ENG-2008 — Page 131

Financial and Monetary Affairs | 87

routinely reviews codes and guidelines to facilitate the launching of new investment products and international funds in the local market.

Improvement of the Mandatory Provident Fund Schemes Ordinance

Since the enactment of the Mandatory Provident Fund Schemes Ordinance in August 1995, the MPFA has been reviewing and making proposals to improve the MPF legislation in the light of operational experience. Amendments to the legislation since the implementation of the MPF System have sought to simplify MPF scheme administration, strengthen protection for scheme members and improve the regulation of MPF schemes and investments.

The Legislative Council passed the Mandatory Provident Fund Schemes (Amendment) Bill 2007 on January 9, 2008 to improve the administration and regulation of MPF schemes, to enhance the enforcement of the MPF System and to better protect the interests of scheme members. The major amendments include removal of the 30-day settlement period to facilitate early recovery of default contributions and removal of the exclusion of housing allowance from the definition of relevant income.

The Mandatory Provident Fund Schemes (Amendment) (No. 2) Bill 2007, covering proposals to enhance enforcement actions and penalties against non- compliant employers so as to better protect the interests of employees, was passed by the Legislative Council on June 18, 2008. Major amendments include the imposition of criminal and civil liability on employers who failed to make MPF contributions when they also failed to enroll their employees in the MPF system, and increasing the maximum penalty against employers for non-enrolment cases and default contributions.

The Mandatory Provident Fund Schemes (Amendment) Bill 2008 was passed by the Legislative Council on July 10 to provide a legal framework for the Mandatory Provident Fund Schemes Authority to implement the Government's proposal to make a one-off injection of $6,000 into the accounts of eligible members of MPF schemes and ORSO schemes to enhance their retirement protection.

Modernising the Companies Ordinance and other Legislative Amendments

The Standing Committee on Company Law Reform (SCCLR) advises the Government on major reviews of Hong Kong's company law to modernise the law and upgrade Hong Kong's corporate governance. Many of the reviews' recommended amendments have been adopted over the years.

However, the piecemeal approach to amending the CO has limitations, particularly with regard to the enhancement of the overall structure, the drafting style and clarity of the CO provisions. To bring the law up-to-date, the CO had to be rewritten extensively and a Companies Bill Team, comprising officers from the Financial Services and the Treasury Bureau and the Companies Registry was formed in 2006 to do the rewriting.

A number of advisory groups were also set up to scrutinise the revisions and to advise on different aspects of the rewritten ordinance. The task was completed in