Global fund manager Fidelity Investments and the Hong Kong Retirement Scheme Association have both strongly opposed any tightening of the Mandatory Provident Fund's (MPF) investment guidelines. Provisional legislators will today resume their discussions over the scheme's subsidiary legislation, which covers specific investment regulations. Many legislators have demanded the Government impose additional restrictions on the MPF. The proposals include increasing the percentage of Hong Kong dollar assets from 30 per cent to 50 per cent and capping equities investments to 50 per cent of the fund. Fidelity Investments (HK) managing director Brett Goodin said the proposals were unacceptable. 'The MPF is not a very profitable business. Further tightening the investment restrictions will drive away many service providers,' he said. 'The MPF should allow employees to choose the investment option they prefer. It is dangerous for the Government or legislators to impose too many restrictions as it limits employees' choice.' He said when the MPF begins operation next year, up to 50 per cent of employees will choose capital preservation products which invest only in low-risk schemes. 'Many employees have no investment experience and will choose the guaranteed-return products first. They will turn to higher-return products later when they discover guaranteed products cannot match inflation,' he said. 'In the United States, 32 per cent of employees chose guaranteed products in 1989 compared with 22 per cent in 1995, while those opting for equities investments rose from 9 per cent in 1989 to 21 per cent in 1995.' The Hong Kong Retirement Association, which represents over 100 members of retirement schemes trustees and administrators in the SAR, yesterday issued a statement condemning increasing the percentage of Hong Kong dollar assets to more than 30 per cent as well as the 50 per cent cap on equities. Association chairman Peter Wong Hong-yuen said: 'We trust legislators will accept our reasons and will concentrate on the best interests of many working people.' He warned if the additional restrictions were passed by the legislature, the working community would suffer as a result of the 'good but misguided intentions of legislators'. The MPF subsidiary legislations would need to be passed by the legislature before April 1 to ensure the scheme began next year, Mr Wong said.