Kuala Lumpur, March 14 - The ASEAN Capital Markets Forum (ACMF) yesterday endorsed key initiatives to be implemented in 2017 under the ACMF Action Plan 2016-2020 that aims to create investment and business opportunities through greater connectivity, inclusiveness and resilience of capital markets within ASEAN.
One of the key initiatives being endorsed at the ACMF’s 26th meeting yesterday, hosted by the Securities Commission Malaysia in Kuala Lumpur, is the cooperation between ACMF and the International Capital Market Association (ICMA) to introduce ASEAN green bond standards that will be applied across capital markets in ASEAN.
This initiative will facilitate ASEAN capital markets in tapping green finance to support sustainable regional growth and meet investor interest for green investments and is part of the ACMF’s broader efforts in developing green finance for the region.
The ASEAN Green Bond Standards will be developed based on ICMA’s Green Bond Principles (GBP). The standards are intended to provide additional guidance on the application of the GBP, as well as to enhance transparency, consistency and uniformity of ASEAN green bonds which will also contribute to the development of a new asset class.
The newly revised ASEAN Corporate Governance Scorecard (Scorecard) was also endorsed by the ACMF meeting. In response to the new principles and recommendations of the G20/OECD Principles of Corporate Governance, the methodology and assessment of the Scorecard has been revised to take into consideration increased investor expectations, and developments in business and corporate governance practices.
The revised Scorecard will include new assessment questions, additional weightage for certain questions, particularly those on the Role of Stakeholders, and a streamlining of questions to place greater emphasis on practicing corporate governance. Another key change to the assessment is the introduction of an independent validation in addition to the existing peer-review process. The enhancements are being introduced to strengthen the quality of assessment in addition to expanding insights on corporate governance practices of companies across participating countries. The assessment using the revised Scorecard will commence in Q2 2017.
The ACMF also endorsed proposals to foster greater mobility of capital market professionals in the region and enhance connectivity by allowing more services to be provided to investors across ASEAN by regional capital market professionals.
The ACMF has engaged with the industry through the ACMF Industry Consultative Panels (AICP) in developing proposals that meet their needs and will continue to work with them in implementing the proposals on a phased basis, starting with investment consultants, research analysts and individuals who are licensed to carry out fund management activities.
The ACMF is working on enhancing the ASEAN Collective Investment Schemes (CIS) framework by further harmonising disclosure standards through common product highlight sheets and prospectuses, and reducing investment restrictions while expanding the range of ASEAN CIS to include real estate investment trusts.
The ACMF continues to focus on enhancing capacity building through the ACMF Market Development Programme (A-MDP) to ensure all ACMF members benefit from regional capital market connectivity.
Following the successful first phase of implementing the regulatory programme in developing domestic bond markets in Cambodia, Lao PDR, Myanmar and Vietnam (CLMV members), a second phase is expected to commence in Q3 2017, targeted at private sector market participants.
The ACMF discussed measures to enhance market connectivity and investor experience in regional investing, including feedback from the AICP and recommendations put forward by the independent consultant commissioned by the Asian Development Bank (ADB) at the ACMF’s request. The ACMF will further discuss the recommendations with relevant stakeholders including the exchanges.