Australian and Korean financial services leaders met on June 12, 2015 to explore opportunities to further Australia-Korea cooperation in the financial services sector through the Korea Australia Free Trade Agreement (KAFTA) and the APEC Asia Region Funds Passport.
The Australia-Korea Financial Forum, which was attended by the Australian Assistant Treasurer Josh Frydenberg and a high-level Australian delegation led by the Financial Services Council (FSC), was hosted by the Australian Trade Commission and the Korea Financial Investment Association (KOFIA).
The discussion centered on the significant opportunities that KAFTA and the Asia Region Funds Passport will provide Korea and Australia, and the cooperative actions both countries can undertake using these new agreements. Participants also called for a reduction in regulatory barriers and for the creation of a standard set of rules for a broader exchange in both countries’ financial services sector.
The success of Australia’s $2 trillion superannuation system and its positive effect on the Australian capital market (forecast to grow to more than $9 trillion by 2040) was also discussed. Korea is an emerging source of fund flows for Australia. Around three per cent of foreign flows received by Australian funds are already sourced from Korea.
Assistant Treasurer Frydenberg said his visit to Korea was valuable in identifying future opportunities for growth in the financial services sector through KAFTA.
“The Australian Government is strongly supportive of the benefits of regional financial services integration, which is why we have been supporting the Asia Region Funds Passport which will help create a regional market for managed investment funds,” Frydenberg said.
Chairman Young-key Hwang of KOFIA said the Australian superannuation model drove high returns and a steady profit stream through active diversified investments and alternative investments.
“Korea could utilise Australian experience and know-how as it seeks to implement a long-term investment strategy for retirement savings, due to low interest rates and an ageing population.
“Through KAFTA, Australian financial services providers have an opportunity to invest in Korea's SMEs and venture companies who have good growth potential in order to share mutual benefits.” said Hwang.
CEO Ms. Sally Loane of the FSC said the announcement of KAFTA last year was another important step towards establishing liberalised trade between the two countries.
CEO Ms. Loane said: “Both Korea and Australia have a lot to gain from mutual cooperation in investment and financial services. The KAFTA, retirement challenges for the funds management industry and the Asia Region Funds Passport have all been important items for discussion with our Korean friends.
“In June 2014, The FSC signed a memorandum of understanding with the Korea Financial Investment Association and the Seoul Metropolitan Government to foster the trade and investment of financial services between Australia and Korea ? Australia’s fourth-largest trading partner.
“Our delegates feel they have gained a deeper understanding of the Korean financial services sector and are pleased with the new links they have created with our Korean counterparts.”
Korean language version: http://www.koreapost.co.kr/news/articleView.html?idxno=6062