4) It is the duty of an auditor to comply with a request made to the auditor in accordance with subsection (2). 105. Access of auditor to scheme records The auditor of a registered scheme is entitled—(a) to have access at all reasonable times to the accounting records and other records that are required to be kept in relation to the scheme by— (40 of 2021 s. 62)(i) the trustee;(ii) the system operator of an electronic MPF system; or(iii) a service provider appointed or engaged by the trustee for the purposes of the scheme; (40 of 2021 s. 62)(b) if the trustee is or includes a company, to have access at all reasonable times to the accounting records and other records that the company is required by law to keep; and(c) to require from the trustee, the system operator and any such service provider such information and explanations as the auditor needs in order to perform a duty imposed on the auditor by this Part or Part 9. (40 of 2021 s. 62)(E.R. 1 of 2013) 106. Auditor’s opinion with respect to information and explanations (1) In performing a duty under this Part or Part 9, the auditor of a registered scheme must form an opinion as to whether the auditor has obtained all the information and explanations that the auditor has required.(2) When forming an opinion for the purposes of making a report under section 102 or 103, the auditor may treat—(a) information contained in a remittance statement lodged with the trustee of the scheme in respect of a scheme member who is a relevant employee of a participating employer in accordance with Part 11; and(b) particulars given to the trustee in accordance with Part 11 by a scheme member who is a self-employed person, as conclusive evidence as to the amount of the member’s relevant income.(E.R. 1 of 2013) 107. Obstruction of auditor (1) This section applies to the following persons—(a) an approved trustee of a registered scheme;(b) any service provider appointed or engaged for the purposes of the scheme.(2) A person to whom this section applies—(a) must allow the auditor of the scheme access to all accounting records and other records relating to the scheme and to the approved trustee of the scheme that are in the person’s possession; and(b) must give any information or explanation to the auditor as and when reasonably required by the auditor; and(c) must not obstruct, hinder or delay the auditor in the performance of the auditor’s duties or the exercise of the auditor’s powers.(3) A person to whom this section applies who, without reasonable excuse, contravenes subsection (2) commits an offence and is liable on conviction to a fine at level 6 and to imprisonment for 12 months. 108. Certain statements of auditor not admissible evidence A statement made by an auditor of a registered scheme in a notice given by the auditor to the Authority under this Part, or made in answer to an inquiry by the Authority arising from the giving of the notice, or as to the reasons for the auditor’s removal or resignation from office or not seeking reappointment as auditor of the scheme—(a) is not admissible in evidence in any civil or criminal proceedings against the auditor; and (b) may not be made the ground of a prosecution or other legal proceedings against the auditor. Part 9 Lodgement of Documents with Authority 109. Approved trustee to lodge trustee’s return with Authority (1) If the approved trustee of a registered scheme is or includes a company, the company must, within 6 months after each relevant period, lodge with the Authority for that period a trustee’s return that complies with this section.(2) If the approved trustee consists of or includes natural persons, each of those persons must, within 6 months after each relevant period, lodge with the Authority for that period a trustee’s return that complies with this section.(3) For the purposes of this section, the relevant period is—(a) in the case of a company, the financial year of the company; or(b) in the case of a natural person, the financial period of the registered scheme in respect of which the person is a trustee or, if the person is a trustee in respect of 2 or more registered schemes, one of those schemes nominated by the person and notified in writing to the Authority.(4) A nomination referred to in subsection (3)(b) may be varied in respect of a later relevant period only with the consent of the Authority.(5) A trustee’s return must include—(a) a statement as to whether or not the particulars specified in subsection (6) have changed in relation to the trustee during the relevant period and, if those particulars have changed during that period, a statement specifying the changes; and(b) a declaration—(i) that the trustee continues to satisfy the requirements for approval as a trustee under section 20 of the Ordinance and has, during the relevant period, complied with all conditions specified in the notice of approval given to the trustee in accordance with that section; or(ii) if the trustee does not continue to satisfy all of those requirements or has not, during that period, complied with all of those conditions, that the trustee continues to satisfy those requirements and to comply with those conditions with the exception of those requirements and conditions specified in the declaration.(6) The following are the particulars referred to in subsection (5)(a)—(a) in the case of a company—(i) particulars of the address of the company’s principal place of business in Hong Kong;(ii) if the company’s registered office is not at the company’s principal place of business in Hong Kong, particulars of that office;(iii) if the appointment of the auditor relating to the trustee was terminated during the relevant period (whether by resignation or by any other means), particulars of the termination and of any other auditor appointed to replace that auditor;(b) in the case of a natural person—(i) particulars of the address of the person’s principal place of business in Hong Kong, unless subparagraph (ii) applies;(ii) the person’s residential address if the person does not have a place of business in Hong Kong.(7) If the trustee is or includes a company, the trustee must attach to the return the following documents—(a) if the trustee is not a non-Hong Kong company, a copy of the financial statements, or the balance sheet and profit and loss account, of the company relating to the immediately preceding financial year of the company, together with a copy of the auditor’s report on the documents and a copy of the directors’ report for that year, all of which must be prepared in accordance with Part 9 of the Companies Ordinance (Cap. 622) or Part IV of the Companies Ordinance (Cap. 32) as in force from time to time before the commencement date* of section 2 of Schedule 9 to the Companies Ordinance (Cap. 622), as the case may be; (30 of 2004 s. 3; 28 of 2012 ss. 912 & 920)(b) if the trustee is a non-Hong Kong company, a copy of the balance sheet and profit and loss account of the company relating to the immediately preceding financial year of the company, together with a copy of the auditor’s report on those documents and a copy of the directors’ report for that year, all of which must be prepared in a form and language, and must contain the particulars, as required by the Authority by written notice to the trustee; (30 of 2004 s. 3; 1 of 2015 s. 31)(c) if the trustee is a company that is provided with continuous financial support from a substantial financial institution, a copy of the balance sheet and profit and loss account of the institution relating to the immediately preceding financial year of the institution, together with a copy of the auditor’s report on those documents and a copy of the directors’ report for that year.(8) If the trustee is a natural person, the person must attach to the return—(a) evidence that the person has in force, and had in force for the whole of the relevant period, a performance guarantee with an authorized financial institution or an authorized insurer securing the performance by the person of the duties imposed by or under the Ordinance on an approved trustee; and(b) if the guarantee was varied during the relevant period, a copy of the variation.(9) A trustee’s return must be signed—(a) in the case of a company, by at least 2 directors of the company; and(b) in the case of a natural person, by that person.Editorial Note:* Commencement date : 3 March 2014. 110. Requirements in section 22A of the Ordinance (1) For the purposes of section 22A(1) of the Ordinance, the date is the deadline after each financial period relating to the registered scheme concerned.(2) The following information is the information that must be included in the annual statement required to be lodged under section 22A of the Ordinance—(a) a statement as to whether or not the trustee has, during the relevant financial period, become aware of any failures by persons appointed or engaged as service providers for the purposes of the scheme to comply with the obligations imposed on them with respect to the scheme and, if the trustee has become aware of any such failures, a statement giving particulars of those failures and any rectification of those failures;(b) a statement as to whether or not the trustee is aware of any events of a significant nature relating to the scheme that occurred during the relevant financial period but have not been reported to the Authority and, if the trustee is aware of any such events, a statement specifying those events;(c) a statement as to whether or not, in so far as it is within the knowledge of the trustee, the provisions of the Ordinance and of the governing rules of the scheme have been complied with in all material respects in respect of the scheme during the relevant financial period and, if within the knowledge of the trustee, those provisions have not been so complied with, a statement giving particulars of the failures to comply with those provisions; (40 of 2021 s. 63)(d) such other information as may be prescribed for the purposes of this section by the guidelines.(3) The following documents are documents that must accompany the annual statement required to be lodged under section 22A of the Ordinance—(a) the consolidated report published in respect of the scheme for the relevant financial period;(b) evidence that the trustee has in force, and had in force for the whole of the relevant financial period, adequate insurance that will indemnify scheme members against losses that the members could incur as a result of the administration of the scheme by the trustee or by any service provider appointed or engaged to provide services for the purposes of the scheme and, if the insurance was varied during that period, particulars of the variation;(c) a declaration that the trustee has, during the relevant financial period, supervised, and exercised proper control over, all service providers appointed or engaged for the purposes of the scheme.(4) The annual statement must be signed—(a) if the trustee is or includes a company, by at least 2 directors of the company; and(b) if the trustee consists wholly of natural persons, by at least 2 of those persons, including the independent trustee. 111. Meaning of relevant period for the purposes of sections 112, 113 and 116 (1) For the purposes of sections 112, 113 and 116—(a) if the trustee concerned is the approved trustee of only one registered scheme, the relevant period is the financial period of that scheme; or(b) if the trustee is the approved trustee of 2 or more registered schemes and a report prepared for the purposes of section 112 relates to 2 or more of those schemes, the relevant period is whichever of the following periods is nominated by the trustee and notified in writing to the Authority—(i) the financial period of one of those schemes specified by the trustee;(ii) the financial year of the trustee.(2) A nomination referred to in subsection (1)(b) may be varied in respect of a later relevant period only with the consent of the Authority. 112. Approved trustee to report on control objectives and internal control measures (1) The approved trustee of a registered scheme must, before the deadline after each relevant period, lodge with the Authority for that period a report specifying—(a) the control objectives of the scheme; and (b) the major procedures and internal control measures for achieving those objectives.(2) If the trustee is the approved trustee of 2 or more registered schemes and the control objectives and procedures and internal control measures for those schemes are the same for each scheme, the trustee may lodge a single report in respect of all of the schemes.(3) A report lodged under this section must be accompanied by an auditor’s report prepared in accordance with section 113.(4) The report must be signed—(a) if the trustee is or includes a company, by at least 2 directors of the company; and(b) if the trustee consists wholly of natural persons, by at least 2 of those persons, including the independent trustee.(5) The approved trustee of an employed sponsored scheme is not required to comply with this section during a relevant period if—(a) it has no more than 1 000 members throughout the immediately preceding relevant period; or(b) is exempted by the Authority under subsection (6).(6) The Authority may grant the approved trustee of an employer sponsored scheme an exemption for the purposes of subsection (5) if satisfied that—(a) for a substantial portion of the immediately preceding relevant period, the scheme had no more than 1 000 members; or(b) the scheme will not have, or is unlikely to have, more than 1 000 members during the current relevant period of the scheme. 113. Duty of auditor in respect of approved trustee’s report under section 112 (1) As soon as practicable after preparing a report for the purposes of section 112, the approved trustee of the scheme or schemes concerned must submit the report to—(a) if the report relates to only one scheme, the auditor of the scheme; or(b) if the report relates to 2 or more schemes and the trustee specifies the financial period of one of the schemes to which the report relates as the relevant period nominated under section 111(1)(b), the auditor of that scheme; or (c) if the report relates to 2 or more schemes and the financial year of the trustee is the relevant period nominated under section 111(1)(b), the auditor of the trustee.(2) The approved trustee must allow the auditor sufficient time to comply with the requirements in subsections (3) and (6).(3) On receiving the report, the auditor must review the report and report in writing to the trustee on the review in accordance with subsections (4) and (5).(4) The auditor’s report on the review must state the auditor’s opinion as to—(a) whether or not appropriate control objectives were established and maintained for the scheme during the period to which the report relates; and (b) if appropriate control objectives were so established and maintained, whether or not effective internal control measures were established and maintained for the purpose of achieving those objectives; and(c) whether or not those internal control measures (if any) were likely to have been sufficiently effective to provide a reasonable assurance that the control objectives established and maintained for the scheme would be achieved if those measures were fully and properly implemented.(5) The auditor’s report must also—(a) state whether or not, during the course of the review of the trustee’s report, the auditor became aware of any shortcomings in the internal control measures that could materially affect the operation of the scheme (including its financial position) or the financial interests of scheme members; and(b) if the auditor did become aware of any such shortcomings, specify those shortcomings.(6) The auditor must ensure that the auditor’s report prepared under this section is given to the trustee concerned in sufficient time to enable the trustee to comply with section 112(1). 114. Approved trustee to report on compliance with capital adequacy requirements (1) In the case of an approved trustee that is or includes a company, the company must, within 6 months after the end of each financial year of the company, lodge with the Authority a report. The report must state—(a) whether or not the prescribed capital adequacy requirements were complied with in respect of the company throughout that financial year; and(b) if the prescribed capital adequacy requirements were not so complied with, in what respects they were not complied with.(2) The report must be accompanied by a report by the auditor of the company that has been prepared in accordance with section 115.(3) The report must be signed by at least 2 directors of the company. 115. Duty of auditor in respect of trustee’s report under section 114 (1) As soon as practicable after a company has prepared a report for the purposes of section 114, the company must submit the report to its auditor.(2) The company must allow the auditor sufficient time to comply with the requirements in subsections (3) and (5).(3) On receiving the report, the auditor must review the report and report in writing on the review to the company. The auditor’s report must state—(a) whether or not, in the auditor’s opinion, the prescribed capital adequacy requirements were complied with—(i) as at the end of the financial year of the company; and(ii) on 2 other dates nominated by the auditor ; and(b) if the prescribed capital adequacy requirements were not so complied with, in what respects they were not complied with.(4) The intervening period between the 2 dates referred to in subsection (3)(a)(ii) must be not less than 3 months or, if the Authority has in a particular case allowed a shorter period, not less than that period.(5) The auditor must ensure that the auditor’s report prepared under this section is given to the company in sufficient time to enable it to comply with section 114(1).(6) For the purposes of this section, the auditor of a company to which this section applies is entitled—(a) to have access at all reasonable times to the accounting and other records that the company is required by law to keep; and(b) to require from the company, and from any controller or employee of the company, such information and explanations as the auditor needs in order to report under this section.(7) A company to which this section applies must take all reasonable steps to ensure that—(a) the auditor of the company is allowed access to any accounting and other records relating to the company that are in the possession of the company or of the controller or any other controller, employee or agent of the company; and(b) any relevant information that are in the possession of the company or of the controller or any other controller, employee or agent of the company or explanation is given as and when required by the auditor; and(c) the auditor is not hindered, obstructed or delayed in the performance of the auditor’s duties under this section.(8) A company that, without reasonable excuse, fails to comply with subsection (7) commits an offence and is liable on conviction to a fine at level 6. 116. Power of Authority to direct approved trustee to rectify matters (1) If the Authority—(a) becomes aware, whether as a result of the lodgement with it in accordance with section 109 of the auditor’s report on the accounts of a company that is or included in an approved trustee or otherwise, that those accounts have been qualified in some material respect; and(b) is of the opinion that the matter to which the qualification relates is capable of being rectified, the Authority may, by written notice given to the company, direct it to rectify the matter within such period as is specified in the notice.(2) If the Authority—(a) becomes aware, whether as a result of an auditor’s report under section 113 or otherwise, that—(i) appropriate control objectives were not established and maintained in respect of a registered scheme during a relevant period; or(ii) effective internal control measures were not established and maintained for the purpose of achieving those objectives; or(iii) there were shortcomings in the internal control measures that could materially affect the operation of the scheme (including its financial position) or the financial interests of scheme members; and(b) is of the opinion that the matter is capable of being rectified, the Authority may, by written notice given to the approved trustee of the scheme, direct the trustee to rectify the matter within such period as is specified in the notice.(3) If the Authority—(a) becomes aware, whether as a result of an auditor’s report under section 115 or otherwise, that a company that is or included in an approved trustee has not, during a financial year of the company, complied with the prescribed capital adequacy requirements applicable to the company; and(b) is of the opinion that the matter is capable of being rectified, the Authority may, by written notice given to the company, direct it to rectify the matter within such period as is specified in the notice.(4) As soon as practicable after giving a direction under this section to rectify a matter, the Authority must—(a) by written notice given to the auditor concerned, request that auditor to provide the Authority, as soon as practicable after the end of the period specified in the notice and at the expense of the company or trustee concerned, with a further report as to whether or not the trustee has rectified the matter; and(b) attach to that notice a copy of the notice given to the company or trustee concerned containing the direction.(5) A company that is or is included in an approved trustee that, without reasonable excuse, fails to comply with a direction given under subsection (1) or (3) commits an offence and is liable on conviction to a fine at level 6.(6) An approved trustee who, without reasonable excuse, fails to comply with a direction given under subsection (2) commits an offence and is liable on conviction to a fine at level 6.(7) It is the duty of an auditor to comply with a request made to the auditor in accordance with subsection (4). 117. Approved trustee to lodge monthly return with Authority Within 7 specified working days after the last day of each calendar month, the approved trustee of a registered scheme must lodge with the Authority a monthly return containing— (9 of 2016 s. 25)(a) (Repealed 40 of 2021 s. 64)(b) such information relating to the capital preservation fund,as may be prescribed for the purposes of this section by the guidelines. Part 10 Restricted Investments 118. Limitations and prohibitions as to investment in restricted investments (1) The limitations and prohibitions set out in this section are the limitations and prohibitions with which the approved trustee of an employer sponsored scheme must comply for the purposes of section 29 of the Ordinance.(2) Not more than 10 per cent of the total assets of each constituent fund of an employer sponsored scheme, as determined by reference to their market value, may consist of restricted securities.(3) Subsection (2) does not apply to—(a) the underlying securities of an approved pooled investment fund in which the assets of a constituent fund are invested; or(b) the debt securities permitted under section 7(2)(a) or (b) of Schedule 1.(4) A loan, other than a loan made by way of a deposit with an authorized financial institution, may not be made from the assets of a constituent fund.(5) In this section—restricted securities (受限制證券) means—(a) any security of, or issued by, a participating employer or an associate of the employer, except an option issued by an associate of the employer that, if exercised, would result in an acquisition of share capital of a company or corporation other than that of the employer or associate; or (L.N. 223 of 2000)(b) any security that contains an option that, if exercised, would result in the conversion of the security to shares or other securities of, or issued by, a participating employer or an associate of the employer; or(c) any security that is an option that, if exercised, would result in the acquisition of shares or other securities of, or issued by, a participating employer or an associate of the employer. Part 11 Scheme Membership and Contributions 119. Definitions In this Part—assessable profits (應評稅利潤) has the same meaning as in the Inland Revenue Ordinance (Cap. 112);business (業務) includes a business and a trade within the meaning of the Inland Revenue Ordinance (Cap. 112) and a profession; maximum level of relevant income (最高有關入息水平), in relation to a self-employed person, means— (a) the amount of the maximum level of relevant income per month as specified in section 3 of Schedule 3 to the Ordinance if the person contributes to a registered scheme on a monthly basis; and (b) the amount of the maximum level of relevant income per year as specified in section 3 of Schedule 3 to the Ordinance if the person contributes to the scheme on a yearly basis; most recent notice of assessment (最近期評稅通知書), in relation to a self-employed person, means the last notice of assessment issued to the self-employed person, or to a partnership of which the self-employed person is a member, as at the time when the person produces evidence of the person’s relevant income to the approved trustee of the scheme;notice of assessment (評稅通知書) means a notice of assessment issued by the Commissioner of Inland Revenue in accordance with the Inland Revenue Ordinance (Cap. 112);payment period (付款期) means the period specified in a notice under section 136(1)(a); (29 of 2002 s. 14)prescribed percentage (訂明百分比) means the percentage specified in section 7C(3) of the Ordinance;profits tax (利得稅) has the same meaning as in the Inland Revenue Ordinance (Cap. 112);self-employed person (自僱人士), when used in relation to a registered scheme, means a self-employed person who is a member of the scheme. (1 of 2008 s. 62)(2 of 2002 s. 21; 29 of 2002 s. 14; 1 of 2008 s. 62; 18 of 2008 s. 18; 40 of 2021 s. 65) Division 1 Provisions relating to Persons Exempted under Section 4(3)(a) or (b) or 5 of the Ordinance (1 of 2008 s. 21) 120. When the Ordinance applies to exempted employee (1 of 2008 s. 22)(1) If a relevant employee who, having been exempted from the Ordinance for a limited period because of the operation of section 4(3)(a) of the Ordinance, continues to be employed by the same employer after that period, the Ordinance applies to the employee and his employer as if the employment had begun immediately after the end of that period. (1 of 2008 s. 22)(2) If a relevant employee who, having been exempted from the Ordinance because of the operation of section 4(3)(b) of the Ordinance, continues to be employed by the same employer after ceasing to be a member of a provident, pension, retirement or superannuation scheme (however described) of a place outside Hong Kong, the Ordinance applies to the employee and his employer as if the employment had begun on the day on which the employee ceased to be such a member. (1 of 2008 s. 22)(3) If a relevant employee who, having been exempted from the operation of all or any of the provisions of the Ordinance by virtue of an exemption granted under section 5 of the Ordinance, continues to be employed by the same employer after ceasing to be so exempted, the Ordinance applies to the employee and his employer as if the employment had begun on the day on which the employee ceased to be so exempted. (1 of 2008 s. 22) 121. When the Ordinance applies to exempted self-employed person (1 of 2008 s. 23)(1) If a self-employed person who, having been exempted from the Ordinance for a limited period because of the operation of section 4(3)(a) of the Ordinance, continues to be self-employed after that period, the Ordinance applies to the person as if the self-employment had begun immediately after the end of that period. (1 of 2008 s. 23)(2) If a self-employed person who, having been exempted from the Ordinance because of the operation of section 4(3)(b) of the Ordinance, continues to be self-employed after ceasing to be a member of a provident, pension, retirement or superannuation scheme (however described) of a place outside Hong Kong, the Ordinance applies to the person as if the self-employment had begun on the day on which he ceased to be such a member. (1 of 2008 s. 23) Division 2 Employer Participation 122. Participating employer to calculate relevant income and pay mandatory contributions (1) In this section— contribution day (供款日)— (a) in relation to a mandatory contribution payable by a participating employer in respect of a relevant employee who is a casual employee (other than a casual employee who is a member of an industry scheme), means, subject to subsection (4), the 10th day after the last day of— (29 of 2002 s. 14; E.R. 4 of 2019)(i) the relevant contribution period; or(ii) the contribution period during which the permitted period ends, whichever is the later; and (aa) in relation to a mandatory contribution payable by a participating employer in respect of a relevant employee (other than a casual employee), means, subject to subsection (4), the 10th day after the last day of— (E.R. 4 of 2019)(i) a calendar month within which the relevant contribution period ends; or(ii) the month during which the permitted period ends, whichever is the later; and (29 of 2002 s. 14) (b) in relation to a mandatory contribution payable by a participating employer in respect of a casual employee who is a member of an industry scheme, means, subject to subsection (4), whichever of the following days is agreed by the participating employer and the approved trustee of the scheme concerned as the contribution day for that employee—(i) the 10th day after the last day of the relevant contribution period; or (2 of 2002 s. 21)(ii) the next working day (other than a Saturday) immediately subsequent to the payment of relevant income for the relevant contribution period; (L.N. 223 of 2000; 2 of 2002 s. 21) contribution period (供款期) has the same meaning as in section 7A(10) of the Ordinance;permitted period (特准限期) has the meaning given by section 7AA(11) of the Ordinance. (1 of 2015 s. 32)(2) A participating employer of a registered scheme must, for each contribution period, calculate—(a) the amount of relevant income of each relevant employee of the employer who is a member of the scheme; and (b) the amount of mandatory contributions that the employer must pay to the approved trustee of the scheme in respect of each relevant employee under section 7A(1)(a) or (2)(a) of the Ordinance; and(c) the amount of mandatory contributions that the employer must deduct from the relevant income of each relevant employee and pay to the approved trustee of the scheme in respect of each of them under section 7A(1)(b) or (2)(b) of the Ordinance.(3) For the purposes of section 7A(8) of the Ordinance—(a) a participating employer in respect of a relevant employee who is a casual employee must, for each contribution period, pay the mandatory contribution to the approved trustee of the scheme in respect of each relevant employee on or before the contribution day;(b) a participating employer in respect of a relevant employee (other than a casual employee) must, for each contribution period which ends in the previous calendar month or during the permitted period, as the case may be, pay the mandatory contribution to the approved trustee of the scheme in respect of each relevant employee on or before the contribution day. (29 of 2002 s. 14)(4) If the contribution day as determined under subsection (1) for the purposes of subsection (3)(a) or (b) is a day specified in subsection (5) (excluded day), the contribution day is to be the next following day that is not an excluded day (40 of 2021 s. 66)(5) The day specified for subsection (4) is—(a) a Saturday; (b) a public holiday; (c) a gale warning day or black rainstorm warning day as defined by section 71(2) of Cap. 1; or (d) subject to subsection (6)—a day on which the electronic MPF system (or any part of it) is suspended under section 19J or 19L(1)(a) or (b) of the Ordinance. (40 of 2021 s. 66)(6) Subsection (5)(d) does not apply to the payment of a mandatory contribution to the approved trustee of a registered scheme unless the suspension affects the payment. (40 of 2021 s. 66)__________________Editorial Notes: 1. For the transitional provision relating to the amendments made by the Mandatory Provident Fund Schemes (Amendment) (No. 2) Ordinance 2002 (29 of 2002), see section 15 of the Amendment Ordinance. 2. For transitional provision relating to the amendments made by the Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1 of 2015), see Part 8 of the Amendment Ordinance. 123. Participating employer to provide remittance statement to approved trustee (1) When paying contributions to the approved trustee of a registered scheme, a participating employer must ensure that the contributions are accompanied by a remittance statement, in a form specified or approved by the Authority, for the contribution period or periods to which the contributions relate.(2) The remittance statement must include the following information—(a) the amount of relevant income of each relevant employee who is a scheme member for the contribution period or each of the contribution periods, as the case requires;(b) the amount of mandatory contributions paid under section 7A(1)(a) or (2)(a) of the Ordinance by the employer to the scheme in respect of that employee for that period or each of those periods, as the case may be;(c) the amount of mandatory contributions deducted from the employee’s relevant income under section 7A(1)(b) or (2)(b) of the Ordinance by the employer and paid to the scheme for that period or each of those periods, as the case may be;(d) the amount of voluntary contributions (if any) deducted from the employee’s relevant income by the employer and paid to the scheme for that period or each of those periods, as the case may be;(e) the amount of voluntary contributions (if any) paid by the employer to the scheme in respect of the employee for that period or each of those periods, as the case may be.(3) A participating employer in an industry scheme is not required to comply with this section in relation to a casual employee who is a member of the scheme if the employer and the approved trustee of the scheme has agreed that the contribution day in relation to the mandatory contribution payable by the employer in respect of the employee is the working day mentioned in paragraph (b)(ii) of the definition of contribution day in section 122(1). (2 of 2002 s. 21)(29 of 2002 s. 14) Editorial Note:For the transitional provision relating to the amendments made by the Mandatory Provident Fund Schemes (Amendment) (No. 2) Ordinance 2002 (29 of 2002), see section 15 of the Amendment Ordinance. 124. (Repealed 1 of 2015 s. 33) Division 3 Contributions of Self-employed Persons 125. Reporting of relevant income and basis of contribution of self-employed person (40 of 2021 s. 67)(1) This section applies to a self-employed person who is a member of a registered scheme. (40 of 2021 s. 67)(2) The self-employed person must, at least 30 days before the end of each financial period of the scheme, report to the trustee— (40 of 2021 s. 67)(a) the person’s relevant income for the payment of mandatory contributions to the scheme for the next financial period of the scheme; and(b) whether the person will contribute to the scheme on a yearly or monthly basis for the next financial period of the scheme.(3) (Repealed 40 of 2021 s. 67) 126. When relevant income of self-employed person is taken to be maximum level of that income A self-employed person’s relevant income for a financial period of the registered scheme concerned is taken to be equal to the maximum level of relevant income if—(a) the person pays for that period a mandatory contribution equal to the prescribed percentage of the maximum level of relevant income; or(b) the person does not produce evidence of relevant income in accordance with section 127(1)(c) or fails to satisfy the approved trustee of the scheme as referred to in section 128(1)(c). 127. Relevant income of self-employed person who produces evidence of that income (1) This section applies to a self-employed person—(a) in respect of whose business profits tax is payable under the Inland Revenue Ordinance (Cap. 112) in relation to a financial period of the registered scheme concerned; and(b) who claims to have a relevant income less than the maximum level of relevant income for that period; and(c) who produces evidence of the person’s relevant income for that period to the approved trustee of the scheme.(2) If the evidence produced to the approved trustee of the scheme by the self-employed person in relation to the relevant financial period consists of, or includes, the most recent notice of assessment of the person, then, subject to subsection (3), the person’s relevant income for that period is taken to be an amount equal to the amount stated as assessable profits in the notice.(3) If—(a) the period between the date on which the most recent notice of assessment of the self-employed person was issued and the date on which the person produces the notice as evidence of the person’s relevant income exceeds 24 months; or(b) the person objects under section 64 of the Inland Revenue Ordinance (Cap.

