Singapore fund managers, with their more extensive regional and global asset management experience, are expected to be the main beneficiaries of the newly-launched Asean fund passport that currently includes Malaysia, Singapore and Thailand.

 

The Monetary Authority of Singapore (MAS), the Securities Commission of Malaysia (SC Malaysia), and the Securities and Exchange Commission, Thailand (SEC Thailand) on August 25 launched the Asean fund passport, also known as the Asean CIS (collective investment scheme) framework to facilitate cross-border offers of CIS to retail investors.

 

Under this scheme, investment managers from Malaysia, Singapore and Thailand with at least US$500 million in assets under management, as well as a minimum of 10 years experience for the CEO and five years experience for the fund manager, can distribute their products to retail investors in each other’s markets.

 

One reason Singapore fund managers may benefit more is that local and global fund managers based in this city have the resources and the international skills to meet the requirements of domestic investors under the scheme when compared to the fund managers in Malaysia and Thailand, whose expertise lie mostly in their domestic markets.

 

“Investors from Thailand, who may be interested in investing cross border under this scheme are not likely to buy funds from a Malaysian fund manager investing in Malaysia and vice-versa. On the other hand, such investors are more likely buy funds from a Singapore-based fund manager who is investing regionally or globally,” says Stewart Aldcroft,  senior advisor, Asian Fund Management Industry, and managing director of Citi Securities & Fund Services.

 

Singapore’s cross border investors, on the other hand, already had access to Thai and Malaysian CIS products even before the launch of the Asean fund passport.

 

“I think it is unlikely that a Singapore investor would be particularly interested in Thai or Malaysian investment funds simply because they already had access to products like that for a long time,” Aldcroft adds.

Singapore fund managers can also benefit from the Asean fund passport as it will allow them to potentially relocate their offices to Malaysia or Thailand if the operational costs in Singapore becomes too high.

 

“I think this is something that has yet to be discussed but can be potentially quite a big change. If you’re in Singapore at the moment, you may be attracted to setting up in Malaysia or Thailand if costs get too high in Singapore because you got the cross border availability for your product,” Aldcroft says.