Hong Kong Regulations

MANDATORY PROVIDENT FUND SCHEMES (GENERAL) REGULATION - SECT 45

Delegation of investment management functions

(Past version on 23/06/2000).
(Past version on 03/08/1999).

(1) The approved trustee of a registered scheme must ensure that the contract
for the appointment of an investment manager prohibits the manager from
delegating the management of the investment of the funds of the scheme to a
person other than to a company or corporation or partnership of companies or
corporations that is solvent and complies with subsection (3) or (4).

(2) If the contract allows the investment manager to delegate its functions
with respect to managing the investment of the funds of the  scheme, the
trustee must ensure that-

   (a)  a delegation of any of those functions can be made only with the
        approval of the trustee; and

   (b)  the delegation is in writing; and

   (c)  the delegate is a company or corporation or partnership of companies
        or corporations that is solvent and complies with subsection (3) or
        (4); and

   (d)  the manager will continue to be bound by the contract between the
        trustee and the manager and to be responsible for the proper
        supervision and control of the delegate and the management of the
        investment of the funds of the scheme.

(3) A company or corporation or partnership of companies or corporations
complies with this subsection if it is-

   (a)  an associate of the investment manager of the scheme; and

   (b)  a corporation licensed to carry on, or an authorized financial 
        institution registered for carrying on, a business in asset management
        under Part V of the Securities and Futures Ordinance ( Cap 571). (5 of
        2002 s. 407)

(4) A company or corporation or partnership of companies or corporations
complies with this subsection if it is authorized, by a regulatory authority
recognized by the Authority, to carry on business as an investment adviser
under the law of a place other than Hong Kong and-

   (a)  is an associate of the investment manager of the scheme; or

   (b)  is an associate of a corporation licensed to carry on, or an
        authorized financial institution registered for carrying on, a
        business in asset management under Part V of the
        Securities and Futures Ordinance ( Cap  571); or (5 of 2002 s. 407)

   (c)  is a corporation licensed to carry on, or an authorized 
        financial institution registered for carrying on, a business in asset
        management under Part V of the Securities and Futures Ordinance (
        Cap 571) and maintains an office in Hong Kong. (5 of 2002 s. 407)

(5) If an investment manager appointed in respect of a registered scheme is
allowed to delegate the manager's functions in relation to the  scheme, the
approved trustee of the scheme must ensure that the functions are delegated
only to a person who is independent of the trustee and of the custodian of
the scheme assets and of any delegate of the custodian. (L.N. 223 of 2000)