The Government and major fund management groups are split over key investment measures planned for the proposed Mandatory Provident Fund (MPF).
The provisions, which are included in draft legislation being considered by the Government, industry and Legislative Councillors, necessitate the creation of specialist funds for the scheme.
Fund companies say this will lead to duplication, additional administrative costs, and regulatory backlogs as managers seek approval for funds which previously could have been approved by the Securities and Futures Commission (SFC).
A Government spokesman backed the measures saying they created a level playing field and met agreed investment restrictions.
There also is likely to be strong political pressure to preserve the tough investment guidelines.
Under the proposals, SFC authorised unit trusts and mutual funds may be used by MPF schemes only if approved also by the MPF Authority, meaning they will need to be double-checked to ensure they also comply with MPF investment standards and restrictions.
