FTSE alters MPF index series following market consultation

25 March 2014   Category: News, Asia, Hong Kong   By Asia Asset Management

FTSE Group announced enhancements to the FTSE MPF Index Series on March 24, which resulted from the market consultation it held in 2013. The consultation has been held every three years since 2001 and is completed in collaboration with Hong Kong Investment Fund Association (HKIFA), Towers Watson, and a working group including MPF fund managers, asset owners, and industry organisations.

In response to the market feedback from the consultation, the capping percentage threshold has been set at 9% using prices adjusted for corporate actions as at the close of business on the second Friday each month. The capping frequency has also changed from daily to monthly. In addition, a new monthly valuation report will provide the Hong Kong investment community with detailed analysis to support the community in making informed investment decisions. 

FTSE also plans to expand the range of benchmarks and launch a FTSE MPF Offshore RMB Bond Index Series based on the FTSE-BOCHK Offshore RMB Bond Index in 2014. The indices will reflect regulatory requirements and investment restrictions applied to MPF investment in debt securities.

Jessie Pak, managing director, Asia, FTSE Group, said: “Benchmarks used in the MPF scheme are important to members, providing an objective basis of evaluation. Since 2001, FTSE has worked closely with market practitioners to incorporate specific MPF requirements and ensure the FTSE MPF Index Series remains the most representative and relevant series of benchmarks for the MPF scheme.”

FTSE launched the FTSE MPF Hong Kong Index Series in 2001, when it was selected by Towers Watson and the HKIFA to create a range of country and regional benchmarks hedged into Hong Kong dollars, for the local investment community.