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Enoch Yiu

Hong Kong’s pension fund will soon be able to invest in more gold exchange-traded funds (ETFs) as part of the government’s push to turn the city into a trading hub for the precious metal, a source with knowledge of the matter told the South China Morning Post.
The Mandatory Provident Fund Schemes Authority (MPFA), which oversaw HK$1.53 trillion (US$195 billion) worth of pension funds as of the end of March, planned to amend the rules about gold ETF investment later this week, the person said.
Instead of approval on a case-by-case basis, the source said the pension regulator would be likely to allow all gold ETFs as long as they met certain criteria that would qualify them as a Mandatory Provident Fund (MPF) investment.
“The change is aimed at adding more gold ETFs, so that the 4.8 million members of the MPF will have more products to choose from,” according to the person with knowledge of the rule changes.
“It is also part of the Hong Kong government’s goal to turn the city into a regional gold trading hub.”
There would be sufficient risk management measures in place banning the ETFs from using derivatives, while their exposure to MPF funds would be capped at 10 per cent, according to the source.
Established in 2000, the MPF is a compulsory retirement scheme. It collects monthly contributions from employers and employees, each at 5 per cent of a worker’s monthly salary, or up to HK$3,000 a month. Employees can choose to invest their contributions in different investment funds including stocks, bonds, bank deposits and other assets.
At present, the MPFA has approved only two gold ETFs for MPF fund managers to invest in, both subject to the 10 per cent cap.


The MPFA did not comment immediately following an inquiry from the SCMP.
Meanwhile, the Hong Kong government was expected to launch its long-awaited gold clearing and settlement system on Tuesday, two separate sources told the SCMP.
Hong Kong Exchanges and Clearing (HKEX) would also waive the fee for its US dollar gold futures from Monday for one year as it relaunches the product, according to a circular it sent to gold traders.
Meanwhile, the pension regulator would also seek a change in the law that would allow it to crack down on employers who delayed making their mandatory contributions, MPFA managing director Cheng Yan-chee told lawmakers on Monday.
Under the proposal, the MPFA would add a second-tier surcharge – equivalent to 10 per cent of the outstanding amount – if employers fail to settle overdue mandatory contributions within 120 days. At present, all overdue payments incur a 5 per cent surcharge.
“The additional level of surcharge is aimed at addressing those employers who deliberately delay their MPF contributions,” said Cheng at a Legislative Council financial affairs panel.
“Any surcharges paid by the employer will, in line with current practice, continue to be credited in full to the MPF accounts of the affected employees.”
Several lawmakers said they supported the additional surcharge, although others expressed concerns that the new rule could add to the burden of small and medium-sized enterprises.


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MPFA to relax gold ETF investment approval rules as part of Hong Kong government’s push to turn the city into a regional gold trading hub


MPFA to relax gold ETF investment approval rules as part of Hong Kong government’s push to turn the city into a regional gold trading hub.


.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}MPFA to relax gold ETF investment approval rules as part of Hong Kong government’s push to turn the city into a regional gold trading hub

MPFA to relax gold ETF investment approval rules as part of Hong Kong government’s push to turn the city into a regional gold trading hub