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Supervision

Proactive Supervisory Approach

The MPFA adopts a proactive supervisory approach in supervising the approved trustees who operate MPF schemes and their related service providers including the Scheme Administrator, Fund Administrators, Investment Managers and Custodians Proactive supervisory approach

The MPFA adopts a proactive, risk-based supervisory approach in supervising MPF approved trustees (“Trustees”). This approach encompasses both on-site inspections and off-site monitoring, the scope of which is determined in part by the risk profile of each MPF approved trustee.

In addition, MPFA has developed regulatory tools to supervise Trustees, with a view to helping them develop good corporate governance, proper risk management and a strong compliance culture within their organizations.

The MPFA also issues various codes and guidelines to Trustees, ensuring that they act in compliance with statutory requirements and supervising the work of their appointed service providers. The service providers are responsible for scheme administration and record keeping, formulation of investment strategies and decisions, and custody of scheme assets respectively.

On-site inspections

The MPFA regularly conducts on-site inspections to Trustees, which is one of the tools ensuring that they comply with statutory and regulatory requirements. In addition, the MPFA carries out thematic reviews on Trustees to check on specific areas of their operations. Trustees are required to rectify internal control weaknesses identified during these inspections and non-compliance issues, if any.

Off-site monitoring

Review of returns from Trustees

Trustees

Trustees

MPF trustees are required to submit returns, audited financial statements and reports in respect of the Trustees and the schemes under their trusteeship, on a monthly, quarterly and annual basis.
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MPFA

MPFA

Investigations and follow-up actions will be carried out if irregularities, deficiencies or contravention of the MPF legislation are identified.
Certain returns must be accompanied by audit reports to provide an independent view of the financial position and the operations of the Trustees and their respective schemes. The returns submitted by the Trustees should cover registered schemes, constituent funds, and approved pooled investment funds. The review of these returns is one of the tools to monitor Trustees' compliance with statutory requirements and relevant governing rules.
MPF trustees are required to submit returns, audited financial statements and reports in respect of the Trustees and the schemes under their trusteeship, on a monthly, quarterly and annual basis. Certain returns must be accompanied by audit reports to provide an independent view of the financial position and the operations of the Trustees and their respective schemes. The returns submitted by the Trustees should cover registered schemes, constituent funds, and approved pooled investment funds. The review of these returns is one of the tools to monitor Trustees' compliance with statutory requirements and relevant governing rules.

For the protection of scheme members’ interests, investigations and follow-up actions will be carried out if irregularities, deficiencies or contravention of the MPF legislation are identified.

Issues identified from complaints

The MPFA takes follow-up actions on issues identified from complaints against Trustees by scheme participants. Complaint has been, and will continue to be, an important avenue for monitoring Trustees’ performance. It is an effective way to identify problems associated with the operations of Trustees and the MPF System. For more information, please refer to Complaint handling and Enforcement actions against Trustees.

Liaison with Trustees

The MPFA maintains a regular dialogue with Trustees on various issues, including administration and operational matters, as well as initiatives to enhance the MPF System. This takes the following forms:
  • The Trustees Operation Liaison Group, comprising representatives from Trustees and MPFA, meets regularly to discuss operational issues of MPF schemes that are of common interest across the industry;
  • Sharing sessions are held with representatives of Trustees and investment managers to discuss issues relating to fund governance and investment compliance; and
  • Working groups with industry representatives on specific issues are held on an as-needed basis.

Last Revision Date: 31/07/2015