LC Paper No. LS166/98-99
Paper for the House Committee Meeting
of the Legislative Council
on 30 April 1999
Legal Service Division Report on
Resolution under section 46 of the
Mandatory Provident Fund Schemes Ordinance (Cap. 485)
The Secretary for Financial Services has given notice to move a motion at the meeting of the Legislative Council on 12 May 1999 to seek the Legislative Council's approval of the Mandatory Provident Fund Schemes (Fees) Regulation ("the Regulation").
2. Section 46 of the Mandatory Provident Fund Schemes Ordinance (Cap. 485), as amended by the Provident Fund Schemes Legislation (Amendment) Ordinance (4 of 1998), provides that fees may be prescribed for, inter alia, the approval of trustees, registration of provident fund schemes, voluntary winding up and merger of registered schemes, approval of investment funds and granting of exemptions to occupational retirement schemes ("ORSO schemes").
3. The Regulation is part of the preparatory work for the implementation of the Mandatory Provident Fund ("MPF") Scheme with effect from 1 December 2000. By three commencement notices made in 1999 (L.N. 68, 69 and 70 of 1999), various provisions in the MPF legislation required for the implementation of the MPF scheme will come into operation on 3 August 1999. Those provisions relate to approval of trustees, MPF schemes and investment products. To tie in with the commencement of those provisions, the Administration has now proposed this Regulation so that the Mandatory Provident Fund Schemes Authority ("MPFA") can commence the licensing process in August 1999 as scheduled.
4. The fees prescribed in the Regulation mainly fall into two categories, the annual fees and the application fees. Annual fees include the annual registration fee for a MPF registered scheme while application fees mainly include fees for application for approval of trustees, investment products and registration of schemes, as well as fees for applications for exemption of existing ORSO schemes from MPF requirements, etc.
5. The proposed fees for application for approval as a trustee by a company and a natural person are $81,500 and $4,900 respectively. The fees payable for application for registration of schemes are $40,000. According to the Administration, in drawing up the proposed fee level, the MPFA has made reference to the fees currently charged by comparable financial regulators and has also considered the current economic situation. The MPF Schemes Advisory Committee has also been consulted on the proposed fee level.
6. Members may also note that the MPFA has decided not to charge the annual registration fees for MPF schemes for the first two years in order to minimize the financial burden to the general public in the light of the current economic situation. However, the MPFA will review the situation in the light of operational experience and consider charging such fees after the initial two years.
7. If passed, the Regulation will come into operation on 3 August 1999. However, as some of the provisions specified in the Regulation under which fees are payable will come into operation after 3 August 1999, for the purpose of clarity, we are asking the Administration whether provision will be made for different days of commencement for different parts of the Regulation. We will make a further report if the Administration will propose amendments to the Regulation.
Fung Sau-kuen, Connie
Assistant Legal Adviser
Legislative Council Secretariat
27 April 1999