XN000022-1993-10-09+10 — Page 6

SUNDAY, OCTOBER 10, 1993

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BY

EXEMPTION COULD BE GRANTED FOR OFFSHORE SCHEMES SUPERVISED A RECOGNISED OVERSEAS AUTHORITY, OR SCHEMES BASICALLY SERVING NON-HONG KONG RESIDENTS," HE SAID.

MR MACLEOD BELIEVED THAT THE ORDINANCE ALSO OFFERED A HEALTHY AND STABLE ENVIRONMENT FOR THE GROWTH OF THE PENSION INDUSTRY.

THE SAID.

BETTER SECURITY FOR SCHEME ASSETS WILL PROVIDE INCENTIVE FOR VOLUNTARY ESTABLISHMENT OF RETIREMENT SCHEMES IN HONG KONG, HE

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MORE NEW SCHEMES WILL BE ESTABLISHED AS HONG KONG FACES AN INCREASINGLY SOPHISTICATED LABOUR MARKET.

EMPLOYERS WILL HAVE TO ESTABLISH VOLUNTARY SCHEMES IN ORDER TO REMAIN COMPETITIVE IN THE LABOUR MARKET, HE ADDED.

HE POINTED OUT THAT THE EXTENT OF UNDER-FUNDING AMONG EXISTING RETIREMENT SCHEMES, THOUGH UNKNOWN, WAS ESTIMATED AT BETWEEN $5 TO $10 BILLION.

FUNDING REQUIREMENT OF THE ORDINANCE, TOGETHER WITH DEMAND FOR NEW SCHEMES, WOULD RESULT IN MORE ASSETS BEING ABSORBED INTO THE POOL OF PENSION FUNDS, HE SAID, ADDING THAT THIS WAS ESTIMATED AT $100 BILLION ACCORDING TO PRIVATE SECTOR RESEARCH.

IN LINE WITH OUR MINIMUM INTERVENTION APPROACH IN REGULATING OUR FINANCIAL MARKET, THE ORDINANCE WOULD ENABLE MANAGERS TO OPERATE WITH MINIMUM GOVERNMENT INTERFERENCE BUT WITH RELIANCE ON PROFESSIONAL CERTIFICATION, HE SAID.

FOR EXAMPLE, THEY ARE REQUIRED TO KEEP PROPER BOOKS AND RECORDS OF TRANSACTIONS, TO HAVE AN ANNUAL AUDIT AND TO DISCLOSE ESSENTIAL INFORMATION TO SCHEME MEMBERS, HE ADDED.

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RESTRICTIONS WERE FEW, EXCEPT TO REQUIRE THAT NOT MORE THAN CENT OF THE SCHEME ASSETS COULD BE INVESTED IN THE EMPLOYER'S BUSINESS, HE ADDED.

RE-INVESTED

THE SCHEME ASSETS WERE ALSO PROHIBITED FROM BRING INTO THE EMPLOYER'S BUSINESS BY WAY OF LOAN AND THE EMPLOYER MUST TAKE PRUDENT MEANSURES TO PROTECT EMPLOYEES' INTEREST, HE SAID.

HE SAID A UNIQUE FEATURE OF THE ORDINANCE WAS ΤΟ ALLOW RETIREMENT SCHEMES TO BE SET UP OUTSIDE HONG KONG.

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"THESE WILL BE SUBJECT TO OVERSEAS JURISDICTION,

HE SAID.

THE

HE ADDRD THAT AS THERE WAS NO TERRITORIAL LIMITATION ON SCHEME'S DOMICILE AND LOCATION OF ITS ASSETS, SCHEME ADMINISTRATORS AND INVESTMENT MANAGERS COULD CAST A WIDE NET FOR PROFITABLE

INVESTMENT.

STATUS

HE

"SUCH A REGULATORY FRAMEWORK COMBINED WITH HONG KONG'S

+ AS AN INTERNATIONAL FINANCIAL CENTRE I AM CONFIDENT OF THE EXCELLENT PROSPECT FOR GROWTH IN THE PENSIONS INDUSTRY IN THE YEARS AHEAD," ADDED.

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