112) to the assessment stated in that notice or has appealed against that assessment in accordance with section 66, 67, 68, 69 or 69A of that Ordinance, the person may declare as relevant income for that period an amount equal to the person’s assessable profits for the preceding year of assessment calculated in accordance with Part 4 of the Inland Revenue Ordinance (Cap. 112). (E.R. 1 of 2012)(4) If the evidence produced to the approved trustee of the scheme by the self-employed person in relation to the relevant financial period does not consist of, or include, the most recent notice of assessment of the person, the person may declare as the person’s relevant income for that period an amount equal to the person’s assessable profits for the preceding year of assessment calculated in accordance with Part 4 of the Inland Revenue Ordinance (Cap. 112).(5) If the self-employed person makes the declaration referred to in subsection (3) or (4), the person’s relevant income for the relevant financial period is taken to be the amount so declared. 128. Relevant income of self-employed person who does not produce evidence of that income (1) This section applies to a self-employed person—(a) in respect of whose business profits tax is payable under the Inland Revenue Ordinance (Cap. 112) in relation to a financial period of the registered scheme concerned; and(b) who claims to have a relevant income less than the maximum level of relevant income for that period; and(c) who satisfies the approved trustee of the scheme concerned that the person is unable to provide the approved trustee with evidence of the person’s relevant income for that period.(2) If the self-employed person contributes to the scheme on a yearly basis for the relevant financial period, the person’s relevant income for that period is taken to be an amount calculated in accordance with the following formula— A = BA × FP 12 where— A represents the amount to be determined; and BA represents the basic allowance within the meaning of section 28 of the Inland Revenue Ordinance (Cap. 112) as in force at the time when the person’s relevant income is reported in accordance with section 125; and FP represents the number of whole calendar months within the relevant financial period. (3) If the self-employed person contributes to the scheme on a monthly basis for the relevant financial period, the person’s relevant income per month for that period is taken to be an amount calculated in accordance with the following formula— A = BA 12 where— A represents the amount to be determined; and BA represents the basic allowance within the meaning of section 28 of the Inland Revenue Ordinance (Cap. 112) as in force at the time when the person’s relevant income is reported in accordance with section 125. (40 of 2021 s. 68) 129. Adjustments in calculating relevant income of self-employed person (1) If, for the purposes of section 127, a self-employed person’s relevant income for a financial period of the registered scheme concerned is taken to be—(a) an amount equal to the amount stated as assessable profits in a notice of assessment and the amount of those profits relates to a period shorter or longer than 12 months; or(b) an amount equal to the person’s assessable profits calculated in accordance with Part 4 of the Inland Revenue Ordinance (Cap. 112) and the amount so calculated relates to a period shorter or longer than 12 months, (E.R. 1 of 2012) that income is to be calculated by making proportional adjustments to the amount concerned.(2) If, in accordance with section 127, the amount of the relevant income of a self-employed person who contributes to the scheme concerned on a monthly basis is calculated by reference to a financial period, the relevant income is to be adjusted by dividing that amount so calculated by the number of whole months in the period.(3) If a self-employed person carries on business as member of a partnership, then, for the purposes of sections 127 and 128, the person’s relevant income for a financial period of the scheme concerned is to be calculated by making proportional adjustments according to the person’s share of the profits of the business for that period.(4) If a self-employed person carries on 2 or more businesses, then, for the purposes of sections 127 and 128, the person’s relevant income for a financial period of the scheme concerned is—(a) an amount equal to the aggregate of the person’s relevant income derived from all of those businesses for that period; or(b) if any of those businesses is carried on by the person in partnership with others, an amount equal to the aggregate of—(i) the person’s relevant income calculated by making proportional adjustments according to the person’s share of the profits in respect of the businesses during that period; and(ii) the person’s relevant income in respect of all of the other businesses of the person during that period.(5) If a self-employed person who contributes to a registered scheme on a yearly basis becomes a scheme member otherwise than on the first day of a financial period of the scheme, the amount that the person is required to contribute to the scheme for that period is to be calculated in accordance with the following formula— A = LS × ND 365 where— A represents the amount to be determined; and LS represents the mandatory contribution that would be payable for the whole of the financial period of the scheme in which the person became a member; and ND represents the number of days within the period, beginning with the day on which the person became a member of the scheme and ending with the last day of that financial period. 130. Net loss sustained in respect of self-employed person’s business (1) This section applies to a self-employed person who is a member of a registered scheme if the business or businesses carried on by the person have sustained a net loss in relation to a financial period of the registered scheme. (40 of 2021 s. 69)(1A) The self-employed person may—(a) make a written statement to the approved trustee of the registered scheme declaring that the business or businesses carried on by the person have sustained a net loss in relation to the financial period of the registered scheme; and (b) discontinue payment of mandatory contributions until the relevant income in respect of the person’s business or businesses exceeds the minimum level of relevant income. (40 of 2021 s. 69)(2) The net loss must be calculated in accordance with Part 4 of the Inland Revenue Ordinance (Cap. 112). (E.R. 1 of 2012) 131. Contribution period and contribution day in respect of self-employed person (1 of 2015 s. 34)(1) In relation to a self-employed person who contributes to a registered scheme on a yearly basis, the prescribed period for the purposes of the definition of contribution period in section 7C(2) of the Ordinance is the year that coincides with each financial period of the scheme.(2) In relation to a self-employed person who contributes to a registered scheme on a monthly basis, the prescribed period for the purposes of the definition of contribution period in section 7C(2) of the Ordinance is each period commencing on the day in each month specified by the person in a written notice given to the approved trustee of the scheme concerned as the commencing day and ending on—(a) the day before the corresponding day in the following month; or (b) if there is no corresponding day in the following month or if the commencing day is the last day of a month, the last day of the following month.(3) The last day of the period prescribed in this section in relation to a self-employed person is the contribution day for the self-employed person. (1 of 2015 s. 34)(4) However, if that last day is a day specified in subsection (5), the next following day that is not a day so specified is the contribution day for the self-employed person. (1 of 2015 s. 34)(5) The day specified for subsection (4) is—(a) a Saturday;(b) a public holiday; or(c) a gale warning day or black rainstorm warning day as defined by section 71(2) of Cap. 1; or(d) subject to subsection (6)—a day on which the electronic MPF system (or any part of it) is suspended under section 19J or 19L(1)(a) or (b) of the Ordinance. (40 of 2021 s. 70)(6) Subsection (5)(d) does not apply to a contribution required to be paid by a self-employed person under section 7C of the Ordinance unless the suspension affects the payment. (40 of 2021 s. 70) Editorial Note: For transitional provision relating to the amendments made by the Mandatory Provident Fund Schemes (Amendment) Ordinance 2015 (1 of 2015), see Part 8 of the Amendment Ordinance. Division 4 Duty of Approved Trustees and Recovery of Arrears 132. (Repealed 40 of 2021 s. 71) 133. (Repealed 1 of 2008 s. 64) 134. (Repealed 18 of 2008 s. 21) 135. (Repealed 40 of 2021 s. 72) 135A. Approved trustee to take actions required by Authority An approved trustee of a registered scheme must take such action as may be reasonably required by the Authority in connection with the recovery of arrears or a contribution surcharge.(1 of 2008 s. 67) 136. Authority to give notice to defaulter (40 of 2021 s. 73)(1) If the Authority reasonably believes that a person has failed to pay a mandatory contribution (or any part of it) or any amount of a contribution surcharge liable to be paid by the employer or person under section 18(2) of the Ordinance (outstanding sum), the Authority must as soon as practicable serve on the person (defaulter) a written notice requiring the defaulter to do all or any of the following— (1 of 2008 s. 68; 40 of 2021 s. 73)(a) to pay the outstanding sum to the approved trustee of the registered scheme concerned within the period specified in the notice; (1 of 2008 s. 68)(b) (regardless of whether the outstanding sum relates only to a contribution surcharge liable to be paid by the defaulter) to give to the Authority an explanation with respect to the failure to pay the arrears; (40 of 2021 s. 73)(c) to comply with any other requirement specified in the notice;(d) if the defaulter is a participating employer, to lodge with the trustee, when paying the outstanding sum, a remittance statement.(1AA) Subsection (1) does not apply if there is any of the circumstances specified in subsection (1A). (40 of 2021 s. 73)(1A) The circumstances referred to in subsection (1AA) are as follows— (40 of 2021 s. 73)(a) the Authority is reasonably satisfied that the defaulter cannot be located;(b) the Authority is reasonably satisfied that the defaulter has paid all of the arrears and contribution surcharges payable on the arrears to the approved trustee;(c)-(e) (Repealed 40 of 2021 s. 73)(f) service of a notice under subsection (1) is not reasonably practicable in all the circumstances of the case. (1 of 2008 s. 68)(2) (Repealed 40 of 2021 s. 73)(3) A person who, having been served a notice requiring an explanation under subsection (1)(b), fails to comply with the requirement within the period specified in the notice is taken to have acknowledged that the person has failed to pay the arrears.(4)-(6) (Repealed 40 of 2021 s. 73)(7) (Repealed 29 of 2002 s. 14)(8) (Repealed 2 of 2002 s. 21)(9) (Repealed 40 of 2021 s. 73)(10) A defaulter must comply with a requirement of a notice served on the defaulter under this section.(40 of 2021 s. 73) 137. (Repealed 40 of 2021 s. 74) 138. (Repealed 40 of 2021 s. 74) Division 5 Other Duties of Employers and Self-employed Persons 139. Participating employer to give monthly pay-records to scheme members (1) A participating employer must—(a) prepare a pay-record for each month in respect of each relevant employee of the employer who is a scheme member; and(b) ensure that the record is given to the employee not later than 7 working days after the payment, or the last payment if there is more than 1 payment, of mandatory contributions during the month concerned.(2) A pay-record must contain the following information—(a) the amount of each payment of relevant income paid to the employee by the employer during the month;(b) the amount of each mandatory contribution paid by the employer in respect of the employee during the month;(c) the amount of each mandatory contribution deducted in respect of the employee during the month;(d) the amount (if any) of each voluntary contribution paid by the employer in respect of the employee during the month;(e) the amount (if any) of each voluntary contribution deducted in respect of the employee during the month;(f) the date on which the contributions were paid to the approved trustee of the registered scheme concerned.(3) A pay-record must either be in writing or in a form that enables the information contained in it to be easily read by the employees.(4) A participating employer in an industry scheme is not required to comply with this section in relation to a casual employee who is a member of the scheme if the employer and the approved trustee of the scheme have agreed that the contribution day in relation to the mandatory contribution payable by the employer in respect of the employee is the working day mentioned in paragraph (b)(ii) of the definition of contribution day in section 122(1). (2 of 2002 s. 21; E.R. 4 of 2019) 140. Employers to keep records (1) An employer of a relevant employee must ensure that a record of each payment of relevant income made by the employer to the employee is kept in respect of the employee until at least 6 months after the payment is made.(2) The record referred to in subsection (1) must include—(a) the total amount of each payment; and(b) the respective amounts of the items making up each payment as described under paragraph (a) of the definition of relevant income in section 2 of the Ordinance; and(c) the date on which each payment is made.(3) An employer of a relevant employee must ensure that a record of the date on which the employee’s employment with the employer began is kept in respect of the employee until at least 6 months after that employment ceases.(4) An employer of a relevant employee who is a member of a registered scheme must ensure that records of the following particulars are kept in respect of the employee—(a) the name and correspondence address of the employee, and the date on which the employee’s employment with the employer began; and(b) the notice of election (if any) given by the employee under section 4 or 15 of the Mandatory Provident Fund Schemes (Exemption) Regulation (Cap. 485 sub. leg. B); and(c) the notice (if any) given by the employee authorizing the employer to deduct voluntary contributions from the relevant income of the employee for payment to the registered scheme.(5) The records referred to in subsection (4) must be kept until at least 6 months after the employee’s employment with the employer ceases.(6) An employer of a relevant employee who is a member of a registered scheme must ensure that the information required to be included in the remittance statement is kept in respect of the employee until at least 7 years after the date of the remittance statement.(7) An employer is not required to comply with this section in relation to a casual employee who is a member of an industry scheme.(8) An employer who, without reasonable excuse, fails to comply with this section commits an offence and is liable on conviction to a fine at level 4.(E.R. 1 of 2013) 141. Participating employer to respond to inquiries relating to registered scheme A participating employer must, as soon as reasonably practicable after receiving an inquiry from a relevant employee of the employer regarding contributions that have been made or are required to be made in respect of the employee to a registered scheme, reply to the inquiry. The reply may be given orally unless the employee requires it to be given in writing. 142. Self-employed person to notify trustee of change of particulars A self-employed person who is a member of a registered scheme must give written notice to the approved trustee of the scheme of any change of the person’s residential address, business address, electronic mail address (if any), telephone number or facsimile number (if any) within 30 days of the change.(40 of 2021 s. 75) 143. Participating employer to notify trustee of certain information (1) A participating employer in a registered scheme must give written notice to the approved trustee of the scheme of the date of payment of relevant income of each relevant employee of the employer when the employee becomes a scheme member.(2) A participating employer in a registered scheme must give written notice to the approved trustee of the scheme of any change of—(a) the employer’s business address, electronic mail address (if any), telephone number or facsimile number (if any); and (b) the residential address, electronic mail address (if any), telephone number or date of payment of relevant income of each relevant employee of the employer; and (29 of 2002 s. 14)(c) the employer’s name, (29 of 2002 s. 14; 1 of 2015 s. 35; 40 of 2021 s. 76) within 30 days of the change.(3) For the purposes of this section, a reference to a relevant employee does not include a reference to a casual employee who is a member of an industry scheme. 143A. Participating employer to give certain document or information to employee (1) This section applies if—(a) an approved trustee of a registered scheme—(i) is required under the Ordinance (including its subsidiary legislation) to give (however described) a member of the scheme any document or information; or(ii) is required under the Ordinance (including its subsidiary legislation) to ensure that the member is given (however described) any document or information;(b) the member concerned is an employee of a participating employer; and(c) the trustee, with the consent of the participating employer, gives (however described) the employer, or arranges to give (however described) to the employer, the document or information.(2) The participating employer must ensure that the document or information is given to the employee within 7 working days after the employer has received the document or information from the trustee.(40 of 2021 s. 77) Part 12 Portability of Accrued Benefits 144. Definitions (1) In this Part—transferee trustee (承轉受託人) means the approved trustee of the registered scheme to which the accrued benefits of a member of another registered scheme are to be transferred in accordance with an election made under this Part;transferor trustee (轉移受託人) means the approved trustee of the registered scheme from which the accrued benefits of a member of the scheme are to be transferred, whether to another registered scheme or to another account within the same scheme, in accordance with an election made under this Part.(2) In this Part—(a) a reference to an election made under this Part or under any particular provision in this Part includes a reference to an election taken to have been so made; and(b) a reference to a person being notified under this Part or under any particular provision in this Part includes a reference to the person taken to have been so notified. 145. Transfer of accrued benefits of member of employer sponsored scheme (1) If accrued benefits of an employee are held in a contribution account in an employer sponsored scheme and the employee ceases to be employed by the participating employer concerned in the scheme, the employee must, subject to subsection (2), elect to have those benefits transferred to—(a) an account in a master trust scheme nominated by the employee; or(b) an existing account of the employee in an industry scheme.(2) If an employee who is a member of an employer sponsored scheme ceases to be employed by the participating employer concerned in the scheme and subsequently becomes employed by another employer, the employee may, instead of making an election under subsection (1), elect to have the employee’s accrued benefits in the scheme transferred to the contribution account in the registered scheme in which the new employer is participating in relation to that employee.(3) An election under subsection (1) is effective when written notice of the election is given to the transferee trustee concerned.(4) An election under subsection (2) is effective when written notice of the election is given to the transferee trustee concerned or to the employee’s new employer.(5) As soon as practicable after the new employer has received a notice of election given under subsection (4), that employer must give written notice of the election to the transferee trustee concerned.(6) The former employer must, by written notice given within 30 days after the cessation of employment of the casual employee concerned, inform the approved trustee of the employer sponsored scheme concerned— (29 of 2002 s. 14)(a) of the employee’s cessation of employment; and (b) of the date on which the employment ceased.(7) Subsection (6) is taken to have been complied with if—(a) the information to be included in the notice referred to in that subsection is included in the remittance statement that the former employer lodged with the approved trustee of the employer sponsored scheme concerned immediately following the casual employee’s cessation of employment; and (29 of 2002 s. 14)(b) that remittance statement is lodged with the approved trustee within 30 days after the cessation of employment.(7A) The former employer must in respect of a relevant employee (other than a casual employee)—(a) in the remittance statement that the former employer is required to lodge with the approved trustee of the employer sponsored scheme concerned in respect of the contribution period that ends immediately following the employee’s cessation of employment; or(b) by written notice given to the approved trustee of the employer sponsored scheme concerned no later than the date on which that remittance statement is required to be lodged, inform the approved trustee—(c) of the employee’s cessation of employment; and(d) of the date on which the employment ceased. (29 of 2002 s. 14)(7B) If—(a) subsection (6) or (7A) is not complied with; and(b) the approved trustee of the employer sponsored scheme concerned is satisfied that the former employer cannot be located or refuses to comply with subsection (6) or (7A), the approved trustee may accept a written notice given by the employee concerned as evidence of the employee’s cessation of employment and the date of cessation. (1 of 2008 s. 24)(7C) The notice referred to in subsection (7B) must be given by way of a statutory declaration in a form approved by the Authority. (1 of 2008 s. 24)(8) If an employee fails to notify an election in accordance with this section within 3 months after the approved trustee of the employer sponsored scheme concerned has been notified, by the employee’s former employer or by the employee, that the employee has ceased to be employed by the former employer— (1 of 2008 s. 24)(a) the employee is taken at the end of that period to have elected to have the employee’s accrued benefits in the scheme transferred to a personal account in a master trust scheme nominated by the transferor trustee concerned and administered by either that trustee or another approved trustee; and (11 of 2009 s. 15)(b) the transferor trustee is taken at the end of that period to have been notified of the election.(9) This section shall not apply to or in relation to an election mentioned in section 12A(6A) and (6B) of the Ordinance or any concomitant transfer of the accrued benefits of an employee. (29 of 2002 s. 14) 145A. Disposal of unclaimed benefits in employer sponsored scheme (1) Subsection (2) applies in relation to accrued benefits in an employer sponsored scheme.