Asia Region Funds Passport Proposed

By Editorial 18 April, 2014

Singapore, Australia, South Korea, New Zealand, Philippines and Thailand have released a joint consultation paper on the operation of the Asia Region Funds Passport (ARFP), which, when implemented, will allow fund managers operating in a passport member economy to offer their funds in other passport member economies under a streamlined authorization process.

The ARFP is an initiative conceived through the Asia-Pacific Economic Cooperation. In September 2013, the Finance Ministers of Singapore, Australia, South Korea and New Zealand signed a Statement of Intent to jointly develop the ARFP to facilitate the cross-border offering of collective investment schemes (CIS) in Asia. The Philippines and Thailand have joined the group since that date.

The initiative will offer fund managers operating in a passport economy a direct and efficient route to distribute their CIS in other passport economies. Investors in the region will also benefit from having access to a broader range of quality investment products.

As an inclusive regional initiative, it is hoped that the ARFP will strengthen the region's fund management capability, deepen capital markets, and provide finance for sustainable economic growth. In the longer term, it could also facilitate CIS from the Asian region being marketed in Europe by way of an Asian/European mutual recognition agreement.

The Finance Ministers also endorsed a framework document which set out the high level principles, basic arrangements and indicative timeline that will guide the development of the ARFP. It was decided that a joint public consultation would be conducted in 2014 on the detailed rules and arrangements needed to implement the ARFP.

The consultation paper therefore sets out the proposed substantive rules and arrangements that will apply to participating fund managers and passport CIS. It sets out common standards and expectations amongst regulators from passport member economies on the supervision of passport CIS, including the protection of investor interests, the procedural requirements for passport CIS and the processes relating to their supervision, and the enforcement of the passport arrangements.

The passport will be an arrangement under which a fund manager who operates eligible CIS in a passport member economy will be able to offer interests in those CIS to investors in other passport member economies, subject to the passport arrangements. The passport arrangements are the rules and processes decided on by passport member economies that will govern the operation of the passport.

Following the consultation, economies that decide to participate in the passport will work together towards the launch of the ARFP in 2016. Other countries that have expressed an interest in the project include Hong Kong, Taiwan, Japan, Indonesia, Malaysia and Vietnam.

Interested parties are invited to submit their views and comments, including those on the practical operation of the proposed arrangements, by July 11, 2014

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Tags: Finance | Investment | Business | Capital Markets | Investment Funds | Australia | Philippines | Singapore | Taiwan | Thailand | Enforcement | Hong Kong | Indonesia | Korea, South | Malaysia | New Zealand | Standards | Japan | Vietnam | Expats | Asia-Pacific | Invest |


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