Roadmap for Financial and Monetary Integration in ASEAN (RIA-Fin)

The RIA-Fin was initially established in 2003 with three (3) main committees: the Capital Account Liberalization, the Capital Market Development and the Financial Services Liberalization. These committees were established as a path towards the integration of financial markets, ensuring the liberalization of financial services and the sustainable development of capital markets. As RIA-Fin evolved, new WCs / WGs were established :

1. Capital Accounts Liberalization (CAL) – it was established to achieve freer flow of capital among AMS by gradually removing restrictions in the current account, foreign direct investments, portfolio investments and other flows. This will ensure efficient allocation of savings in ASEAN to facilitate economic growth and welfare,.  

Progress to date.  The WC-CAL has come up with a heatmap to track the progress of the ASEAN Member States’ (AMS) capital account liberalization, an enhanced policy dialogue framework on capital flows and safeguard mechanisms in assisting AMS to monitor flow trends and policy formulation in maintaining financial stability in the region.  Recently, they have completed the ASEAN Guiding Principles on Local Currency Settlement Framework.

2. Capital Market Development (CMD) – it was established to build capacity and lay infrastructure for the development of ASEAN capital markets, particularly the bond markets. CMD has the long-term goal of achieving cross-border collaborations among capital markets in ASEAN.

Progress to date.  The WC-CMD have contributed a lot in enhancing regional cooperation and integration among capital markets in ASEAN.  To date, it has collaborated with the ASEAN Capital Markets Forum (ACMF) working groups on infrastructure financing and sustainable financing to promote these initiatives.  It has also developed a report on sustainable finance in ASEAN which focuses on government  and quasi-government sectors.

3. Financial Services Liberalization (FSL) – it was established to provide a forum for AMS to share information and exchange experiences on financial services liberalization, carry out the process of financial services liberalization among AMS, and facilitate financial services liberalization by ASEAN with its Dialogue Partners.

Progress to Date.  As of 2019, the WC-FSL has signed eight (8) Protocols to Implement the Packages of Specific Commitments on Financial Services under the ASEAN Framework Agreement on Services (AFAS). These protocols underscore ASEAN’s commitment in advancing linkages among AMS by further opening market access and progressively removing restrictions in the financial services sector.  WC-FSL has also facilitated several Free Trade Agreements (FTAs) negotiations with Dialogue Partners, including the most recent Regional Comprehensive Economic Partnership (RCEP) Financial Services Annex conclusion.  Series of capacity building activities have been conducted  in preparation for the transition  from the ASEAN Framework Agreement on Services (AFAS)  positive list to the non-conforming measures negative list in ASEAN Trade in Services Agreement (ATISA).  The ATISA will strengthen the platform and legal framework to realize the free flow of services, including financial services.

4. ASEAN Capital Markets Forum (ACMF) – it was established in 2004 to develop a deep, liquid and integrated regional capital market.  AMS participate in ACMF initiatives based on their readiness and ability to meet the requirements of the respective framework.

Progress to date.  The ACMF has introduced several initiatives:  

• The ASEAN Corporate Governance Scorecard that aims to raise corporate governance standards and practices, showcase and enhance the visibility of well-governed ASEAN publicly listed companies (PLCs), and promote ASEAN as an international asset class; 

• The Collective Investment Schemes (CIS) that allows fund managers to offer CIS to retail investors under a streamlined authorization process; 

• Professional Mobility that facilitates the movement of capital market professionals and publication of research report on a phased basis; and 

• Disclosure Standards and Streamlining Review Framework that has been incorporated for the ASEAN Common prospectus initiative.  

Recently, the ACMF also developed an initiative on Digital Oversight to exchange views and information on regulatory developments and scams among regulators. The ACMF is also responsible for the issuance of the ASEAN Green Bond Standards, ASEAN Social Bond Standards and ASEAN Sustainability Bond Standards.  These Standards are expected to enhance transparency, consistency and uniformity of ASEAN green, social and sustainability bonds, as well as to reduce due diligence cost and assist global investors to make informed decisions.

5. ASEAN Insurance Regulators’ Meeting (AIRM) – it was established in 1998 as a platform to strengthen the insurance cooperation in the developments of insurance regulatory and supervisory frameworks and research and capacity building through ASEAN Insurance Training and Research Institute (AITRI). A joint plenary meeting between the AIRM and the insurance industry is held annually with the members from the ASEAN Insurance Council (AIC), the ASEAN Council of Bureaux (COB), the ASEAN Insurance Education Committee (AIEC), and the ASEAN Natural Disasters Research Works Sharing (ANDREWS). The annual joint plenary meeting serves as a platform to exchange views on the progress and implementation of the various insurance initiatives.

