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Ada Pertanyaan? Hubungi Kami Robert Sidauruk
Thomson Reuters ASEAN Regulatory Summit
Due to the fact that they constitute an emerging global market, ASEAN member states are being urged to open up investment opportunities across the region by facilitating the movement of funds between members. One idea that hopes to achieve this objective is for ASEAN members to participate in the creation of an Asia Region Funds Passport (ARFP), a scheme which is expected to get underway in early 2016.
Ministers representing Australia, New Zealand and the Republic of Korea signed a Statement of Intent as regards the implementation of the ARFP on 20 September 2013 at the APEC Finance Ministers meeting which was held in Nusa Dua in Bali.
Through the ARFP, each ASEAN member state will be able to allow fund managers operating within their countries to also offer funds in other member countries via a streamlined authorization process. In the long term, the ARFP will also allow member states to facilitate the marketing in Europe of funds from the Asia region via an Asian/European mutual-recognition agreement.
Director and Head of Market Advocacy for Deutsche Bank, Boon-Hiong Chan, has defined the ARFP as a network-based agreement. Chan therefore believes that the more countries that join the program, the more this will create a vibrant marketplace in which a greater number of choices can be generated. Furthermore, Chan believes that ASEAN’s growing markets and middle-class will prove capable of creating a strong business climate if the ARFP is ultimately implemented.
“The increasing purchasing power and behavior of the middle classes across the region is crucial for boosting the market,” stated Mr. Chan during the Thomson Reuters ASEAN Regulatory Summit, which was held in Singapore on Tuesday, 24 November 2015.
However, while the ARFP has yet to be officially implemented, some scepticism regarding the initiative has been expressed by various analysts. According to Chris Leahy, Co-Founder of the Blackpeak Group, a Singapore-based strategic-advisory firm, the ARFP is an interesting initiative but will not ultimately change much as regards the current state of affairs.
Mr. Leahy believes that the different currencies used across the region, as well as the different tax structures and regulatory systems that exist in the ASEAN member states, will end up hampering the implementation of the ARFP.
“A lack of clarity as regards tax structures and treaties on withholding tax, as well as a lack of common currency, will surely hinder the implementation of the ARFP,” asserted Mr. Leahy.
Another problem regarding the implementation of the ARFP concerns the size of the ASEAN market itself. Mr. Leahy thinks that at the present moment, the ASEAN region is not really large enough for such a fund-movement scheme. Several markets within the ASEAN region are showing positive progress, Indonesia for example, where the economy is growing. Ultimately however, the development of capital markets, both in Indonesia and in other ASEAN countries, remains slow and capital flows are not yet significant.
“Although the middle class is expanding across several ASEAN countries, the savings, products, industry, and domestic funds are not yet there,” added Mr. Leahy.
Despite his scepticism as regards on the implementation of the ARFP though, Mr. Leahy believes that there will soon be changes to the current product and service distribution platform, regulatory framework, and the ways in which ASEAN members states structure their funds. However, such changes will have to be made through a Mutual Recognition Agreement (MRA), and not through the mechanism of the ARFP.
According to the Asia-Pacific Economic Cooperation (APEC) Policy Support Unit, implementing the ARFP initiative could end up saving Asian investors some USD 20 billion per annum in fund-management costs.
Furthermore, the initiative will potentially create 170,000 jobs throughout Asia and promote sustainable economic development. Within the last couple of months however, Singapore has elected not to sign the ARFP Statement of Understanding, due to the taxation terms laid out therein.
(sp)
Robert Sidauruk
Thomson Reuters ASEAN Regulatory Summit
Due to the fact that they constitute an emerging global market, ASEAN member states are being urged to open up investment opportunities across the region by facilitating the movement of funds between members. One idea that hopes to achieve this objective is for ASEAN members to participate in the creation of an Asia Region Funds Passport (ARFP), a scheme which is expected to get underway in early 2016.
Ministers representing Australia, New Zealand and the Republic of Korea signed a Statement of Intent as regards the implementation of the ARFP on 20 September 2013 at the APEC Finance Ministers meeting which was held in Nusa Dua in Bali.
Through the ARFP, each ASEAN member state will be able to allow fund managers operating within their countries to also offer funds in other member countries via a streamlined authorization process. In the long term, the ARFP will also allow member states to facilitate the marketing in Europe of funds from the Asia region via an Asian/European mutual-recognition agreement.
Director and Head of Market Advocacy for Deutsche Bank, Boon-Hiong Chan, has defined the ARFP as a network-based agreement. Chan therefore believes that the more countries that join the program, the more this will create a vibrant marketplace in which a greater number of choices can be generated. Furthermore, Chan believes that ASEAN’s growing markets and middle-class will prove capable of creating a strong business climate if the ARFP is ultimately implemented.
“The increasing purchasing power and behavior of the middle classes across the region is crucial for boosting the market,” stated Mr. Chan during the Thomson Reuters ASEAN Regulatory Summit, which was held in Singapore on Tuesday, 24 November 2015.
However, while the ARFP has yet to be officially implemented, some scepticism regarding the initiative has been expressed by various analysts. According to Chris Leahy, Co-Founder of the Blackpeak Group, a Singapore-based strategic-advisory firm, the ARFP is an interesting initiative but will not ultimately change much as regards the current state of affairs.
Mr. Leahy believes that the different currencies used across the region, as well as the different tax structures and regulatory systems that exist in the ASEAN member states, will end up hampering the implementation of the ARFP.
“A lack of clarity as regards tax structures and treaties on withholding tax, as well as a lack of common currency, will surely hinder the implementation of the ARFP,” asserted Mr. Leahy.
Another problem regarding the implementation of the ARFP concerns the size of the ASEAN market itself. Mr. Leahy thinks that at the present moment, the ASEAN region is not really large enough for such a fund-movement scheme. Several markets within the ASEAN region are showing positive progress, Indonesia for example, where the economy is growing. Ultimately however, the development of capital markets, both in Indonesia and in other ASEAN countries, remains slow and capital flows are not yet significant.
“Although the middle class is expanding across several ASEAN countries, the savings, products, industry, and domestic funds are not yet there,” added Mr. Leahy.
Despite his scepticism as regards on the implementation of the ARFP though, Mr. Leahy believes that there will soon be changes to the current product and service distribution platform, regulatory framework, and the ways in which ASEAN members states structure their funds. However, such changes will have to be made through a Mutual Recognition Agreement (MRA), and not through the mechanism of the ARFP.
According to the Asia-Pacific Economic Cooperation (APEC) Policy Support Unit, implementing the ARFP initiative could end up saving Asian investors some USD 20 billion per annum in fund-management costs.
Furthermore, the initiative will potentially create 170,000 jobs throughout Asia and promote sustainable economic development. Within the last couple of months however, Singapore has elected not to sign the ARFP Statement of Understanding, due to the taxation terms laid out therein.
(sp)