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Malaysia, Singapore, Thailand in capital markets integration

October 02, 2013
This step would mean a wider choice of investment schemes for investors in the three countries. - File Photo
This step would mean a wider choice of investment schemes for investors in the three countries. - File Photo

PETALING JAYA: Malaysia’s Securities Commission (SC), the Monetary Authority of Singapore (MAS) and Thailand’s Securities and Exchange Commission (SEC) have moved a step closer towards regional capital market integration, which will be a boost for investors in the three countries.

The regulators have signed MoU to set up the Asean CIS framework to allow cross-border offering of collective investment schemes (CIS), moving a step closer towards regional capital market integration.

The framework, set to take effect in the first half of 2014, would enable fund managers operating in a member jurisdiction to offer CIS constituted and authorised in that jurisdiction to retail investors in other member jurisdictions under a streamlined authorisation process.

This would mean a wider choice of investment schemes for investors in Malaysia, Singapore and Thailand.

SC chairman Ranjit Ajit Singh said in a statement that the MoU, which represented yet another significant milestone for the Asean Capital Markets Forum (ACMF), was in line with the goal of promoting greater regional cross-border flows and to build brand recognition of Asean as an asset class.

“The framework aims to create a more efficient environment to facilitate cross-border offerings of investment funds and brings us a step closer towards achieving an Asean passporting regime,” he explained.

Under the MoU, the SC, MAS and SEC agreed to adopt a set of common standards to govern the cross-border offering of Asean CIS. The adoption of the common standards by the signatories would allow fund managers to establish a suite of CIS that could potentially be offered in all three jurisdictions, which is currently not possible.

The common standards are also to ensure that fund managers who tapped on the framework had the necessary expertise and experience, and the schemes offered under the framework were managed based on industry best practices.

According to MAS assistant managing director (capital markets group) Lee Chuan Teck, the Asean CIS framework was a testament of ACMF’s commitment to achieve the vision of the Asean economic community, which is to transform all 10 members of Asean into a one-stop global investment centre by 2015.

He viewed the framework as an important initiative that would further integrate Asean capital markets and improve the flow of fund products among participating economies.

Meriam Yaacob, the public interest director of the Federation of Investment Managers Malaysia, said she believed that the development of the Asean CIS framework would result in a wider selection of investment products for investors in participating countries.

And Raymond Tang, chairman of the Malaysian Association of Asset Managers, said the framework would recognise and promote Asean fund management expertise and provide a springboard for local fund managers to compete in the regional and ultimately global sphere.

Eastspring Investments Bhd chief investment officer (equity) Yvonne Tan Hong Yean told StarBiz: “We can definitely expect there to be a wider range of products, which is a good thing for retail investors… but the existing players will have to beef up to compete.”

An officer at another local fund management company concurred, saying: “The development is favourable for the Malaysian market from the industry development point of view, especially if the new entrants are already established and well-regarded regionally.

“The positive impact extends also to the end-investor, in terms of having access to more unique investment solutions, plus the fact that indirectly, more competition would mean existing local players are kept on their toes.”

– By arrangement with the ANN/The Star –