Financial and Monetary Affairs | 93
To ensure that the interests of MPF scheme members are protected, the MPFA closely monitors the operation of MPF trustees and other service providers, investigates complaints about non-compliance and takes enforcement actions accordingly. Proactive inspections are carried out at business premises to ensure compliance of employers in enrolling their employees in MPF schemes and making contributions. The MPFA also educates the public on the need for retirement protection and on the MPF System, with an emphasis on investor education. Some of the educational activities were held in conjunction with other bodies (e.g. the Hong Kong Investment Funds Association and labour unions).
The MPFA is also the Registrar of Occupational Retirement Schemes.
Recent Developments
To enhance the effectiveness and efficiency of the MPF System, the MPFA continues to review the MPF legislation in the light of operational experience. A number of amendments to the legislation related to operational and technical issues were enacted in 2002. The MPFA is continuing to deliberate on further proposed amendments covering investment regulation, scheme administration and enforcement.
The MPFA also initiated a project in late 2002 to review and improve the disclosure of information about fees, charges and fund performance of MPF products, to enable scheme members to make informed investment decisions. Having consulted the industry and other stakeholders, the MPFA issued a Code on Disclosure for MPF Investment Funds in June 2004 for phased implementation of key reforms, including those related to expense ratios, fee tables and fund fact sheets. Meanwhile, the MPFA is making proposals for improvements to member benefit statements.
Financial Links between Hong Kong and the Mainland
Hong Kong has long served as an international financial centre for the Mainland, facilitating Mainland enterprises to access international capital through its banking, equity and debt markets. Nevertheless, the cross-boundary capital flows have by no means been one-way. Hong Kong's banks have maintained a strong presence in the Mainland. The financial links between Hong Kong and the Mainland have been further strengthened with China's accession to the World Trade Organisation (WTO), which will over time generate increasing demand for a wide range of financial support services for increasing trade and investment flows between the Mainland and the rest of the world. The smooth and orderly development of renminbi (RMB) business facilitates cross-border tourist spending in Hong Kong and helps promote economic integration between Hong Kong and the Mainland. Further development of renminbi business is expected to increase the attractiveness of Hong Kong as an international financial centre.
Cross-boundary funds were flowing steadily among financial institutions in both places. 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
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