(2) If, after having taken the reasonable steps specified in the operating rules, the approved trustee of the scheme is unable to locate the person who is entitled to the accrued benefits, the trustee must, within the period specified in subsection (3), transfer the benefits to a master trust scheme nominated by the employer concerned or in accordance with the governing rules.(3) The period is the period of 6 months beginning on the date immediately after the date of completion of the reasonable steps mentioned in subsection (2).(40 of 2021 s. 78) 146. Transfer of accrued benefits of member of master trust scheme or industry scheme (other than a casual employee who is a member of an industry scheme) (1) If accrued benefits of an employee are held in a contribution account in a master trust scheme and the employee ceases to be employed by the participating employer concerned in the scheme, the employee may elect to have those benefits transferred to—(a) another account in the scheme; or(b) an account in another master trust scheme nominated by the employee; or(c) an existing account of the employee in an industry scheme.(2) If accrued benefits of an employee are held in a contribution account in an industry scheme and the employee ceases to be employed by the participating employer concerned in the scheme, the employee may elect to have those benefits transferred to—(a) an account in a master trust scheme nominated by the employee; or (b) an existing account of the employee in another industry scheme.(3) If an employee who is a member of a master trust scheme or an industry scheme ceases to be employed by the participating employer concerned in the scheme and subsequently becomes employed by another employer, the employee may also elect to have the employee’s accrued benefits in the scheme transferred to the contribution account in the registered scheme in which the new employer is participating in relation to that employee.(4) An election under subsection (1) is effective—(a) in relation to an account referred to in paragraph (a) of that subsection, when written notice of the election is given to the transferor trustee concerned; and(b) in relation to an account referred to in paragraph (b) or (c) of that subsection, when written notice of the election is given to the transferee trustee concerned.(5) An election under subsection (2) is effective when written notice of the election is given to the transferee trustee concerned.(6) An election under subsection (3) is effective when written notice of the election is given to the transferee trustee concerned or to the employee’s new employer.(7) As soon as practicable after the new employer has received a notice of election given under subsection (6), that employer must give written notice of the election to the transferee trustee concerned.(8) The former employer must, by written notice given within 30 days after the cessation of employment of the casual employee concerned, inform the approved trustee of the registered scheme concerned— (29 of 2002 s. 14)(a) of the employee’s cessation of employment; and (b) of the date on which the employment ceased.(9) Subsection (8) is taken to have been complied with if—(a) the information to be included in the notice referred to in that subsection is included in the remittance statement that the former employer lodged with the approved trustee of the registered scheme concerned immediately following the casual employee’s cessation of employment; and (29 of 2002 s. 14)(b) that remittance statement is lodged with the approved trustee within 30 days after the cessation of employment.(9A) The former employer must in respect of a relevant employee (other than a casual employee)—(a) in the remittance statement that the former employer is required to lodge with the approved trustee of the registered scheme concerned in respect of the contribution period that ends immediately following the employee’s cessation of employment; or(b) by written notice given to the approved trustee of the registered scheme concerned no later than the date on which that remittance statement is required to be lodged, inform the approved trustee—(c) of the employee’s cessation of employment; and(d) of the date on which the employment ceased. (29 of 2002 s. 14)(9B) If—(a) subsection (8) or (9A) is not complied with; and(b) the approved trustee of the registered scheme concerned is satisfied that the former employer cannot be located or refuses to comply with subsection (8) or (9A), the approved trustee may accept a written notice given by the employee concerned as evidence of the employee’s cessation of employment and the date of cessation. (1 of 2008 s. 25)(9C) The notice referred to in subsection (9B) must be given by way of a statutory declaration in a form approved by the Authority. (1 of 2008 s. 25)(10) If an employee fails to notify an election in accordance with this section within 3 months after the approved trustee of the registered scheme concerned has been notified, by the employee’s former employer or by the employee, that the employee has ceased to be employed by the former employer— (1 of 2008 s. 25)(a) the employee is taken at the end of that period to have elected to have the employee’s accrued benefits held in the contribution account concerned in the scheme transferred to a separate personal account in the same scheme; and (11 of 2009 s. 16)(b) the transferor trustee concerned is taken at the end of that period to have been notified of the election.(11) This section does not apply to a casual employee who is a member of an industry scheme.(12) This section shall not apply to or in relation to an election mentioned in section 12A(6A) and (6B) of the Ordinance or any concomitant transfer of the accrued benefits of an employee. (29 of 2002 s. 14) 147. Transfer of accrued benefits of casual employee who is a member of industry scheme (1) If accrued benefits of a casual employee are held in a contribution account in an industry scheme and the employee ceases to be employed by the participating employer concerned in the scheme, the employee may elect to have those benefits transferred to—(a) an account in a master trust scheme nominated by the employee; or (b) an existing account of the employee in another industry scheme.(2) If a casual employee who is a member of an industry scheme ceases to be employed by the participating employer concerned in the scheme and subsequently becomes employed by another employer, the employee may also elect to have the employee’s accrued benefits in the scheme transferred to the contribution account in the registered scheme in which the new employer is participating in relation to that employee, but only if that registered scheme is not the industry scheme in which those benefits are currently held.(3) An election under subsection (1) is effective when written notice of the election is given to the transferee trustee concerned.(4) An election under subsection (2) is effective when written notice of the election is given to the transferee trustee concerned or to the employee’s new employer.(5) As soon as practicable after the new employer has received a notice of election given under subsection (4), that employer must give written notice of the election to the transferee trustee concerned.(6) A casual employee who fails to make an election under this section is taken to have elected not to have the employee’s accrued benefits held in the contribution account concerned in the industry scheme transferred under this section but to retain the benefits in that account. 148. Transfer of accrued benefits of self-employed person (1) If accrued benefits of a self-employed person are held in a contribution account in a master trust scheme, the person may, at any time, elect to have those benefits transferred to—(a) an account in another master trust scheme nominated by the person; or(b) an existing account of the person in an industry scheme; or(c) an account in an industry scheme to which the person is eligible to belong.(2) If accrued benefits of a self-employed person are held in a contribution account in an industry scheme, the person may, at any time, elect to have those benefits transferred to—(a) an account in a master trust scheme nominated by the person; or(b) an existing account of the person in another industry scheme; or(c) an account in another industry scheme to which the person is eligible to belong.(3) If a self-employed person who is a member of a master trust scheme or an industry scheme subsequently becomes employed by an employer, the person may also elect to have the person’s accrued benefits in the scheme transferred to the contribution account in the registered scheme in which the employer is participating in relation to the person.(4) An election under subsection (1) or (2) is effective when written notice of the election is given to the transferee trustee concerned.(5) An election under subsection (3) is effective when written notice of the election is given to the transferee trustee concerned or to the person’s employer.(6) As soon as practicable after the employer has received a notice of election given under subsection (5), that employer must give written notice of the election to the transferee trustee concerned.(7) If a self-employed person who is a member of a master trust scheme ceases to be self-employed, the person must, by written notice given not later than the next contribution day for the person following the cessation, inform the approved trustee of the scheme—(a) of the person’s cessation of self-employment; and (b) of the date on which the self-employment ceased.(8) If a self-employed person who is a member of a master trust scheme fails to notify an election in accordance with this section within 3 months after the approved trustee of the scheme concerned has been notified that the person has ceased to be self-employed—(a) the person is taken at the end of that period to have elected not to have the person’s accrued benefits held in the contribution account concerned in the scheme transferred under this section but to retain the benefits in that account; and(b) the approved trustee is taken at the end of that period to have been notified of the election. 148A. Transfer of accrued benefits derived from mandatory contributions in respect of current employment to personal accounts (1) This section does not apply to a case in which an employee has ceased to be employed as referred to in section 145, 146 or 147.(2) If accrued benefits of an employee are held in one or more than one sub-account referred to in section 78(6)(b) within a master trust scheme or an industry scheme, the employee may, at any time, subject to subsection (4), elect to have all accrued benefits in the sub-account, or in any one or more than one of those sub-accounts, transferred to—(a) a personal account of the employee within the same registered scheme nominated by the employee; or(b) a personal account of the employee within another registered scheme, which is a master trust scheme or an industry scheme, nominated by the employee.(3) If accrued benefits of an employee are held in one or more than one sub-account referred to in section 78(6)(b) within an employer sponsored scheme, the employee may, at any time, subject to subsection (4), elect to have all accrued benefits in the sub-account, or in any one or more than one of those sub-accounts, transferred to a personal account of the employee within a master trust scheme or an industry scheme, nominated by the employee.(4) An employee may make an election under subsection (2) or (3) in respect of the employee’s sub-account within a registered scheme (or if accrued benefits of the employee are held in more than one such sub-account, whether or not within the same registered scheme, in respect of each of those sub-accounts)—(a) only once in every calendar year; or(b) more than once in every calendar year in accordance with the governing rules of the registered scheme from which, or within which, the accrued benefits are transferred if those governing rules so provide.(5) An election under subsection (2) or (3) is effective—(a) in relation to a personal account within a registered scheme referred to in subsection (2)(a), when written notice of the election is given to the transferor trustee; and(b) in relation to a personal account within a registered scheme referred to in subsection (2)(b) or (3), when written notice of the election is given to the transferee trustee.(11 of 2009 s. 17) 148B. Transfer of accrued benefits derived from mandatory contributions in respect of former employment or former self-employment to contribution accounts or personal accounts (1) This section does not apply to a case in which an employee has ceased to be employed as referred to in section 145, 146 or 147.(2) If accrued benefits of an employee are held in one or more than one sub-account referred to in section 78(6)(c) within a master trust scheme or an industry scheme, the employee may, at any time, elect to have all accrued benefits in the sub-account, or in any one or more than one of those sub-accounts, transferred to—(a) another contribution account of the employee within the same registered scheme nominated by the employee;(b) a contribution account of the employee within another registered scheme, nominated by the employee;(c) a personal account of the employee within the same registered scheme nominated by the employee; or(d) a personal account of the employee within another registered scheme, which is a master trust scheme or an industry scheme, nominated by the employee.(3) If accrued benefits of an employee are held in one or more than one sub-account referred to in section 78(6)(c) within an employer sponsored scheme, the employee may, at any time, elect to have all accrued benefits in the sub-account, or in any one or more than one of those sub-accounts, transferred to—(a) another contribution account of the employee within the same registered scheme nominated by the employee;(b) a contribution account of the employee within another registered scheme, nominated by the employee; or(c) a personal account of the employee within a master trust scheme or an industry scheme, nominated by the employee.(4) An election under subsection (2) or (3) is effective—(a) in relation to a contribution account within a registered scheme referred to in subsection (2)(a) or (3)(a), when written notice of the election is given to the transferor trustee;(b) in relation to a contribution account within a registered scheme referred to in subsection (2)(b) or (3)(b), when written notice of the election is given to the transferee trustee;(c) in relation to a personal account within a registered scheme referred to in subsection (2)(c), when written notice of the election is given to the transferor trustee; and(d) in relation to a personal account within a registered scheme referred to in subsection (2)(d) or (3)(c), when written notice of the election is given to the transferee trustee.(11 of 2009 s. 17) 149. Transfer of accrued benefits in personal accounts to contribution accounts or other personal accounts (1) If accrued benefits of a member of a master trust scheme or an industry scheme are held in one or more than one personal account of the member within the scheme, the member may, at any time, elect to have all accrued benefits in the account, or in any one or more than one of those accounts, transferred to—(a) a contribution account of the member within the same registered scheme nominated by the member;(b) a contribution account of the member within another registered scheme, nominated by the member;(c) another personal account of the member within the same registered scheme nominated by the member; or(d) a personal account of the member within another registered scheme, which is a master trust scheme or an industry scheme, nominated by the member.(2) An election under subsection (1) is effective—(a) in relation to a contribution account within a registered scheme referred to in paragraph (a) of that subsection, when written notice of the election is given to the transferor trustee;(b) in relation to a contribution account within a registered scheme referred to in paragraph (b) of that subsection, when written notice of the election is given to the transferee trustee;(c) in relation to a personal account within a registered scheme referred to in paragraph (c) of that subsection, when written notice of the election is given to the transferor trustee; and(d) in relation to a personal account within a registered scheme referred to in paragraph (d) of that subsection, when written notice of the election is given to the transferee trustee.(11 of 2009 s. 18) 149A. Transfer of accrued benefits in TVC account in registered scheme (1) If a scheme member holds a TVC account in a registered scheme, the member may, at any time, elect to have all accrued benefits in the account transferred to another TVC account of the member in another registered scheme which the member is eligible to join.(2) An election under subsection (1) is effective when written notice of the election is given to the transferee trustee.(7 of 2019 s. 21) 149B. Transfer of accrued benefits in TVC account in employer sponsored scheme (1) Subsection (2) applies if—(a) a member of an employer sponsored scheme is an employee of a participating employer; and(b) accrued benefits are held by the member in a TVC account in the scheme.(2) The member must, when the member ceases to be employed by the participating employer, elect to have all accrued benefits in the TVC account transferred to another TVC account of the member in a master trust scheme or an industry scheme.(3) An election under subsection (2) is effective when written notice of the election is given to the transferee trustee.(4) If a member fails to notify an election in accordance with this section within 3 months after the approved trustee of the employer sponsored scheme concerned has been notified, by the member’s participating employer or by the member, that the member has ceased to be employed by the participating employer—(a) the member is taken at the end of that period to have elected to have all accrued benefits in the scheme transferred to a TVC account in a master trust scheme nominated by the transferor trustee concerned and administered by either that trustee or another approved trustee; and(b) the transferor trustee is taken at the end of that period to have been notified of the election.(7 of 2019 s. 21) 150. Transfer by participating employer of employee’s accrued benefits If a member of a registered scheme is an employee of a participating employer in the scheme, the employer may elect to have the accrued benefits held in the contribution account in the scheme in respect of the member’s employment with that employer transferred to another registered scheme in which the employer is a participant by giving written notice of the election to the transferee trustee in the event of—(a) the winding up of the first-mentioned scheme under section 34 or 34A of the Ordinance; or(b) the restructuring of the first-mentioned scheme under section 34B of the Ordinance; or (29 of 2002 s. 14)(c) (Repealed 29 of 2002 s. 14)(d) the employer providing notice, personally or through the transferee trustee, of his intention to cease participation in the first-mentioned scheme in respect of that member. (L.N. 223 of 2000) 150A. Transfer of accrued benefits where section 12A(6A) and (6B) of the Ordinance is applicable Where section 12A(6A) and (6B) of the Ordinance is applicable, the new employer may only elect to have the employee’s accrued benefits in the scheme transferred to a registered scheme—(a) in which the new employer is a participant; and(b) by giving written notice of the election to the trustee of the last-mentioned scheme within the permitted period.(29 of 2002 s. 14) 151. Form of election An election under this Part must be in a form specified or approved by the Authority. 152. (Repealed 40 of 2021 s. 79) 153. Duty of approved trustee on being notified of election (1) (Repealed 40 of 2021 s. 80)(1A) (Repealed 40 of 2021 s. 80)(1B) (Repealed 40 of 2021 s. 80)(1C) (Repealed 40 of 2021 s. 80)(1D) (Repealed 40 of 2021 s. 80)(2) Within 30 days after being notified of an election made under this Part, or if an election is made by an employee who ceases to be employed by the participating employer concerned in a registered scheme, within 30 days after the last contribution day in respect of the employment that has ceased, whichever is the later, the transferor trustee must take all practicable steps to ensure that all the accrued benefits concerned are transferred in accordance with the election. (40 of 2021 s. 80)(3) A transferor trustee who is notified of an election under section 146(4)(a) or (10)(b), 148A(5)(a), 148B(4)(a) or (c) or 149(2)(a) or (c) must, within 30 days after being so notified, or if an election is made by an employee who ceases to be employed by the participating employer concerned in a registered scheme, within 30 days after the last contribution day in respect of the employment that has ceased, whichever is the later, arrange for the accrued benefits concerned to be transferred to a separate account within the same registered scheme in accordance with the election. (3A) A transferor trustee who is taken to have been notified of an election under section 145(8)(b) must, within 30 days after the end of the period referred to in that section, arrange for the accrued benefits concerned to be transferred to the personal account referred to in section 145(8)(a). (11 of 2009 s. 19)(3B) A transferor trustee who is taken by a particular date to have been notified of an election under section 149B(4)(b) must, within 30 days after that date, arrange for the accrued benefits concerned to be transferred to a TVC account referred to in section 149B(4)(a). (7 of 2019 s. 22)(4) A person who makes an election under this Part must give to the transferor trustee, and the transferee trustee (if any), such information as is requested by the trustee to enable the transfer to be made.(5) Subsections (2), (3) and (3A)— (11 of 2009 s. 19)(a) are subject to section 157; and (40 of 2021 s. 80)(b) are not complied with unless all of the accrued benefits concerned are transferred in accordance with the election made or taken to have been made.(6) Subsection (3B) is subject to section 157. (7 of 2019 s. 22)(7) Subsection (3B) is not complied with unless all the accrued benefits concerned are transferred in accordance with the election. (7 of 2019 s. 22)(11 of 2009 s. 19) 154. (Repealed 40 of 2021 s. 81) 155. (Repealed 40 of 2021 s. 81) 156. (Repealed 40 of 2021 s. 82) 157. Approved trustee to comply with Authority’s requirement not to give effect to election etc. (40 of 2021 s. 83)(1) This section applies if a transferor trustee is notified of an election made under this Part or an election to transfer scheme assets and, at the time of the notification— (L.N. 223 of 2000; 40 of 2021 s. 83)(a) the Authority has served on the transferor trustee a notice requiring that trustee to arrange for an auditor to investigate and to prepare a report under section 30 of the Ordinance; or(b) the Authority has served on that trustee a notice notifying the trustee that the Authority intends to conduct an investigation under section 32 of the Ordinance. (40 of 2021 s. 83)(1A) The Authority may, by written notice given to the transferor trustee, require the trustee not to give effect to the election. (40 of 2021 s. 83)(1B) On receiving the notice given under subsection (1A), the transferor trustee must not give effect to the election until the Authority— (a) has given its written consent for the trustee to do so; or (b) has notified the trustee of the results of the valuation of the scheme assets carried out in relation to the investigation or the report. (40 of 2021 s.

