The South Korean government announced on May 19 that the Asia Region Funds Passport (ARFP) would be introduced on May 27 so that cross-border fund trading becomes possible.
The five current members of the ARFP are South Korea, Australia, New Zealand, Japan and Thailand. ARFP funds registered in one of the five countries can be freely sold in the other four countries. Any public fund registered in South Korea can become an ARFP fund if it satisfies all requirements such as equity capital and size. Such funds can be run in the form of short-term financial products, derivatives or securities lending.
Each ARFP fund is subject to no eligibility review on the assumption that it satisfies every registration requirement in accordance with the Financial Investment Services and Capital Markets Act. Foreign ARFP funds are provided by domestic sellers such as banks and securities companies and, as such, exactly the same investor protection measures are applied to domestic and foreign ARFP funds.