Korea, Australia, New Zealand, and Singapore have agreed to open a fund market.
On September 16, the Financial Services Commission (FSC) announced that the four finance ministers will sign an declaration of intent for a discussion of introduction of an Asian Passport allowing international cross selling at the Asia-Pacific Economic Cooperation (APEC) finance ministers meeting to be held on September 20.
Through this declaration, details on how to allow cross selling of funds in the four nations will be discussed. From Korea, the Deputy Prime Minister and Minister of Strategy and Finance Hyun Oh-seok will attend.
A fund passport is a policy to provide a common criteria for permissions, registrations, and sales for cross selling funds among participating countries. Europe has been participating since 1985, and Australia started in 2010 as the first from Asia. 13 more countries are reviewing participation.
However, the declaration of intent has no binding effects, and the final participation decisions will be made in 2014, after reviewing the domestic asset management business capacities and other factors.
The FSC will continue to discuss details on the common criteria on passport funds, registration procedures, and management to apply to passport countries until 2014. It will also encourage participation from nations such as Taiwan, Malaysia, and Indonesia, to where Korean companies are trying to expand business.
A FSC representative said, “The market will be broadened in the long run by providing a wider range of fund investment selections to investors, and allowing asset management companies to sell funds internationally,” and added, “This will help enforce the competition of domestic asset management companies by rushing the globalization.”