Asia Region Funds Passport initiative progresses

Commerce Minister Craig Foss today released a consultation paper on the Asia Region Funds Passport initiative, which will open up opportunities for cross-border offerings of managed funds.

The consultation paper is seeking feedback on detailed rules for the regime, such as investment and portfolio allocation restrictions. It has been prepared in conjunction with Australia, Korea, Singapore, Thailand and the Philippines

“The funds passport will allow a managed fund based in New Zealand to be more easily offered to investors in other participating jurisdictions,” says Mr Foss.

“Funds offered under the initiative will have to comply with strict rules, such as being highly diversified and investing in simple financial products. These requirements are designed to promote investor confidence in the regime.

“The funds passport reflects the Government’s commitment under the Business Growth Agenda to improve the performance of New Zealand’s capital markets and help business growth. The recently passed Financial Markets Conduct Act has helped restore investor confidence and the regulatory integrity of our markets,” says Mr Foss.

It will provide New Zealanders and investors in the Asia region with access to a greater range of investment opportunities, deepening the region’s capital markets and supporting the development and competitiveness of the region’s fund management industry. A similar passport initiative in Europe has been highly successful over the last decade.

“We are very excited about this initiative. It will make it simpler to sell New Zealand managed funds in other countries in the region, and it will help to link the growing pool of investors to investment opportunities across our countries,” says Mr Foss.

Copies of the consultation paper and details about how to make a submission can be found on the Ministry of Business, Innovation and Employment website at www.med.govt.nz/business/business-law/current-business-law-work/asia-region-funds-passport.

The closing date for consultation is 11 July 2014.