Financial authorities pledged to reach a consensus with countries in the Asia-Pacific region on the introduction of an “Asia Region Funds Passport” when they reported their 2014 policy direction to the president on Monday.

Korea has been in talks with Australia, New Zealand and Singapore for an agreement on opening the money market. The pact will allow asset management firms to sell products in member countries without regulatory approval.

“A fund product designed by a Korean asset management firm could be launched simultaneously both in Korea and the other member markets,” said an official of the Financial Supervisory Service.

“Currently, firms seeking fund sales overseas have to go through an approval process with supervisory agencies in other countries. The coming agreement could be likened to a financial free trade pact,” he said.

According to the FSS, the four countries are scheduled to hold a forum on the coming deal this August and plan to increase the number of members gradually.

While the idea of an Asia Region Funds Passport was initiated by Australia in 2011, the concept of a joint fund sales market was first developed by countries in Europe.

Japan and Thailand are reportedly taking a wait-and-see attitude toward the deal.

FSS officials said Korea is vigorously pushing for the deal as it is urgent for the financial industry, including firms in the stock brokerage sector, to actively tap into the overseas countries amid their worsening profitability in the saturated domestic market.

In a similar vein, financial authorities said they would ease regulations on the overseas units of Korean banks and insurance firms.

Bolstered by Gov. Choi Soo-hyun’s drive to upgrade the market, the FSS has actively signed memorandums of understanding with the regulatory entities of several of the involved countries over the past two years.

Chief regulator Choi has continued to call for the nation’s financial industry to scrap its conventional business methods that are still focused mainly on domestic consumers.

He stressed that Korea’s major financial firms have been excessively dependent upon interest income.

“They are lagging far behind global financial groups. It is necessary to drop the past operating methods and carry out a management overhaul in the low-interest, low-growth era,” he said.

Financial Services Commission head Shin Je-yoon has said that advancing into foreign countries is unavoidable as the domestic market is saturated.

Shin said that under the policy, Korea would provide emerging Asian markets with its infrastructure to operate capital markets.

By Kim Yon-se (kys@heraldcorp.com)