The current Brokerage Regulations in Thailand have forced some international brokers to consider restructuring and reorganising their businesses in order to comply.
As it stands, the current regulations stipulate that a maximum 25% foreign share ownership can be maintained. This applies to brokers who have been given dispensation to maintain a 49% foreign shareholding under the previous regime. This means that some brokers have had to plan to reduce their foreign shareholding to 25% by the end-of-year deadline.
Under the current regulations, the ability to offer composite brokerage has also been effectively removed. This means that some broker organisations have had to contemplate end-of-year business reorganisation so that their life and non-life insurance brokerage businesses are clearly split between separate brokerages.
However, the Office of the Insurance Commissioner has decided to review the position and is expected to implement a new set of regulations before year-end to address concerns.
The key changes are likely to be:
- The current regulations would be repealed.
- Brokers licensed for 49% foreign shareholding would be able to maintain that status. Likewise, new brokerages could be formed with any foreign shareholding as long as it remains less than 50%.
- Composite brokerage is possible, particularly for brokerages already licensed as such.
The final content of the regulations remains to be seen, but international brokers in Thailand are awaiting the outcome with a degree of optimism.
This update was authored by DLA Piper Consultant, Jonathan Goacher
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