83)(2) Within 30 days after the Authority has given its written consent for the transferor trustee to give effect to the election, or has notified the transferor trustee of the results of the valuation of the scheme assets, that trustee must take all reasonably practicable steps to ensure that all of the accrued benefits concerned are transferred in accordance with the election and the results of that valuation of the scheme assets. 157A. (Repealed 40 of 2021 s. 84) 157B. Register of members of registered schemes who have established and maintained personal accounts within master trust schemes or industry schemes (1) The Authority must establish and maintain a register of members of registered schemes who have established and maintained personal accounts within master trust schemes or industry schemes for the purposes of enabling—(a) a person who made a request under subsection (4) to ascertain in accordance with that subsection any information contained in the register; and(b) the Authority to notify under subsection (5) a member of a registered scheme of any information contained in the register.(2) The register may be in the form determined by the Authority.(3) The register must, in relation to each member of a registered scheme who has established and maintained a personal account, specify—(a) the member’s name;(b) the member’s Hong Kong Identity Card number or travel document number;(c) the number of personal accounts established and maintained by the member;(d) the name and business address of the approved trustee of the master trust scheme or industry scheme within which the personal account, or each of the personal accounts, is established and maintained; and(e) the name and telephone number of the contact person designated by the approved trustee, or each of the approved trustees, for the purpose of providing information relating to the personal account concerned.(4) If requested by—(a) any person (the relevant person);(b) the authorized representative of a person; (1 of 2015 s. 38)(ba) a person entitled in priority to the administration of the estate of a deceased person; or (1 of 2015 s. 38)(c) the personal representative of a deceased person, the Authority must, as soon as reasonably practicable, provide, without charge, to the person who made the request any information contained in the register about the personal accounts (if any) established and maintained within any master trust scheme or industry scheme by the relevant person, the person who authorized the representative to make the request or the deceased person.(5) If the Authority considers appropriate, it may, on its own initiative, notify a member of a registered scheme in writing of any information contained in the register about the personal accounts (if any) established and maintained within any master trust scheme or industry scheme by the member.(11 of 2009 s. 22) Part 13 Payment of Accrued Benefits 158. Definition (1) In this Part— (1 of 2015 s. 39)claim (申索) means a claim for the payment of the accrued benefits of a scheme member or a former scheme member in accordance with section 15 of the Ordinance; (1 of 2015 s. 39)registered Chinese medicine practitioner (註冊中醫) has the meaning given by section 2(1) of the Chinese Medicine Ordinance (Cap. 549). (1 of 2015 s. 39)(2) For the purposes of this Part, a member departs from Hong Kong permanently if the member departs from Hong Kong to reside elsewhere with no intention of returning for employment or to resettle in Hong Kong as a permanent resident. (1 of 2015 s. 39)(3) A member who has an illness that is likely to reduce the life expectancy of the member to 12 months or less has a terminal illness for the purposes of this Part. (1 of 2015 s. 39) Division 1 Claims for Payment of Accrued Benefits 159. Claim for payment on attaining retirement age (1) A member of a registered scheme who has reached the retirement age may lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) The claim must be accompanied by evidence satisfactory to the trustee that the member has reached the retirement age. 160. Claim for payment on attaining early retirement age (1) A member of a registered scheme who wishes to be paid the member’s accrued benefits under section 15(2) of the Ordinance must, in addition to complying with that subsection, lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) The claim must be accompanied by—(a) evidence satisfactory to the trustee that the member has reached the early retirement age specified in Schedule 7 to the Ordinance; and(b) a statutory declaration as required by section 15(2) of the Ordinance. 161. Claim for payment on death (1) If a member of a registered scheme has died, a personal representative of the member may lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) A claim made by a person who purports to be the personal representative of the relevant scheme member must be accompanied by evidence satisfactory to the trustee of the person’s status as such.(3) (Repealed 40 of 2021 s. 88) 162. Additional classes of persons entitled to be paid accrued benefits (1) For the purposes of section 15(3) of the Ordinance, a member of a registered scheme who has not reached the retirement age is, subject to this Part, entitled to be paid by the approved trustee of the scheme, as a lump sum, the whole of the member’s accrued benefits in the scheme if the member—(a) has permanently departed from Hong Kong or is about to depart from Hong Kong permanently; or(b) is totally incapacitated; or(ba) has a terminal illness; or (1 of 2015 s. 40)(c) is a member to whom subsection (2) applies.(2) This subsection applies to a member if—(a) the member’s accrued benefits kept in the scheme as at the date of the claim for payment of those benefits made by him under section 165 do not exceed $5,000; and (1 of 2008 s. 27)(b) as at the date of the claim, at least 12 months have elapsed since the contribution day in respect of the latest contribution period for which a mandatory contribution is required to be made to that scheme or to any other registered scheme by or in respect of the member; and (1 of 2008 s. 27)(c) the member does not have accrued benefits kept in any other registered scheme. 163. Claim for payment on ground of permanent departure from Hong Kong (1) A member of a registered scheme who, before reaching the retirement age, wishes to be paid the member’s accrued benefits in the scheme on the ground that the member has departed, or is about to depart, from Hong Kong permanently, must lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) The claim must be accompanied by—(a) a statutory declaration by the claimant that the claimant departed, or will depart, from Hong Kong permanently on a specified date; and (1 of 2008 s. 38)(b) evidence satisfactory to the approved trustee of the scheme that the claimant is permitted to reside in a place other than Hong Kong.(3) A person who has been paid accrued benefits from a registered scheme on the ground that, on a specified date, the person has departed, or was about to depart, from Hong Kong permanently is not, before reaching the retirement age, entitled to be paid the member’s accrued benefits from the same or another registered scheme on the ground that, on a later date, the person purports to have departed, or to be about to depart, from Hong Kong permanently.(4)-(5) (Repealed 40 of 2021 s. 89)(5A) (Repealed 40 of 2021 s. 89)(6) If accrued benefits held in an account of a member of a registered scheme have been paid to the member on the ground that, on a specified date, the member has departed, or was about to depart, from Hong Kong permanently, the member is not, before reaching the retirement age, precluded from making a further claim on the ground of permanent departure on that specified date if the claim is for the payment of other accrued benefits of the member held in another account in that scheme, or for the payment of other accrued benefits of that member in another registered scheme.(7) Subsections (2) and (3) apply to a further claim referred to in subsection (6). (1 of 2008 s. 38; 40 of 2021 s. 89) 164. Claim for payment on ground of total incapacity (1) A member of a registered scheme who, before reaching the retirement age, wishes to be paid the member’s accrued benefits in the scheme on the ground of total incapacity must lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) If a claim is made by a scheme member of a registered scheme who was, immediately before becoming totally incapacitated, a relevant employee, the approved trustee of the scheme may pay the member’s accrued benefits to that member, but only if—(a) the member can provide the trustee with a medical certificate, in a form specified or approved by the Authority and issued by a registered medical practitioner or registered Chinese medicine practitioner, certifying that the member is permanently unfit to perform the kind of work specified in the certificate for a reason so specified; and (16 of 2006 s. 33)(b) the member satisfies the trustee that the member was engaged in that kind of work under a contract of employment immediately before becoming totally incapacitated; and(c) the member can provide the trustee with a declaration by the member, in a form specified or approved by the Authority, stating that that contract of employment for that particular kind of work has been terminated. (1 of 2015 s. 41)(3) (Repealed 1 of 2015 s. 41)(4) If a claim is made by a scheme member of a registered scheme who was, immediately before becoming totally incapacitated, a self-employed person, the approved trustee of the scheme may pay the member’s accrued benefits to that member, but only if—(a) the member can provide the trustee with a medical certificate, in a form specified or approved by the Authority and issued by a registered medical practitioner or registered Chinese medicine practitioner, certifying that the member is permanently unfit to perform the kind of work specified in the certificate for a reason so specified; and (16 of 2006 s. 33)(b) the member satisfies the trustee that the member was engaged in that kind of work as a self-employed person immediately before becoming totally incapacitated.(5) If a claim is made by a scheme member of a registered scheme who was, immediately before becoming totally incapacitated, unemployed, the approved trustee of the scheme may pay the member’s accrued benefits to that member, but only if the member—(a) can provide the trustee with a medical certificate, in a form specified or approved by the Authority and issued by a registered medical practitioner or registered Chinese medicine practitioner, certifying that the member is permanently unfit to perform the kind of work specified in the certificate for a reason so specified; and (16 of 2006 s. 33)(b) satisfies the trustee that the member was last engaged in that kind of work under a contract of employment before becoming totally incapacitated; and(c) can provide the trustee with a declaration by the member, in a form specified or approved by the Authority, stating that that contract of employment for that particular kind of work has been terminated. (29 of 2002 s. 14; 1 of 2015 s. 41)(6) If a claim is made by a scheme member of a registered scheme who, immediately before becoming totally incapacitated, ceased to be a self-employed person, the approved trustee of the scheme may pay the member’s accrued benefits to that member, but only if the member—(a) can provide the trustee with a medical certificate, in a form specified or approved by the Authority and issued by a registered medical practitioner or registered Chinese medicine practitioner, certifying that the member is permanently unfit to perform the kind of work specified in the certificate for a reason so specified; and (16 of 2006 s. 33)(b) satisfies the trustee that the member was last engaged in that kind of work as a self-employed person before becoming totally incapacitated. (29 of 2002 s. 14)(7) A reference in this section to a medical certificate issued by a registered Chinese medicine practitioner does not include a medical certificate so issued before the commencement* of section 33 of the Certification for Employee Benefits (Chinese Medicine) (Miscellaneous Amendments) Ordinance 2006 (16 of 2006). (16 of 2006 s. 33)(8) (Repealed 1 of 2015 s. 41) Editorial Note: * Commencement date: 1 December 2006. 164A. Claim for payment on ground of terminal illness (1) A member of a registered scheme who, before reaching the retirement age, wishes to be paid the member’s accrued benefits on the ground of terminal illness must lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section.(2) The claim must be in a form specified or approved by the Authority.(3) If a claim is made by a scheme member of a registered scheme who has a terminal illness, the approved trustee of the scheme may only pay the member’s accrued benefits to that member if the member can provide a medical certificate, in a form specified or approved by the Authority, that—(a) is issued by a registered medical practitioner or registered Chinese medicine practitioner;(b) states that, in the practitioner’s opinion, the member falls within section 158(3); and(c) is dated not earlier than 12 months before the date on which the claim is lodged.(1 of 2015 s. 42) 165. Claim for payment of small balance (1) A member of a registered scheme who wishes to be paid the member’s accrued benefits before reaching the retirement age and who claims to be a member to whom section 162(2) applies must lodge with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this section. The claim must be in a form specified or approved by the Authority.(2) The claim must be accompanied by a statutory declaration by the member that—(a) the member does not intend to become employed or self-employed; and (1 of 2015 s. 43)(b) as at the date of the claim, at least 12 months have elapsed since the contribution day in respect of the latest contribution period for which a mandatory contribution is required to be made to that scheme or to any other registered scheme by or in respect of the member; and (1 of 2008 s. 28)(c) the member does not have accrued benefits kept in any other registered scheme.(3) On receiving a claim made by a scheme member under this section, the trustee must pay the member’s accrued benefits to that member if satisfied that—(a) the member’s accrued benefits kept in the scheme as at the date of the claim do not exceed $5,000; and (1 of 2008 s. 28)(b) as at the date of the claim, at least 12 months have elapsed since the contribution day in respect of the latest contribution period for which a mandatory contribution is required to be made to that scheme or to any other registered scheme by or in respect of the member; and (1 of 2008 s. 28)(c) the member does not have accrued benefits kept in any other registered scheme. 165A. Claim for payment by committee of estate appointed under Mental Health Ordinance (1) This section applies if a committee of the estate is appointed in relation to the property and affairs of a member of a registered scheme.(2) The committee of the estate may, as if it were the member—(a) lodge with the approved trustee of the registered scheme a claim for payment of the accrued benefits of the member; or(b) continue with a claim initiated by the member.(3) This section does not apply in relation to a claim made under section 161.(4) In this section—committee of the estate (產業受託監管人) means a committee of the estate appointed under section 11 of the Mental Health Ordinance (Cap. 136).(1 of 2015 s. 44) 166. Approved trustee to ensure payment of accrued benefits within certain periods (1) Subsections (1A) and (1B) apply if— (1 of 2015 s. 45)(a) a claim for the payment of a scheme member’s accrued benefits is lodged with the approved trustee of a registered scheme in accordance with this Part; and(b) the claimant satisfies the trustee that the claimant is entitled to be paid those benefits. (1A) If the benefits are paid in a lump sum, the trustee must ensure that the benefits are paid to the claimant not later than whichever is the later of the following—(a) 30 days after the date on which the claim is lodged;(b) 30 days after the contribution day in respect of the last contribution period that ends before the claim is lodged. (1 of 2015 s. 45)(1B) If the benefits are paid by instalments, the trustee must, unless otherwise agreed between the trustee and the claimant, ensure that each instalment is paid to the claimant no later than 30 days after the date on which the claimant instructs the trustee to pay that instalment. (1 of 2015 s. 45)(2) (Repealed 1 of 2015 s. 45)(3) This section is subject to section 167. 167. Approved trustee to comply with Authority’s requirement not to make payment etc. (40 of 2021 s. 90)(1) This section applies if a member of a registered scheme has lodged with the approved trustee of the scheme a claim for payment of the member’s accrued benefits in accordance with this Part or if the approved trustee has received a request for other payment of scheme assets out of the scheme and, at the time of the lodgement— (L.N. 223 of 2000; 40 of 2021 s. 90)(a) the Authority has served on the trustee a notice requiring the trustee to arrange for an auditor to investigate and to prepare a report under section 30 of the Ordinance; or(b) the Authority has served on the trustee a notice notifying the trustee that the Authority intends to conduct an investigation under section 32 of the Ordinance. (L.N. 223 of 2000; 40 of 2021 s. 90)(1A) The Authority may, by written notice given to the approved trustee, require the trustee not to make the payment. (40 of 2021 s. 90)(1B) On receiving the notice given under subsection (1A), the approved trustee must not make the payment until the Authority—(a) has given its written consent for the trustee to do so; or (b) has notified the trustee of the results of the valuation of the scheme assets carried out in relation to the investigation or the report. (40 of 2021 s. 90)(2) Within 30 days after the Authority has given its written consent for the trustee to make the payment, or has notified the trustee of the valuation of the scheme assets, the trustee must— (40 of 2021 s. 90)(a) determine the accrued benefits payable to the member (including the arrears and contribution surcharge (if any) paid to the trustee), and determine those benefits by reference to the valuation (if any); and(b) pay to the member the accrued benefits so determined. 168. Approved trustee to ensure claimant provided with benefit payment statement (1 of 2015 s. 46)When the approved trustee of a registered scheme pays accrued benefits to a claimant in accordance with this Part, the trustee concerned must ensure that the claimant is provided with a benefit payment statement containing the following information— (1 of 2015 s. 46)(a) the name of the trustee, the name of the scheme and the account number of the account from which the payment is made;(b) the name and address of the scheme member concerned;(c) the total amount of the accrued benefits paid to the claimant and the date on which the benefits were paid to the claimant;(d) an itemised statement of any expenses relating to the payment of the accrued benefits that were deducted from those benefits by the trustee before making the payment;(e) if any contribution or contribution surcharge was outstanding at the time of the payment—(i) the fact that a contribution or surcharge is outstanding; and(ii) the amount of the contribution or surcharge if known to the trustee; and(iii) if the contribution or surcharge was irrecoverable, the fact that it is irrecoverable and the amount concerned if known to the trustee; and (1 of 2015 s. 46)(f) any other information as may be specified for the purposes of this section by guidelines. (1 of 2015 s. 46) 169. Payment of outstanding contribution or contribution surcharge after payment of accrued benefits If, after paying accrued benefits to a claimant in accordance with section 166, the approved trustee of a registered scheme receives an outstanding contribution or contribution surcharge for the benefit of the claimant, the trustee must pay the contribution or surcharge to the claimant as soon as practicable after receiving it. 169A. Treatment of accrued benefits that are unclaimed or that have not been paid (1) This section applies in relation to any accrued benefits of a scheme member in a registered scheme that have not been claimed or paid in accordance with the Ordinance or the governing rules (specified benefits).(2) For a registered scheme that is not an employer sponsored scheme, the approved trustee of the scheme must continue to retain the specified benefits in the scheme.(3) Subject to section 12A of the Ordinance and the governing rules, the specified benefits retained in a registered scheme continue to vest in the scheme member concerned.(40 of 2021 s. 91) Division 2 Unclaimed Benefits 170. (Repealed 40 of 2021 s. 93) 171. (Repealed 40 of 2021 s. 93) 172. (Repealed 40 of 2021 s. 93) 172A. (Repealed 40 of 2021 s. 93) 172B. (Repealed 40 of 2021 s. 93) 172C. Register of scheme members who have unclaimed benefits to be kept (1) The Authority must establish and maintain a register of scheme members of a registered scheme who have unclaimed benefits in the scheme.(2) The register may be in such form, and contain such information, as the Authority may determine.(3) The register is to be kept at the head office of the Authority in Hong Kong.(4) The register is to be made available for inspection to enable a person who may be entitled to benefits in a registered scheme to ascertain whether he has any unclaimed benefits in the scheme.(5) Any member of the public is entitled, without charge, to inspect the register during ordinary business hours of the Authority.(1 of 2008 s. 33) 173. (Repealed 40 of 2021 s. 95) 174. (Repealed 40 of 2021 s. 96) Division 3 Offences 175. Offences An approved trustee who, without reasonable excuse, fails to comply with section 164(2) or (4), 164A(3), 165(3), 167 or 169 commits an offence and is liable on conviction to a fine at level 5 and to imprisonment for 12 months.(1 of 2015 s. 48; 40 of 2021 s. 97) Part 14 Compensation Fund (Format changes—E.R. 2 of 2012) 176. Definitions (1) In this Part—administrator (管理人) means a person or persons appointed in accordance with this Part to act as an administrator of the compensation fund or, if no such person is appointed, means the Authority;net asset value (淨資產值), in relation to the assets of a registered scheme, means the amount by which the total assets of the scheme exceed its total liabilities as shown in the balance sheet, made out in accordance with section 81, in respect of the immediately preceding financial period of the scheme.(2) If the Authority is the administrator, a provision of this Part requiring the administrator to consult the Authority is to be construed as if the requirement has been omitted. Division 1 Establishment and Administrator of Compensation Fund 177. Establishment of compensation fund (1) There is established for the purposes of section 17 of the Ordinance a compensation fund to be known as the Mandatory Provident Fund Schemes Compensation Fund.(2) The administrator of the compensation fund may fix any period of 12 months to be the financial year of the compensation fund.(3) The administrator of the compensation fund may, after consulting the Authority, vary the financial year of the compensation fund. 178. Appointment of administrator of compensation fund (1) The Authority may appoint one or more competent persons to act as the administrator of the compensation fund.(2) The appointment of a person under this section is subject to terms and conditions and for a period specified by the Authority in the document by which the person is appointed. 179. Functions of administrator The functions of the administrator are as follows—(a) to administer the compensation fund; and(b) to make good losses in respect of accrued benefits caused by misfeasance or illegal conduct as determined by the Court. 180. What compensation fund comprises The compensation fund consists of the following—(a) all money received as the levies payable under section 17(3) of the Ordinance;(b) all money paid or recovered in accordance with section 17(7) of the Ordinance;(c) all other money lawfully paid into the compensation fund. 181. Compensation fund to be kept in separate bank account The administrator must ensure—(a) that at least one separate account is opened at a bank located in Hong Kong; and(b) that all money paid to the compensation fund is credited to the account; and(c) that all money so credited is kept in the account until invested or applied in accordance with this Part. 182. Administrator may invest surplus funds The administrator may, after consulting the Authority, invest money held in the compensation fund that is not immediately required for the purposes of the compensation fund in any manner in which trustees may invest trust funds. 183. What payments may be made from compensation fund (1) The administrator may pay from the compensation fund only payments of the kind specified in subsection (2).(2) The payments referred to in subsection (1) are as follows—(a) the amount of all claims (including costs) allowed by the Court in accordance with section 17B of the Ordinance;(b) all legal and other expenses incurred in investigating or defending claims made under this Part;(c) the expenses incurred by the administrator in administering the compensation fund, including remunerating persons employed by the administrator in relation to the compensation fund;(d) all other money payable out of the compensation fund in accordance with this Part. 184. Accounts and audit of compensation fund (1) The administrator must—(a) keep proper accounting records of all transactions entered into in respect of the compensation fund; and(b) within 3 months after the end of each financial year of that fund, prepare financial statements in respect of that fund for that year.(2) The administrator must appoint an accounting practice unit to audit the accounting records kept, and the financial statements prepared, in respect of the compensation fund.(3) The auditor appointed by the administrator must—(a) audit the accounting records of the compensation fund and the financial statements prepared in respect of the compensation fund; and(b) prepare a report on those records and statements; and(c) not later than 2 months after those financial statements are prepared, deliver the report to the administrator.(4) The administrator must, within 14 days after each report was delivered to them, give to the Authority a copy of the report in accordance with this section, together with the relevant financial statements.(5) Subsection (4) does not apply if the Authority is the administrator.(6) The administrator must, on being requested to do so by a member of the public, make available to the member a copy of the financial statements prepared in respect of the compensation fund for its immediately preceding financial year and a copy of the auditor’s report on those statements. Division 2 Legal Proceedings to Establish Claims for Compensation 185. Application to Court An application to the Court for the purposes of section 17B of the Ordinance must specify the following information—(a) the name of the registered scheme concerned;(b) the amount of loss of accrued benefits in the scheme due to misfeasance or illegal conduct;(c) the value of scheme assets net of such losses in paragraph (b);(d) particulars of the investigation of the claim conducted under section 17A(4) of the Ordinance;(e) any other information relevant to determining the application. 186. Administrator to pay compensation to approved trustee (1) If the Court makes an order under section 17C of the Ordinance for the award of compensation, the administrator must pay the compensation to such person as is specified in the order.(2) The compensation must be paid to the trustee within 3 months after either—(a) the end of the period within which an appeal may be made against the determination of the Court; or(b) if an appeal against the determination is lodged within that period and not subsequently withdrawn, the date on which the matter is finally determined. 187. Compensation to include interest (1) If the Court makes an order under section 17C of the Ordinance for the award of compensation, the administrator must add interest to the compensation.(2) The interest is to be calculated—(a) at the same rate as allowed for a judgment debt from time to time under section 49 of the High Court Ordinance (Cap. 4); and (31 of 1999 s. 3)(b) on and from the day on which they found that the loss was incurred until the day on which payment is made in accordance with section 186. Division 3 Levies 188. Amount of levy payable for compensation fund For the purposes of section 17 of the Ordinance, the prescribed rate of the levy payable by the approved trustee of a registered scheme is 0.03% of the net asset value of the scheme assets. 189. Approved trustee to pay levy to administrator of compensation fund Subject to section 191A, the approved trustee of a registered scheme must, before the deadline for each financial period of the scheme, pay to the administrator of the compensation fund the amount of levy for the immediately preceding financial period. The amount is to be calculated at the rate prescribed by section 188.(L.N. 122 of 2012) 190. Consequences of failure to pay compensation fund levy If an amount of levy is not paid before the deadline referred to in section 189, the Authority may, by proceedings brought in a court of competent jurisdiction, recover the amount as a debt due to the Authority. 