The Government today welcomed the approval of an amendment regulation that aims to facilitate Mandatory Provident Fund (MPF) investment in debt securities issued by the Central People’s Government (CPG) and Mainland policy banks.

Under the amended MPF Schemes (General) Regulation, the CPG and its central bank, the People’s Bank of China, as well as the Agricultural Development Bank of China, the China Development Bank and The Export-Import Bank of China would become an exempt authority.

An MPF constituent fund could invest up to 30% of its total funds in debt securities of the same issue issued or unconditionally guaranteed by an exempt authority.

Separately, all of the funds of the MPF constituent fund could also be invested in debt securities comprising at least six different issues issued or unconditionally guaranteed by the same exempt authority.

Welcoming the Legislative Council’s approval, Secretary for Financial Services & the Treasury Christopher Hui said the amendment regulation was made in response to demands from both MPF scheme members and the industry.

He pointed out that Mainland government debt securities present great investment potential and have the benefit of risk diversification, and the facilitation measure provides MPF scheme members with more diversified investment options and enables them to leverage the opportunities brought by the Mainland bond market development.

Noting that the Mainland bond market is now the largest in Asia and the second-largest in the world, Mr Hui said the facilitation measure also helps promote mutual access between the Mainland and Hong Kong financial markets.

It further strengthens Hong Kong’s status as a global offshore renminbi business hub, and supports the city’s integration into the country’s overall development, he added.

The Mandatory Provident Fund Schemes (General) (Amendment) Regulation 2022 will take effect upon gazettal on June 2.