Senator the Hon Mathias Cormann
Minister for Finance
MATHIAS CORMANN: Good afternoon everyone. It is my great pleasure, my very great pleasure, together with my colleagues to announce the signing of the Asia Region Funds Passport Statement of Understanding today, by Australia, Japan, Korea, New Zealand, the Philippines and Thailand.
The Asia Region Funds Passport is a trade liberalisation initiative that either waives or diminishes key behind the border regulatory impediments to the cross-border trade in managed funds or collective investment schemes. It is a multilateral arrangement which will allow any eligible collective investment scheme, registered in its home economy, to be offered in other participating economies without needing to meet different sets of operational and licensing requirements.
The more APEC countries participate in this initiative in the future, the more competitive we will be as a region, vis-a-vis other regions in the world, when it comes to the trade in managed funds and collective investment schemes. This is one of the key tangible outcomes that we are able to progress today out of the Cebu Action Plan, which was endorsed by APEC Ministers only a few moments ago.
While Singapore is unable to sign the Statement of Understanding today, it has been represented at Passport negotiations and intends to participate in the Passport moving forward. The economies involved and represented here today, including Singapore, have demonstrated strong leadership and commitment to our region in developing these Passport arrangements.
It is our firm belief that this initiative will significantly help to boost financial integration across our region and that this initiative will help us improve the depth, liquidity and quality of financial markets in our part of the world.
This joint statement expresses our commitment to join the Asia Region Funds Passport. As signatories, we commit to work together to finalise all outstanding issues necessary to enable the Passport to commence operating. This includes putting in place the multilateral cooperation arrangements that will underpin the Passport. The Statement also invites all eligible APEC economies to consider participating in this Passport when it begins in 2016, or at a time that is appropriate to their particular circumstances.
The Passport has been designed, from the very beginning, to benefit our region’s diverse range of economies. Its arrangements have been developed by the signatory economies in consultation with representatives of a number of other regional economies. This developmental approach makes the Passport uniquely suited to our region. We do hope that in time, other regional economies will see the benefits of the Passport to their investors, their consumers and their economies and elect to participate in it.
Today’s signing demonstrates the value that we place on the Passport. It also represents a pivotal event in the establishment of the Passport. I do hope that it will generate further momentum for this important regional initiative by encouraging more economies to participate. Because wider participation will increase its economic benefit to the region.
Indeed, the Passport will deepen the region’s capital markets, channel savings to much needed investments which strengthen the capacity and competitiveness of our financial sectors and provide investors with greater choice.
We look forward to the time when Passport fund managers need only be licensed in their home economies, with that licence recognised in all other member economies. To the time when Passport funds domiciled in one economy, will be able to be offered in all other participating economies under a streamlined authorisation process, a process that is to be completed within 28 days down from the six to twelve months it can take today. Implementation of the Passport is an important policy development and a key priority for APEC and for all of the governments represented here today.
The Passport provides a world-class regulatory framework and enjoys broad support from countries in our region. We look forward to the Passport becoming the de-facto regional standard.
At its core the Passport means reassuring investors across our region that they can invest abroad while enjoying substantially equivalent standards of performance and protection as they would expect in their home market. It will provide investors with ready access to a more diverse range of investment opportunities offered by fund managers from across our region. In doing so, the Passport will enable investors to better manage their investment portfolio and meet their investment objectives. It is very much a pathway to improving regional financial services integration as is envisaged by the Cebu Action Plan.
The next milestone will be the signing of the Memorandum of Cooperation by our securities regulators by the end of 2015. I encourage all of you and others to have your securities regulators sign the Memorandum of Cooperation. Following that signing, economies will have twelve months in which to implement the Passport arrangements domestically. Participation in the Passport remains open to all eligible economies and we will continue to encourage other regional economies to join and reap the benefits that this important initiative provides.
Finally, I would like to extend my personal thanks to my counterparts here today. It is only through your leadership and vision and the mutual cooperation between our economies that we have been able to reach this decisive and very important point in this process and in the Passport’s development today. I look forward to the Asia Region Funds Passport being up and running and its membership expanding as soon as possible in the future.
Thank you so much to all of you for joining us here today for this very important occasion and thank you so much again to all of my colleagues from the signatory countries today for their leadership and their commitment to this important initiative.