Ahead of “semi-portability”: bureau tables bill to license MPF intermediaries

To pave the way for MPF “semi-portability” (the Employee Choice Arrangement), the Financial Services and the Treasury Bureau has tabled proposals to legislate tougher oversight of MPF intermediaries’ sales and marketing — including a registration regime and statutory powers for regulators to police intermediary conduct.

Why fix intermediaries before semi-portability?

2.5 million workers become direct sales targets. Permanent Secretary Au King-chi noted intermediaries used to pitch to just 200,000-plus employers; once semi-portability opens, all 2.5 million-plus Hong Kong workers become direct prospects, and intermediaries may sell more aggressively — raising mis-selling risk. The goal: table the bill this year and pass it before the legislative session ends next July, then launch semi-portability.

What does the proposal contain?

Registration plus criminal penalties; “one trade, three regulators” stays. Modelled on existing administrative guidelines, the plan creates a unified registration regime — unregistered MPF selling becomes a criminal offence. Bank, insurance and securities intermediaries stay under the HKMA, Insurance Authority and SFC respectively, each gaining statutory powers to investigate and discipline (reprimands, fines, suspension or revocation), with a single independent statutory appeal channel. A process-review committee would keep the three frontline regulators consistent.

Existing intermediaries get a two-year transition. As of end-February there were 28,365 MPF intermediaries — 70% insurance, 28% banking, 2% securities. They can re-register within two years of enactment, observing statutory conduct and continuing-education requirements meanwhile. The MPFA will also launch a unified online platform for semi-portability forms, and crack down harder on employers in arrears — defying a court order to pay becomes a criminal offence.

To choose the right provider under semi-portability, visit MPF fund comparison.