Australia signs Memorandum of Cooperation on the Asia Region Funds Passport

2733168-v2\SYDDMS Legal Alert 5 MAY 2016 Contact us Visit our website Australia signs Memorandum of Cooperation on the Asia Region Funds Passport Introduction The Australian government recently signed the Asia Region Funds Passport (Passport) Memorandum of Cooperation (MoC) with Japan, Korea and New Zealand. The Passport is designed to create a new set of collective investment vehicles that will be recognised by all participating regulators across the Asia-Pacific region under the Mutual Recognition Regime. The objective of the Passport is to facilitate cross-border investment in the funds management sector. Significance of the MoC The recent signing of the MoC by the governments of Australia, Japan, Korea and New Zealand is a significant milestone after more than six years of international negotiation on the Passport arrangements. The MoC comes into effect on 30 June 2016 and its current form ensures that any eligible APEC economy is able to participate in the Passport even after it comes into effect. The participating economies have up to 18 months from 30 June 2016 to implement the Passporting arrangements through domestic legislation. The Passport will become activated as soon as any two participating economies implement the arrangements contemplated under the MoC domestically. Projected Benefits of the Passport APEC reported in June 2015 that the Passport could save APEC investors an annual $20 billion USD ($28.32 billion AUD) in fund management fees, provide higher investment returns, and create 170,000 jobs across the APEC economies within five years of its implementation. A report by consulting firm AT Kearney indicates that the Passport could exceed $600 billion USD of funds under administration by 2030. The unexpected Japanese commitment to the Passport is expected to allow access by Australian fund managers to the $14 trillion USD ($19.83 trillion AUD) in savings held by Japanese households. Australian fund managers in particular believe the Passport will allow them to offer Japanese households an alternative to the sub-par returns they have historically received on their savings 2733168-v2\SYDDMS domestically. Conclusion and next steps If you are uncertain about the effect of the MoC, have a question about the Passport, or would otherwise like to contact us, please do not hesitate to get in touch with a member of our team. Supplementary information Click here to read the MoC. Follow us For more information Astrid Raetze Partner astrid.raetze @bakermckenzie.com Sam Appleton Senior Associate sam.appleton @bakermckenzie.com Nick Alexander Associate nick.alexander @bakermckenzie.com Brisbane Level 8, 175 Eagle Street Brisbane QLD 4000 Australia Tel: +61 7 3069 6200 Melbourne Level 19, 181 William Street Melbourne VIC 3000 Australia Tel: +61 3 9617 4200 Sydney Level 27, AMP Centre, 50 Bridge Street Sydney NSW 2000 Australia This email is sent by Baker & McKenzie (ABN 32 266 778 912), an Australian partnership and member of Baker & McKenzie International, a Tel: +61 2 9225 0200 Swiss Verein. This communication has been prepared for the general information of clients and professional associates of Baker & McKenzie. You should not rely on the contents. It is not legal advice and should not be regarded as a substitute for legal advice. The contents may contain copyright. Personal information contained in communications with Baker & McKenzie is subject to our Privacy Policy and the obligations of the Privacy Act. Emails sent to Baker & McKenzie are subject to automated email filtering. Should you receive this email in error, please telephone us on +61 2 9225 0200 or email our Helpdesk. Before you send email to Baker & McKenzie, please be aware that your communications with us through this message will not create a lawyer-client relationship with us. Do not send us any information that you or anyone else considers to be confidential or secret unless we have first agreed to be your lawyers in that matter. Any information you send us before we agree to be your lawyers cannot be protected from disclosure. Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Thank you. UNSUBSCRIBE THIS COMMUNICATION UNSUBSCRIBE ALL