Neither the Philippines nor Thailand have lost interest in joining the Asia Region Funds Passport scheme, despite their surprise failure last week to sign the memorandum of cooperation.

The participation of the Philippines has merely been stalled by an eligibility requirement in the ARFP memorandum, while Thailand’s signing has been delayed by internal processes, regulators from both countries said on Tuesday.

Australia, Korea, Japan, and New Zealand have so far signed the 146-page memorandum, which is due to come into effect on June 30 to facilitate the sale of cross-border funds between participating markets, as reported previously by AsianInvestor.

Pariya Techamuanvivit, director of corporate affairs at Securities and Exchange Commission Thailand, told AsianInvestor: “We have been actively engaging with the working group of the ARFP from the beginning. We are ready to participate.”

The SEC is just waiting for the Thai cabinet to give the approval, he said, adding that there are no issues holding Thailand back from participating and that it still hopes to sign the memorandum by June 30.

The Philippines, meanwhile, has a bigger issue to deal with. Its eligibility into ARFP hinges on becoming a full member of the International Organisation of Securities Commissions (IOSCO), an international body that promotes the adherence to internationally recognised standards for securities regulation.

Speaking to AsianInvestor, Ephyro Luis Amatong, commissioner at the Philippines Securities and Exchange Commission, said the Philippines’s application for IOSCO membership has been filed.

“But clarifications are needed regarding our ability to share bank deposit information. That has been the stumbling block,” Amatong said.

Under IOSCO rules full membership requires the signing of the multilateral memorandum of understanding concerning consultation and cooperation and the exchange of information. This allows signatories to provide information and assistance when authorities are in the process of investigating offences such as any related to insider dealing and market manipulation.

IOSCO members can provide information including records that identify the beneficial owner and controller of an account, among others.

The Philippines, however, has a bank secrecy law, prohibiting the disclosure of, or inquiry into, deposits with any banking institution.

Amatong said the Philippines has an existing mechanism that allows regulators to share bank deposit information but this has to course through the Anti-Money Laundering Council, which is led by the governor of the central bank, commissioner of the Insurance Commission, and chairman of the SEC.

IOSCO is reviewing if this mechanism is enough to qualify the Philippines to become a full member. If not, the bank secrecy law will have to be amended through legislation, which will likely not happen until after the Philippine presidential and legislative elections on May 9, noted Amatong.

The Philippine central bank and the country's Bureau of Internal Revenue have been pushing for the bank secrecy laws to be lifted as local authorities investigate $81-million bank heist laundered through the country’s casinos and banking system

This story has been updated to reflect the fact the Thai cabinet must approve the memorandum of cooperation.