MPF providers fear power grab

Upcoming changes to Hong Kong regulation has sparked fears among service providers that the Mandatory Provident Fund Schemes Authority (MPFA) is extending its power at the expense of the investment management industry – and the market. Leading banks, insurance companies and fund managers have long complained MPFA is deaf to their concerns, and they are trying to find new ways – perhaps even an ultimatum to leave the business – to counter what they see as excessive regulation.

First, the amendment. It has been a long-publicized fact that the rules governing MPF would need a lot of tweaking. The US 401(k) market is so successful because it has been modified over the years in a trial-and-error manner. Wise master trust administrators have processing systems flexible enough to be changed over time. MPF providers had hoped future changes would harmonize and simplify the scheme.