Security of Scheme Assets 計劃資產的保障

Stringent Authorization Requirements 嚴格的認可規定

Every MPF scheme must be governed by Hong Kong law. Two separate regulatory steps matter: MPFA approves the trustee, while a provident fund scheme must obtain MPFA registration to become an MPF scheme; approval of a trustee does not automatically register every scheme it manages.

A trustee must obtain approval before acting as an MPF trustee. The financial requirements include paid-up share capital and net assets of at least HK$150 million each: both must meet the threshold separately, and meeting these financial requirements alone does not satisfy every approval condition.

When assessing an application, MPFA also examines the scheme’s investment manager, custodian and other service providers. It considers whether those involved have sufficient knowledge, qualifications, experience, financial capability and control to manage the scheme, invest its funds and protect members’ interests.

The scheme must separately meet the registration requirements. MPFA checks its governing rules for compliance with legislation, so scrutiny of service providers and scrutiny of the scheme’s rules provide complementary safeguards. [Source: MPFA Study Notes, Tenth Edition, section 3.1.1](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-intermediaries/registration-requirements/study_notes_10th_v1_eng.pdf)

Professional Indemnity Insurance 專業彌償保險

Professional indemnity insurance must be arranged for an MPF scheme against prescribed risks. These include fraud and negligence by the trustee and by other service providers carrying out duties delegated by the trustee.

The required cover extends beyond ordinary professional indemnity insurance and includes risks such as loss of scheme assets in transit. It should therefore not be understood as covering only professional negligence committed personally by the trustee.

Losses from investing scheme funds in the ordinary course of business are excluded. For example, an investment loss caused solely by falling markets, without fraud or negligence, is not made good simply because insurance exists; the cause of the loss matters. [Source: MPFA Study Notes, Tenth Edition, section 3.1.2](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-intermediaries/registration-requirements/study_notes_10th_v1_eng.pdf)

Compensation Fund 補償基金

The Compensation Fund protects scheme members and other people with beneficial interests in a scheme. The loss of accrued benefits must result from misfeasance or illegal conduct by the trustee or other service providers involved in administering the scheme; poor investment performance alone does not meet this condition.

The Government initially injected HK$600 million into the fund, with further funding provided through a levy on MPF schemes. The levy rate is 0.03% of the net asset value of scheme assets: its basis is scheme asset value, rather than current contributions or the amount claimed.

The fund provides compensation as a last resort: professional indemnity insurance must first be utilised, followed by an application to MPFA. It may therefore provide a route where insurance compensation is insufficient, but a loss does not automatically produce a payment from the fund. [Source: MPFA Study Notes, Tenth Edition, section 3.1.3](https://www.mpfa.org.hk/en/-/media/files/supervision/mpf-intermediaries/registration-requirements/study_notes_10th_v1_eng.pdf)

The automatic levy triggering mechanism began in September 2012, with reserve trigger levels of HK$1 billion for resuming the levy and HK$1.4 billion for suspending it. These figures concern the Compensation Fund’s own reserves, rather than individual compensation limits; 0.03% is the rate used when the levy applies. [Source: MPFA announcement on the Compensation Fund levy mechanism](https://www.mpfa.org.hk/en/info-centre/press-releases/2153_record)