(a) a financial institution of another Party;
(b) an investor of another Party, and an investment of that investor, in a financial institution in the Party's territory; and
(c) cross-border trade in financial services.
2. Chapter 14 (Investment) and Chapter 15 (Cross-Border Trade in Services) apply to a measure described in paragraph 1 only to the extent that those Chapters are incorporated into this Chapter.
(a) Article 14.6 (Minimum Standard of Treatment), Article 14.7 (Treatment in Case of Armed Conflict or Civil Strife), Article 14.8 (Expropriation and Compensation), Article 14.9 (Transfers), Article 14.13 (Special Formalities and Information Requirements), Article 14.14 (Denial of Benefits), Article 14.16 (investment and Environmental, Health, Safety, and other Regulatory Objectives), and Article 15.11 (Denial of Benefits) are incorporated into and made a part of this Chapter.
(b) Article 15.12 (Payments and Transfers) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to obligations pursuant to Article 17.3.3 (National Treatment), Article 17.5.1(b) and (c) (Market Access), and Article 17.6 (Cross-Border Trade Standstill).
3. This Chapter does not apply to a measure adopted or maintained by a Party relating to:
(a) an activity or a service forming part of a public retirement plan or statutory system of social security; or
(b) an activity or a service conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities,
except that this Chapter applies to the extent that a Party allows an activity or service referred to in subparagraph (a) or (b) to be conducted by its financial institutions in competition with a public entity or a financial institution.
4. This Chapter does not apply to government procurement of financial services.
5. This Chapter does not apply to a subsidy or a grant provided by a Party, including a government supported loan, guarantee, and insurance, with respect to the cross-border supply of financial services by a cross-border supplier of another Party.
Article 17.3. National Treatment
1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords to its own investors, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions, and investments in financial institutions in its territory.
2. Each Party shall accord to financial institutions of another Party, and to investments of investors of another Party in financial institutions, treatment no less favorable than that it accords to its own financial institutions, and to investments of its own investors in financial institutions, in like circumstances, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of financial institutions and investments.
3. Each Party shall accord to:
(a) financial services or cross-border financial service suppliers of another Party seeking to supply or supplying the financial services as specified by the Party in Annex 17-A (Cross-Border Trade); and
(b) financial services or cross-border financial service suppliers of another Party seeking to supply or supplying financial services subject to paragraph 4,
treatment no less favorable than that it accords to its own financial services and financial service suppliers, in like circumstances.
4. Subparagraph 3(b) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party's territory. A Party may define "doing business" and "solicitation" in its law for the purposes of this paragraph.
5. The treatment to be accorded by a Party under paragraphs 1, 2, and 3 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to financial institutions of the Party, investors of the Party, and investments of those investors, in financial institutions; or financial services or financial service suppliers, of the Party.
6. For greater certainty, whether treatment is accorded in "like circumstances" under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.
Article 17.4. Most-Favored-Nation Treatment
1. Each Party shall accord to:
(a) investors of another Party, treatment no less favorable than that it accords to investors of any other Party or of a non-Party, in like circumstances;
(b) financial institutions of another Party, treatment no less favorable than that it accords to financial institutions of any other Party or of a non-Party, in like circumstances;
(c) investments of investors of another Party in a financial institution, treatment no less favorable than that it accords to investments of investors of any other Party or of a non-Party in financial institutions, in like circumstances; and
(d) financial services or cross-border financial service suppliers of another Party, treatment no less favorable than that it accords to financial services and cross- border financial service suppliers of any other Party or of a non-Party, in like circumstances.
2. The treatment to be accorded by a Party under paragraph 1 means, with respect to a government other than at the central level, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that government to financial institutions of another Party or anon-Party; investors of another Party or a non-Party, and investments of those investors, in financial institutions; or financial services or cross-border financial service suppliers of another Party or non-Party.
3. For greater certainty, whether treatment is accorded in "like circumstances" under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors in financial institutions, investments in financial institutions, financial institutions, or financial services or financial service suppliers on the basis of legitimate public welfare objectives.
