This year, the APEC-inspired Asia Region Funds Passport will commence and Australian asset managers will have an opportunity to sell their investment funds directly to Asian investors in their home market. Mark Evans highlights the significance of the passport, further establishing Australia as a regional financial services hub.
With regulations now being agreed by the seven Asian countries initially participating, a Memorandum of Cooperation is expected to be signed by Australia in the first half of 2016. Managers can then obtain a 'passport' for their Managed Investment Trusts (MITs) allowing direct sale to Asian retail and institutional investors, once the passport rules have been incorporated into Australian law.
Expanding a domestic funds business by successfully targeting foreign markets can fuel business growth by boosting funds under management, driving economies of scale and improving product innovation. While the benefits of Asian distribution are very attractive, (look at the astonishing success of European funds in Asia over the past 12 years), numerous challenges exist.
In our experience, cross-border fund success is achieved through developing, quickly implementing and efficiently maintaining a multi-dimensional strategy into the long term. Success under the new Asian fund passport will depend on being able to identify and navigate a range of tax, regulatory, product and market related issues both here and in each of the host target markets.
With our considerable experience in cross-border fund distribution, KPMG will be supporting clients through our holistic 'one-stop-shop' fund distribution service covering all the tax, regulatory, audit and strategy issues that clients will need to address to achieve ultimate sales success.
Together with new policy settings that encourage and support the 'exportation' of Australian asset management products, the Asia Funds Passport should be the opportunity to finally establish Australia as a regional financial services hub.