FINANCIAL AND MONETARY AFFAIRS
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Occupational Retirement Schemes Ordinance (ORSO) which regulates private voluntary occupational retirement schemes operating in or from Hong Kong.
The occupational retirement schemes (ORSO schemes) registered under the ORSO are voluntary schemes established by employers for their employees. The objective of the ORSO is to regulate all voluntarily established occupational retirement schemes through a registration system which requires that these schemes are properly administered and funded, so as to provide greater certainty that retirement scheme benefits promised to employees will be paid when they fall due. There is an appeal board established under the ORSO to consider appeals against the MPFA's decisions, on matters such as registration and cancellation of ORSO schemes.
All registered schemes must meet certain basic requirements, including asset separation, independent trusteeship, restricted investments, funding, independent audit, actuarial reviews and the submission of annual returns and audited financial statements to the Registrar. There are also requirements for disclosure of information to the scheme members regarding the operation of the scheme. As for exempted schemes, annual submission of compliance certificates or membership statements, as appropriate, are required. Changes of certain scheme particulars in respect of both registered and exempted schemes are also required to be notified on prescribed forms and within statutory time limits.
To tie in with the implementation of the MPF System, registered and exempted ORSO schemes could apply for MPF exemption, subject to the conditions as set out in the MPF legislation. The MPFA has completed the processing of all applications for exemption as scheduled. Members of the MPF-exempted ORSO schemes are exempted from the requirement of the MPFSO. They may choose to remain in the existing scheme which is granted exemption, or join new MPF schemes. During the year, the Registrar has made rules on the recovery of arrears for MPF-exempted ORSO schemes, to facilitate the Registrar in recovering the arrears in contributions payable by the relevant employers of an MPF-exempted ORSO scheme.
Financial Links between Hong Kong and the Mainland
Hong Kong is the Mainland's primary channel for international fund-raising through the SAR's banking, equity and debt markets. Nevertheless, the cross-boundary capital flows have by no means been one-way. Direct investment and interbank fund flows have developed in both directions. Hong Kong banks have also expanded their business presence in the Mainland.
Cross-boundary fund flows among financial institutions have grown in the last two decades. Over the years, the Mainland has accumulated a substantial amount of funds in Hong Kong dollars from trading activities and inward investment. These funds are placed with financial institutions in the Mainland and are subsequently channelled back to Hong Kong through the interbank market.
Since 1980, external liabilities of authorised institutions in Hong Kong to financial institutions in the Mainland have grown at an average rate of 35 per cent per annum to $331.3 billion by the end of December. Over the same period, claims on financial institutions in the Mainland by authorised institutions in Hong Kong registered an annual growth of about 18 per cent to $189.9 billion.
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