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Occupational Retirement Schemes (Amendment) Bill 1995
Following is the speech by the Secretary for Financial Services, Mr Michael Cartland, at the resumption of the second reading debate of the Occupational Retirement Schemes (Amendment) Bill 1995 in the Legislative Council today (Wednesday):
Mr President,
I would like to thank the Bills Committee under the chairmanship of the Hon Marvin Cheung as well as its technical sub-group led by the Hon Peter Wong for their careful consideration of the bill. I would also like to express my appreciation to the professional and trade organisations for their valuable advice.
When introducing the Bill, I explained that we proposed to relax investment restrictions in mutual funds and in shares listed on emerging stock markets. Members have questioned the Administration's reasons for permitting investments in emerging stock markets, as they appeared to involve a higher investment risk than investments in established stock markets. I should point out that, under the present Occupational Retirement Schemes Ordinance, the Registrar has discretion to approve investments in companies not listed on the Hong Kong Stock Exchange or in emerging stock markets on application by fund managers. Moreover, we feel that it should not be the Registrar's role to act as an investment adviser to scheme administrators or trustees, since they already have a duty to perform in the best interests of their beneficiaries. A total ban on investment in emerging markets is therefore unnecessary. And we have accordingly proposed a limited relaxation of the investment restrictions.
To address the concern expressed by the Bills Committee that a scheme administrator could, whilst observing the 15 per cent investment restriction, avoid disclosure of investments in emerging stock markets to the consultative committee of a registered scheme, we have proposed that, where, in aggregate, investment in these markets constitutes five per cent or more of a scheme's assets. disclosure at the request of the consultative committee should be required.