Luang Prabang meeting signals shift in ASEAN capital markets towards sustainability and innovation
The 40th ASEAN Capital Markets Forum (ACMF) Chairs’ Meeting, held in the historical setting of Luang Prabang and hosted by the Lao Securities Commission Office, marked a pivotal anniversary – the 20th year since the ACMF’s inception.
Initiated by ASEAN finance ministers in 2004, the ACMF has been pivotal in shaping deep, liquid, and integrated regional capital markets. This year’s meeting was not just a reflection on two decades of progress but also a forward-looking session into the evolving landscape of ASEAN’s financial markets.
The core of the discussions revolved around the ACMF Roadmap for ASEAN Sustainable Capital Markets (2020-2025), a strategic plan designed to integrate sustainability into the fabric of regional finance.
With the implementation of its recommendations expected to exceed 90 per cent by 2024, the roadmap is a clear indicator of ASEAN’s commitment to sustainable finance. The roadmap’s success sets the stage for the next phase: developing the ACMF Action Plan for 2026-2030.
The adoption of the ASEAN Green, Social, Sustainability and Sustainability-Linked Bond Standards since 2017 has been a significant move towards sustainable investment in the region.
The successful issuance of USD47.46 billion in ASEAN-labelled bonds and sukuk by February 2024 underscores the growing investor appetite for green and sustainable finance options.
Furthermore, the recent rollout of Version 2 of the ASEAN Taxonomy for Sustainable Finance, following thorough stakeholder consultation, marks a crucial step towards standardising sustainability criteria across ASEAN markets.
This adaptation, effective from February 2024, reflects a responsive and inclusive approach to developing sustainable finance frameworks.
The 40th ACMF Chairs’ Meeting signals a strategic shift in ASEAN’s capital markets towards sustainability and innovation.
The meeting’s outcomes emphasise a future where economic growth in ASEAN is increasingly driven by green, inclusive and sustainable investments.
The 40th ACMF Chairs’ Meeting reinforced its backing for the ASEAN Taxonomy Board (ATB) and its ongoing efforts, including the development of Version 3 of the ASEAN Taxonomy.
The ATB is currently focused on completing the technical screening criteria for the taxonomy’s key sectors in a phased manner.
To facilitate this process, the ACMF has re-appointed the Brunei Darussalam Central Bank (BDCB) and Securities Commission Malaysia (SCM) as its representatives on the ATB for the term from March 31, 2024 to March 30, 2026.
This decision ensures continuity and expertise in driving the taxonomy’s evolution and implementation.
In alignment with the ACMF Roadmap’s objectives, the meeting welcomed the enthusiastic response from regional and international stakeholders to the ASEAN Transition Finance Guidance Version 1 (ATFG).
The ATFG complements the ASEAN Taxonomy for Sustainable Finance and is integral to maintaining the momentum of sustainable finance progress.
The meeting also endorsed a stakeholder consultation exercise for the ATFG and supported the ongoing development of future versions.
These initiatives underline the ACMF’s commitment to advancing sustainable finance practices across ASEAN, highlighting a collaborative approach towards achieving regional sustainability goals.
The ACMF continued its ongoing collaboration with the IFRS – International Sustainability Standards Board (ISSB) with a high-level dialogue between the two bodies on the development of sustainability reporting in the region.
At the same time, the meeting endorsed the 2024 workplan for capacity building on sustainability reporting.
The meeting also noted the launch of the Sustainability Innovation Lab, based in Singapore, a joint effort by the ISSB and the Global Reporting Initiative (GRI), intended to advance regional capabilities in sustainability reporting especially for companies that report on a multi-stakeholder basis.
To address industry feedback and further encourage the cross-border offerings of funds under the ASEAN Collective Investment Schemes (CIS) framework, the ACMF endorsed the development of the Guidance Notes on Disclosure Requirements for Wrapper of Prospectuses for Cross-Border Offerings of ASEAN CIS and the holistic assessment of the ASEAN CIS framework to support the development of the next ACMF Action Plan 2026-2030.
In addition, the ACMF acknowledged the commencement of the revision of the Memorandum of Understanding on Streamlined Authorisation Framework for Cross-Border Public Offers of ASEAN CIS to enhance the attractiveness of the framework.
Among others, the revision would allow Singapore Variable Capital Companies (VCC) as one of the permissible structures for a qualifying CIS under this framework.
The ACMF noted the continuing initiatives to build capacity and encourage cooperation through the ACMF Market Development Programme, which includes a secondment and capacity-training program for staff of ACMF members as well as collaboration with external parties and technical experts.
The ACMF likewise looks forward to the implementation of the revised ASEAN Corporate Governance Scorecard (ACGS) with an Assessment taking place within 2024 and results expected to be announced in 2025.
The meeting also continued its networking and exchange of experiences on Digital Assets by members.
The Monetary Authority of Singapore (MAS) updated on their regulatory measures for Digital Payment Token Services in Singapore; while the SCM provided an update on Digital Asset Market Developments in Malaysia.
The ACMF expressed its gratitude to the Asian Development Bank (ADB) for its 20 years of consistent and fruitful support to the ACMF through technical assistance and expert guidance to foster capital market development throughout the ASEAN region.
The ACMF also thanked the Sustainable Finance Institute Asia (SFIA) for its support and providing its expertise, resources, and network, to enable ACMF to continue making significant progress in its sustainability journey.
The ACMF is a high-level grouping of capital market regulators from all 10 ASEAN jurisdictions, namely Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. – Lao Securities Commission Office
