The Asia Region Funds Passport ("Passport") Joint Committee ("JC") held its third face-to-face meeting in Bangkok, Thailand, on 3 – 4 October 2017, hosted by the Securities and Exchange Commission of Thailand, and was attended by representatives from Australia (Chair), Thailand (Deputy Chair), Japan, South Korea and New Zealand. The JC was pleased to welcome representatives from the Monetary Authority of Singapore, who attended the meeting in an observer capacity.
Implementation Progress
The participating economies are finalising legal and regulatory requirements in their respective jurisdictions. This has involved considerable work and consultation in each jurisdiction to date. It is expected that this work will be completed in the next few months and that the Passport will commence in the first half of 2018 (when at least two participating economies have formally confirmed implementation has been completed).
The Chair of the JC, Mr Gerard Fitzpatrick of the Australian Securities and Investments Commission, said:
“It is important to recognise the significant benefits that may result from the successful operation of the Passport. Good progress is being made by the member economies in implementing the Passport and in a range of areas that will underpin its operation.”
The JC gave further consideration to an industry pilot to test the practical application of the Passport arrangements in each economy and welcomes industry initiatives in this area.
New member initiatives
The JC considered initiatives to extend the Passport across the region and welcomed the technical consultation workshop for non-participating economies to take place in KL in November. The JC also identified a number of enhancements to the "Memorandum of Cooperation on the Establishment and Implementation of the Asia Region Funds Passport" (MoC) to provide flexibility to meet the future growth and development of the passport. In looking to the future of the passport, the JC recognised the potential for further harmonisation across the different economies’ legal and regulatory regimes.
Passport guidance consultation
The JC considered the responses to its earlier consultation of the host economy laws and regulations and will shortly publish on its website fundspassport.apec.org an update to the guidance and feedback on the submissions. The JC also finalised its approach to the common parts of the Passport application.
Tax working group
The JC welcomed the upcoming meeting of its tax working group to occur in October. The aim of the group is to harmonise to the extent practicable, tax laws affecting the Passport. Its guiding principle is to achieve tax neutrality between home and host country passport funds.
Following the meeting, JC members discussed progress on the Passport with representatives of the funds industry from across Asia at a seminar on the Passport organised by the Stock Exchange of Thailand.
Mr Fitzpatrick said: “The Joint Committee welcomes the ongoing engagement with industry in the development of the Passport and looks forward to seeing funds prepare to offer through the Passport.”
The JC proposes to hold its next face-to-face meeting in Australia in early 2018.
Background
The Passport is intended to provide benefits to investors through broader and more diverse fund offerings, while maintaining effective legal and regulatory arrangement for investor protection. It is also intended to strengthen the capacity, expertise and international competitiveness of financial markets and the funds industry and to grow the pool of funds available in the region.
The JC was established under the MoC to oversee the effective implementation and operation of the Passport which was entered into by Australia, Japan, Korea, New Zealand and Thailand in June 2016.
13 October 2017