Fund managers welcomed the entry of Japan into the Asia Region Funds Passport (ARFP) scheme as a breakthrough that will boost the development of the region’s answer to the European UCITS scheme.

 

“This development is a significant advance that holds great promise for investors and capital markets across the Asia-Pacific region. Japan’s intention to join the group of Asia-Pacific financial markets allowing regulated funds to be “passported” between them will further support the integration of financial markets across the Asia-Pacific region, broaden the base of investors that can take advantage of the investment opportunities offered by the ARFP, and support the efforts by operators of regulated funds to achieve greater regional scale and efficiencies,” says Qiumei Yang, CEO of Asia-Pacific for ICI Global.

 

Six Asia Pacific Economic Cooperation (APEC) economies have signed a Statement of Understanding (SOU) on the Asia Regional Funds Passport (ARFP) on Friday, September 11 following meetings between senior representatives held in Cebu, Philippines.

 

Australia, South Korea, New Zealand, Thailand, Japan, and the Philippines signed the SOU on the ARFP which, once implemented, will pave the way for a multilateral arrangement that will facilitate the cross-border marketing of managed funds among participating economies.

 

Philippines Finance Secretary Cesar V. Purisima, host of this year's Asia-Pacific Economic Cooperation (APEC) Finance Ministers' Process said that "closer financial integration is a key pillar of our agenda here in Cebu."

 

"We are optimistic that regional cooperation in building better financial linkages can smoothen our path to shared prosperity. With 40% of the region's Micro, Small, and Medium Enterprises (MSMEs) underserved, we expect easier cross-border flows of funds to accelerate trade and investment in the region," Purisima says.

 

The signatories are: Senator Mathias Cormann, Minister of Finance, Australia; Isshu Sugawara, State Minister of Finance, Japan; Bang Moonkyu, Vice Minister of Strategy and Finance, Korea; James Beard, Manager for International Financial markets and Tax Strategy, Treasury of New Zealand; Apisak Tantivorawong, Minister of Finance, Thailand; Cesar Purisima, Minister of Finance, Philippines.

 

The ARFP is one of three cross border or fund passporting schemes that are currently being developed in the region. The other is the Asean’s (Association of Southeast Asian Nations) Collective Investment Schemes (CIS), the cross-border fund passporting framework that includes Singapore, Malaysia and Thailand. In addition, Hong Kong and China are also developing a mutual recognition scheme that will allow funds of from both jurisdictions to be marketed in each other.