The Securities Commission Malaysia, the Monetary Authority of Singapore, and the Securities and Exchange Commission of Thailand signed a supplemental memorandum of understanding (MoU) this week to admit the Philippine Securities and Exchange Commission to the Asean CIS framework.
The supplemental MoU took effect on Tuesday.
The CIS framework is an initiative under the regional capital markets integration plan endorsed by the Asean finance ministers in 2009 to facilitate cross-border product access and fund distribution for investors and issuers respectively.
Philippine investment companies and fund managers can now offer eligible funds to retail investors in Malaysia, Singapore, and Thailand while their counterparts in these neighbouring countries can offer investment products to the Philippines domestic market, boosting cross-border investment flow in the Southeast Asian region.
The CIS scheme was launched in 2014, but participation has been unenthusiastic. In some countries, notably Malaysia and Thailand, feeder fund routes have attracted more interest from domestic investors.
Nevertheless, in a statement, the Asean capital markets forum (ACMF) said that the entry of the Philippines into the framework is the latest step towards enhancing capital market connectivity in the region.
“With SEC Philippines’ participation in the Asean CIS Framework, qualified investment companies in the Philippines and their fund managers will now be able to offer eligible funds to retail investors in the other three member jurisdictions, and vice versa,” it said.
Retail investors are able to tap into a wider choice of funds from beyond their borders, and fund managers can offer their products cross-border under an efficient approval system.
The expansion of the Asean CIS initiative to the Philippines further strengthens connectivity in the region, said SEC Philippines chairperson Emilio Aquino.
“As the fourth signatory to the framework, we will also endeavour to work together with other signatories in encouraging other Asean countries in joining the framework and in promoting cross-border offerings of Asean Funds,” he said.