11 September 2015

Asia Region Funds Passport provides opportunity for Australia’s financial services sector

Cross border issuing of managed investment funds is set to become easier across the Asia region following the signing of the Asia Region Funds Passport Statement of Understanding at the APEC Finance Ministers’ Meeting in Cebu, the Philippines today.

Finance Ministers from Australia, Japan, Korea, New Zealand, the Philippines and Thailand signed the Passport Statement of Understanding in a milestone ceremony. The statement signals the commitment of these economies to join the Passport ahead of its commencement in 2016. Importantly, this is the first time that Japan has committed to progressing the Passport.

The statement also notes the intention of signatories to ensure all other eligible APEC economies are able to participate in the Passport when it begins or at a time appropriate to their circumstances.

The Passport will create a regional market and reduce red tape for managed funds, while providing fund managers with a better opportunity to compete for a larger share of managing Asia’s savings. Further, APEC estimates that the Passport has the potential to create more than 170,000 jobs in the region over the next five years.

The Passport will also provide Australian investors with greater choice of investment products from well-regulated foreign funds.

Members of the Asia Region Funds Passport Working Group (Australia, Japan, Korea, New Zealand, the Philippines, Singapore and Thailand) and the funds management industry are now working on aspects of the region’s tax regimes to ensure the international competitiveness of the Passport.

The next milestone will be the signing of the Memorandum of Cooperation by participating securities regulators by the end of 2015.