Why Did Lawmakers Fear One Industry, Four Regulators?

Why Did Lawmakers Fear “One Industry, Four Regulators”?

On 4 April 2011, LegCo’s financial affairs panel debated tighter MPF intermediary regulation, with lawmakers worried about “one industry, many regulators”. The plan split oversight of MPF sales across the MPFA, HKMA, SFC and Insurance Authority by institution type.

Why did officials call it “one firm, one regulator”?

Permanent Secretary Au King-chi replied that each financial firm would answer to one regulator — not four. Regulators would get investigation and disciplinary powers; the MPFA would set conduct standards, take complaints and run a single appeal mechanism. Since MPF sales were only a sideline for intermediaries, a brand-new regime would take time and might not work better.

What did the industry say?

It decried “one industry, four regulators”: banks, insurers, brokers and fund houses each under different masters meant inconsistent standards. It wanted one clear, common sales guideline.

What did regulation mean for members?

Clearer rules meant cleaner sales. Still do your own homework — compare MPF funds.