Progress to date.  The AIRM continues to exchange updates in improving their observance on the Insurance Core Principles of the International Association of Insurance Supervisors (IAIS). They shared updates on the new insurance regulations and insurance initiatives to improve the penetration rates. The AIRM has also supervised and provided guidance to the implementation of Protocol 5 on the ASEAN Scheme of Compulsory Motor Vehicle Insurance under the ASEAN Framework Agreement on the Facilitation of Goods in Transit (AFAFGIT).  

6. ASEAN Forum on Taxation (AFT) – it was established in 2010 as platform to address tax-related impediments and policies on regional economic integration as well as to support regional dialogue on taxation issues for regional integration. It will also support the completion of the network of bilateral agreements on avoidance of double taxation (DTAs) and address withholding tax and double tax issues and enhance information sharing and reduce possibility of tax evasions. AMS are currently working toward regional implementation of Exchange of Information (EOI) and Automatic Exchange of Information (AEOI).

Progress to date.  The AFT has completed 68 of the possible 90 bilateral tax treaty among AMS.  Implementation of exchanges of information and automatic exchange of information have also improved with several AMS joining the global forum on exchange of information.  Recently, a study on ASEAN Withholding Tax Structure was submitted to the ASEAN Finance Ministers. AFT also developed a new initiative to standardize a certificate of residence in ASEAN. Furthermore, ASEAN Excise database on tobacco is also expected to be completed by the end of 2020.

7. ASEAN Banking Integration Framework (ABIF) – It was originally established in 2011 as a task force to formulate the initial milestones and timelines for financial services liberalisation within the ASEAN banking sector. The original mandate for the ABIF Task Force was fulfilled in December 2014 with the finalisation of the ABIF Guidelines. In 2015,  the AFMGM allowed the ABIF to continue as a working committee to focus on facilitating the implementation of banking integration and the initiatives to strengthen the region’s regulatory framework and financial system stability. 

Progress to date.  The WC-ABIF has already concluded the signing of three (3) ABIF arrangements among AMS and established two Qualified ASEAN Banks (QABs) in Indonesia (CIMB and Maybank).  It has also developed a roadmap on enhancing regulatory transparency, standards and coherence with a compilation of AMS’ cross-border data sharing practices and requirements.  

8. ASEAN Insurance Forum (AIFo) – it was established in 2011 to facilitate collaboration between WC-FSL and AIRM, as well as leveraging the private sector to help achieve significant progress in ASEAN insurance integration.

Progress to date.  The AIFo published a handbook for ASEAN Insurers offering Cross-Border Marine, Aviation and Goods in Transit (MAT) Insurance in 2019. The Handbook serves as an industry reference on MAT definition, regulatory framework and procedures for offering the cross-border MAT insurance, and consumer protection mechanisms among AMS. Recently, it has also finalized the ASEAN Insurance Integration Framework’s Roadmap which serves as a proposed phases of ASEAN insurance liberalisation by 2021. The Guiding Principles was also developed to guide the implementation of the AIIF.

9. Financial Inclusion (FINC) – it was established in 2015 to deliberate and effectively coordinate initiatives to advance financial inclusion in ASEAN through close collaboration with relevant working committees and working groups. It is also mandated to serve as a platform for sharing country experiences, expertise and information to facilitate AMS to develop or enhance their national financial inclusion strategies and initiatives. 

Progress to date.   The WC-FINC has already published the following Guidance Notes: (a) Developing a Monitoring and Evaluation Framework for Financial Inclusion, (b) Digital Financial Services, (c) Financial Education and Consumer Protection, and (d) National Financial Inclusion Strategy, as well as a Report on Advancing Digital Financial Inclusion in ASEAN.  

10. Payment and Settlement Systems (PSS) – it  was established in 2010 to prepare the PSS of AMS  in embracing the AEC by conducting studies and providing policy recommendation for the development of the PSS and the cooperation as well as the harmonization of the ASEAN PSS.

Progress to date.  The WC-PSS has already completed the environmental scan of the real-time retail payment systems of the AMS. It has also finalized the ASEAN Payments Policy Framework for Cross-border Real Time Retail Payment and its Implementing Policy Guidelines.

11. ASEAN Cross-Sectoral Coordinating Committee on Disaster Risk Financing and Insurance (ADRFI) –  it was established in 2013, to serve as platform for coordination among ASEAN Finance and Central Bank Deputies Meeting (AFCDM), AIRM, and ASEAN Committee of Disaster Management (ACDM) to implement the ASEAN DRFI Roadmap. The Roadmap aims to strengthen the capacities of individual AMS and the region to effectively manage the impacts of disasters, enhance financial resilience to disasters, and promote regional cooperation for improved disaster and climate resilience.

Progress to date.  The ADRFI has already completed its first phase from 2017-2018 and contributed to the development of AMS’ capabilities in ex-ante risk financing and risk transfer strategies.  Recently, the Phase 2 of the ADRFI was endorsed by the AFMM to cover 2019-2021 with emphasis on Risk Assessment, Risks Advisory and Capacity Building.