191. Authority to publish rate of levy and other particulars (1) The Authority must publish in the Gazette or in some other publications a notice specifying—(a) the rate of levy prescribed under section 188; and(b) the period within which the approved trustee of a registered scheme must pay the levy in accordance with section 189. (L.N. 122 of 2012)(2) The Authority may include in the notice any other information relating to the compensation fund that it thinks appropriate. 191A. Exemption of approved trustee from payment of compensation fund levy (1) If a report prepared under section 184(3)(b) for a financial year of the compensation fund shows that the net asset value of the fund exceeds $1.4 billion as at the end of that financial year, the Authority must by notice (exemption notice) published in the Gazette exempt the approved trustee of a registered scheme from paying the levy in accordance with section 189 for—(a) the financial period of the registered scheme beginning on or after a date specified in the exemption notice, which date must not be later than 2 months after publication of the exemption notice in the Gazette; and(b) each subsequent financial period of the registered scheme.(2) The exemption notice must be published in the Gazette as soon as practicable after a copy of the report is given to the Authority under section 184(4) or, if the Authority is the administrator, after the report is delivered to the administrator under section 184(3)(c).(3) The Authority is not required to grant the exemption under subsection (1) if the Authority has reason to believe that the net asset value of the compensation fund would likely fall below $1 billion as at or before the end of the next financial year of the fund and has consulted the Financial Secretary on its intention of not granting the exemption.(4) An exemption granted under subsection (1) remains in force until it is revoked under section 191B(1). (5) If an exemption granted under subsection (1) is in force, the Authority is not required to grant another exemption under that subsection.(6) An exemption notice is not subsidiary legislation. (L.N. 122 of 2012) 191B. Revocation of exemption (1) If a report prepared under section 184(3)(b) for a financial year of the compensation fund shows that the net asset value of the fund is below $1 billion as at the end of that financial year, the Authority must by notice (revocation notice) published in the Gazette revoke the exemption granted under section 191A(1). (2) The revocation notice must be published in the Gazette as soon as practicable after a copy of the report is given to the Authority under section 184(4) or, if the Authority is the administrator, after the report is delivered to the administrator under section 184(3)(c).(3) The Authority is not required to revoke the exemption under subsection (1) if the Authority has reason to believe that the net asset value of the compensation fund would likely exceed $1.4 billion as at or before the end of the next financial year of the fund and has consulted the Financial Secretary on its intention of not revoking the exemption.(4) If the exemption is revoked under subsection (1), the approved trustee of a registered scheme must pay the levy in accordance with section 189 for—(a) the financial period of the registered scheme beginning on or after a date specified in the revocation notice, which date must not be later than 2 months after publication of the revocation notice in the Gazette; and(b) each subsequent financial period of the registered scheme.(5) The revocation of the exemption does not revive the obligation to pay any levy not payable under the exemption.(6) A revocation notice is not subsidiary legislation.(L.N. 122 of 2012) Part 15 Winding Up of Registered Schemes Division 1 Voluntary Winding Up of Employer Sponsored Schemes 192. Definitions In this Division—application (申請) means an application made under section 34(2) of the Ordinance to the Authority for its consent to the voluntary winding up of an employer sponsored scheme;scheme assets (計劃資產) includes the funds of each constituent fund of the registered scheme concerned. 193. Circumstances in which employer sponsored scheme may be wound up voluntarily The circumstances in which an employer sponsored scheme may be wound up under section 34 of the Ordinance are as follows—(a) if the only participating employer or the only remaining participating employer ceases to participate in the scheme or gives notice to the approved trustee of the scheme that the employer intends to cease to participate in the scheme;(b) where the only participating employer or the only remaining participating employer is a natural person—(i) if there is a change of ownership of the business of that employer, whether by transfer or otherwise; or(ii) if the person dies; or(iii) on the occurrence of an event that entitles a creditor to present a bankruptcy petition against the person; or(iv) if the person is, under the Mental Health Ordinance (Cap. 136), found by the Court to be of unsound mind and incapable of managing himself or herself and his or her affairs; or(c) where the only participating employer or the only remaining participating employer is a body corporate—(i) if there is a change of ownership of the body corporate, whether by acquisition of the company’s shares, a transfer of the assets of the body corporate or otherwise; or(ii) on the commencement of the winding up of the body corporate;(d) where the only participating employer or the only remaining participating employer is a partnership, if the partnership is dissolved (without being reconstituted because of the death, retirement or withdrawal of a partner or the admission of a new partner). 194. Application for Authority’s consent (1) Participating employers are prescribed as a class of persons for the purposes of section 34(2) of the Ordinance.(2) For the purposes of section 34(3) of the Ordinance, the information that must be included in an application is—(a) a statement specifying the reasons for the winding up of the scheme; and(b) a statement specifying the assets and liabilities of the scheme as at a date not earlier than 7 days before the application was made.(3) For the purposes of section 34(3) of the Ordinance, the documents that must accompany an application are—(a) a statutory declaration that complies with subsection (4); and(b) a winding up proposal that complies with subsection (5).(4) The statutory declaration—(a) must be to the effect that, as a result of having conducted an inquiry into the affairs of the scheme, the approved trustee of the scheme is satisfied either—(i) that all existing liabilities (including obligations to scheme members) can be met from the scheme assets; or(ii) that there are no scheme assets, and no liabilities (including obligations to scheme members) that have to be met from the scheme assets; and(b) must be signed—(i) if the trustee is or includes a company, by at least 2 directors of the company; or(ii) if the trustee consists wholly of natural persons, by at least 2 of those persons, one of whom must be an independent trustee.(5) The winding up proposal must specify—(a) whether or not there are any scheme assets and, if there are, what arrangements have been made for the realization and disposal of scheme assets; and (b) whether or not there are any members of the scheme and, if there are, what arrangements (if any) have been made for the transfer of the accrued benefits of scheme members to another registered scheme. 195. Consent of Authority to winding up of employer sponsored scheme (1) The Authority may consent to the voluntary winding up of an employer sponsored scheme without appointing a liquidator if, on receiving an application, the Authority is satisfied that—(a) there are no scheme assets to be realized or disposed of; or(b) if there are any such assets, appropriate arrangements have been made for their realization and disposal; or(c) there are no remaining scheme members; or(d) if there are remaining scheme members, appropriate arrangements have been made for those members’ accrued benefits to be transferred to another registered scheme acceptable to the Authority.(2) The Authority may consent to the voluntary winding up of an employer sponsored scheme subject to the appointment of a liquidator if, on receiving an application, the Authority is satisfied that—(a) there are scheme assets, and appropriate arrangements have not been made for their realization and disposal; or(b) there are remaining scheme members, and appropriate arrangements have not been made for those members’ accrued benefits to be transferred to another registered scheme acceptable to the Authority.(3) In giving its consent to the voluntary winding up of an employer sponsored scheme, the Authority may impose such reasonable conditions as to the conduct of the winding up as it considers appropriate. However, if the Authority proposes to appoint a liquidator to conduct the winding up of the scheme, it—(a) must consult the applicant before the appointment; and(b) may, as a condition of giving that consent, require the participating employer concerned to produce to the Authority a performance guarantee with respect to the payment of the liquidator’s fees and the expenses incurred in winding up the scheme.(4) The performance guarantee—(a) must be issued in writing by an authorized financial institution; and(b) must impose an obligation on the authorized financial institution to indemnify the liquidator against any loss sustained by the liquidator as a result of a failure by the participating employer concerned to pay the liquidator’s fees and the expenses incurred in winding up the scheme.(5) The winding up of an employer sponsored scheme commences on the date on which notice of the consent is given to the applicant under subsection (6) or, if a later date is specified in the notice, on that later date.(6) As soon as practicable after giving its consent, the Authority must give written notice of the consent to the applicant and, if the applicant is not the approved trustee of the scheme concerned, to that trustee. The notice must specify—(a) any conditions subject to which the Authority has imposed with respect to the conduct of the winding up; and(b) if the Authority has appointed a liquidator to conduct the winding up, the name and address of the liquidator and the terms and conditions of the liquidator’s appointment; and(c) the date on which the winding up is to commence.(7) Within 7 days after being given notice of the Authority’s consent to the winding up of the scheme, the applicant must publish in at least 2 newspapers circulating in Hong Kong a notice—(a) to the effect that the scheme is being wound up and that the Authority has given its consent to the winding up under section 34 of the Ordinance; and (b) specifying any conditions imposed by the Authority in granting its consent to the winding up; and(c) if a liquidator has been appointed to conduct the winding up, specifying the name and address of the liquidator; and (d) specifying the date on which the winding up commenced. One of the newspapers must be a newspaper that is printed in the Chinese language and the other newspaper or one of the other newspapers must be a newspaper that is printed in the English language.(8) The applicant must, within 7 days after the date on which the notice is published, serve a copy of that notice—(a) if there are any remaining scheme members, on each of those members; and(b) if the applicant is not the approved trustee of the scheme, on that trustee; and(c) if the applicant is not the participating employer concerned, on that employer. 196. Appointment of liquidator (1) On appointing a liquidator to conduct the voluntary winding up of an employer sponsored scheme, the Authority must give written notice of the appointment to the liquidator.(2) If the office of the liquidator becomes vacant for any reason, the Authority may appoint another person to fill the vacancy. 197. Effect of winding up employer sponsored scheme (1) After the commencement of the voluntary winding up of an employer sponsored scheme, a person can no longer become a member of the scheme and an employer can no longer become a participant in the scheme.(2) If any mandatory contributions or voluntary contributions are paid to the scheme after 3 months from the commencement of the winding up of the scheme, the approved trustee of the scheme or, if a liquidator has been appointed to conduct the winding up, the liquidator must transfer those contributions to the Authority to be dealt with in a manner consistent with the Ordinance. 198. Effect of appointment of liquidator (1) On the appointment of a liquidator to conduct the winding up of an employer sponsored scheme—(a) the scheme assets vest in the liquidator, subject to the beneficial interests of the members with respect to their accrued benefits in the scheme; and(b) the approved trustee, and any persons concerned with the administration of the scheme (including any service provider appointed or engaged by that trustee for the purposes of the scheme) cease to be responsible for the administration of the scheme and, except as directed or authorized by the liquidator, cease to have any function to exercise or perform in relation to the scheme.(2) A liquidator—(a) must take all reasonably practicable steps to take possession of the scheme assets as soon as practicable after being appointed; and (b) may require any person to whom this subsection applies to pay, deliver or transfer to the liquidator, within such reasonable period as the liquidator may specify, any scheme assets in the possession of that person.(3) Subsection (2) applies to the following persons—(a) the approved trustee of the scheme;(b) any service provider appointed or engaged for the purposes of the scheme;(c) any other person who, in the opinion of the liquidator, appears to be concerned with the administration of the scheme, whether directly or indirectly;(d) the participating employer concerned;(e) any employee or agent of a person referred to in paragraphs (a) to (d).(4) A person who, except at the direction or with the authority of the liquidator, purports to exercise or perform a function in relation to the administration of an employer sponsored scheme after the appointment of a liquidator in respect of the scheme commits an offence and is liable on conviction to a fine at level 6 and to imprisonment for 12 months.(5) A person who, without reasonable excuse, fails to comply with a requirement of a liquidator made under subsection (2) commits an offence and is liable on conviction to fine at level 6 and to imprisonment for 12 months.(6) A person who, in any document given to the liquidator—(a) makes a statement that the person knows to be false or misleading in a material respect; or(b) recklessly makes a statement which is false or misleading in a material respect, commits an offence and is liable on conviction to a fine at level 6 and to imprisonment for 12 months. 199. Powers of liquidator on winding up (1) Subject to the beneficial interests of the members with respect to their accrued benefits in an employer sponsored scheme, a liquidator appointed in respect of the winding up of the scheme may exercise all or any of the following powers—(a) the power to realise the scheme assets by public auction or private contract, with the power to transfer those assets to any person (including the power to sell them in parcels);(b) the power to bring or defend any legal proceedings in the name of the approved trustee of the scheme and on behalf of the trustee;(c) the power to enter into a compromise or arrangement with respect to any debt, claim or liability relating to the scheme assets;(d) the power to engage the services of others to assist in the performance of the liquidator’s functions;(e) the power to do such other things as may be necessary for winding up the scheme, including the power to transfer the scheme assets to another registered scheme and, to pay or transfer members’ accrued benefits, in accordance with the Ordinance.(2) The liquidator may, from time to time, request the Authority to give directions to the liquidator with respect to the conduct of the winding up of the scheme concerned.(3) The Authority must give directions to the liquidator in response to a request made under subsection (2). 200. Duty of liquidator to report to Authority etc. (1) The Authority may, from time to time—(a) require the liquidator to report to the Authority on matters relating to the winding up of the scheme; and(b) give directions to the liquidator as to the conduct of the winding up of the scheme.(2) The liquidator is required to comply with a requirement or direction made or given by the Authority under subsection (1).(3) The Authority may remove from office a liquidator who fails, without reasonable excuse, to comply with the requirement or direction.(4) The liquidator must ensure that the liquidator’s fees and the expenses incurred in winding up the scheme are borne by the participating employer concerned.

201. Disposal of scheme assets on winding up (1) In a voluntary winding up of an employer sponsored scheme, the scheme assets are to be applied in the following order of priority—(a) the payment of amounts owing to general creditors of the approved trustee of the scheme in relation to the scheme at the date of commencement of the winding up;(b) if, at the commencement of the winding up, there are any remaining scheme members whose accrued benefits have not previously been transferred to another registered scheme or paid in accordance with the Ordinance, the transfer or payment of those benefits in accordance with arrangements approved by the Authority.(2) Any surplus that remains after satisfying all outstanding liabilities referred to in subsection (1) is to be distributed—(a) in accordance with the governing rules of the scheme; or(b) if those rules do not make provision for the distribution of such a surplus, to the participating employer concerned. Division 2 Winding Up of Registered Schemes Generally 202. Appointment of liquidator A person may be appointed as liquidator under section 34 or 34A of the Ordinance only if the person—(a) has consented in writing to the appointment; and(b) is a certified public accountant as defined by section 2 of the Professional Accountants Ordinance (Cap. 50), or is an approved trustee; and (23 of 2004 s. 56)(c) is not an undischarged bankrupt. Part 16 Miscellaneous 203. Circumstances in which persons are exempted from operation of the Ordinance (1) For the purposes of section 4(3)(a) of the Ordinance, the circumstances in which a person is exempt from the Ordinance are when—(a) permission is given to the person to land or remain in Hong Kong for the purposes of employment under the conditions of stay imposed in accordance with section 11 of the Immigration Ordinance (Cap. 115); and(b) the period during which the person is given permission to remain in Hong Kong does not exceed 13 months. (2 of 2002 s. 21)(2) If the original period during which the person is given permission to remain in Hong Kong for the purposes of employment is extended in accordance with section 11 of the Immigration Ordinance (Cap. 115), and the original period and the extended period together exceed 13 months, the person ceases to be exempt from the Ordinance from the end of 13 months after the beginning of the original period. (2 of 2002 s. 21)(3) For the purposes of section 4(3)(b) of the Ordinance, the circumstances in which a person is exempt from the Ordinance are when—(a) permission is given to the person to land or remain in Hong Kong for the purposes of employment under the conditions of stay imposed in accordance with section 11 of the Immigration Ordinance (Cap. 115); and(b) the person is a member of a provident, pension, retirement or superannuation scheme established outside Hong Kong.(4) In this section, a reference to employment includes a reference to self-employment. 203A. Defence for offence relating to section 78, 164(2) or (4), 164A(3), 165(3), 167 or 169 (1) It is a defence for a person charged with an offence under section 94, for failing to perform a duty imposed under section 78 (non-performance), to establish that the non-performance was only because of the failure of the system operator of the electronic MPF system to discharge the system operator’s duties.(2) It is a defence for a person charged with an offence under section 175, for failing to comply with a relevant provision (non-compliance), to establish that the non-compliance was only because of the failure of the system operator of the electronic MPF system to discharge the system operator’s duties.(3) A person charged with an offence mentioned in subsection (1) or (2) is taken to have established a matter that needs to be established for the purpose of the relevant defence if—(a) there is sufficient evidence to raise an issue with respect to the matter; and(b) the contrary is not proved by the prosecution beyond reasonable doubt.(4) In this section—relevant defence (相關免責辯護)—(a) in relation to an offence mentioned in subsection (1), means the defence under that subsection; and(b) in relation to an offence mentioned in subsection (2), means the defence under that subsection;relevant provision (相關條文) means section 164(2) or (4), 164A(3), 165(3), 167 or 169.(40 of 2021 s. 98) 204. Appeal period For the purposes of section 35(1) of the Ordinance, the prescribed period is 2 months after the date on which the Authority gives written notice of its decision. 205. Prescription of financial penalty (1) The provisions specified in column 2 of Schedule 4 are prescribed for the purposes of sections 45B and 45C of the Ordinance.(2) The amounts of financial penalties set out in columns 4, 5 and 6 of Schedule 4 are financial penalties prescribed in relation to the provisions in column 2 of Schedule 4. 206. How notices or other documents are to be given for purposes of the Ordinance (1 of 2015 s. 49; 40 of 2021 s. 99)(1) Unless a contrary intention appears from the context of the Ordinance, a notice or other document to be given for the purposes of the Ordinance shall be given— (29 of 2002 s. 14; 1 of 2015 s. 49; 40 of 2021 s. 99)(a) in the case of a person other than a body corporate or partnership—(i) by delivering it to the person personally; or(ii) by sending it by post in a letter addressed to the person at the person’s usual place of residence or business or, if the person’s address is unknown, addressed to the person’s last known place of residence or business; or(b) in the case of a body corporate—(i) by delivering it to any place in Hong Kong at which the body carries on business and handing it to a person apparently concerned with the management of, or apparently employed by, the body; or(ii) by sending it to the body by post by letter addressed to the body at its registered office in Hong Kong or at any place in Hong Kong at which the body carries on business; or(c) in the case of a partnership—(i) by delivering it to any place in Hong Kong at which the partnership carries on business and handing it to a person apparently concerned with the management of, or apparently employed by, the partnership; or(ii) by sending it to the partnership by post by letter addressed to the partnership at any place in Hong Kong at which the partnership carries on business. (1 of 2015 s. 49)(1A) A notice or other document to be given for the purposes of the Ordinance is, in the absence of evidence to the contrary, taken to have been given if it is sent by post to the last known place of business or residence of the person to whom the notice or document is required to be given. (1 of 2015 s. 49)(2) Unless a contrary intention appears from the context of the Ordinance, a notice or other document is also taken to have been given for the purposes of the Ordinance if— (40 of 2021 s. 99)(a) it is sent to the recipient by facsimile transmission or electronic mail at the recipient’s facsimile number or electronic mail address last known to the sender, or by other means specified by the recipient, and a record generated by the means of transmission establishes that the notice or document was so sent;(b) it is made available to the recipient on a website, and the recipient is notified of its availability by the operation of paragraph (a) or subsection (1)(a), (b) or (c); (40 of 2021 s. 99)(ba) it is made available to the recipient by any other electronic means (other than the means mentioned in paragraph (c)), and the recipient is notified of its availability by the operation of paragraph (a) or subsection (1)(a), (b) or (c); or (40 of 2021 s. 99)(c) it is made available to the recipient by means of an electronic system designated by the Authority under section 6KA(1) of the Ordinance for use for the purposes of this subsection. (1 of 2015 s. 49)(2A) Subsection (2)(a), (b) and (ba) does not apply unless the recipient has given consent to being given the notice or document by the means described in that subsection. (1 of 2015 s. 49; 40 of 2021 s. 99)(2B) For the purposes of subsection (2A), if— (1 of 2015 s. 49; 40 of 2021 s. 99)(a) the notice or document is made available to the recipient other than by an electronic MPF system; and(b) the recipient is a participating employer or a member (or a prospective participating employer or a prospective member) of a registered scheme,prior consent must be given in the terms specified by the Authority. (40 of 2021 s. 99)(3)-(4) (Repealed 1 of 2015 s. 49)(5) This section does not apply to summonses. (1 of 2008 s. 48)(6) In this section—give (給予), in relation to a notice or document, includes serve, lodge, send, deliver, provide or otherwise make available. (1 of 2015 s. 49)(29 of 2002 s. 14) 206A. (Repealed 40 of 2021 s. 100) 207. Rate of contribution surcharge The contribution surcharge is an amount equal to 5 per cent of the amount of the arrears.(18 of 2008 s. 24) 208. Transitional provisions for 2021 Amendment Ordinance The transitional provisions specified in Schedule 5 have effect.(40 of 2021 s. 101) Schedule 1 [ss. 37, 39, 40, 44, 65, 70 & 118 & Sch. 3](L.N. 223 of 2000; 1 of 2008 ss. 13 & 36)Investment of Scheme Funds Part 1 Preliminary 1. Definitions (1) In this Schedule—call warrant (認購權證) means a security that confers a right (but does not impose an obligation) on its holder to purchase from the issuer of the security the ordinary shares of a company or companies or corporation or corporations on or before a specified date at a specified price or prices, whether or not the issuer retains the right to elect to give a cash payment equal to the excess (if any) of the value of those ordinary shares over the exercise price without the holder of the warrant receiving those shares from the issuer; (L.N. 223 of 2000; 5 of 2002 s. 407; L.N. 145 of 2006)collective investment scheme (集體投資計劃) has the meaning assigned to it by the Securities and Futures Ordinance (Cap. 571); (29 of 2002 s. 14)constituent fund (成分基金) means a constituent fund of a registered scheme; effective exposure (有效風險) means— (a) in relation to financial option contracts, the nominal value of the investment multiplied by delta (as defined by subsection (2)); or (b) in relation to financial futures contracts, the full value of the contracts; or (c) in relation to other kinds of securities and investments, the market value of the securities and investments; hedging (對沖) has the meaning given by subsection (3);index-tracking collective investment scheme (緊貼指數集體投資計劃) means a collective investment scheme which has the sole investment objective of tracking a particular market index; (29 of 2002 s. 14)put warrant (認沽權證) means a security that confers a right (but does not impose an obligation) on its holder to sell to the issuer of the security the ordinary shares of a company or companies or corporation or corporations on or before a specified date at a specified price or prices, whether or not the issuer retains the right to elect to give a cash payment equal to the excess (if any) of the exercise price over the value of those ordinary shares without the holder of the warrant delivering those shares to the issuer; (L.N. 223 of 2000; 5 of 2002 s. 407; L.N. 145 of 2006) warrant (認股權證) means a security that— (a) confers a right (but does not impose an obligation) on its holder to subscribe for the ordinary shares of the issuer of the warrant on or before a specified date at a specified price or prices; or (5 of 2002 s. 407) (b) is a call warrant; or (c) is a put warrant. (5 of 2002 s. 407; L.N. 145 of 2006) (2) For the purposes of the definition of effective exposure in subsection (1), “delta” is the expected increase or decrease in the market value of the financial option contract given a 1 unit change in the value of the underlying investment. (E.R. 4 of 2019)(3) For the purposes of this Schedule, a financial futures contract, a financial option contract, a currency forward contract or a put warrant is acquired for hedging purposes if it is of a kind that will have the effect of reducing the impact on existing assets of a constituent fund, or on assets acquired for the fund at the same time as the contract or warrant is acquired, of a possible reduction in the value of those assets.