Korea Capital Market Institute

 APEC-level discussions are currently under way to introduce an Asia Region Funds Passport (ARFP) similar to Europe’s Undertakings for Collective Investment in Transferable Securities (UCITS) directive. Although a fund passport has many merits such as wider investors’ choices, efficiency improvement of asset management, and facilitation of capital circulation in the region, its impact on the asset management industry will differ across nations. For instance, Korea’s participation in ARFP may weaken the demand for Korean asset management companies and change the industry’s competition structure in the short run. But it may contribute to enhancing the industry’s international competitiveness and overseas expansion. Therefore, strategic priority should be placed on improving regulatory frameworks to secure demand for Korea’s asset management industry, and strengthen the industry’s investment capacity. Furthermore, it is desirable to explore new overseas markets to expand the overall fund market, and facilitate alternative investments in order to raise investment capacity of Korean players.