SEC lauds Asean bond fund

The Securities and Exchange Commission welcomes the development of a regional bond issuance framework, which is seen to facilitate cross border bond issuance.

The so- called Asean + 3 multi-currency bond Issuance framework or AMBIF will allow companies to issue local currency bonds in multiple countries within the region.

The SEC sees the AMBIF as a possible mechanism for addressing the diversity of regulations and market practices among the Asean +3, composed of the 10 Asean member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) plus China, Japan and South Korea.

SEC chairperson Teresita Herbosa said the AMBIF would help deepen the capital markets in the country.

“We believe that this initiative is a useful tool for the development of our capital markets and increasing foreign investments in the country, and will help us ultimately achieve inclusive and sustained economic growth. With this initiative from the Asean Bond Market Forum, we hope we can make it easier for companies to set up their business here in the Philippines and create more opportunities for Filipinos,” Herbosa said.

At present, a company intending to issue cross-border bonds in the Asean +3 is faced with diversity in rules, regulations and practices and may incur substantial cost in simply trying to understand the regulations and processes of each country.

This initiative by the ABMF aims to lessen that concern by providing a set of guidelines to assist a company in looking for financing or investment in an unfamiliar market, the SEC said.

“By making use of a Single Submission Form in conjunction with country specific Bond Market Guides and Implementation Guidelines, the framework aims to facilitate cross-border bond transactions and hopefully provide issuers with a streamlined process for raising funds in any country in the region,” the corporate regulator said.

Six jurisdictions, including the Philippines, Japan, Malaysia, Thailand, Hong Kong and Singapore, have been identified as possible markets for AMBIF’s pilot issuance.

Furthermore, the AMBF is also hoping to expand AMBFI participation to other markets such as Korea, China and Indonesia.