(4) For the purposes of this Schedule, a security is to be listed on an approved stock exchange or an approved futures exchange if the requirements specified by the Authority for this purpose are complied with in relation to the security. (L.N. 145 of 2006) Part 2 Permissible Investments 2. General restrictions—spread of investments (1) The total amount invested in securities and other permissible investments (excluding an investment permitted under section 11 of this Schedule) issued by any one person must not exceed 10 per cent of the total funds of a constituent fund. (L.N. 145 of 2006)(1A) For the purposes of subsection (1), where the funds of a constituent fund are invested in a relevant investment, the amount invested in the relevant investment is also to be taken into account in the manner specified by the Authority for the purposes of this subsection when ascertaining the total amount of the funds invested in the securities and other permissible investments issued by the person who issues the underlying investment of the relevant investment. (L.N. 145 of 2006)(1B) Where the repayment of principal or the payment of interest in respect of a debt security issued by a person is guaranteed by another person, the debt security is, for the purposes of subsection (1), to be regarded as also issued by the other person. (L.N. 145 of 2006)(2) Not more than 10 per cent of the shares of a particular class, or the total amount of debt securities, issued by one person may be acquired for the purposes of a constituent fund. (L.N. 145 of 2006)(3) Notwithstanding subsections (1) and (2), where part or all of the funds of a constituent fund are invested in accordance with section 6(b)(i), (ii) or (iii) of this Schedule, then subsections (1) and (2) shall not apply to that part or all of the funds of the constituent fund so invested. (29 of 2002 s. 14)(4) Notwithstanding subsections (1) and (2), where a constituent fund has the sole investment objective of tracking a particular market index, then those subsections shall not apply to the constituent fund if the approved trustee has the prior approval of the Authority that those subsections shall not apply to the constituent fund. (29 of 2002 s. 14)(5) In granting an approval mentioned in subsection (4), the Authority may impose such conditions with respect to the constituent fund concerned as the Authority considers appropriate. (29 of 2002 s. 14)(6) Where the Authority—(a) has decided that it is appropriate to—(i) amend any conditions imposed under subsection (5) or this subsection with respect to a constituent fund; or(ii) impose conditions with respect to a constituent fund; and(b) has given to the approved trustee concerned—(i) not less than 30 days’ advance notice of its decision, specifying its grounds; and(ii) an opportunity to make written representations as to why the conditions should not be amended or imposed,then the Authority may, by written notice served on the approved trustee—(c) amend any conditions imposed under subsection (5) or this subsection with respect to the constituent fund; or(d) impose conditions with respect to the constituent fund. (29 of 2002 s. 14)(7) In this section— relevant investment (有關投資項目) means a permissible investment— (a) the value of which is determined by reference to the value of another investment; and (b) which is specified, or belongs to a class of investment specified, by the Authority as a relevant investment for the purposes of this definition; underlying investment (基礎投資項目), in relation to a relevant investment, means an investment— (a) by reference to the value of which the value of the relevant investment is determined; and (b) which is specified, or belongs to a class of investment specified, by the Authority as an underlying investment for the purposes of this definition. (L.N. 145 of 2006) 3. Restrictions on borrowing and lending of securities (1) Securities must not be borrowed for the purposes of a constituent fund (whether for the purposes of selling the securities short or any other purposes).(2) Securities held in respect of a constituent fund may be lent only if—(a) the lending is in respect of fully-paid up shares listed on an approved stock exchange; and (5 of 2002 s. 407)(b) the requirements in section 52 of this Regulation are complied with. 4. Restrictions on borrowing of money Money may be borrowed for the purposes of a constituent fund only if it is borrowed—(a) for the purpose of enabling accrued benefits to be paid to or in respect of scheme members, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the fund at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) the period of the borrowing does not exceed 90 days; or(b) for the purpose of settling a transaction relating to the acquisition of securities or other investments in respect of the fund, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the fund at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) the period of the borrowing does not exceed 7 working days; and(iv) at the time the decision to enter into the transaction was made, it was unlikely that the borrowing would be necessary. 5. Restrictions on acquiring securities that carry an unlimited liability (1) A security involving the assumption of a potential liability that is unlimited must not be acquired for the purposes of a constituent fund.(2) A liability must not be incurred in respect of a constituent fund in excess of the total value of the accrued benefits of the scheme members in relation to the fund. 6. Permissible investments: general restrictions The funds of a constituent fund may be invested only—(a) in investments that satisfy the requirements of sections 7 to 16 of this Schedule; or(b) in—(i) an approved pooled investment fund—(A) that satisfies the requirements of Part 4 of this Schedule; and(B) the underlying investments of which would comply with this Part if references in this Part to “constituent fund” were references to “approved pooled investment fund”;(ii) an index-tracking collective investment scheme approved by the Authority for the purposes of section 6A of this Schedule; or(iii) a combination of an approved pooled investment fund falling within subparagraph (i) and an index-tracking collective investment scheme falling within subparagraph (ii). (29 of 2002 s. 14)(E.R. 1 of 2013) 6A. Permissible investments: index-tracking collective investment scheme The funds of a constituent fund may be invested in an index-tracking collective investment scheme which is— (L.N. 145 of 2006)(a) either—(i) authorized by the Securities and Futures Commission, within the meaning of the Securities and Futures Ordinance (Cap. 571); or(ii) listed on a stock exchange approved by the Authority for the purposes of this section; and (L.N. 145 of 2006)(b) approved by the Authority for the purposes of this section.(29 of 2002 s. 14) 7. Permissible investments: debt securities (1) In this section— exempt authority (獲豁免當局) means— (aa) the Central People’s Government; (L.N. 130 of 2022) (aab) the People’s Bank of China; (L.N. 130 of 2022) (aac) the Agricultural Development Bank of China; (L.N. 130 of 2022) (aad) the China Development Bank; (L.N. 130 of 2022) (aae) The Export-Import Bank of China; (L.N. 130 of 2022) (a) the Government; (L.N. 130 of 2022) (b) the Exchange Fund established by the Exchange Fund Ordinance (Cap. 66); (L.N. 130 of 2022) (c) a company all of the shares of which are owned beneficially by the Government; or (d) a government, the central or reserve bank of a country or territory, or a multilateral international agency all with the highest possible credit rating determined by a credit rating agency approved by the Authority. (2) The funds of a constituent fund may be invested in—(a) a debt security issued by an exempt authority; or (b) a debt security in respect of which the repayment of the principal and the payment of interest is unconditionally guaranteed by an exempt authority; or(c) a debt security that satisfies a minimum credit rating set by the Authority, based on the credit rating of the security as determined by a credit rating agency approved by the Authority for the purposes of this Schedule; or(d) a debt security listed on an approved stock exchange, being a security issued by, or guaranteed by, a company or corporation whose shares are listed on that exchange or another approved stock exchange. (L.N. 223 of 2000; 5 of 2002 s. 407; 29 of 2002 s. 14; L.N. 145 of 2006)(3) Section 2 of this Schedule does not apply in relation to a debt security of a kind referred to in subsection (2)(a) or (b) and the following provisions apply instead—(a) not more than 30 per cent of the funds of a constituent fund may be invested in debt securities of the same issue if they are of a kind referred to in either of those paragraphs;(b) all of the funds of a constituent fund may be invested in debt securities of the same issuer so long as they comprise at least 6 different issues and are of a kind referred to in either of those paragraphs.(4) The funds of a constituent fund may be applied for the purposes of entering into a repurchase agreement, but only if—(a) the agreement is in respect of a debt security of a kind referred to in subsection (2)(a), (b), (c) or (d); and(b) the requirements in section 51 of this Regulation are complied with.(5) For the purposes of this section, debt security (債務證券) does not include a document issued by a person as evidence of a deposit, within the meaning of section 11 of this Schedule, that is placed with that person. (L.N. 145 of 2006) 8. Permissible investments: equities and other securities (1) The funds of a constituent fund may be invested in—(a) fully-paid up shares listed on an approved stock exchange other than the shares of a company which is a collective investment scheme; (5 of 2002 s. 407)(b) an index-tracking collective investment scheme approved by the Authority for the purposes of section 6A of this Schedule; or (29 of 2002 s. 14)(c) securities listed on an approved stock exchange that are approved, or are of a kind approved, by the Authority. (L.N. 145 of 2006)(2) Not more than 10 per cent in total of the funds of a constituent fund may be invested in the following— (L.N. 145 of 2006)(a) fully-paid up shares listed on a stock exchange that is not an approved stock exchange, other than the shares of a company that is a collective investment scheme;(b) securities that are approved, or are of a kind approved, by the Authority, other than shares listed on an approved stock exchange; and(c) an authorized unit trust or authorized mutual fund of a kind to which Part 4 of this Schedule does not apply but which is approved by the Authority for the purposes of this Part. (5 of 2002 s. 407)(L.N. 145 of 2006; E.R. 1 of 2013) 9. Permissible investments: convertible debt securities (1) The funds of a constituent fund may be invested in— (L.N. 145 of 2006)(a) a convertible debt security listed on an approved stock exchange and convertible to shares listed on that exchange or another approved stock exchange; or ( 5 of 2002 s. 407; 29 of 2002 s. 14; L.N. 145 of 2006)(b) a convertible debt security that satisfies the minimum credit rating requirements for a debt security.(2) For the purposes of this section, convertible debt security (可轉換債務證券) does not include a document issued by a person as evidence of a deposit, within the meaning of section 11 of this Schedule, that is placed with that person. (L.N. 145 of 2006) 10. Permissible investments: warrants The funds of a constituent fund may be applied for the purposes of acquiring a warrant, but only if—(aa) the warrant is listed on an approved stock exchange or an approved futures exchange; (L.N. 145 of 2006)(ab) the underlying ordinary shares to which the warrant may be converted are listed on an approved stock exchange; (L.N. 145 of 2006)(a) the warrant does not (except when the warrant is purchased for the specific purpose of hedging) contain a put warrant; and(b) after acquisition of the warrant, no more than 5 per cent of the total funds of the constituent fund will be invested in warrants. 11. Permissible investments: deposits (1) The funds of a constituent fund may be placed on deposit with— (L.N. 145 of 2006)(a) an authorized financial institution; or(b) an eligible overseas bank, but only in accordance with this section.(1A) The funds of a constituent fund must not be placed on deposit with a branch outside Hong Kong of an authorized financial institution incorporated outside Hong Kong that is not a re-domiciled entity unless the authorized financial institution satisfies a minimum credit rating set by the Authority, based on the credit rating of the authorized financial institution as determined by an approved credit rating agency. (L.N. 145 of 2006; 14 of 2025 s. 239)(2) The funds of a constituent fund must not be placed on deposit with an authorized financial institution or an eligible overseas bank if the total amount so placed would be more than 10 per cent of the issued capital and reserves of the institution or bank. (L.N. 145 of 2006)(3) Funds of a constituent fund must not be placed on deposit with an authorized financial institution or an eligible overseas bank if the total amount of funds so placed would exceed— (L.N. 145 of 2006)(a) where the total market value of the constituent fund is less than $8,000,000, 25 per cent of that fund; or(b) in any other case, 10 per cent of that fund.(3A) Notwithstanding subsection (3), where a constituent fund has a total market value of less than $8,000,000, then that subsection shall not apply to the constituent fund if the approved trustee has the prior approval of the Authority that that subsection shall not apply to the constituent fund. (29 of 2002 s. 14)(3B) In granting an approval mentioned in subsection (3A), the Authority may impose such conditions with respect to the constituent fund concerned as the Authority considers appropriate. (29 of 2002 s. 14)(3C) Where the Authority—(a) has decided that it is appropriate to—(i) amend any conditions imposed under subsection (3B) or this subsection with respect to a constituent fund; or(ii) impose conditions with respect to a constituent fund; and(b) has given to the approved trustee concerned—(i) not less than 30 days’ advance notice of its decision, specifying its grounds; and(ii) an opportunity to make written representations as to why the conditions should not be amended or imposed, then the Authority may, by written notice served on the approved trustee—(c) amend any conditions imposed under subsection (3B) or this subsection with respect to the constituent fund; or(d) impose conditions with respect to the constituent fund. (29 of 2002 s. 14)(4) Funds of a constituent fund must not be placed on deposit with a group of associated authorized financial institutions or eligible overseas banks (or a combination of them) if the total amount of funds so placed would exceed 25 per cent of the total market value of the constituent fund. (L.N. 145 of 2006)(4A) Notwithstanding subsection (4), where a constituent fund has a total market value of less than $8,000,000, then that subsection shall not apply to the constituent fund if the approved trustee has the prior approval of the Authority that that subsection shall not apply to the constituent fund. (L.N. 145 of 2006)(4B) For the purposes of this section, where the funds of a constituent fund are invested in a certificate of deposit that is—(a) issued by an authorized financial institution or an eligible overseas bank; and(b) acquired from a person other than the authorized financial institution or eligible overseas bank, such amount of the funds as is equal to the market value of the certificate of deposit is to be regarded as having been placed on deposit with the authorized financial institution or eligible overseas bank. (L.N. 145 of 2006)(5) In this section— deposit (存款) means a loan of money that is repayable with or without interest or premium, either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, but does not include a loan of money— (a) upon terms referable to the provision of property or services or the giving of security; or (b) specified by the Authority as not being regarded as a deposit for the purposes of this definition, and references to placing funds on deposit shall be construed accordingly. (L.N. 145 of 2006) 12. (Repealed L.N. 145 of 2006) 13. Permissible investments: securities to be listed The funds of a constituent fund may be applied for acquiring securities that are—(a) of a kind to which section 7(2)(d), 8(1), 9(1)(a) or 10 of this Schedule would apply if they were listed on an approved stock exchange or an approved futures exchange; and(b) to be listed on an approved stock exchange or an approved futures exchange. (L.N. 145 of 2006) 14. Futures contracts and option contracts: restrictions on acquisition (1) Subject to this section, the funds of a constituent fund may be applied for acquiring a financial futures contract or a financial option contract only—(a) for hedging purposes; or(b) for any other purpose, but only if—(i) the acquisition does not result in the constituent fund becoming leveraged; and(ii) the effective exposure of the fund in financial futures contracts and financial option contracts as a result of the acquisition of the contract does not exceed 10 per cent of the market value of the fund.(2) A financial futures contract must not be acquired for a constituent fund unless it is traded on an approved futures exchange. (5 of 2002 s. 407; L.N. 145 of 2006)(2A) A contract described in paragraph (a) or (b)(i) of the definition of financial futures contract in section 2 of this Regulation must not be acquired for a constituent fund unless investing in the specified security or securities concerned is permitted under this Schedule at the time when the contract is entered into. (L.N. 145 of 2006)(3) A financial option contract must not be acquired for a constituent fund unless it is traded on an approved futures exchange or an approved stock exchange. (5 of 2002 s. 407; L.N. 145 of 2006) (4) A financial futures contract or a financial option contract may be acquired for the purposes of a constituent fund only if the approved trustee of the scheme and the investment manager appointed for the purposes of the fund have special qualifications approved or specified by the Authority for the purposes of this section.(5) For the purposes of this section—(a) a constituent fund is leveraged if the effective exposure of the fund exceeds the market value of the fund; and(b) the effective exposure, in relation to a constituent fund, means the sum of the effective exposures of all investments of the fund. 15. Currency forward contracts: restrictions on acquisition (1) Subject to this section, the funds of a constituent fund may be applied for acquiring a currency forward contract only—(a) for hedging purposes; or(b) for the purpose of settling a transaction relating to the acquisition of securities.(2) Subject to subsection (2A), a currency forward contract may be acquired for a constituent fund only if it is acquired— (L.N. 145 of 2006) (a) from an authorized financial institution or an eligible overseas bank; and (L.N. 145 of 2006) (b) the period of the contract is not more than 12 months.(2A) A currency forward contract must not be acquired from a branch outside Hong Kong of an authorized financial institution incorporated outside Hong Kong that is not a re-domiciled entity unless the authorized financial institution satisfies a minimum credit rating set by the Authority, based on the credit rating of the authorized financial institution as determined by an approved credit rating agency. (L.N. 145 of 2006; 14 of 2025 s. 239)(3) (Repealed 29 of 2002 s. 14) Part 3 Currency Exposure 16. Permissible investments: minimum Hong Kong dollar currency exposure (1) At least 30 per cent of a constituent fund must be held in Hong Kong dollar currency investments, as measured by the effective currency exposure.(2) The percentage referred to in subsection (1) is to be calculated—(a) by dividing the total effective currency exposure of Hong Kong dollar currency investments by the total market value of the constituent fund (disregarding the value of any collateral securities given as referred to in sections 51 and 52 of this Regulation); and(b) by multiplying the resulting amount by 100.(3) In this section—effective currency exposure (有效貨幣風險), in relation to a constituent fund, means the proportion of the fund that is effectively invested in investments of a particular currency denomination as compared with the market value of the fund; Hong Kong dollar currency investment (港元貨幣投資項目) means an investment that is denominated in Hong Kong dollars and of which the value is not linked to a foreign currency and, in particular, includes any of the following— (a) cash in Hong Kong dollars and deposits in Hong Kong dollars, other than deposits in relation to which the repayment of principal or the payment of interest is, directly or indirectly, affected by fluctuations in exchange rates for a foreign currency; (b) debt securities of a kind referred to in section 7(2)(a), (b) or (c) or 9(1)(b) of this Schedule that are denominated in Hong Kong dollars and in relation to which— (L.N. 145 of 2006)(i) the repayment of principal and the payment of interest are to be made in Hong Kong dollars; and(ii) the amounts of the principal to be repaid and the interest to be paid are not, directly or indirectly, affected by fluctuations in exchange rates for a foreign currency; (c) securities of a kind referred to in section 7(2)(d), 8(1) or 9(1)(a) of this Schedule that are listed or to be listed on a recognized stock market; (5 of 2002 s. 407; L.N. 145 of 2006) (d) warrants of a kind referred to in section 10 of this Schedule that are listed or to be listed on a recognized stock market; (5 of 2002 s. 407; L.N. 145 of 2006) (e) financial option contracts, of a kind referred to in section 14(3) of this Schedule that are traded on a recognized futures market or a recognized stock market with reference to underlying securities or an index of securities of a kind referred to in paragraph (c); (5 of 2002 s. 407) (f) currency forward contracts of a kind referred to section 15(2) of this Schedule if the contracts are to buy Hong Kong dollars; (g) currency forward contracts of a kind referred to in section 15(2) of this Schedule if the contracts are to sell Hong Kong dollars; (h) receivables in Hong Kong dollars; (i) payables in Hong Kong dollars; (j) approved pooled investment funds that are denominated in Hong Kong dollars, but only if each of those funds has a total value of Hong Kong dollar currency investments equal to the total market value of the fund, as measured by the effective currency exposure; (k) other approved pooled investment funds. (4) For the purposes of this section, the effective currency exposure, in relation to the Hong Kong dollar currency investments of a constituent fund, is the amount by which the aggregate of all amounts specified in subsection (5) exceed the aggregate of all amounts specified in subsection (6).(5) The following amounts are the amounts firstly referred to in subsection (4)—(a) an amount equal to 30 per cent of the market value of the approved pooled investment funds referred to in paragraph (k) of the definition of Hong Kong dollar currency investment in subsection (3) that are held in respect of the constituent fund;(b) an amount equal to the market value of the investments referred to in paragraphs (a) to (e) and (j) of that definition that are held in respect of that fund; (32 of 2000 s. 48)(c) an amount equal to the market value of the currency forward contracts referred to in paragraph (f) of that definition that are held in respect of that fund;(d) an amount equal to the receivables referred to in paragraph (h) of that definition that relates to that fund.(6) The following amounts are the amounts secondly referred to in subsection (4)—(a) an amount equal to the market value of the currency forward contracts referred to in paragraph (g) of the definition of Hong Kong dollar currency investment in subsection (3) that are held in respect of the constituent fund;(b) an amount equal to the amount of the payables referred to in paragraph (i) of that definition that relates to that fund. Part 4 Pooled Investments 17. Pooled investment funds (1) Subject to subsection (2), the funds comprising a constituent fund may be invested in a pooled investment fund, which may in turn be invested in 1 or more other pooled investment funds.(2) A pooled investment fund in which funds are invested as referred to in subsection (1) must comply with the following requirements—(a) the fund must be authorized by the Securities and Futures Commission in accordance with the requirements relating to collective investment schemes under Part IV of the Securities and Futures Ordinance (Cap. 571) and approved by the Authority for the purposes of this Regulation; (5 of 2002 s. 407)(b) the bases for all charges (including investment management charges, initial charges, annual and other periodic fees, surrender charges, surrender penalties and other deductions that may apply to that fund) must be disclosed to the holders of interests in the fund; (c) investment management charges in respect of that fund must be expressed as a percentage of the assets of the fund or on some other basis approved by the Authority;(d) if the fund provides a guaranteed return of capital or of income on capital (or both), there must be full disclosure of main features of the guarantee, including a clear description of how the return is to be determined and the extent of any discretion that may be exercised in making such a determination;(e) if the fund is a unit trust or mutual fund, it must satisfy the requirements of section 18 of this Schedule;(f) if the fund is an insurance policy, it must satisfy the requirements in section 19 of this Schedule;(g) the trustee of the fund, and any investment manager or custodian appointed by the trustee in relation to the fund, must comply with such of the requirements of this Regulation as relate to an approved trustee of a registered scheme, and to an investment manager or custodian appointed by such an approved trustee, in so far as those requirements are relevant to the fund; (h) the financial statements, investment reports and auditor’s reports of the fund must be lodged with the Authority and additional information relating to those statements and reports must be provided to the Authority whenever the Authority requests;(i) no additional initial charges may be imposed in relation to the management of the fund if the manager of the fund, or an associate of that manager, manages the relevant constituent fund;(j) if the fund is invested in another fund and the manager of the fund, or an associate of that manager, manages the other fund, no additional initial charges may be imposed in relation to the management of that other fund;(k) the fund must be governed by the law of Hong Kong. 18. Unit trusts and mutual funds (1) The funds of a constituent fund may be invested in a unit trust or mutual fund, but only if it is an authorized unit trust or an authorized mutual fund.(2) An authorized unit trust or an authorized mutual fund that provides for a guaranteed amount to be paid to investors who hold units in the unit trust, or shares in the mutual fund, at a specified date in the future must have a guarantor that is an authorized financial institution that complies with subsection (3).(3) For the purposes of subsection (2), an authorized financial institution complies with this subsection only if it satisfies capital adequacy or reserve requirements imposed in respect of investment guarantees by the Monetary Authority. 19. Insurance policies (1) The funds of a constituent fund may be invested in an insurance policy, but only if the policy—(a) is within class G or H insurance business for the purposes of the Insurance Ordinance (Cap. 41); and (12 of 2015 s. 132)(b) is issued by an authorized insurer; and(c) in the case of a policy that is within class H insurance business, operates, to the satisfaction of the Authority, as a full investment-linked policy linked to a separate pooled investment fund; and(d) in the case of a policy that is fully or partially investment-linked, has policy values that are, to the satisfaction of the Authority, fully unitised.(2) An authorized financial institution may act as the guarantor of an insurance policy of class G, but only if the institution complies with subsection (3).(3) For the purposes of subsection (2), an authorized financial institution complies with this subsection only if it satisfies capital adequacy or reserve requirements imposed in respect of investment guarantees by the Monetary Authority.(4) The underlying investments of an insurance policy of the same series must be kept in a separate pooled investment fund.