Cross-selling of funds from five Asian countries starting today

[Infostock Daily= Reporter Park Hyo-sun] The Asia Region Funds Passport(ARFP) will be implemented from today (27th), where five Asian countries, including Korea, Japan, Thailand, Australia and New Zealand, can sell fund products beyond barriers between countries.

The ARFP is a system that allows fund registered in one member state, like passports, to be sold through a simple registration process in another member state.

The ARFP is a system that allows a member state to sell registered fund, like passports, through simplified procedure in another member state.

The ARFP fund invests in securities, currencies, deposits, gold deposit certificates, short-term financial instruments, or operates by trading derivative securities or securities lending .

Before, in order to sell overseas funds in Korea, the Financial Supervisory Service had to review the qualification requirements for off-shore funds.

But from this day, the ARFP funds will be sold in Korea through a simplified process.

On the contrary, the same is true when domestic funds go abroad.

Foreign ARFP funds are sold through domestic sellers (banks and securities firms), the same investor protection device as domestic public offering funds sell is applied. 

However, in order to register domestic funds as ARFP funds in accordance with the Enforcement Decree, the fund operator must have more than $ 1 million in equity capital and more than $ 500 million in operating assets. In addition, it should meet the manpower requirements to have two or more executives with more than five years of financial management experience.

Also, previously small funds with total assets of less than 30 billion won were exempted from auditing, but now ARFP funds must be audited without exception.

If the amount of the ARFP fund's redemption claim exceeds 10% of the net asset value of the fund, it is recognized as a reason for postponement of redemption.

Reporter Park Hyo-sun hs1351@infostock.co.kr