ASEAN’s 1995 Framework Agreement on Services (AFAS) seeks to reduce barriers to trade in services, requiring members to negotiate to lift restrictions in specific market segments and to some degree expand upon their commitments under the WTO’s General Agreement on Trade in Services (GATS). The commitments are not confined to allowing foreign access only to ASEAN members. The following table summarizes ASEAN financial services market access commitments under the ASEAN framework.
| ASEAN Financial Services Sector Commitments |
| |
Market segment |
Future limits to foreign access |
| Brunei, Darussalam |
Financial advisory and ancillary services. Insurance and reinsurance |
Official approval required |
| Cambodia |
Lending and deposit-taking |
Permitted through licensed intermediaries |
| Life and non-life insurance |
Natural or juridical persons may enter contracts only with licensed insurance companies in Cambodia |
| Reinsurance and retrocession |
Companies must reinsure 20% of their risk with state reinsurer Cambodian Re (until end-2008) |
| All payment and monetary transmission services |
Permitted through authorized financial institutions as banks |
| Guarantees and commitments |
Not proscribed until related law is established |
| Indonesia |
Commercial banking |
Limited to two sub-branches and two auxiliary offices for foreign banks and two sub branches for joint venture banks |
| Lao PDR |
Insurance |
Authorized insurance companies must trade through a corporate entity with minimum registered capital and parent guarantee lodged with a Laotian bank |
| Financial leasing, payment and money transmission services |
Unlimited |
| Securities, money broking, settlement and clearing services, advisory and auxiliary financial services |
Unlimited until a related law is established |
| Malaysia |
Insurance |
Foreign shareholding not to exceed 30 percent |
| Advisory, intermediation and other auxiliary financial services |
Investment advice requires a physical commercial presence. Other services must be jointly undertaken with commercial banks or merchant banks in Malaysia |
| Myanmar |
Loss adjustment |
No restriction |
| Actuarial services |
No limits |
| Philippines |
Insurance, reinsurance and ancillary insurance |
Foreign interests may control 60 per cent of domestic insurers (40 per cent of ancillary insurance ventures). No more than one third of directors may be foreign nationals |
| Securities brokerage and dealing |
Permitted as foreign equity participation in domestic corporations or a branch office.
Prior registration required for broker-dealers. Foreign broker-dealers limited to two branches |
| Singapore |
Insurance |
Foreign interests may control 49% of domestic insurers; no restrictions on new insurance licenses and representative offices |
| Securities |
Bank and merchant bank exchange membership must be held through subsidiaries |
| Thailand |
Lending and deposit-taking; leasing; money transmission; guarantees |
No restrictions on bank representative offices; full market access limited to acquisitions of existing licensed companies but licenses may be granted to new entrants; foreign interests may control the entire issued share capital of banks |
| Securities trading and issuance; asset management; advisory, intermediation and other auxiliary financial services; financial advisory |
Foreign nationals restricted as directors of securities dealers, depending on the extent of foreign shareholdings |
| Viet Nam |
Bank guarantees |
Foreign bank branches and joint ventures may issue guarantees in limited circumstances, covering mainly overseas interests or foreign funded ventures in Viet Nam |
| Banking and other financial services |
Viet Nam may limit equity participation by foreign credit institutions in incorporated Vietnamese state-owned banks; total foreign equity in joint-stock commercial banks may not exceed 30% of chartered capital; foreign banks ATMs allowed only at branches |
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