Smartshares will soon be able to offer its funds to investors in the Asia region after it was granted the first ‘investment passport’ under a new cooperation scheme.
The Financial Markets Authority has approved Smartshares as a ‘passport fund’ under the the Asia Region Funds Passport (ARFP) scheme.
ARFP is a multilateral agreement between NZ, Australia, Japan, Thailand, and South Korea which allows fund managers to operate in other countries without setting up a local business.
It is like a system used in Europe succinctly named: Undertakings for the Collective Investment in Transferable Securities, or UCITS for short.
The Asia scheme was launched in 2019 but Smartshares is the first fund to be issued with the regional ‘passport’.
Fund managers wanting to offer passport funds need to apply to the FMA and the relevant overseas regulator in each country for approval.
Chief executive Hugh Stevens was a member of the group appointed by the government in 2010 to launch the scheme in New Zealand.
“We are absolutely thrilled to be the first globally to hold this funds passport, which recognises Smartshares is delivering world-class services to our investors,” he said.
The NZX-owned fund manager will now be able to distribute its funds to a population of more than 270 million people living in the signatory nations.
FMA’s director of supervision, James Greig said it was encouraging to see a local investment firm to be the first to be granted a passport.
“The Financial Markets Conduct Act balances innovation with robust regulation and has allowed New Zealand to participate in the agreement, which opens new markets for NZ’s fund managers and should broaden investment options available to New Zealanders,” he said.
