An APEC initiative to make it easier for financial services professionals to market investment products such as mutual funds to retail customers in other Asia-Pacific economies, and boost job creation in the region, is on-track for a launch in 2016.
Finance officials and regulators from the six APEC member economies leading the development of the Asia Region Fund Passport just concluded a week of meetings in Singapore to iron out the details. They include Australia, Korea, New Zealand, the Philippines, Singapore and Thailand—its pilot participants at present.
The initiative aims to cut down on incompatible or overlapping regulation that may hinder the marketing of managed funds between participating economies.
Once the passport is fully up and running, it could save the region’s investors USD20 billion annually in fund management costs, offer higher investment returns at the same or lower degree of risk, and encourage the establishment of locally domiciled funds which could create 170,000 jobs in APEC economies within five years, according the APEC Policy Support Unit.
“We are working to finalize the rules and governing arrangements of the Asia Region Funds Passport for participating APEC members to sign on to by the end of 2015 and to begin piloting the scheme next year,” said Manuel Gaite, Commissioner of the Philippines Securities and Exchange Commission.
Officials and regulators from participating APEC members discussed feedback submitted during a second round public consultation period from the end of February to mid-April as well as possible amendments to a draft multilateral memorandum of understanding that outlines the rules and arrangements of the initiative.
Those from six other APEC members – Hong Kong, China; Indonesia; Japan; Malaysia; Chinese Taipei; and Viet Nam – joined parallel discussions on the passport’s rules and arrangements, and were provided an opportunity to raise regulatory issues of concern.
“Before the pilot is launched, participating APEC members will need to facilitate necessary legislative changes and policy settings that will allow funds to be ‘passported’ through their economies,” Commissioner Gaite explained.
Australia, which helped to originate the passport, along with Korea, New Zealand and Singapore, provided targeted policy and technical training to help economies join and implement it. The training was conducted in partnership with Malaysia.
“Targeted capacity building has been a central component of this initiative from the outset,” said Leslie Williams, Director of Reform, Security and Economic and Technical Cooperation, APEC Branch for Australia’s Department of Foreign Affairs and Trade. “Our strategy is to ensure that those APEC economies that are not ready to join the passport in 2016 are given the opportunity to develop their capacity in order to meet the passport regulatory and membership requirements in the future.”
Participating APEC members will provide an update on the initiative’s progress when APEC Finance Ministers meet on 10-11 September 2015 in Cebu, the Philippines.
# # #
Additional information on the Asia Region Funds Passport can be found here.
Asia Region Funds Passport: A Study of Potential Economic Benefits and Costs can be downloaded at this link.
Read more about finance initiatives being taken forward by APEC member economies here.
For further details, or to arrange possible media interviews with APEC officials, please contact:
David Hendrickson +65 9137 3886 at email@example.com
Michael Chapnick +65 9647 4847 at firstname.lastname@example.org
More on APEC meetings, events, projects and publications can be found on www.apec.org. You can also follow APEC on Twitter and join us on Facebook and LinkedIn.