Hong Kong Regulations

MANDATORY PROVIDENT FUND SCHEMES (GENERAL) REGULATION - SECT 47

Investment management contract

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

(1) The approved trustee of a registered scheme must ensure that there is in
force between the trustee and the investment manager appointed in respect of
the scheme an investment management contract that specifies the obligations of
that manager with respect to the investment of funds of the scheme.

(2) The contract must comply with Schedule 2.

(3) The approved trustee of a registered scheme must not appoint an investment
manager in respect of the scheme unless-

   (a)  the trustee has given an undertaking by deed, or by a document of like
        effect, to notify in writing the manager of any matters that the
        trustee regards as pertinent to the manager's appointment; and

   (b)  the manager has given an undertaking by deed, or by a document of like
        effect, to notify in writing the trustee of any changes to matters
        referred to in paragraph (a) within 30 days after those changes have
        occurred. (1 of 2008 s. 7)

(4) Despite anything in the governing rules of the scheme, any provision of an
investment management contract relating to the scheme that purports to exempt
the investment manager from liability for negligence or fraud, or to limit
that liability, is void.

(5) An investment management contract may permit the investment manager to
engage an associate of that manager or an associate of the approved trustee as
an agent for the purpose of acquiring or disposing of securities for or in
relation to the scheme, but, if it does so, the contract must provide that no
more than half of the total value of the commissions or other agency rewards
paid for those transactions is to be paid to the associate, or the associate
together with other associates of that manager or associate of the approved
trustee, during a financial  period of the scheme. (L.N. 223 of 2000)