Australian funds in the second-half of 2012 may begin offering their products in Hong Kong and Singapore under a scheme agreed by government leaders at the Asia-Pacific Economic Cooperation forum this month.

The so-called Asia region funds passport will allow Australian funds to offer a product without having to seek licenses and authorisations from regulators in Singapore and Hong Kong.

Likewise, Hong Kong and Singapore funds will be allowed to sell their products in Australia.

The fund management products are likely to restrict the use of leverage and derivatives. Further negotiations on the scheme need to take place but the Financial Services Council is hopeful it will be implemented sometime after June 30, next year.

The scheme may kick start Australian fund management expansion into Asia. A rapidly growing Asian middle class, intent on saving, are keen to invest in products that improve their wealth, say the Financial Services Council.

“There would also be significant economic benefits flowing from enhanced regional capital flows, growing and deepening financial markets and higher levels of employment in Asia’s funds management industry,” says Financial Services Council chief executive John Brogden.

Japan and South Korea have expressed interest in joining the scheme.