Regulation Impact Statement - Department of the Treasury
On 28 March 2018, the Australian Government introduced the Corporations Amendment (Asia Region Funds Passport) Bill 2018 to develop a mutual recognition scheme where collective investment schemes based and regulated in one country (home country) could be ‘passported’ or sold to other investors in the region.
Australia’s funds management industry has a strong competitive advantage due to a well-developed, high quality financial system, experience and skills with managing funds (from Australia’s compulsory superannuation system) and strong ties with Asia. However, these advantages have not translated to strong fund management exports, and the Australian Financial Centre Forum’s 2010 report, Australia as a Financial Centre – Building on our Strengths identified cross-country regulatory barriers as a significant reason for this. Differences and duplication in regulatory requirements across different countries make it more difficult for Australian fund managers to sell their products overseas.
Australia, Japan, Korea, New Zealand and Thailand are signatories to the Passport’s Memorandum of Cooperation (MoC), which took effect on 30 June 2016. By legislating the arrangements of the MoC, regulatory barriers associated with cross-border trade of collective investment schemes are anticipated to decrease, providing the Australian funds management industry with improved access to existing markets and access to new markets.
The Department of the Treasury prepared and certified a Regulation Impact Statement (RIS), which the Office of Best Practice Regulation (OBPR) assessed as compliant with the Australian Government RIS requirements and consistent with best practice.
The RIS estimates the average annual regulatory saving at $776,467. The OBPR agreed that, as the costs were less than $2 million per annum, regulatory costs could be self-assessed by the Department of the Treasury.