ICI Global Commends Asia Region Funds Passport, But Suggests Areas For Improvement

The Investment Company Institute (ICI) Global says the Asia Region Funds Passport (ARFP) has the potential to “encourage competition, lower costs and spur fund managers to innovate and find ways to offer superior services and products – all to the benefit of investors.”
By Editorial
The Investment Company Institute (ICI) Global says the Asia Region Funds Passport (ARFP) has the potential to “encourage competition, lower costs and spur fund managers to innovate and find ways to offer superior services and products – all to the benefit of investors.”

The initiative is intended to further deepen and develop financial markets in six Asia-Pacific countries: Australia, Korea, New Zealand, Singapore, Thailand, and the Philippines.

However, ICI has included recommendations for improving operational, implementation and tax issues in its comment letter. Proposals included reducing the number of different investment restrictions and investor disclosure requirements in order to facilitate common approaches to investment across regions; the formation of a ‘college or group of representatives from member economies’ to monitor passport developments and help resolve differences in implementation; and equal tax treatment for funds across Asia-Pacific Economic Cooperation (APEC) jurisdictions, regardless of any existing home country tax advantages to support competition among firms and choice among investors.

“To be globally competitive and successful, fund firms are increasingly centralizing management resources and research systems, and the “passport concept” of allowing a single fund structure to be offered efficiently across all six economies will benefit both fund sponsors and fund investors. The changes we recommend will help make the passport more economically and operationally feasible,” comments Qiumei Yang, CEO, ICI Global Asia-Pacific. “This is a highly valuable initiative for the region and we applaud APEC’s efforts on the consultation,” he added. “We believe this framework could help achieve the passport objectives including supporting deeper financial markets and industry growth to the benefit of investors.”

The Asia-Pacific region has experienced over 450% growth in total fund assets over the last two decades and the passport initiative’s new framework is expected to facilitate the continuation of such growth towards a stronger and larger regional industry overall. Yang submitted ICI Global’s comments to finance ministers in the six ARFP countries.

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