InvestorDaily reported in September last year that Australia, South Korea, New Zealand and Singapore had entered a four-country agreement to pilot the cross-border distribution of funds management products created, administered and distributed within a set region.
Six countries including Australia, Korea, Singapore, New Zealand, Thailand and the Philippines have now joined the Asia Region Funds Passport.
A statement by Secretary to the Treasurer Steven Ciobo said fund managers seeking to market funds across jurisdictions currently face barriers such as different regulatory and legal requirements and the need to be licensed in more than one jurisdiction.
Mr Ciobo said the passport will enable fund managers in passport member economies to export their products to other member economies under a streamlined process.
“This international ‘portability’ of passport funds will avoid the need for fund managers to manufacture and manage funds in each economy,” he said.
“By increasing cross-border trade of funds, the passport will offer more choice for investors, potentially lowers fees, help create a more competitive Asian industry and improve access to capital and improved regulatory standards across the region.”
FSC chief executive John Brogden also supports the passport and believes Australia and Korea “have a lot to gain from mutual cooperation in investment and financial services”.
“The passport has the ability to significantly increase cross-border capital flows and trade within the region,” said Mr Brogden.
He said the Korea-Australia free trade agreement will also be a critical discussion point on the agenda.
Mr Ciobo said the Republic of Korea and Australia have one of the “strongest and most complementary trading relationships in the Asia-Pacific region”.
“This trip will help further the relationship between our financial service’s industry and build support for the Asia Region Funds Passport,” he said.
