Australia has worked with the other members of the passport working group (New Zealand, the Philippines, Singapore and Thailand) to prepare the paper.
This is the second passport consultation after the working group consulted with the industry about the broader shape of the regime throughout 2014.
Interested parties have until 10 April 2015 to make a submission to the working group.
Commenting on the release of the consultation paper, Assistant Treasurer Josh Frydenberg noted that only about four per cent of Australia's managed investment funds are managed on behalf of foreign residents.
"The Passport will create a regional market for managed investment funds by facilitating cross-border issuing," Mr Frydenberg said.
"This will provide Australian fund managers with an important opportunity to increase their presence in Asia and develop further businesses.
"The Passport will also reduce red tape for fund managers by creating a standardised set of rules that will apply across Passport participants while providing Australian investors with a greater choice of investment products," Mr Frydenberg said.
