ASEAN Financial Regulation

Summary

This research investigates the need for greater cross-border cooperation in the face of increasing financial integration among Asian countries, with particular focus on the effects of the ASEAN Economic Community.

Researchers

Project Background and Aims

Increasing interconnectedness in Asian financial systems suggests the need for regulatory frameworks to support regional financial stability. At the same time, the establishment of the ASEAN Economic Community and initiatives such as the Asia Region Funds Passport and ASEAN CIS passport raise the need for legal frameworks to facilitate the provision of consumer redress for cross-border transactions. The research explores the need for cross-border cooperation in support of these aspects of financial integration in Asia.

Findings

The project proposes frameworks to facilitate cross-border cooperation, building on ASEAN’s established and distinct form of consensus-based cooperation, and drawing on international models of cross-border cooperation, best practices and existing mechanisms in ASEAN 5 countries. The research identifies challenges to cross-border cooperation in Asia in the area of bank resolution and potential measures to enhance cooperation. In line with the consensus-based approach that is common in Asia, these measures include strengthening regulatory harmonisation and promoting convergence in supervisory practices through the use of non-binding guidelines. Drawing on the experience in the EU and the Trans-Tasman cooperation between Australia and New Zealand, the paper proposes that convergence-promoting functions be incorporated within existing institutions and considers the use of resolution colleges. In addition, acknowledging the preference in Asia for bilateral arrangements over multilateral arrangements, the paper suggests ways in which information sharing and recognition of foreign resolution action can be enhanced and draws on the experience of Singapore for this purpose.

The research on financial consumer dispute resolution services for cross-border transactions proposes a framework based on international best practices and existing financial consumer dispute resolution mechanisms in ASEAN 5 countries. It explores the need for cross-border cooperation to facilitate the effective resolution of financial consumer disputes arising from cross-border transactions. Key proposals include requiring ASEAN CIS passport operators to submit to the jurisdiction of host country financial consumer alternative dispute resolution mechanisms. The ASEAN Committee on Consumer Protection, with its contact points in each Member State and website on available consumer redress mechanisms across ASEAN, provides a platform for the strengthening of cross-border cooperation and facilitating financial consumer access to affordable redress in cross-border transactions.

Output

  • Vivien Chen, Andrew Godwin and Ian Ramsay, ‘Consumer Financial Dispute Resolution in a Time of Increased Regulatory Scrutiny’ in Research Handbook on Asian Financial Law (Edward Elgar, 2019) (in press).
  • Vivien Chen, Andrew Godwin and Ian Ramsay, ‘An ASEAN Framework for Cross-Border Cooperation in Financial Consumer Dispute Resolution’ (2017) 12 Asian Journal of Comparative Law 167.
  • Vivien Chen, Andrew Godwin and Ian Ramsay, ‘Cross-border Cooperation in Bank Resolution: A Framework for Asia’ [2016] Singapore Journal of Legal Studies 1.