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As a matter of fact, this requirement is similar to the prudential measures imposed by other regulatory regimes. Many countries, including Germany, Canada, and Japan, which have no exchange control policy, also set maximum foreign currency exposure limits on pension funds on prudential grounds.

Such a requirement is not foreign exchange control and, therefore, it is not in conflict with Article 112 of the Basic Law. First of all, foreign exchange control policies would be those which impose controls on the ability of holders of Hong Kong dollars to exchange them for a currency of another country. The proposed MPF regulation would not have such an effect. It would not prohibit the exchange of Hong Kong dollars for their equivalent in money in either Hong Kong dollars or currency of another country.

Secondly, the proposed regulation does not contain a specific requirement that MPF assets denominated in Hong Kong dollars have to be maintained in Hong Kong. There would be no restriction on the freedom of movement of capital in and out of Hong Kong. This is a feature that is inconsistent with the notion of exchange control.

Exchange control regulations are usually imposed for reasons of conserving gold and foreign currency reserves, protecting the currency itself and/or helping to maintain the balance of payments. The proposed MPF regulation relating to the maximum limit on foreign currency exposure is not devised for any of these reasons. It is, instead, a prudential measure designed to protect the interest of MPF beneficiaries.

Traffic accidents caused by tail-gating

Following is a question by the Hon John Tse Wing-ling, and a written reply by the acting Secretary for Transport, Mr Paul Leung, in the Legislative Council today (Wednesday):

Question:

As the occurrence of some traffic accidents is due to tail-gating, will the Government inform this Council: