Provisional Legislative Council
PLC Paper No. CB(1)825
(These minutes have been
seen by the Administration)
Ref : CB1/BC/3/97
Bills Committee on
Provident Fund Schemes
Legislation (Amendment) Bill 1997
Minutes of the meeting held on
Tuesday, 16 December 1997, at 11:45 am
in Chamber of the Legislative Council Building
Members present :
Hon Ronald ARCULLI, JP (Chairman)
Dr Hon LAW Cheung-kwok (Deputy Chairman)
Hon WONG Siu-yee
Hon LEE Kai-ming
Hon NGAN Kam-chuen
Members absent :
Hon James TIEN Pei-chun, JP
Hon HO Sai-chu, JP
Hon Mrs Peggy LAM, JP
Hon Henry WU
Hon MA Fung-kwok
Dr Hon Mrs TSO WONG Man-yin
Hon CHAN Yuen-han
Hon CHAN Kam-lam
Hon YEUNG Yiu-chung
Hon Ambrose LAU Hon-chuen, JP
Hon Paul CHENG Ming-fun, JP
Dr Hon TANG Siu-tong, JP
Hon CHOY So-yuk
Public officers attending :
- Mrs Pamela TAN
- Mandatory Provident Fund Office
- Ms Maisie CHENG
- Assistant Director
- Scheme Operations
- Mr Raymond TAM
- Assistant Director
- Regulatory Standards
- Mr LUK Nai-man
- Assistant Commissioner, Unit 2(2)
- Inland Revenue Department
- Ms Imelda CHIU Hau-lin
- Technical Secretary
- Inland Revenue Department
Clerk in attendance:
- Miss Polly YEUNG
- Chief Assistant Secretary (1)3
Staff in attendance :
- Mr LEE Yu-sung
- Senior Assistant Legal Adviser
- Miss Anita HO
- Assistant Legal Adviser 2
- Miss Connie FUNG
- Assistant Legal Adviser 3
- Mr Daniel HUI
- Senior Assistant Secretary (1)5
I. Meeting with the Administration
Members continued the scrutiny of proposed amendments to relevant Ordinances as set out in Schedules 6 to 12 of the Provident Fund Schemes Legislation (Amendment) Bill 1997.
Proposed amendment to the Banking Ordinance
2.The Assistant Director/Regulatory Standard (AD/RS) informed members that the proposed amendment to section 120 of the Banking Ordinance was to authorize the Hong Kong Monetary Authority to disclose information to the future Mandatory Provident Fund Schemes Authority (MPFA) for monitoring activities in connection with the MPF Schemes Ordinance (MPFSO).
Proposed amendment to the Prevention of Bribery Ordinance
3.The Assistant Director/Scheme Operations (AD/SO) advised that the proposed amendment was to include the future MPFA in the schedule of public bodies subject to the provisions of the Prevention of Bribery Ordinance.
Proposed amendment to the Defamation Ordinance
4.Members noted that the proposed amendment to the Schedule of the Defamation Ordinance would have the effect of exempting the future MPFA from liability under the Defamation Ordinance arising from publishing a fair and accurate summary of a report prepared by an auditor or investigator in accordance with sections 30 and 32 of the MPFSO.
Proposed amendment to the Securities and Futures Commission Ordinance
5.AD/RS explained that the proposed amendment to section 59(2)(e) of the Securities and Futures Commission (SFC) Ordinance would allow the SFC to disclose certain information to the future MPFA.
Proposed amendment to the Rehabilitation of Offenders Ordinance
|6.As regards proposed section 4(1)(ea) of the Rehabilitation of Offenders Ordinance, the Chairman requested the Senior Assistant Legal Adviser (SALA) to check whether the SFC or other statutory bodies had similar powers as those proposed to be vested with the future MPFA. Under the proposed section, the MPFA could have access to past criminal record of a person in determining the persons suitability for becoming an approved trustee or a controller of an approved corporate trustee.
Proposed amendment to the Protection of Wages on Insolvency Ordinance
7.AD/SO informed members that the proposed amendment to section 24 of the Ordinance was only a consequential amendment and there was no change in policy in relation to that section. In reply to the Chairman, AD/SO confirmed that the Labour Advisory Board had noted the proposed amendment.
Proposed amendment to the Estate Duty Ordinance
8.The Assistant Commissioner/Inland Revenue Department clarified that the proposed amendment to section 10 of the Estate Duty Ordinance would exempt from Estate Duty any property consisting of the accrued benefits of a deceased member of a provident fund scheme registered under the MFPSO that were to be paid in accordance with section 15(4) of that Ordinance.
Draft Mandatory Provident Fund Schemes (General) Regulation (MPFS(G)R)
9.The Chairman suggested that as the Bills Committee had gone through major proposed amendments to the relevant Ordinances as set out in the Bill and pending the Administrations responses to major policy and legal issues identified in the course of deliberation, the Committee would proceed to examine the draft Mandatory Provident Fund Schemes (General) Regulation. Member agreed.
Proposed section 2
10. Members deliberated on the following proposed definitions.
|11.On the proposed definition of "account", the Chairman requested the Administration to check with its legal adviser on whether "s" should be added to the expression "account".
12.In reply to the Chairman, AD/RS advised that the proposed definition of "actuary" had provided flexibility for the MPFA to recognize a professional actuary body with a standard equivalent to that of currently recognized professional actuary bodies. In this connection, AD/RS added that undergraduates in Hong Kong pursuing actuarial studies could become actuaries subject to acquiring membership of the recognized professional bodies.
|13.AD/SO advised that trustees would have the discretion to settle default contributions with the employers or self-employed persons within 30 days after contributions had been in arrears. The employers and self-employed persons concerned would not be penalised if the default contributions were paid within the 30-day period. In response to members concerns, the Administration would clarify with its legal adviser the circumstances that would give rise to arrears of mandatory contributions or otherwise. For example, in the case of payment of contribution by cheque, it would be necessary to confirm whether clearance of the cheque was required in fulfilling the persons statutory obligation.
"continuous financial support"
14.In reply to the Chairman, AD/RS explained that "continuous financial support" as defined in proposed section 10 of the draft MPFS(G)R would be a continuous requirement and that the substantial financial institution had to enter into an undertaking with the future MPFA to fulfil its commitment of continuous financial support. AD/RS also confirmed that the Insurance Companies Ordinance contained similar provisions.
|15.Responding to the Chairmans enquiry, the Administration would check whether the proposed definition would be sufficiently embracive to include payments due to a MPF Scheme, such as compensation payable under a professional indemnity insurance covering a MPF Scheme.
"financial futures contract" and "financial option contract"
16.In reply to members, AD/RS clarified that "financial futures contract" and "financial option contract" would not include foreign currency futures contracts so as to allow fund managers to hedge the risks related to possible fluctuation in foreign exchange rates. However, stock index futures contracts would be included in the proposed definition of "financial futures contract". AD/RS supplemented that the future MPFA would continue to monitor the availability of new investment products and revise the relevant definitions as necessary.
17.Replying to a member, AD/SO advised that under proposed section 7 of the MPFSO, employers, employees and self-employed persons would be given a grace period, duration of which had yet to be decided, for participation in MPF Schemes after the commencement of the Ordinance.
II. Any other business
18.The Chairman reminded members that the next meeting would be held at 2:30 pm on the same day.
19.The meeting ended at 12:30 pm.
Provisional Legislative Council Secretariat
3 February 1998