Hong Kong Ordinances

OCCUPATIONAL RETIREMENT SCHEMES ORDINANCE - SECT 27

Investment requirement

(Past version on 30/06/1997).

(1) In this section-

"loan" (貸款) does not include a deposit made with an authorized institution
within the meaning of the Banking Ordinance ( Cap 155);

"mutual fund corporation" (互惠基金法團) means a corporation-

   (a)  which is or holds itself out as being engaged primarily in the
        business of investing, reinvesting or trading in securities or any
        other property; and

   (b)  the shares in which are exclusively, or primarily, redeemable shares;
        (Added 53 of 1995 s. 16)

"restricted investment" (受限制投資項目) means-

   (a)  any security of, or issued by, the relevant employer of a
        registered scheme or an associate of such employer except security
        issued by an associate of such employer in the form of an option which
        if exercised will constitute investment in the share capital of a body
        corporate other than the relevant employer or an associate of such
        employer; or

   (b)  any security in the form of an option which if exercised will
        constitute investment in the share capital of the relevant employer of
        a registered scheme or an associate of such employer. (Amended 53 of
        1995 s. 16)

(2) Where an occupational retirement scheme is registered under this
Ordinance-

   (a)  not more than 10% of the assets of the scheme shall consist of
        restricted investments; (Replaced 53 of 1995 s. 16)

   (b)  no asset of the scheme shall consist of a loan to the relevant 
        employer of the scheme or an associate of the relevant employer;
        (Replaced 53 of 1995 s. 16)

   (c)  subject to subsection (3), no asset of the scheme acquired on or after
        15 October 1993 shall consist of investments in the share capital of a
        body corporate which share capital is not-

        (i)    listed on a recognized stock market as defined in section 1 of
               Part 1 of Schedule 1 to the Securities and Futures Ordinance (
               Cap 571); or (Replaced 5 of 2002 s. 407)

        (ii)   publicly listed on a specified stock exchange as defined in
               that section. (Replaced 5 of 2002 s. 407)

(3) Subsection 2(c) shall not operate to prohibit-

   (a)  up to but not exceeding 15% of the assets of the scheme consisting of
        investments in the share capital of bodies corporate which share
        capital is publicly listed on a stock exchange legally established and
        regulated as a stock exchange in accordance with the laws of the
        jurisdiction in which it is established and which is other than the
        stock exchanges referred to in subsection (2)(c) (which 15% is not in
        addition to any investments of the same nature held prior to 15
        October 1993 and exempted from the restriction of subsection (2)(c));

   (b)  the assets of the scheme consisting of investments in redeemable
        shares in a mutual fund corporation; and

   (c)  investments that derive directly from entitlements attached to
        investments held prior to 15 October 1993 or acquired as a result of
        this paragraph and which would otherwise be prohibited by subsection
        (2)(c) about which investments the administrator, before making the
        investments, shall obtain the Registrar's permission to make the
        investments by satisfying the Registrar-

        (i)    that the investments derive directly from entitlements attached
               to the holding of investments held prior to 15 October 1993 or
               were acquired as a result of this paragraph;

        (ii)   that the investments have become available in the normal course
               of business; and

        (iii)  that the registered scheme would be disadvantaged if the
               investments were not made. (Replaced 53 of 1995 s. 16)

(4) The Registrar may give guidelines as to what evidence or documentary
material would be relevant to the issue of satisfying him of the matters set
out in subsection (3)(c) including the requirement that the evidence and
documentary materials be verified by independent advisors specified by the
Registrar. (Replaced 53 of 1995 s. 16)

(5) The Registrar is not liable for any loss incurred by a scheme as a result
of an investment made with his permission under subsection

(3)(c). (Replaced 53 of 1995 s. 16)

(6) In determining at any time whether the requirement of subsection (2) is
complied with assets shall be valued at their market value or, where such
value cannot be ascertained, the net realizable value, at that time.

(7) Where the Registrar reasonably believes that the requirement of subsection
(2) is for the time being not being complied with as regards a
registered scheme, he may, having regard to the interests of the members of
the scheme as a whole, by notice in writing to the administrator of the scheme
require him to ensure compliance with the requirement as regards the scheme
within such period as the Registrar reasonably considers necessary (being a
period of not less than 1 month beginning on the date of the notice).

(8) A notice under subsection (7) relating to a registered scheme shall state
that representations as regards the requirement specified in the notice may be
made in writing to the Registrar within such period as is specified in the
notice (being a period of not less than 1 month beginning on the date of the
notice) by or on behalf of the administrator of the scheme.

(9) Where a representation relating to a requirement is made in accordance
with this section, the Registrar, having had regard to such representation,
may-

   (a)  withdraw or modify the requirement; or

   (b)  extend the period referred to in subsection (7). (Enacted 1992)

"loan" (貸款)

"mutual fund corporation" (互惠基金法團)

"restricted investment" (受限制投資項目)