According to the Zhitong Finance APP, the Hong Kong Mandatory Provident Fund (MPF) Authority updated its guidelines today (July 7) to optimize the approval process for gold exchange-traded funds (gold ETFs), changing from individual approvals to category approvals, effective immediately, to facilitate more gold ETFs joining the market as investment options for MPF funds.

A spokesperson for the MPF Authority stated that the authority continues to review and expand the asset classes available for investment by MPF funds, providing the MPF industry with more diversified investment tools to enhance risk diversification and improve return potential for MPF plan members. The authorities understand that gold ETFs offer a low-cost, high-liquidity, and transparent way to invest in gold. Under the current MPF regulatory framework, two gold ETFs have already been individually approved by the MPF Authority as permitted investment projects for MPF funds, allowing MPF funds to invest in the gold market through gold ETFs.

The spokesperson further indicated that after optimization, a gold ETF only needs to meet the criteria set by the MPF Authority, including being recognized by the Hong Kong Securities and Futures Commission and listed on the Hong Kong Stock Exchange, being a physical gold ETF, and not being classified as a derivative product fund, to become a permitted investment project for MPF funds, without the need for individual approval from the MPF Authority. The limit on MPF funds investing in gold ETFs will remain at no more than 10% of the fund's net asset value, with the relevant investment regulations aimed at effectively controlling investment risks and ensuring the interests of plan members are properly protected.

The MPF Authority also stated that it welcomes the Hong Kong government’s plan to submit a bill to the Legislative Council in the fourth quarter of this year to amend the MPF legislation, which includes proposals to relax the simultaneous investment of MPF funds in components approved by the MPF Authority (i.e., approved pooled investment funds and index-tracking collective investment schemes) and individually permitted investment projects (such as gold ETFs, real estate investment trusts, etc.). Once implemented, this will help enhance the flexibility of fund investments and facilitate the industry in making good use of permitted investment asset classes, including gold ETFs, to diversify risks and improve fund return potential. The MPF Authority will fully cooperate with the relevant work of the Hong Kong government