The AFRP is an Asia-Pacific Economic Cooperation-led initiative to combine the fund markets of Australia, Japan, Republic of Korea, New Zealand and Thailand. It is designed to enable cross-border offerings of managed funds to retail investors, while maintaining investor protections.
Japan, Thailand and Australia have completed preparations for implementation, while the Republic of Korea and New Zealand are well advanced in the legal and regulatory requirements needed in their respective jurisdictions.
A number of funds have used the pilot process to obtain registration in their home economy, which an ARFP update said “helped improve efficiency and effectiveness in relation to dealing with the applications”.
However, host economy arrangements have not yet been fully tested.
Ahead of the launch, operators will continue to consider how the passport arrangements will apply in each economy and prepare to make applications. Applications from prospective passport funds in their home economies may be made but funds will not be registered before 1 February 2019.
After 1 February, applications can be made by passport funds to host economies to allow cross-border offers.
Regulators may continue to deal with a fund on a pilot-like basis for the period up to and beyond 1 February. Host economy requirements and processes will also continue to be tested over this period “to ensure they are practicable”.