Asia Fund Passport, Mandatory Audit Regardless of Fund Size

[Asia Economy Reporter Park Jihwan] The Enforcement Decree of the Capital Markets Act for the implementation of the Asia Fund Passport was passed at the Cabinet meeting on the 19th. To register a domestic fund as a passport fund, the fund must have a minimum of $1 million in equity capital and $500 million in assets under management. Additionally, even small-scale funds must undergo an audit without exception.

On the same day, the Financial Services Commission announced at the Cabinet meeting that the amendment to the 'Enforcement Decree of the Capital Markets and Financial Investment Business Act' was approved. The Asia Fund Passport is a system that allows funds registered in one country to be more easily sold in other member countries.

The new enforcement decree specifies the requirements for asset management companies to register passport funds. They must have at least $1 million in equity capital and $500 million in assets under management. Furthermore, asset management companies with at least two executives who have more than five years of managerial experience in the financial sector can register passport funds.

For passport funds, redemption requests exceeding 10% of the fund's net asset value will be recognized as grounds for redemption suspension.

Also, small-scale funds are required to undergo audits without exception. The amendment to the Enforcement Decree of the Capital Markets Act is scheduled to take effect from the 27th.

A Financial Services Commission official stated, "We plan to support asset management companies in utilizing the system by distributing practical guides from the Korea Financial Investment Association and supervisory materials related to registration procedures from the Financial Supervisory Service in line with the enforcement date."

This content was produced with the assistance of AI translation services.