2016年-SWIFT环球同业银行金融电讯_How_FMIs_are_improving_operational_efficiency_in_the_Asian_fund_industry_6页_690kb

Summary of How FMIs are Improving Operational Efficiency in the Asian Fund Industry

Core Content

The document discusses the role of Financial Market Infrastructures (FMIs) in enhancing operational efficiency in the Asian fund industry. It highlights the increasing growth of Asian fund markets and the implementation of regional fund passport schemes, which are expected to drive cross-border fund flows. However, the lack of uniform communication standards and automation levels across Asian markets remains a challenge. The Asia Funds Standardisation Forum (AFSF) is playing a key role in addressing these issues by promoting standardisation and facilitating collaboration between market participants, regulators, and international institutions.

Main Points

• Automation Trends in Asia:

  • Asian fund markets are showing a trend toward increased automation, although progress varies by country.
  • Korea has an established domestic fund platform (FundNet) that automates the entire fund process, but it uses proprietary standards for domestic operations and ISO 20022 for offshore transactions.
  • Indonesia has launched S-Invest, an automated fund platform, but it currently supports domestic funds only and may adopt ISO 20022 once offshore investment services are introduced.
  • Thailand is in the process of launching a new fund platform and is considering the adoption of international standards to support cross-border operations.

• Fund Passport Schemes:

  • Three major fund passport schemes are currently in place in Asia: the China-Hong Kong Mutual Recognition Scheme (MRF), the Asia Region Funds Passport (ARFP), and the ASEAN Collective Investment Scheme (ASEAN CIS).
  • These schemes are expected to increase regional fund flows and create a more integrated market. However, challenges such as regulatory differences and the need for standardisation remain.

• Role of ISO 20022:

  • ISO 20022 is seen as a critical standard for improving automation and connectivity in cross-border fund transactions.
  • Some countries, like Korea, have already adopted ISO 20022 for offshore operations, while others are still in the process of considering its implementation.

• AFSF and Regional Collaboration:

  • The Asia Funds Standardisation Forum (AFSF) is a key initiative aimed at standardising fund processing across Asia.
  • It provides a platform for sharing experiences, addressing challenges, and promoting best practices in fund automation.
  • AFSF includes 13 CSDs from 12 economies and five global fund service providers, working together to develop a more efficient and transparent fund market.

• Future Outlook:

  • By 2025, the document predicts a more integrated and efficient Asian fund market.
  • There will be a greater emphasis on regional fund domiciliation centres, similar to Ireland or Luxembourg.
  • Increased automation will allow asset managers to focus more on product development and expanding their investor base.
  • There is also an expectation of more bilateral mutual recognition arrangements between Asian and European markets.

Key Information

• Korea:

  • FundNet is a domestic fund platform that automates the entire process.
  • OSP, an offshore fund platform, uses ISO 20022 for communication with international banks.
  • Korea has signed the ARFP MoC and is working on regulatory changes to support cross-border fund distribution.

• Thailand:

  • The Stock Exchange of Thailand is developing a new fund platform and is considering ISO 20022 for cross-border operations.
  • The country is involved in both ARFP and ASEAN CIS, and is in the process of implementing new domestic arrangements.

• Indonesia:

  • S-Invest is a new fund platform launched in August 2016.
  • It currently supports domestic funds only, but may adopt ISO 20022 once offshore investment services are introduced.
  • The regulator is reviewing and amending existing regulations to improve the mutual fund industry.

• Global Standards and Collaboration:

  • The adoption of ISO 20022 is seen as a crucial step toward reducing operational risks and costs.
  • Regional forums like AFSF are essential for facilitating communication and standardisation across different Asian markets.
  • Euroclear and SWIFT are supporting the development of a more interconnected and efficient fund market in Asia.

• Challenges and Opportunities:

  • Language barriers are not a significant issue in Thailand, but local market participants may not see the need for international standards in domestic processes.
  • The ASEAN CIS has a higher entry threshold compared to other schemes, which may limit its reach.
  • The growth of the fund industry in Asia will require greater automation and standardisation to support increased transaction volumes and cross-border flows.

Conclusion

The Asian fund industry is on the path toward greater operational efficiency and automation, driven by the implementation of regional fund passport schemes and the efforts of FMIs like the Asia Funds Standardisation Forum (AFSF). While some countries have already made significant progress, others are still in the early stages of automation. The adoption of international standards, particularly ISO 20022, is crucial for enabling smoother cross-border transactions and reducing operational risks. As the industry evolves, collaboration between CSDs, regulators, and market participants will be essential for building a more integrated and competitive fund market in Asia.