Australia, Japan, Korea and New Zealand today signed the eagerly awaited memorandum of cooperation (MoC) for the Asia Region Funds Passport, which is due to come into effect on June 30.
Any other eligible economy that signs the MoC before then will be an original participant in the passport, which will facilitate cross-border sales of authorised funds between signatory countries. The MoC also ensures that any other eligible Asia-Pacific Economic Cooperation (Apec) economies are able to participate in the passport even after it comes into effect.
Participating economies have up to 18 months from June 30 to implement domestic arrangements, said an Apec statement. Activation of the passport will occur as soon as any two participating economies implement the arrangements under the MoC.
The signing is an outcome of more than six years international negotiation on the passport arrangements, added Apec. “Australia, Japan, Korea, New Zealand, the Philippines, Singapore and Thailand have contributed expertise to developing the framework in the working group,” it noted.
However, the Philippines and Thailand – which both signed a statement of understanding on the scheme on September 11 – are absent from the MoC. No detail was given as to why this was the case.
The Monetary Authority of Singapore has already explained to AsianInvestor why it did not participate in the MoC at the time – for reasons of unequal tax treatment – but has said it is still open to the idea of being involved.
Singapore had been part of the original group of four Asian nations – alongside Australia, New Zealand and South Korea – to sign a statement of intent on ARFP when the scheme was first announced at an Apec meeting in Bali in September 2013, as reported.