Hong Kong Regulations

MANDATORY PROVIDENT FUND SCHEMES (GENERAL) REGULATION - SECT 74

Approved trustee to review service providers' reports

Division 2-

Provisions applicable to service providers generally

(1) The approved trustee of a registered scheme must require each service
provider appointed or engaged by the trustee to submit to the trustee such
reports as will enable the trustee to perform the trustee's duties under the
Ordinance.

(2) The reports that the trustee must require include (but are not limited
to)-

   (a)  a report of any material event ; and

   (b)  an annual report that complies with subsection (5).

(3) An event is a material event for the purposes of subsection

(2)(a) if it involves-

   (a)  a material change, or a proposal for a material change, relating to
        the eligibility of the service provider; or

   (b)  a material breach of the obligations of the service provider.

(4) The trustee must require a service provider to submit a report of a
material event-

   (a)  as soon as practicable after the event occurs; or

   (b)  if it involves a proposal for a material change relating to the
        eligibility of the service provider, as soon as practicable after the
        service provider becomes aware of the event.

(5) An annual report complies with this subsection if it-

   (a)  contains a copy of the audited profit and loss account and of the
        balance sheet for the financial year of the service provider that ends
        on or before the relevant financial period of the scheme, together
        with a copy of the auditor's report on those documents and the
        directors' report for that year; and

   (b)  is accompanied by a report by the auditor of the service provider
        stating whether or not, in the auditor's normal course of duties, the
        auditor had become aware of-

        (i)    any failure of the service provider to comply with the service
               provider's obligations under the contract of appointment or
               engagement entered into between the trustee and the service
               provider; and

        (ii)   any false declaration made by the service provider to the
               trustee or any other person, and if so, give particulars of the
               failure or false declaration.

(6) The trustee must require a service provider to submit an annual report at
least 2 months before the deadline after each financial period relating to
the scheme.

(7) The trustee must carefully review the reports submitted to the trustee by
the service provider.

(8) If the trustee doubts the truth or accuracy of a report submitted by a
service provider in accordance with a requirement made under this section, the
trustee must make such inquiries as may be necessary to ascertain whether or
not the service provider has properly performed the obligations that it owes
to the trustee.

(9) If, after inquiry, the trustee is not satisfied that the service provider
has performed the obligations owed to the trustee, the trustee must either-

   (a)  terminate the appointment or engagement of the service provider; or

   (b)  take such steps as are necessary to ensure that the failure of the
        service provider to perform those obligations is rectified (in so far
        as it can be rectified) and, as far as practicable, does not recur.