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4 ASEAN countries sign deal on free movement of investment advisors

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Photo: ASEAN Secretariat

MALAYSIA, the Philippines, Singapore and Thailand signed a memorandum of understanding (MOU) to facilitate cross-border movement of investment advisers which would give regional investors greater access to professional services, the Securities and Exchange Commission (SEC) said on Friday.

The signing took place at the 2nd ASEAN Capital Market Conference (ACMF). The agreement introduces the ACMF Pass allowing licensed professionals to provide advisory services with participating jurisdictions within the Association of Southeast Asian Nations, with fast-track registration and no additional licensing requirements.

The initiative was hosted by the Monetary Authority of Singapore in collaboration with the Asian Development Bank (ADB).

The ACMF also launched ASEAN Social Bonds Standards (ASEAN SBS), and ASEAN Sustainability Bond Standards (ASEAN SUS),following the ASEAN Green Bond Standards launched in November 2017. These all give ASEAN a “complete suite of standards” to drive sustainable finance development in the region.

The SEC said that the ASEAN SBS were developed based on the International Capital Market Association’s (ICMA) Social Bond Principles, and proceeds from this will be used to finance projects that are socially beneficial.

Meanwhile, proceeds from the sustainability bonds will go to a combination of green and social projects, which environmental and social benefits, respectively, can be reaped off.

According to the SEC, these two complement the ASEAN Green Bond Standards which have earned “encouraging traction” after five issuances by Malaysia and Singapore under the ASEAN Green Bond label.

Meanwhile, the first sovereign sukuk instrument in ASEAN issued by Indonesia has been aligned with the ASEAN Green Bond Standards. A sukuk is an Islamic financial certificate that complies with Sharia law, which does not permit the charging of “riba” or interest.

A sukuk is not structured as a debt but as share of an asset that generates earnings for the investor

The SEC said that these standards aim for uniformity of ASEAN green, social and sustainability bonds, leading to reduced due diligence costs.

The ACMF is currently chaired by the Securities Commission Malaysia, and will be next chaired by SEC Thailand. — Reicelene Joy N. Ignacio