Sources say Hong Kong’s Mandatory Provident Fund (MPF) system will be permitted
to invest in more gold ETFs as part of the Hong Kong government’s plan to build
a regional gold trading centre. The MPFA is expected to amend gold ETF
investment rules later this week. MPFA-regulated MPF assets were about HKD1.53
tln (USD195bn) at end-March. Currently the MPFA approves gold ETFs on a
case-by-case basis; the proposed change would make ETFs that meet prescribed
standards automatically eligible, removing the need for individual approvals.
The move is intended to expand choices for roughly 4.8 million MPF members. Risk
controls would remain: gold ETFs would be barred from using derivative leverage
and the MPF allocation cap to gold ETFs would stay at 10%.
