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MPF intermediaries
MPFMPF Intermediaries ExaminationIIQE MPF · Topic 4
MPF exam chapter 4 (5% of the paper): how a trust works, a trustee's fiduciary duties and the recourse against a trustee, the three categories of MPF trustee and their approval requirements, the MPFA's ongoing monitoring, and the Compliance Standards and Governance Principles.
6 min read5 sections
Checked against the MPF Study Notes, Tenth Edition (June 2026; for exams from 1 Oct 2026), chapter 4, and the MPFA's How is MPF Protected page (last reviewed 16 Jul 2026). Reviewed 6 Nov 2026.. Independent prep, not endorsed by the MPFA or any examination provider.
Chapter 4 is 5% of the paper, about four questions, and they reward precise wording: registered versus beneficial owner, restoration versus accountability.
A trust puts property in the name of a trustee, who holds it for the benefit of others, the beneficiaries. The trustee is the registered owner but not the beneficial owner, so it cannot give the property away or benefit from it except as the trust allows. A trust is normally created by a trust deed, which sets out the duties, powers and rights of everyone involved. A trustee may be an individual or a company, and a trust may have more than one trustee.
A trustee's fiduciary duties include:
| Recourse | What it means |
|---|---|
| Restoration | A trustee whose breach of trust causes a loss must restore the property, or pay compensation, at its own cost. It may not use scheme assets to cover its own mistake |
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A corporate trustee needs paid-up share capital and net assets of at least $150 million each to be approved by the MPFA (MPF Study Notes, Tenth Edition, 4.4).
Only for an employer sponsored scheme, with at least two individual trustees, each ordinarily resident in Hong Kong and providing a performance guarantee of 10% of the scheme's net asset value, capped at $10 million. Master trust and industry schemes must have corporate trustees.
Scheme assets are held in trust and kept separate from the trustee's own assets, so its creditors cannot reach them. Trustees also carry professional indemnity insurance, and the MPFA's compensation fund covers losses from misfeasance or illegal conduct as a last resort.
| Accountability |
| Any profit the trustee makes from trust property must be handed over to the beneficiaries |
The trust structure is itself a protection: if the trustee, a service provider or the employer runs into financial trouble, its creditors cannot reach the scheme assets.
Trap: being the registered owner does not make the trustee the owner in substance. A question saying the trustee may keep investment profits is wrong.
Takeaway: trustee = legal owner, member = beneficial owner. Breach means restore at the trustee's own cost; profits belong to members.
| Category | Key approval requirements | Which schemes |
|---|---|---|
| Local or re-domiciled corporate trustee | Paid-up share capital and net assets of at least $150 million each; suitable directors and chief executive; capability to run MPF schemes with proper internal controls; sufficient presence and control in Hong Kong | Any scheme type |
| Offshore corporate trustee | The corporate requirements plus extra ones, such as supervision by an offshore authority acceptable to the MPFA and trust and company laws comparable to Hong Kong's | Any scheme type |
| Individual trustee | Ordinarily resident in Hong Kong, of good reputation and character; a performance guarantee (insurance policy or bank guarantee) of 10% of scheme net asset value, up to $10 million; at least two individual trustees | Employer sponsored schemes only |
Suitability means the directors and chief executive are of good reputation and character. The chief executive and a majority of the directors, including an independent director, must have enough skill, knowledge and expertise in administering provident fund schemes.
The MPFA's public guidance adds that all currently approved trustees are incorporated in Hong Kong (MPFA, How is MPF Protected, last reviewed 16 Jul 2026).
Trap: an individual cannot be the trustee of a master trust or industry scheme. Individuals are limited to employer sponsored schemes, and there must be at least two.
Takeaway: $150 million paid-up capital and $150 million net assets for corporate trustees. Individuals: employer sponsored only, two or more, 10% guarantee capped at $10 million.