Recruitment of Manager (Supervision) pdf
REQUIREMENTS
Approval of trustees
MPFA is empowered to regulate and monitor the operation of the MPF System and ensure that MPF trustees comply with statutory requirements. All applicants must be approved by MPFA before they can act as trustees for MPF schemes. Trustees must perform their duties in accordance with the following principles:
- exercise a reasonable level of care, skill, diligence and prudence;
- make use of all relevant knowledge and skill that the trustee may be reasonably expected to have to administer and maintain the scheme;
- ensure the assets of the scheme are invested in different investments so as to minimize the risk of losses of those assets;
- act in the interest of scheme members and not in the trustee’s own interest;
- act in accordance with the governing rules of the scheme; and
- supervise and exercise proper control over all service providers appointed or engaged for the purposes of the scheme.
Learn more about MPF approved trustees.
Approval of corporate applicants
Requirements for approval of corporate applicants as trustees include:
- capital adequacy;
- financial soundness;
- fitness and propriety of each controller;
- adequate mix and competency of the board of directors (including an independent director) and the chief executive officer; and
- adequate insurance, sound governance and internal control measures.
MPFA should be satisfied that the applicant has sufficient expertise and management resources to conduct its operations effectively. Each application for approval as a trustee is examined in detail by MPFA to ensure that all approval requirements are satisfied.
Registration and approval of MPF schemes and funds
All MPF schemes must be registered with MPFA.
Upon receipt of the application for registration of MPF schemes and approval of funds, MPFA will conduct a detailed review to ensure that they comply with the MPF legislation and that the interests of MPF scheme members are protected.
Approval of changes to controllers and other information of trustees
MPFA also processes the applications for changes of controllers and other information of trustees to ensure that such changes comply with the MPF legislation and approval conditions.
Prior consent of MPFA is required for the appointment of directors or chief executive officers of trustees, as well as for the proposal of persons to become substantial shareholders of any trustee.
On-site inspections and off-site monitoring
MPFA supervises MPF approved trustees by way of both on-site inspections and off-site monitoring. The scope of supervision is determined in part by the risk profile of each MPF approved trustee.
On-site inspections
MPFA conducts regular on-site inspections to approved trustees, which is one of the measures for ensuring their compliance with statutory and regulatory requirements. In addition, MPFA carries out thematic reviews on approved trustees to check on specific areas of their operations. Approved trustees are required to rectify any internal control weaknesses and non-compliance issues identified during these inspections.Off-site monitoringReview of returns from approved trustees
A sample framework of an MPF scheme
Regulatory measures to supervise trustees and their service providers
MPFA has developed regulatory measures to supervise trustees, with a view to assisting them to develop good corporate governance, proper risk management and a strong compliance culture within their organizations.
MPFA issues various codes and guidelines to ensure that trustees comply with statutory requirements and to help trustees supervise the work of their appointed service providers.
Service providers are responsible for duties such as scheme administration, record keeping, formulation of investment strategies and decisions, and custody of scheme assets, respectively.
Complaints against trustees
Handling complaints is an important way for MPFA to monitor the performance of trustees. It effectively identifies problems associated with the operations of trustees and the MPF System. MPFA will identify issues from complaints against trustees lodged by the public and take follow-up actions.
Liaison with trustees
MPFA meets regularly with trustees to exchange views on various issues, including MPF administration and operational matters, and initiatives to enhance the MPF System. Meetings between MPFA and trustees are held through the following channels:
- The Trustees Operation Liaison Group – meetings are held with representatives from trustees and MPFA regularly to discuss operational issues of MPF schemes that are of common interest across the industry;
- Sharing Sessions – sharing sessions are held with representatives from trustees and investment managers to discuss issues relating to fund governance and investment compliance; and
- Working Groups – working group meetings are held as needed with industry representatives to discuss specific issues.