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Government passes Asia Region Funds Passport bill, opens consultation on associated Regulations
The Australian Government has passed the Corporations Amendment (Asia Region Funds Passport) Bill 2018 (Bill), which brings into effect the long-contemplated Asia Region Funds Passport (Passport) (discussed in our previous insight here). The Government has also opened consultation on draft Passport Regulations and related explanatory materials.
Government passes ARFP bill
The Passport is a region-wide initiative designed to facilitate the offer of interests in certain collective investment schemes established in Passport member economies to investors in other Passport member economies. It aims to provide Australian fund managers with greater access to economies in the Asia-Pacific region by reducing existing regulatory hurdles. Australia, Japan, Korea, New Zealand and Thailand are all signatories to the Passport's Memorandum of Cooperation (MoC). Each jurisdiction is currently in the process of giving effect to its respective obligations under the MoC in order to bring the Passport regime into operation.
The Bill amends the Corporations Act 2001 (Cth) (Corporations Act) to:
- incorporate key definitions and the mechanism for incorporating the rules for passport funds into Australian domestic law;
- specify the processes for Australian and foreign passport funds to offer interests in Australia and for registration of passport funds;
- specify the processes for deregistration of Australian passport funds and de-notification of foreign passport funds;
- set out requirements in relation to disclosure and financial reporting for foreign passport funds; and
- provide transitional arrangements for delegations of functions or powers by the minister and certain decisions of ASIC.
Passport Regulations consultation
The Bill was passed on 28 June 2018 and received royal assent on 29 June 2018. On the same day, the Government opened consultation on draft Passport Regulations and related explanatory materials. Notably, the regulations:
- require an operator of or notified foreign passport fund to lodge copies of the prescribed form and set out other requirements regarding lodging documents with the Australian Securities and Investments Commission (ASIC);
- list the particulars which are to be included on the new register of passport funds and give the public a right to search the register;
- extend many of the disclosure requirements and exemptions that currently apply to managed investment products to foreign passport fund products; and
- amend various fee regulations to prescribe new fees for certain matters relating to notified foreign passport funds.
The accelerated consultation period (which closed on 13 July 2018) was said to be necessary in order to allow for the regulations to be made and commence with the Passport legislation when it receives proclamation. This will be the final step in the Government fulfilling its current commitments in the Passport MoC.