Finance Ministers of the Asia-Pacific Economic Cooperation (APEC) economies convened its 20th annual meeting in Nusa Dua, Bali, Indonesia, on 19 and 20 September 2013 under the Chairmanship of Dr. Muhamad Chatib Basri, Indonesia's Finance Minister. The meeting was attended by various delegates, including the President of the Asian Development Bank (ADB), the Managing Director of the World Bank Group, and the Deputy Managing Director of the International Monetary Fund (IMF).
In a statement the delegates said: "We note the progress in the development of Asia Region Funds Passport, including the formation and on-going development of a framework document that sets out its voluntary guiding principles and basic arrangements. We welcomed the signing of the Statement of Intent (SOI) in Nusa Dua, Bali, Indonesia, on 20 September 2013 by some economies that will potentially become members of a pilot group launching the Passport and publicly consult on the detailed rules for its implementation in accordance with the timeline set out in the SOI."
The pilot group includes Australia, New Zealand, Singapore and South Korea who will now set to work to create the Asia Region Funds Passport (ARFP), which it is hoped, will work like an Asian UCITS, allowing a level regulatory playing field and cross border sales for funds across the Asian region. The target is to have the passport up and running by 2016. A key driver for this development is the increasingly close cross border financial relationship in funds between China and Hong Kong, which is expected to be added to by Taiwan, creating a Greater China alliance in funds, which might push fund groups from the rest of the region out.
Reported in Asia Pacific Intelligence's October 2012 edition, Angelyn Lim from Dechert explained Thailandand Singapore were leading the way in establishing a Ucits type fund passport across the Association of Southeast Asian nations (ASEAN).
In an interview with Asia Pacific Intelligence, Lim said that, at that time, Thailand and Singapore had stolen a march on the other countries interested in forming some sort of funds distribution union, and predicted that any such scheme would start as a pilot with other countries joining in.
At the time, Lim explained that certain Asia-Pacific countries have been pushing for a funds passport for some years. "Specifically Australia and New Zealand were very keen to have an Asian Ucits-type passport." One factor limiting the development has been the Australian tax regime which is not conducive to passporting arrangements with offshore funds. "There appears to be government support for a passporting arrangement and a more conducive domestic tax regime but it has not yet translated into practical action" she said.
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.