Hong Kong Regulations

MANDATORY PROVIDENT FUND SCHEMES (GENERAL) REGULATION - SECT 71

Eligibility of delegate of custodian

(Past version on 19/07/2002).
(Past version on 15/02/2002).
(Past version on 01/12/2000).

(1) A person is not eligible to be a delegate of a custodian of scheme assets
unless the person- (2 of 2002 s. 21)

   (a)  would be eligible to be a custodian of scheme assets;

   (b)  is an approved overseas bank or approved overseas trust company which
        complies with section 68(4); or

   (c)  is an overseas bank or overseas trust company that is a subsidiary or
        related company of an entity described in subsection (1A).

(1 of 2008 s. 53)
(L.N. 223 of 2000)

(1A) The entity referred to in subsection (1)(c) is an approved 
overseas bank, an approved overseas trust company, an authorized financial 
institution or a registered trust company incorporated in Hong Kong, that-

   (a)  has a paid up capital of not less than US$200000000 or an equivalent
        amount in another currency; and

   (b)  satisfies a minimum credit rating set by the Authority based on a
        credit rating determined by an approved credit rating agency. (1 of
        2008 s. 53)

(2) The approved trustee of a registered scheme must ensure that-

   (a)  if the custodian of scheme assets is appointed under section  50 (1),
        the contract for the appointment prohibits the custodian from
        delegating the custodian's function as a custodian to a person who is
        not eligible under subsection (1) to be a delegate of the custodian;

   (b)  if the trustee is the custodian of the scheme assets in accordance
        with section 50(2), the trustee does not delegate the trustee's
        function as a custodian to a person who is not eligible under
        subsection

(1) to be a delegate of the custodian. (2 of 2002 s. 21)

(3) The approved trustee of a registered scheme who, without reasonable
excuse, fails to comply with a requirement imposed on the trustee by
subsection (2) commits an offence and is liable on conviction to a fine at
level 5. (2 of 2002 s. 21)

(4) For the purposes of subsection (1)(c), a company is a related company of
another company if both are subsidiaries of a third company.

(1 of 2008 s. 53)