(5) The insurer may act as the investment manager of the fund referred to in subsection (4) only if the insurer is a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in asset management under Part V of the Securities and Futures Ordinance (Cap. 571). (5 of 2002 s. 407) Schedule 2 [ss. 44 & 47]Investment Management Contracts (1) An investment management contract relating to a registered scheme must be in writing and must be governed by the law of Hong Kong. (2) The contract must also—(a) oblige the investment manager to disclose to the approved trustee particulars (including the form, method of calculation and amount) of all emoluments and other benefits received or to be received by the manager as a result of being the investment manager for the scheme; and(b) oblige the investment manager to report in writing to the approved trustee at intervals of not more than 3 months the amounts of brokerage and commissions charged in respect of dealings with securities relating to the scheme and to include in the report particulars of the persons who charged those amounts; and(c) require that any payment made to the approved trustee or investment manager by a third party, either directly or indirectly, will be credited to the scheme if the payment is derived from the acquisition or disposal of scheme assets; and(d) oblige the investment manager—(i) to include in an annual report to the approved trustee a description of the manager’s business practices with respect to the provision of goods and services to the manager by a broker or dealer in consideration of directing to the broker or dealer business relating to transactions involving the acquisition or disposal of scheme assets; and(ii) to specify in the report the value of those goods and services; and(e) state whether or not the contract restricts the right of the investment manager to act as an investment manager or in any other capacity for any other person and, if not, specify the capacity in which the investment manager may act for another person; and(f) state what period of notice must be given by any of the parties to the contract in order to terminate the contract; and(g) provide for the contract to be terminated if the company constituting the investment manager is commenced to be wound up or is dissolved without being wound up; and(h) oblige the investment manager to be bound by, and to comply with, the statement of investment policy applicable to the scheme; and(i) state whether or not the contract allows the investment manager to delegate any of the manager’s functions in respect of the scheme and, if it does, specify which of those functions may be delegated; and(j) oblige the investment manager to ensure that the investment of the funds are made in accordance with the Ordinance; and(k) state whether or not, and if so under what conditions, the funds of the scheme may be applied for the purposes of—(i) subscribing for debt securities from an underwriter or sub-underwriter; or(ii) purchasing or subscribing for the issue of securities offered to the public by prospectus; and(l) include provisions that will enable the approved trustee to require the investment manager from time to time to give to the trustee—(i) appropriate information as to the investment of the funds of the scheme and the return on those investments; and(ii) such information as is necessary to enable the trustee to assess the capacity of the investment manager to manage those investments in a proper manner; and(m) specify whether or not the contract prohibits any of the parties to the contract from entering into any other kinds of contracts and, if so, specify those other kinds of contracts; and(n) oblige the investment manager, and any delegate of that manager, to exercise—(i) the duty of care, skill, diligence and prudence reasonably to be expected of a prudent person who is acting in a similar capacity to the manager or delegate and is familiar with the management of the investment of the funds of a provident fund scheme; and(ii) the duty to make use of all relevant knowledge and skill that the manager or delegate may be reasonably expected to have because of the business or occupation of the manager or delegate; and(iii) the duty to ensure that the funds of the scheme are invested in different investments so as to minimise the risk of losses to those funds, unless in particular circumstances it is prudent not to do so; and(iv) the duty to act in the interest of scheme members and not in the interest of the manager or delegate; and(v) the duty to act in accordance with the governing rules of the scheme; and(o) oblige the investment manager, and any delegate of that manager, to do everything within their power to enable the trustee to comply with section 47 of this Regulation; and (p) oblige the investment manager to report to the trustee as soon as is practicable—(i) any matter affecting the investment manager’s qualifications or capacity to perform the manager’s functions in relation to the scheme; and(ii) material contraventions of the investment manager’s obligations; and(q) oblige the investment manager to report to the approved trustee—(i) any relationship that the investment manager has with a service provider appointed or engaged for the purposes of the scheme because either of them is an associate of the other; and(ii) any arrangement whereby fees, commissions or other payments are received from, paid to or shared with any third party to the contract as a result of being appointed as investment manager for the scheme, and to disclose to the trustee the amounts of those fees, commissions or payments; and(r) require the investment manager to provide information necessary to enable the approved trustee to perform the trustee’s duties with respect to the scheme; and(s) if the investment manager breaches the contract, oblige the manager, as soon as practicable, to take all practicable steps to rectify the breach;

and(t) if the investment manager, or a delegate of the manager, fails to comply with a direction given, guideline issued or requirement made by the approved trustee with respect to the investment of the funds of the scheme, oblige the manager to compensate the scheme for any loss that is attributable to the failure, except where the failure is a result of an event that was not under the control of the investment manager or that manager’s delegate or could not have been foreseen; and(u) oblige the investment manager to rectify as soon as practicable any failure to comply with a direction given, guideline issued or requirement made by the approved trustee with respect to the investment of the funds of the scheme; and(v) if the investment manager contravenes the Ordinance, oblige the investment manager to take into account the interests of scheme members before entering into any transaction to rectify the contravention, and to compensate those members for any loss attributable to the contravention. Schedule 3 [ss. 69 & 72]Contents of Custodial Agreements 1. The agreement must require the scheme assets—(a) to be recorded and controlled in such manner as may be customary and prudent in the circumstances; and(b) to be entrusted to the custodian for safe keeping; and (L.N. 222 of 2000; L.N. 223 of 2000)(c) entrusted to the custodian—(i) where the scheme assets are in registered form, to be—(A) registered in the name of the custodian or its delegate; or(B) administered and dealt with by the custodian or its delegate in such manner as may be customary and prudent in the relevant market;(ii) where the scheme assets are in bearer form, to be held in the physical possession of the custodian or its delegate; and (L.N. 222 of 2000; L.N. 223 of 2000)(d) to be segregated from the custodian’s and its delegates’ assets. (L.N. 222 of 2000; L.N. 223 of 2000) 2. Subject to section 11 of this Schedule, the agreement must require the scheme assets to be recorded separately from all other assets of the custodian and trustee, including any assets held by the custodian or trustee for the benefit of a participating employer or any other person. (L.N. 223 of 2000) 3. The agreement must require that the scheme assets are not to be made subject to any encumbrance except—(a) where the encumbrance is created for the purpose of securing an amount borrowed to enable accrued benefits to be paid to or in respect of scheme members, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of borrowing would exceed 90 days; or (L.N. 222 of 2000; L.N. 223 of 2000)(b) where the encumbrance is created for the purpose of securing an amount borrowed to settle a transaction relating to the acquisition of scheme assets, and then only if—(i) the amount borrowed (together with any other borrowings made for the same purpose) does not exceed 10 per cent of the market value of the scheme assets at the time of the borrowing; and(ii) the borrowing is not part of a series of borrowings; and(iii) at the time the borrowing was made, it was unlikely that the period of borrowing would exceed 7 working days; and(iv) at the time the decision to enter into the transaction was made, it was unlikely that the borrowing would be necessary; or (L.N. 222 of 2000; L.N. 223 of 2000)(c) where the encumbrance is created for the purpose of securing a claim for payment of fees for the safe custody or administration of the scheme assets by a central securities depository or a delegate of a custodian; or (L.N. 223 of 2000; 1 of 2008 s. 14)(d) where the encumbrance is created for the purpose of acquiring a financial futures contract pursuant to section 14 of Schedule 1 or a currency forward contract pursuant to section 15 of Schedule 1; or (L.N. 223 of 2000)(e) where the encumbrance is created by the operation of law in Hong Kong or in a place outside Hong Kong. (L.N. 223 of 2000) 4. The agreement must require that the scheme assets can be applied only for the purpose of the registered scheme and that any encumbrance created or granted over scheme assets is void to the extent to which it is inconsistent with this Schedule. 5. Subject to section 11 of this Schedule, the agreement must require the scheme to be indemnified by the custodian— (L.N. 222 of 2000; L.N. 223 of 2000)(a) for any direct losses incurred by scheme members that are attributable to fraudulent, dishonest or negligent acts or omissions committed by the custodian or its employees in connection with the performance of the custodian’s obligations under the agreement; and (L.N. 222 of 2000; L.N. 223 of 2000)(b) for any direct losses attributable to fraudulent, dishonest or negligent acts or omissions committed by delegates of the custodian to the same extent as if the custodian had committed those acts or omissions itself. (29 of 2002 s. 14) 6. (1) Subject to section 11 of this Schedule, the agreement must require the custodian to report to the trustee any of the following events as soon as practicable after they occur— (L.N. 222 of 2000; L.N. 223 of 2000)(a) material changes affecting the custodian’s eligibility to be a custodian of the scheme assets or its capacity to exercise its functions; and(b) material breaches of the custodian’s obligations.(2) Subject to section 11 of this Schedule, the agreement must also require the custodian to lodge with the trustee periodically (but not less than once during each financial period of the scheme concerned) a report stating whether or not any material events have occurred during the period to which the report relates and, if any such events have occurred during that period, specifying details of those events. However, details of a material event do not have to be included in such a report if the event has already been reported under subsection (1). (L.N. 222 of 2000; L.N. 223 of 2000) 7. Subject to section 11 of this Schedule, the agreement must require the custodian to provide to the trustee within 4 months after the end of each financial year of the custodian— (L.N. 222 of 2000; L.N. 223 of 2000)(a) a statement as to whether or not each delegate of the custodian satisfies the same eligibility requirements as those applicable to the custodian and, if not, a statement specifying the extent to which those requirements are not satisfied; and(b) if the custodian is a company, a copy of the balance sheet and profit and loss account of the custodian with respect to that financial year, together with a copy of the auditor’s report with respect to those documents. 8. The agreement must require the custodian to maintain accurate records of the scheme assets and allow the approved trustee (including its agents and the auditors appointed in respect of the scheme) to have access to those records. 9. The agreement must require the custodian, when exercising its functions in relation to the scheme concerned, to apply the same degree of care, skill, diligence and prudence as may be reasonably expected of a prudent person who has custody of scheme assets. 10. The agreement must be in writing and provide that it is to be governed by the law of Hong Kong. However, a subcustodial agreement does not have to be governed by the law of Hong Kong if the relevant assets are kept in a place outside Hong Kong. 11. The Authority may, subject to such conditions as the Authority thinks fit, by notice in writing (published in such manner as the Authority thinks fit) waive or modify the provisions of section 2 of this Schedule, and, in the case of a delegate of a custodian, section 2, 5, 6(1)(a) or (2) or 7(a) of this Schedule, where the Authority is of the opinion that the provisions—(a) cause undue hardship;(b) are incapable of or precluded from being complied with by virtue of a law in a place outside Hong Kong; or(c) are not in the interests of relevant scheme members. (L.N. 222 of 2000) 12. For the avoidance of doubt, it is hereby declared that—(a) scheme assets—(i) comprising cash held by a custodian which is an authorized financial institution, an eligible overseas bank or an approved overseas bank may be held by any such custodian in its capacity as a bank; and(ii) may be deposited by the custodian and its delegates with, and held in, any central securities depository on such terms as such central securities depository customarily operate; and(b) any encumbrance created over the scheme assets of a registered scheme that is, at the time of creation, consistent with the exception under section 3 of this Schedule shall remain valid throughout the period for which the borrowing concerned remains outstanding. (L.N. 222 of 2000) Schedule 4 [s. 205 & Sch. 5] (40 of 2021 s. 102)Financial Penalties Part 1 Mandatory Provident Fund Schemes Ordinance (Cap. 485) Item Relevant section of the Ordinance Short description of the relevant duty or requirement Amount of financial penalty for first failure Amount of financial penalty for second failure Amount of financial penalty for third or subsequent failure $ $ $ 1AA 6KA(3) Approved trustee to take action for ensuring proper and efficient operation of designated electronic system (16 of 2012 s. 27) 10,000 20,000 50,000 1 7A(8) Participating employer to pay contribution $5,000 or 10 per cent of the amount to be paid, whichever is the greater 1A 7AA Employer to pay contributions to Authority (18 of 2008 s. 25) $5,000 or 10 per cent of the amount to be paid, whichever is the greater 1B 7AB Employer to provide statements (18 of 2008 s. 25) 10,000 20,000 50,000 1C-1D (Repealed 40 of 2021 s. 102) 1E 7AD(2) Approved trustee to take actions reasonably required by Authority with regard to contribution (40 of 2021 s. 102) 10,000 20,000 50,000 2 7C(1)(b) Self-employed person to pay contribution $5,000 or 10 per cent of the amount to be paid, whichever is the greater 2A 18(2) Requirement to pay contribution surcharge (1 of 2008 s. 69) $5,000 or 10 per cent of the amount to be paid, whichever is the greater 2B 19B(5)(a) Approved trustee to pay special contributions into specified sub-accounts (30 of 2008 s. 9) 10,000 10,000 10,000 2C (Repealed 40 of 2021 s. 102) 2D 19C(4) Requirements with respect to giving of information or documents to Authority (30 of 2008 s. 9) 10,000 10,000 10,000 2E 19D(4) Approved trustee to take actions required by Authority (30 of 2008 s. 9) 10,000 10,000 10,000 2F 19E(4)(a) Approved trustee to withdraw sums from specified accounts and pay them to Authority (30 of 2008 s. 9) 10,000 10,000 10,000 2G (Repealed 40 of 2021 s. 102) 2H 19P(3)(a) Approved trustee to take actions under section 19P(3)(a) of the Ordinance (40 of 2021 s. 102) If approved trustee fails to comply with section 19P(3)(a) of the Ordinance—(a) for the first occasion on which the trustee fails to do so—a daily penalty of $10,000 for each day on which the failure continues;(b) for the second occasion on which the trustee fails to do so—a daily penalty of $20,000 for each day on which the failure continues; and(c) for the third or subsequent occasion on which the trustee fails to do so—a daily penalty of $50,000 for each day on which the failure continues 2I 19P(3)(b) Approved trustee to comply with requirements imposed under section 19P(2)(b) of the Ordinance (40 of 2021 s. 102) If approved trustee fails to comply with section 19P(3)(b) of the Ordinance—(a) for the first occasion on which the trustee fails to do so—a daily penalty of $10,000 for each day on which the failure continues;(b) for the second occasion on which the trustee fails to do so—a daily penalty of $20,000 for each day on which the failure continues; and(c) for the third or subsequent occasion on which the trustee fails to do so—a daily penalty of $50,000 for each day on which the failure continues 2J 19P(3)(c) Approved trustee to comply with requirements imposed under section 19P(2)(c) of the Ordinance (40 of 2021 s. 102) If approved trustee fails to comply with section 19P(3)(c) of the Ordinance—(a) for the first occasion on which the trustee fails to do so—a daily penalty of $10,000 for each day on which the failure continues;(b) for the second occasion on which the trustee fails to do so—a daily penalty of $20,000 for each day on which the failure continues; and(c) for the third or subsequent occasion on which the trustee fails to do so—a daily penalty of $50,000 for each day on which the failure continues 2K 19U(2) Approved trustee must not charge more than total amount payable to system operator of electronic MPF system (40 of 2021 s. 102) $5,000 or 10% of the exceeded amount, whichever is the greater 2L 19V(2)(c)(i) Approved trustee to submit audited reference ratio to Authority (40 of 2021 s. 102) 10,000 20,000 50,000 2M 19V(2)(c)(ii) Approved trustee to submit relevant rate of administration fee to Authority (40 of 2021 s. 102) 10,000 20,000 50,000 2N 19Y(2) Approved trustee to determine FER for relevant corresponding period of constituent fund (determined FER), cause determined FER to be audited and submit audited FER to Authority (40 of 2021 s. 102) 10,000 20,000 50,000 2O 19Z(2) Approved trustee to determine permitted percentage for constituent fund and submit permitted percentage to Authority (40 of 2021 s. 102) 10,000 20,000 50,000 2P 19Z(3) Approved trustee to specify in submission to Authority— (a) whether FER for relevant corresponding period of constituent fund exceeds permitted percentage; and(b) amount determined in accordance with Schedule 16 to the Ordinance (40 of 2021 s. 102) 10,000 20,000 50,000 2Q 19ZA(2) Approved trustee to pay determined amount into constituent fund (40 of 2021 s. 102) $5,000 or 10% of the determined amount, whichever is the greater 2R 19ZA(3) Approved trustee to pay determined amount into registered scheme (40 of 2021 s. 102) $5,000 or 10% of the determined amount, whichever is the greater 2S 19ZC Approved trustee to determine under section 19ZC(3) of the Ordinance FER for corresponding period of constituent fund, cause determined FER to be audited and submit audited FER to Authority (40 of 2021 s. 102) 10,000 20,000 50,000 3 22A Approved trustee to lodge annual statements 10,000 20,000 50,000 4 22B Approved trustee to pay annual registration fee $5,000 or 10 per cent of the amount to be paid, whichever is the greater 4AA 22C Approved trustee to ensure that no fee is charged to registered schemes, constituent funds or scheme members for annual registration fees payable under section 22B of the Ordinance (16 of 2020 s. 11) $5,000 or 10% of the amount of the fee charged, whichever is the greater 4A 27(2A) Approved trustee to invest accrued benefits according to selection of scheme member as permitted under the governing rules (9 of 2016 s. 26) 10,000 20,000 50,000 4B 34DB(1)(a) Approved trustee to provide in the governing rules a default investment strategy that complies with Part 2 of Schedule 10 to the Ordinance (9 of 2016 s. 26) if approved trustee fails to provide in the governing rules of a registered scheme a default investment strategy that complies with Part 2 of Schedule 10 to the Ordinance—(a) in the case of the first occasion on which the trustee fails to do so, a daily penalty of $10,000 for each day on which the failure continues;(b) in the case of the second occasion on which the trustee fails to do so, a daily penalty of $20,000 for each day on which the failure continues; and(c) in the case of the third or subsequent occasion on which the trustee fails to do so, a daily penalty of $50,000 for each day on which the failure continues 4C 34DB(1)(b) Approved trustee to ensure investment related to default investment strategy accords with Part 4AA of, and Part 2 of Schedule 10 to, the Ordinance (9 of 2016 s. 26) 10,000 20,000 50,000 4D 34DB(1)(c) Approved trustee to invest accrued benefits of scheme member according to default investment strategy in default of specific investment instructions (9 of 2016 s. 26) 10,000 20,000 50,000 4E 34DB(1)(d) Approved trustee to ensure default investment strategy is available for selection by scheme member (9 of 2016 s. 26) 10,000 20,000 50,000 4F 34DB(3) Approved trustee must not invest according to default investment strategy the accrued benefits in pre-existing account of scheme member who the trustee is aware has reached 60 years of age before the commencement date* of Part 4AA of the Ordinance unless having received specific investment instructions (9 of 2016 s. 26) 10,000 20,000 50,000 4G (Repealed 40 of 2021 s. 102) 4H 34DD(1) Approved trustee to ensure only payments for services complying with section 34DD(3) of the Ordinance may be charged to or imposed on scheme member etc. relating to DIS constituent fund (9 of 2016 s. 26) 10,000 20,000 50,000 4I 34DD(4) Approved trustee to ensure aggregate of certain payments does not exceed percentage of net asset value of DIS constituent fund specified in Schedule 11 to the Ordinance (9 of 2016 s. 26) 10,000 20,000 50,000 4J 34DH(1) Approved trustee to continue to invest accrued benefits in DIA account unless having received specific investment instructions (9 of 2016 s. 26) 10,000 20,000 50,000 4K 34DH(2) Approved trustee to continue to invest any accrued benefits in DIA account according to default investment strategy after accrued benefits have been invested according to strategy under section 34DI(2) or 34DJ(3) or (5) unless having received specific investment instructions (9 of 2016 s. 26) 10,000 20,000 50,000 4L 34DI(1) Approved trustee to give specified notice to scheme member within 6 months after the commencement date* of Part 4AA of the Ordinance (9 of 2016 s. 26) 10,000 20,000 50,000 4M 34DI(2) Approved trustee to invest accrued benefits according to default investment strategy in default of reply to specified notice within 14 days after expiry day (9 of 2016 s. 26) 10,000 20,000 50,000 4N 34DJ(2) Approved trustee to locate scheme member in the manner and within time limit specified in guidelines (9 of 2016 s. 26) 10,000 20,000 50,000 4O 34DJ(3) Approved trustee to invest within 14 days after time limit accrued benefits of scheme member who cannot be located (9 of 2016 s. 26) 10,000 20,000 50,000 4P 34DJ(4) Approved trustee to give specified notice to scheme member who is located (9 of 2016 s. 26) 10,000 20,000 50,000 4Q 34DJ(5) Approved trustee to invest accrued benefits of scheme member who is located according to default investment strategy in default of reply to specified notice within 14 days after expiry day (9 of 2016 s. 26) 10,000 20,000 50,000 4R 34DK(2) Approved trustee not to invest accrued benefits invested in guaranteed fund according to default investment strategy unless the market value of those benefits is not less than the value guaranteed by the fund (9 of 2016 s. 26) 10,000 20,000 50,000 4S 34DM Approved trustee to continue to invest part of accrued benefits in pre-existing account unless having received specific investment instructions (9 of 2016 s. 26) 10,000 20,000 50,000 4T 43BA(7) Approved trustee to take actions reasonably required by Authority (40 of 2021 s. 102) 10,000 20,000 50,000 Editorial Note: * Commencement date: 1 April 2017. Part 2 Mandatory Provident Fund Schemes (General) Regulation (Cap. 485 sub. leg. A) Item Relevant section of the Regulation Short description of the relevant duty or requirement Amount of financial penalty for first failure Amount of financial penalty for second failure Amount of financial penalty for third or subsequent failure $ $ $ 5 (Repealed 18 of 2008 s. 34) 6 29 Maintenance of adequate insurance 10,000 20,000 50,000 7 31(1) Non-refusal of application for membership of registered scheme made by or on behalf of relevant employee of participating employer, or by a self-employed person (40 of 2021 s. 102) 10,000 20,000 50,000 7A 31(1A) Non-refusal of application made for participation in registered scheme (40 of 2021 s. 102) 10,000 20,000 50,000 7B 31(1B) Non-refusal of application for membership of registered scheme made only for purpose of maintaining personal account within scheme (40 of 2021 s. 102) 10,000 20,000 50,000 7C 31(2) and (3) Disclosure of information (40 of 2021 s. 102) 10,000 20,000 50,000 7D 31(4) Requirement regarding giving notice of participation (40 of 2021 s. 102) 10,000 20,000 50,000 7E 31(5) Requirement with respect to termination of membership of scheme member (40 of 2021 s. 102) 10,000 20,000 50,000 7F 31(6) Requirement with respect to termination of participation of employer (40 of 2021 s. 102) 10,000 20,000 50,000 7G 31(7) Requirement not to charge fees, impose financial penalties or apply certain other restrictions or requirements if accrued benefits of scheme member are being or have been transferred pursuant to Part 12 (40 of 2021 s. 102) 10,000 20,000 50,000 8 32 Acceptance of contributions etc. (18 of 2008 s. 25) 10,000 20,000 50,000 9 33(1) and (3) Requirements with respect to voluntary contributions 10,000 20,000 50,000 10 34 Requirements with respect to charging of fees for transfer of accrued benefits 10,000 20,000 50,000 11 35 Requirements with respect to charging of fees on transfer of accrued benefits in certain circumstances 10,000 20,000 50,000 11A 35A(1) Requirements with respect to charging of fees etc. for payment of accrued benefits in lump sum (1 of 2015 s. 51) 10,000 20,000 50,000 11B 35B(1) Requirements on payment of accrued benefits by instalments (1 of 2015 s. 51) 10,000 20,000 50,000 12 37 Requirements in respect of capital preservation fund 10,000 20,000 50,000 12A 42B(1) Approved trustee to obtain Authority’s consent to appointment of officer (18 of 2008 s. 34) 10,000 20,000 50,000 12B 42B(5) Approved trustee to terminate appointment of officer (18 of 2008 s. 34) a daily penalty of $1,000 for each day on which the failure to terminate the appointment continues 12C 42B(6) Approved trustee to apply for consent to appointment of replacement director (18 of 2008 s. 34) a daily penalty of $1,000 for each day on which the failure to make an application for consent continues after the expiry of the 30 day period 12D 42B(7) Approved trustee to apply for consent to appointment of replacement chief executive officer (18 of 2008 s. 34) a daily penalty of $1,000 for each day on which the failure to make an application for consent continues after the expiry of the 30 day period 12E 42C(1) Authority’s consent required in respect of person proposing to become shadow director (18 of 2008 s. 34) 10,000 20,000 50,000 12F 42C(5) Shadow director not to give instructions to directors of approved trustee (18 of 2008 s. 34) 10,000 20,000 50,000 12G 42C(6) Director to notify Authority of contravention of section 42C(5) (18 of 2008 s. 34) 10,000 20,000 50,000 12H 42D(1) Authority’s consent required in respect of person proposing to become substantial shareholder (18 of 2008 s. 34) 10,000 20,000 50,000 12I 42D(2) Substantial shareholder who has contravened section 42D(1) to notify approved trustee and Authority (18 of 2008 s. 34) a daily penalty of $1,000 for each day on which the failure to serve the required notice continues after the expiry of the 3 day period 12J 42D(3) Approved trustee to apply for Authority’s consent in respect of person who has become substantial shareholder without Authority’s prior consent (18 of 2008 s. 34) 10,000 20,000 50,000 12K 42D(7) Substantial shareholder not to exercise voting right (18 of 2008 s. 34) 10,000 20,000 50,000 12L 42E(7) Approved trustee to terminate appointment of officer (18 of 2008 s. 34) a daily penalty of $1,000 for each day on which the failure to terminate the appointment of the officer continues 12M 42E(9) Shadow director not to give instructions to directors of approved trustee (18 of 2008 s. 34) 10,000 20,000 50,000 12N 42E(10) Director to notify Authority of contravention of section 42E(9) (18 of 2008 s. 34) 10,000 20,000 50,000 13 53(2) Duty of approved trustee with respect to investing in financial futures contracts and financial option contracts 10,000 20,000 50,000 14 54 Requirements with respect to provision of information to scheme members 10,000 20,000 50,000 15 (Repealed 1 of 2015 s. 51) 16 56 Requirements with respect to provision of annual benefit statements to scheme members 5,000 10,000 20,000 16A (Repealed 40 of 2021 s. 102) 17 57 Approved trustee to assist employers and scheme members 5,000 10,000 20,000 18 58 Requirements with respect to changes of approved trustee’s business particulars 5,000 10,000 20,000 19 (Repealed 40 of 2021 s. 102) 20 60 Approved trustee to ensure presence of independent trustee at meetings 5,000 10,000 20,000 21 61 Disclosure of conflicts of interest 10,000 20,000 50,000 22 62 Approved trustee to report events of significant nature 10,000 20,000 50,000 23 63 Amendments to the governing rules of registered scheme not to take effect without Authority’s approval 10,000 20,000 50,000 23A 63A Amendments to offering documents require Authority’s approval (2 of 2002 s. 21) 10,000 20,000 50,000 24 74 Approved trustee to review service providers’ reports 10,000 20,000 50,000 25 79 Requirements with respect to financial period of registered scheme 5,000 10,000 20,000 26 80 Approved trustee to prepare statement of accounting policies 10,000 20,000 50,000 27 81 Approved trustee to prepare financial statements 10,000 20,000 50,000 28 82 Auditor’s report to be attached to financial statements 10,000 