Under local regulations, managers of the city’s HK$1.3 trillion ($210 billion) Mandatory Provident Fund system can only invest more than 10% of their funds in Treasuries if the US has a AAA or equivalent rating from an approved agency.
Hong Kong’s pension fund managers have formed a preliminary plan to sell down their Treasury holdings within as soon as three months if the US loses its last recognized top credit rating, according to people familiar with the matter.
Industry groups including the Hong Kong Investment Funds Association and the Hong Kong Trustees’ Association discussed the proposal with the pensions regulator on Wednesday, the people said, asking not to be identified as the meeting was private.
