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Legislation & Regulations



2 February 2002

To : All Approved Trustees of Registered Schemes

Dear Sirs,

Calculation of Compensation Fund Levy

Pursuant to section 17 of the Mandatory Provident Fund Schemes Ordinance (Cap. 485) ("the Ordinance"), an approved trustee is required to pay compensation fund levy ("CFL") of 0.03% of the net asset value ("NAV") of the scheme assets.

The Authority would like to clarify that for the purposes of calculating CFL to be paid to the Authority, NAV of the scheme before provision for CFL should be used. As such, for any scheme where CFL provision has been made, the amount of CFL provision should be added back to the audited NAV of the scheme for the purposes of calculating CFL to be paid to the Authority.

In this regard, trustees are required to disclose clearly the amount of CFL provision in the financial statements of the scheme to be submitted, or to make a declaration of the amount provided in the account to be submitted at the time of paying the CFL payment. For example, CFL for a scheme with audited NAV of HK$10 million (after provision of CFL of HK$3,000) would be HK$3000.90, i.e. 0.03% of HK$10,003,000 (HK$10,000,000 + HK$3,000).

Should you have any question about the content of this circular letter, please feel free to contact your case officer at the Authority.

Yours faithfully,

(Ms Hendena YU)
Chief Operating Officer (Compliance)

Last Revision Date: 17/10/2014