LC Paper No. LS 209/98-99

Object(s) of the Bill

To clarify that the eligibility of an occupational retirement scheme to apply for exemption under the Mandatory Provident Fund ("MPF") Schemes Ordinance (Cap. 485) is not affected though subsequent changes in accordance with or not prohibited by the Occupational Retirement Schemes Ordinance (Cap. 426) ("ORSO") have taken place since the registration of the scheme.

LegCo Brief Reference

2. C13/4/11/1C(99) (no date provided) issued by the Financial Services Bureau.

Date of First Reading

3. 16 June 1999.

Comments

4. To qualify for exemption under section 16 of the MPF Schemes (Exemption) Regulation (Cap. 485 sub. leg.), existing schemes registered under the ORSO which are under insurance arrangements are required to be converted into schemes governed by trust. Moreover, the existing schemes must have been established before or on 15 October 1995 and an application for exemption or registration in respect of the schemes under section 7 or 15 of the ORSO respectively was received by the Registrar of the Occupational Retirement Schemes not later than 15 January 1996.

5. However, subsequent changes made to an existing scheme in accordance with the ORSO may require the scheme to apply for registration again under the ORSO. For example, if a registered scheme changes its insurance agreement into a trust-governed scheme, it has to be registered again. To remove possible doubts on whether such re-registered schemes or other schemes which have undergone changes are still eligible for MPF exemption, the Bill amends the ORSO by:

1. clarifying that an occupational retirement scheme under the ORSO that qualifies for exemption under the MPF Schemes Ordinance because of its date of application for registration or exemption under the ORSO will not be disqualified from receiving a certificate of exemption by reason only that certain subsequent changes have taken place in accordance with, or that are not prohibited by, the ORSO; and
   
   
2. setting out certain examples of changes that are accepted or not accepted for the purpose of seeking exemption from the MPF Schemes Ordinance.

Public Consultation

6. The Law Society of Hong Kong and members of the Guidelines Committee of the MPF Schemes Authority have been consulted. All of them have indicated support to the proposal.

Consultation with the LegCo Panel

7. No consultation with any LegCo Panel has been conducted.

Conclusion

8. We have raised queries with the Administration on certain drafting points. As a result of the Administration's clarification, we are satisfied that the legal and drafting aspects of the Bill are in order. Subject to Member's views, the Bill is ready for resumption of Second Reading debate.


Prepared by

FUNG Sau-kuen, Connie
Assistant Legal Adviser
Legislative Council Secretariat
21 June 1999