The Asia Region Funds Passport (“Passport”) Joint Committee (“JC”) held its sixth face-to-face meeting in Seoul, Republic of Korea on 8 and 9 May 2019, hosted by the Financial Services Commission of Korea. The meeting was attended by representatives from Australia, Japan, New Zealand (Chair), Republic of Korea (Deputy Chair) and Thailand. The JC was pleased to welcome representatives from the Securities and Futures Bureau of Chinese Taipei, the Securities and Futures Commission of Hong Kong and the Monetary Authority of Singapore who attended the meeting in an observer capacity.
The Passport is intended to provide significant benefits to investors through more fund choice, while maintaining effective legal and regulatory arrangements for investor protection. It is also intended to strengthen the capacity, depth, expertise and international competitiveness of financial markets and the funds industry in the region.
Progress of Passport
The Passport commenced on 1 February 2019 with Japan, Thailand and Australia able to receive and process registration applications from local prospective Passport funds and entry applications from foreign Passport funds from this date. New Zealand has consulted on draft regulations required to implement the rules into New Zealand law. It anticipates that it will complete preparations for implementation and be ready to receive registration applications under the ARFP by the end of July 2019. The Republic of Korea continues to make progress with the legal and regulatory requirements for implementation required in its jurisdiction. It has fully drafted sub-regulations and awaits the passage of the Passport Bill at the National Assembly.
Now that the Passport is in operation, the JC encourages industry to collaborate and engage across the region on operational and practical aspects of offering Passport funds. Each JC member will work with their local industry to facilitate this.
A new initiative established by the JC in 2019 has been to hold a dedicated observer discussion session on Day 2 of the JC meeting. The purpose of this session is to provide an opportunity for dialogue between the JC and potential new members about the opportunities and practical considerations associated with joining the Passport.
The JC discussed the future direction of the Passport including possible ways to extend the Passport across the region, drive uptake and interoperability with other passport arrangements.
Industry outreach
The JC discussed strategies to continue to closely engage with industry throughout the region to ensure that the Passport would meet industry needs.
The JC welcomed the Industry Day event arranged by the Korea Financial Investment Association that is to be held on 10 May 2019 in Seoul. Over 200 stakeholders are expected from around the Region. The Vice-Chairman of the Financial Services Commission of Korea, Kim Yong Beom, will open the event. Attendees will hear from JC members and industry about opportunities and challenges including on the vision and values of ARFP for globalization of the asset management industry, fund taxation in the five ARFP countries, and the opportunities for service providers.
Next Meeting
The next face-to-face meeting of the JC is planned to take place in Singapore in October 2019.
Background
The Passport will enable cross-border offerings of managed funds to retail investors while maintaining appropriate investor protections. It was established through the APEC Finance Ministers’ Process.
In June 2016, Australia, Japan, the Republic of Korea, New Zealand and Thailand entered into a memorandum of co-operation (“MoC”). The JC was established under the MoC to oversee the effective implementation and operation of the Passport.
9 May 2019