MPFA to Consult Market on MPF Intermediary Code Within Two Months

In January 2012, an MPFA spokesman told reporters the authority was consulting frontline regulators on a draft code of conduct for MPF intermediaries and planned a wider market consultation within two months. It was a quiet but decisive step: without this regulatory scaffolding, that year’s Employee Choice Arrangement could never have launched.

Why regulate MPF intermediaries by statute?

Statutory intermediary regulation was the gatekeeper for portability. The bill, tabled in the Legislative Council at the end of 2011, sets conduct requirements for intermediaries plus the key principles governing MPF sales and promotional activities; without it, members risked becoming victims of mis-selling once semi-portability made promotion far more aggressive.

What was the consultation timetable?

The MPFA said the draft code was then under consultation with frontline regulators, with a market-wide round planned within two months. A single code covering different sectors would follow, guiding intermediaries on meeting the statutory conduct requirements, and the industry would have ample chance to exchange views with the authority. Because drafting was still at the consultation stage, no contents could be disclosed yet.

What made the regulatory model distinctive?

Since the vast majority of existing MPF intermediaries work primarily in banking, insurance or securities, the bill proposed an institution-based model: the HKMA, the Insurance Authority and the SFC would serve as frontline regulators, supervising and investigating intermediaries in their own sectors. A package of measures would ensure intermediaries under different frontline regulators competed on a level playing field.