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Singapore, Malaysia and Thailand agree move towards integrated ASEAN capital markets

Singapore, Malaysia and Thailand have taken a step towards integrating ASEAN (Association of Southeast Asian Nations) capital markets, and regulators there hope that Indonesia and the Philippines will join by the end of the year.11 Mar 2015

The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have signed a memorandum of understanding with the Securities Commission Malaysia and the Securities and Exchange Commission, Thailand to develop a streamlined review framework for an ASEAN common prospectus, the organisations said in a joint statement.

The framework will help equity securities and plain debt securities to be offered across the three countries by streamlining the review process, the organisations said.

The framework would require both home and host authorities to complete a review process on a security within "three to four" months from the date when it was submitted. This should shorten the time needed to gain approval to offer securities in multiple jurisdictions, so that issuers can be more confident of the time it will take to get a product to market, the statement said.

The framework is an initiative under the ASEAN Capital Markets Forum (ACMF) implementation plan. At the signing ceremony, ACMF chairman Datuk Ranjit Ajit Singh said: "We believe the framework is already creating traction and we believe Indonesia and the Philippines will sign on by the end of this year," the Sun Times reported.

The three current signatories aim to implement the framework by the third quarter of 2015, and will issue a handbook with guidance on criteria for issuers, application procedures and the review timeline, they said.

Lee Boon Ngiap, assistant managing director for capital markets at MAS said: "The MOU represents another progressive step towards regional capital markets integration. ASEAN issuers will benefit from the streamlined review process that will make it easier to raise capital across ASEAN countries."

As the region's economy develops, the need for infrastructure investment will grow, said Magnus Brocker, chief executive of SGX: "Today’s agreement will pave the way for ASEAN companies to more efficiently raise funds for their investment and expansion, while investors will have easier access to more opportunities."