The Asia Region Funds Passport (ARFP), launched last week by the Financial Markets Authority (FMA), will smooth the path for fund managers from New Zealand, Australia, Japan and Thailand to offer products to investors in each other’s economies.
To qualify, the fund must have US$500m under management and US$1m of equity, and the offering document must be compliant with the laws of the home country.
Applications for registration are now open in each jurisdiction.
ARFP design features
Fund managers must be licensed in their home jurisdiction and comply with New Zealand disclosure requirements, and the home regulator (the FMA in New Zealand) must provide sign-off to confirm compliance with the passport rules. The FMA will also perform a monitoring and enforcement role.
Fund managers must have at least US$500m ‘assets under management’ and US$1m (minimum) capital thresholds.
A number of additional “preconditions” must also be met, including having an application to offer a managed fund product as a “passport fund” granted by the FMA.
The ARFP should expand the investment options available to New Zealand investors, facilitate the development of domestic fund industries, and increase capital flows between the participating jurisdictions.
We would not expect much take-up between New Zealand and Australia as the Trans-Tasman Mutual Recognition Scheme already allows an issuer in Australia or New Zealand to offer financial products in both countries, with reduced disclosure requirements.
If you would like assistance in making an offer under the new ARFP or negotiating the FMA approval process, or advice on what this new opportunity could mean for you, please get in touch with one of our contacts.
FMA Guidance for foreign passport fund operations – Asia Region Funds Passport
Asia-Pacific Economic Cooperation – Official website of the Asia Region Funds Passport
Financial Markets Conduct (Asia Region Funds Passport) Regulations 2019