HKT Trust Units Approved as MPF Permissible Investment

On 22 December 2011, HKT Trust (6823) — listed for less than a month — announced it had been advised by the Mandatory Provident Fund Schemes Authority that its share stapled units were a permissible investment for MPF purposes, requiring no further approval. That meant MPF constituent funds could add HKT Trust to their Hong Kong equity portfolios.

What counts as an MPF permissible investment?

An MPF permissible investment is an investment target meeting the requirements of the Mandatory Provident Fund Schemes (General) Regulation — constituent funds may only invest in permitted items. Under section 8 of Schedule 1, funds may invest in fully paid-up shares listed on an approved exchange, index-tracking collective investment schemes, or securities listed on an approved exchange and approved by the Authority. The Hong Kong Exchange lists a wide variety of securities, and not all qualify — the MPFA sets clear rules on what counts.

How it unfolded

HKT Trust was the business trust spun off from PCCW (0008), listed in the form of share stapled units. Around listing, the price-stabilisation funds of its sponsor Goldman Sachs had just been exhausted, and the market was watching its share price.

• Evening of 21 December: HKT Trust announced it had been advised by the MPFA that its share stapled units were an MPF permissible investment;
• MPFA’s response: a spokesperson said HKT Trust had approached the Authority on its own initiative, and the units were confirmed compliant after verification;
• Industry reaction: fund managers said any compliant product would be considered, but inclusion in MPF Hong Kong equity portfolios would ultimately depend on each manager’s direction and strategy. The news did not lift HKT Trust’s share price.

What does it mean for employees?

For MPF members, the practical takeaway is that MPF’s investment universe isn’t static — it expands as new market products emerge. Constituent fund managers pick securities within the permitted scope that fit each fund’s objectives; members neither need nor should rush to adjust their portfolios over a single new listing.

And permissibility is no promise of returns. MPF remains long-term investing — fund choice should rest on overall objectives, risk level and fees, not on chasing individual stock news. For the investment scope of each MPF fund type, see mpf.hk’s MPF education hub.