Finance officials and regulators from the six Asia Pacific Economic Cooperation (APEC) members who are leading the development of the Asia Region Fund Passport have just concluded a week of meetings in Singapore to iron out the details of the proposal. The six countries are Australia, Korea, New Zealand, the Philippines, Singapore and Thailand.
“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.
The initiative aims to cut down on incompatible or overlapping regulation that may hinder the marketing of managed funds between participating economies.
The APEC policy support unit has estimated that once the passport is fully up and running, it could save the region’s investors $20bn 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.
Australia, which helped to originate the passport initiative, 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.
"The initiative aims to cut down on incompatible or overlapping regulation."
“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,” said Gaite.
Six other APEC members – Hong Kong, China; Indonesia; Japan; Malaysia; Chinese Taipei; and Vietnam – are also closely following the discussions on the passport’s rules and arrangements.
“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,” said Leslie Williams, director of reform, security and economic and technical cooperation, APEC Branch at Australia’s Department of Foreign Affairs and Trade.
The participating APEC members plan to meet again on the sidelines of the APEC Finance Ministers meeting in September 2015 in Cebu, the Philippines to give an update on the progress of the initiative.