20,000 50,000 29 85 Signing of financial statements 10,000 20,000 50,000 30 86 Preparation of scheme report 10,000 20,000 50,000 31 87 Preparation of investment report 10,000 20,000 50,000 32 88 Approved trustee to comply with sections 86 and 87 before deadline 10,000 20,000 50,000 33 89 Approved trustee to publish consolidated report 10,000 20,000 50,000 34 90 Approved trustee to give copy of consolidated report to scheme members 5,000 10,000 20,000 35 91 Keeping of register of scheme members 10,000 20,000 50,000 36 92 Keeping of other records of registered scheme 5,000 10,000 20,000 37 93 Periods for which accounting and other records are to be kept 10,000 20,000 50,000 38 99(1) and (2) Requirements with respect to removal of auditor of registered scheme 5,000 10,000 20,000 39 109 Approved trustee to lodge trustee’s return with Authority 10,000 20,000 50,000 40 110 Requirements in section 22A of the Ordinance 10,000 20,000 50,000 41 111(2) Requirements with respect to varying a relevant period for the purposes of sections 112, 113 and 116 5,000 10,000 20,000 42 112 Approved trustee to report on control objectives and internal control measures 10,000 20,000 50,000 43 114 Approved trustee to report on compliance with capital adequacy requirements 10,000 20,000 50,000 44 117 Approved trustee to lodge monthly return with Authority 10,000 20,000 50,000 45 123 Participating employer to provide remittance statements 10,000 20,000 50,000 46-47 (Repealed 1 of 2015 s. 51) 48-49 (Repealed 40 of 2021 s. 102) 50-51 (Repealed 1 of 2008 s. 69) 52 (Repealed 40 of 2021 s. 102) 52A 135A Approved trustee to take actions required by Authority (1 of 2008 s. 69) 10,000 20,000 50,000 53 (Repealed 40 of 2021 s. 102) 54 136(10) Participating employer and self-employed person to comply with requirement of a notice served under section 136 10,000 20,000 50,000 55 (Repealed 40 of 2021 s. 102) 56 139 Participating employer to give monthly pay-records to scheme members 10,000 20,000 50,000 57 141 Participating employer to respond to inquiries relating to registered scheme 5,000 10,000 20,000 58 142 Self-employed person to notify trustee of change of particulars 5,000 10,000 20,000 59 143 Participating employer to notify trustee of certain information 5,000 10,000 20,000 59A 143A Participating employer to give document or information to employee (40 of 2021 s. 102) 5,000 10,000 20,000 60 145(5), (6) and (7A), 146(7), (8) and (9A), 147(5) and 148(6) Participating employer to give notice to trustee under sections 145(5), (6) and (7A), 146(7), (8) and (9A), 147(5) and 148(6) (1 of 2008 s. 26) 5,000 10,000 20,000 60A 145A Approved trustee to transfer accrued benefits to master trust scheme (40 of 2021 s. 102) 10,000 20,000 50,000 61 148(7) Self-employed person to give notice to trustee under section 148(7) 5,000 10,000 20,000 62 (Repealed 40 of 2021 s. 102) 63 153 Duty of approved trustee on being notified of election of transfer of accrued benefits 10,000 20,000 50,000 64 (Repealed 40 of 2021 s. 102) 64A (Repealed 40 of 2021 s. 102) 65-66 (Repealed 40 of 2021 s. 102) 67 157 Approved trustee to comply with Authority’s requirement not to give effect to election (40 of 2021 s. 102) 10,000 20,000 50,000 68 (Repealed 40 of 2021 s. 102) 69 (Repealed 1 of 2015 s. 51) 70 166 Approved trustee to ensure payment of accrued benefits within certain period 10,000 20,000 50,000 70A 167 Approved trustee to comply with Authority’s requirement not to make payment (2 of 2002 s. 21; 40 of 2021 s. 102) 10,000 20,000 50,000 71 168 Approved trustee to ensure claimant provided with benefit payment statement (1 of 2015 s. 51) 10,000 20,000 50,000 71A 169A Requirements with respect to treatment of unclaimed accrued benefits or accrued benefits that have not been paid (40 of 2021 s. 102) 10,000 20,000 50,000 72-74 (Repealed 40 of 2021 s. 102) 74A-74B (Repealed 40 of 2021 s. 102) 75-76 (Repealed 40 of 2021 s. 102) 77 189 Approved trustee to pay levy to administrator of compensation fund $5,000 or 10 per cent of the amount to be paid, whichever is the greater 78 195(7) and (8) Applicant to publish notice on Authority’s consent to the voluntary winding up of employer sponsored scheme and to serve copy of notice on remaining scheme members etc. 10,000 20,000 50,000 79 197 Requirements with respect to the effect of winding up employer sponsored scheme 10,000 20,000 50,000 The short descriptions specified in column 3 of this Schedule are used for the purposes of reference only and are not intended to affect the operation of the provisions specified in column 2 of this Schedule. Schedule 5 [s. 208]Transitional Provisions for 2021 Amendment Ordinance 1. Interpretation In this Schedule—effective day (規定生效日), in relation to a pre-existing scheme, means the day specified under section 19N(1) of the Ordinance for the scheme;relevant requirement (相關規定) has the meaning given by section 19O(2) of the Ordinance. 2. Transitional arrangement relating to control objectives to be maintained for each pre-existing scheme—section 39 (1) Despite the commencement of section 52 of the 2021 Amendment Ordinance (amendment provision), section 39 as in force immediately before the commencement date applies to control objectives of a pre-existing scheme, to the extent that section 34DC(1) applies to the approved trustee of the scheme.(2) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation; section 34DC(1) (第34DC(1)條)— (a) means section 34DC(1) of the Ordinance as in force immediately before the commencement date; and (b) includes section 34DC(1) of the Ordinance that applies because of section 7 of Schedule 17 to the Ordinance. Editorial Note: * Commencement date: 26 June 2024. 3. Transitional arrangements relating to provision of tax deductible voluntary contributions summaries with respect to TVC accounts to scheme members—section 56A (1) Despite the commencement of section 55 of the 2021 Amendment Ordinance (amendment provision), section 56A as in force immediately before the commencement date (pre-amended section 56A) applies to a pre-existing scheme in relation to a contribution summary for a financial year of the scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement takes effect on—(i) a day either before the beginning of the financial year or in the financial year; or(ii) a day falling within the specified period mentioned in the pre-amended section 56A.(2) Despite the commencement of section 102(9) of the 2021 Amendment Ordinance, item 16A of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 56A applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 4. Transitional arrangements relating to notification to scheme members—section 59(1) (1) Despite the commencement of section 57(2) of the 2021 Amendment Ordinance (amendment provision), section 59(1) as in force immediately before the commencement date (pre-amended section 59(1)) applies to a pre-existing scheme if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the inquiry or request concerned was received by the approved trustee of the scheme before the effective day.(2) Despite the commencement of section 102(10) of the 2021 Amendment Ordinance, item 19 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 59(1) applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 5. Transitional arrangements relating to service provider’s duty to report certain matters to Authority—section 75(1)(aa)(iii) (1) Despite the commencement of section 59 of the 2021 Amendment Ordinance (amendment provision), section 75 (to the extent that it relates to subsection (1)(aa)(iii)) as in force immediately before the commencement date (pre-amended section 75) applies to a service provider in relation to a pre-existing scheme if, on or after the commencement date, the service provider, in the course of performing the service provider’s obligations relating to the scheme, becomes aware that the approved trustee of the scheme—(a) was not complying with section 34DC(1) of the Ordinance (section 34DC(1)) before the commencement date; or(b) is not complying with section 34DC(1) that applies to the approved trustee because of section 7 of Schedule 17 to the Ordinance.(2) Because of subsection (1), the reference to section 75 in section 76 includes the pre-amended section 75.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 6. Transitional arrangements relating to service provider’s duty to report certain matters to Authority—section 75(1)(f) (1) Despite the commencement of section 59 of the 2021 Amendment Ordinance (amendment provision), section 75 (to the extent that it relates to subsection (1)(f)) as in force immediately before the commencement date (pre-amended section 75) applies to a service provider in relation to a pre-existing scheme if, on or after the commencement date, the service provider, in the course of performing the service provider’s obligations relating to the scheme, becomes aware that the approved trustee of the scheme—(a) had not complied with section 135 before the commencement date; or(b) has not complied with section 135 that applies to the approved trustee because of section 15 of this Schedule.(2) Because of subsection (1), the reference to section 75 in section 76 includes the pre-amended section 75.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 7. Transitional arrangement relating to auditor’s duty to report on financial statements etc.—section 102 (1) Despite the commencement of section 60 of the 2021 Amendment Ordinance (amendment provision), section 102 as in force immediately before the commencement date (pre-amended section 102) applies in relation to a financial period of a pre-existing scheme if—(a) as at the time specified in subsection (2)(e)(i) of the pre-amended section 102; or(b) as at any of the dates specified in subsection (2)(e)(ii) of the pre-amended section 102,the approved trustee of the scheme is required to comply with section 34DC(1) of the Ordinance (whether or not because of section 7 of Schedule 17 to the Ordinance).(2) Because of subsection (1), the reference to section 102 in section 106 includes the pre-amended section 102.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 8. Transitional arrangements relating to auditor’s duty to report certain matters to Authority—section 103(1)(ab)(ii) (1) Despite the commencement of section 61 of the 2021 Amendment Ordinance (amendment provision), section 103 (to the extent that it relates to subsection (1)(ab)(ii)) as in force immediately before the commencement date (pre-amended section 103) applies to an auditor of a pre-existing scheme if, on or after the commencement date, the auditor, in the course of performing the auditor’s duties under Part 8, becomes aware that the approved trustee of the scheme—(a) was not complying with section 34DC(1) of the Ordinance (section 34DC(1)) before the commencement date; or(b) is not complying with section 34DC(1) that applies to the approved trustee because of section 7 of Schedule 17 to the Ordinance.(2) Because of subsection (1), the references to section 103 in sections 104 and 106 include the pre-amended section 103.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 9. Transitional arrangements relating to auditor’s duty to report certain matters to Authority—section 103(1)(g) (1) Despite the commencement of section 61 of the 2021 Amendment Ordinance (amendment provision), section 103 (to the extent that it relates to subsection (1)(g)) as in force immediately before the commencement date (pre-amended section 103) applies to an auditor of a pre-existing scheme if, on or after the commencement date, the auditor, in the course of performing the auditor’s duties under Part 8, becomes aware that the approved trustee of the scheme—(a) had not complied with section 135 before the commencement date; or(b) has not complied with section 135 that applies to the approved trustee because of section 15 of this Schedule.(2) Because of subsection (1), the references to section 103 in sections 104 and 106 include the pre-amended section 103.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 10. Transitional arrangements relating to annual statements required to be lodged under section 22A of Ordinance—section 110 (1) Despite the commencement of section 63 of the 2021 Amendment Ordinance (amendment provision), section 110 as in force immediately before the commencement date (pre-amended section 110) applies to a pre-existing scheme in relation to a financial period of the scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the financial period ends on—(i) the effective day; or(ii) a day after the effective day.(2) Because of subsection (1), the reference to section 110 in section 102 includes the pre-amended section 110.(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 11. Transitional arrangement relating to approved trustee’s duty to lodge monthly return with Authority—section 117 (1) Despite the commencement of section 64 of the 2021 Amendment Ordinance (amendment provision), section 117 as in force immediately before the commencement date (pre-amended section 117) applies to the approved trustee of a pre-existing scheme in relation to a monthly return for a calendar month unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement takes effect on—(i) a day either before the beginning of the calendar month or in the calendar month; or(ii) a day falling within the period mentioned in the pre-amended section 117.(2) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 12. Transitional arrangements relating to approved trustee’s duty to ascertain certain particulars—section 125 (1) Despite the commencement of section 67 of the 2021 Amendment Ordinance (amendment provision), section 125(1) as in force immediately before the commencement date (pre-amended section 125(1)) applies to the approved trustee of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) Despite the commencement of the amendment provision, section 125(3) as in force immediately before the commencement date (pre-amended section 125(3)) applies to the approved trustee of the pre-existing scheme in relation to a self-employed person and a financial period of the scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement takes effect—(i) on the first day of the financial period (relevant day);(ii) before the relevant day; or(iii) on a day falling within the last 30 days of the financial period.(3) Despite the commencement of section 102(11) of the 2021 Amendment Ordinance—(a) item 48 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee to which subsection (1) applies, to the extent that the pre-amended section 125(1) applies to the approved trustee because of that subsection; and(b) that item applies to the approved trustee to which subsection (2) applies, to the extent that the pre-amended section 125(3) applies to the approved trustee because of that subsection.(4) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 13. Transitional arrangement relating to relevant income of self-employed person who does not produce evidence of that income—section 128 (1) This section applies to a self-employed person relating to a pre-existing scheme, and a financial period of the scheme, if section 125(1) or (3) as in force immediately before the date of commencement* of section 67 of the 2021 Amendment Ordinance (commencement date) applies to the person in relation to the financial period because of section 12 of this Schedule.(2) Despite the commencement of section 68 of the 2021 Amendment Ordinance, section 128 as in force immediately before the commencement date applies to the person in relation to the financial period. Editorial Note: * Commencement date: 26 June 2024. 14. Transitional arrangements relating to approved trustee’s duty to check calculations of mandatory contributions—section 132 (1) Despite the commencement of section 71 of the 2021 Amendment Ordinance (amendment provision), section 132 as in force immediately before the commencement date (pre-amended section 132) applies to the approved trustee of a pre-existing scheme in relation to a mandatory contribution payable by a participating employer if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the contribution was received before the effective day.(2) Despite the commencement of section 102(11) of the 2021 Amendment Ordinance, item 49 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 132 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 15. Transitional arrangements relating to approved trustee’s duty to inform Authority of failure to pay mandatory contribution—section 135 (1) Despite the commencement of section 72 of the 2021 Amendment Ordinance (amendment provision), section 135 as in force immediately before the commencement date (pre-amended section 135) applies to the approved trustee of a pre-existing scheme in relation to a mandatory contribution payable by a participating employer or self-employed person if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the contribution day falls on a day before the effective day.(2) Despite the commencement of section 102(11) of the 2021 Amendment Ordinance, item 52 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 135 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 16. Transitional arrangements relating to Authority’s notice to defaulter and approved trustee’s duty to inform Authority of non-payment—section 136 (1) Despite the commencement of sections 65 and 73 of the 2021 Amendment Ordinance (amendment provisions), sections 119 and 136 as in force immediately before the commencement date apply to or in relation to a pre-existing scheme if a notice is given by the approved trustee of the scheme to the Authority under the pre-amended section 135.(2) If the approved trustee of the pre-existing scheme has not received all arrears and contribution surcharges within the payment period as described in section 136(5) as in force immediately before the commencement date (pre-amended section 136(5)), the approved trustee must inform the Authority of the fact in accordance with the pre-amended section 136(5) unless—(a) there is a section 19N notice in respect of the scheme; and(b) the last day of the payment period falls on—(i) the effective day; or(ii) a day after the effective day.(3) Despite the commencement of section 102(11) of the 2021 Amendment Ordinance, item 53 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 136(5) applies to the approved trustee because of this section.(4) In this section—*commencement date (生效日期) means the date on which the amendment provisions come into operation; pre-amended section 135 (原有第135條) means— (a) section 135 as in force immediately before the commencement date; or (b) section 135 as it applies to the approved trustee of the pre-existing scheme because of section 15 of this Schedule. Editorial Note: * Commencement date: 26 June 2024. 17. Transitional arrangements relating to approved trustee’s duty to check calculations of arrears and contribution surcharge—section 137 (1) Despite the commencement of sections 65 and 74 of the 2021 Amendment Ordinance (amendment provisions), sections 119 and 137 as in force immediately before the commencement date (pre-amended provisions) apply to the approved trustee of a pre-existing scheme in relation to an amount received by the approved trustee as arrears or contribution surcharge if—(a) there is no section 19N notice in respect of the scheme;

or(b) there is a section 19N notice in respect of the scheme, and the amount was received before the effective day.(2) Despite the commencement of section 102(11) of the 2021 Amendment Ordinance, item 55 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended provisions apply to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provisions come into operation. Editorial Note: * Commencement date: 26 June 2024. 18. Transitional arrangement relating to crediting of payments—section 138 (1) Despite the commencement of section 74 of the 2021 Amendment Ordinance (amendment provision), section 138 as in force immediately before the commencement date (pre-amended section) applies to the approved trustee of a pre-existing scheme in relation to a payment described in subsection (1) of the pre-amended section if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the payment was made to the approved trustee before the effective day.(2) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 19. Transitional arrangements relating to approved trustee’s duty to notify scheme member of member’s options of transfer—section 152 (1) Despite the commencement of section 79 of the 2021 Amendment Ordinance (amendment provision), section 152 as in force immediately before the commencement date (pre-amended section 152) applies to the approved trustee of a pre-existing scheme in relation to a scheme member who has ceased to be employed by a participating employer or ceased to be self-employed if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and—(i) the approved trustee has been notified, before the effective day, that the member has ceased to be employed by a participating employer or ceased to be self-employed; and(ii) the 30-day period mentioned in the pre-amended section 152 ends before the effective day.(2) Despite the commencement of section 102(14) of the 2021 Amendment Ordinance, item 62 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 152 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 20. Transitional arrangements relating to approved trustee’s duty to give transfer statement to scheme member—section 154 (1) Despite the commencement of section 81 of the 2021 Amendment Ordinance (amendment provision), section 154 as in force immediately before the commencement date (pre-amended section 154) applies to a pre-existing scheme in relation to a transfer of the accrued benefits of a member of the scheme if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the transfer was completed before the effective day.(2) Despite the commencement of section 102(14) of the 2021 Amendment Ordinance, items 64 and 64A of Schedule 4 as in force immediately before the commencement date apply to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 154 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 21. Transitional arrangements relating to confirmation of transfer to new scheme—section 155 (1) Despite the commencement of section 81 of the 2021 Amendment Ordinance (amendment provision), section 155 as in force immediately before the commencement date (pre-amended section 155) applies to a pre-existing scheme (relevant scheme) in relation to a transfer of the accrued benefits of a member of another registered scheme to the relevant scheme if—(a) there is no section 19N notice in respect of the relevant scheme; or(b) there is a section 19N notice in respect of the relevant scheme, and the transfer was completed before the effective day.(2) Despite the commencement of section 102(14) of the 2021 Amendment Ordinance, item 65 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the relevant scheme, to the extent that the pre-amended section 155 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 22. Transitional arrangement relating to transfer of outstanding sums received by transferor trustees—section 157A (1) Despite the commencement of section 84 of the 2021 Amendment Ordinance (amendment provision), section 157A as in force immediately before the commencement date applies to the approved trustee of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 23. Transitional arrangement relating to claim for payment on death—section 161(3) (1) Despite the commencement of section 88(2) of the 2021 Amendment Ordinance (amendment provision), section 161(3) as in force immediately before the commencement date applies to the approved trustee of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 24. Transitional arrangements relating to claim for payment on ground of permanent departure from Hong Kong—sections 163 and 175 (1) Despite the commencement of section 89(2) and (3) of the 2021 Amendment Ordinance (amendment provision), section 163 as in force immediately before the commencement date (pre-amended section 163) applies to the approved trustee of a pre-existing scheme in relation to the payment of accrued benefits of a member of the scheme if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and—(i) a claim for payment of the benefits has been lodged by the member of the scheme, in compliance with section 163(2); and(ii) the claim was lodged with the approved trustee before the effective day.(2) Despite the commencement of sections 97 and 102(17) of the 2021 Amendment Ordinance, section 175 as in force immediately before the commencement date and item 68 of Schedule 4 as in force immediately before that date apply to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 163 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 25. Transitional arrangements relating to approved trustee’s duty if scheme member cannot be located—section 170 (1) Despite the commencement of section 93 of the 2021 Amendment Ordinance (amendment provision), section 170 as in force immediately before the commencement date (pre-amended section 170) applies in relation to the accrued benefits of a member of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 72 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 170 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 26. Transitional arrangements relating to approved trustee’s duty if claimant cannot subsequently be located—section 171 (1) Despite the commencement of section 93 of the 2021 Amendment Ordinance (amendment provision), section 171 as in force immediately before the commencement date (pre-amended section 171) applies to or in relation to the accrued benefits of a member of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 73 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 171 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 27. Transitional arrangements relating to approved trustee’s duty to notify scheme member who has reached retirement age of their entitlement—section 172 (1) Despite the commencement of section 93 of the 2021 Amendment Ordinance (amendment provision), section 172 as in force immediately before the commencement date (pre-amended section 172) applies to or in relation to the accrued benefits of a member of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 74 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 172 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 28. Transitional arrangements relating to approved trustee’s duty when scheme member whose accrued benefits are retained in scheme cannot be located—section 172A (1) Despite the commencement of section 93 of the 2021 Amendment Ordinance (amendment provision), section 172A as in force immediately before the commencement date (pre-amended section 172A) applies to or in relation to accrued benefits of a member of a pre-existing scheme unless—(a) there is a section 19N notice in respect of the scheme; and(b) the relevant requirement has taken effect.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 74A of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 172A applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 29. Transitional arrangements relating to approved trustee’s duty to submit to Authority particulars of scheme members who have unclaimed benefits—section 172B (1) Despite the commencement of section 93 of the 2021 Amendment Ordinance (amendment provision), section 172B as in force immediately before the commencement date (pre-amended section 172B) applies to the approved trustee of a pre-existing scheme if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme and, but for the commencement of the amendment provision—(i) the approved trustee would have been required to submit a quarterly report under the pre-amended section 172B within the period specified in the guidelines; and(ii) the end day of the specified period would have fallen on a day before the effective day.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 74B of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 172B applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provision comes into operation. Editorial Note: * Commencement date: 26 June 2024. 30. Transitional arrangements relating to disposal of unclaimed benefits in employer sponsored scheme—section 173 (1) Despite the commencement of sections 78 and 95 of the 2021 Amendment Ordinance (amendment provisions), section 173 as in force immediately before the commencement date (pre-amended section 173) applies to a pre-existing scheme in relation to accrued benefits of a member of the scheme that were treated as unclaimed benefits under the relevant provision if—(a) there is no section 19N notice in respect of the scheme; or(b) there is a section 19N notice in respect of the scheme, and the 6-month period mentioned in section 173(1) as in force immediately before the commencement date begins before the effective day.(2) Despite the commencement of section 102(20) of the 2021 Amendment Ordinance, item 75 of Schedule 4 as in force immediately before the commencement date applies to the approved trustee of the pre-existing scheme, to the extent that the pre-amended section 173 applies to the approved trustee because of subsection (1).(3) In this section—*commencement date (生效日期) means the date on which the amendment provisions come into operation; relevant provision (相關條文)— (a) means section 170, 171, 172 or 172A as in force immediately before the commencement date (pre-amended section); and (b) includes a pre-amended section that applies because of section 25, 26, 27 or 28 of this Schedule. Editorial Note: * Commencement date: 26 June 2024. (Schedule 5 added 40 of 2021 s. 103)