Article 17.5. Market Access
1. No Party shall adopt or maintain with respect to:
(a) a financial institution of another Party or, an investor of another Party seeking to establish those institutions;
(b) a cross-border financial service supplier of another Party seeking to supply or supplying the financial services as specified by the Party in Annex 17-A (Cross- Border Trade); or
(c) a cross-border financial service supplier of another Party seeking to supply or supplying financial services, subject to paragraph 2,
either on the basis of a regional subdivision or on the basis of its entire territory, a measure that:
(d) imposes a limitation on:
(i) the number of financial institutions or cross-border financial service suppliers, whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirement of an economic needs test,
(ii) the total value of financial service transactions or assets in the form of numerical quotas or the requirement of an economic needs test,
(iii) the total number of financial service operations or the total quantity of financial services output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test, (3) or
(iv) the total number of natural persons that may be employed in a particular financial service sector or that a financial institution or cross-border financial service supplier may employ and who are necessary for, and directly related to, the supply of a specific financial service in the form of numerical quotas or the requirement of an economic needs test; or
(e) restricts or requires specific types of legal entity or joint venture through which a financial institution or cross-border financial service supplier may supply a service.
2. Subparagraph 1(c) does not require a Party to permit a cross-border financial service supplier of another Party to do business or solicit in the Party's territory. A Party may define "doing business" and "solicitation" in its law for the purposes of this paragraph.
3. No Party shall require a cross-border financial service supplier of another Party to establish or maintain a representative office or an enterprise, or to be resident, in its territory as a condition for the cross-border supply of a financial service, with respect to the financial services referred to in Article 17.6 (Cross-Border Trade Standstill) and the financial services as specified by the Party in Annex 17-A (Cross-Border Trade).
4. For greater certainty, a Party may require the registration or authorization of a cross-border financial service supplier of another Party or of a financial instrument.
Article 17.6. Cross-Border Trade Standstill
No Party shall adopt a measure restricting any type of cross-border trade in financial services by cross-border financial service suppliers of another Party that the Party permitted on January 1, 1994, or that is inconsistent with Article 17.3.3 (National Treatment), with respect to the supply of those services.
Article 17.7. New Financial Services (4)
Each Party shall permit a financial institution of another Party to supply a new financial service that the Party would permit its own financial institutions, in like circumstances, to supply without adopting a law or modifying an existing law. (5) Notwithstanding Article 17.5.1(a) and(e) (Market Access), a Party may determine the institutional and juridical form through which the new financial service may be supplied and may require authorization for the supply of the service. If a Party requires a financial institution to obtain authorization to supply a new financial service, the Party shall decide within a reasonable period of time whether to issue the authorization and may refuse the authorization only for prudential reasons.
Article 17.8. Treatment of Customer Information
This Chapter does not require a Party to disclose information related to the financial affairs or accounts of individual customers of financial institutions or cross-border financial service suppliers.
Article 17.9. Senior Management and Boards of Directors
1. No Party shall require a financial institution of another Party to engage a natural person of a particular nationality as senior managerial or other essential personnel.
2. No Party shall require that more than a simple majority of the board of directors of a financial institution of another Party be composed of nationals of the Party, persons residing in the territory of the Party, or a combination thereof.
Article 17.10. Non-Conforming Measures
1, Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5 (Market Access), and Article 17.9 (Senior Management and Boards of Directors) do not apply to:
(a) an existing non-conforming measure that is maintained by a Party at:
(i) the central level of government, as set out by that Party in Section A of its Schedule to Annex III,
(ii) a regional level of government, as set out by that Party in Section A of its Schedule to Annex III, or
(iii) a local level of government;
(b) the continuation or prompt renewal of a non-conforming measure referred to in subparagraph (a); or
(c) an amendment to a non-conforming measure referred to in subparagraph (a) to the extent that the amendment does not decrease the conformity of the measure as it existed:
(i) immediately before the amendment, with Articles 17.3.1 and 17.3.2 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5.1(a) (Market Access), or Article 17.9 (Senior Management and Boards of Directors), or
(ii) on the date of entry into force of this Agreement for the Party applying the non-conforming measure with Article 17.3.3 (National Treatment), Article 17.5.1(b) (Market Access), or Article 17.5.1(c) (Market Access).
2. Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment), Article 17.5 (Market Access), Article 17.6 (Cross-Border Trade Standstill), and Article 17.9 (Senior Management and Boards of Directors) do not apply to a measure that a Party adopts or maintains with respect to a sector, subsector, or an activity, as set out by that Party in Section B of its Schedule to Annex IL.
3. A non-conforming measure, set out in a Partyâs Schedule to Annex I or II as not subject to Article 14.4 (National Treatment), Article 14.5 (Most-Favored-Nation Treatment), Article 14.11 (Senior Management and Boards of Directors), Article 15.3 (National Treatment) or Article 15.4 (Most-Favored-Nation Treatment), shall be treated as a non-conforming measure not subject to Article 17.3 (National Treatment), Article 17.4 (Most-Favored-Nation Treatment) or Article 17.9 (Senior Management and Boards of Directors), as the case may be, to the extent that the measure, sector, subsector or activity set out in the Partyâs schedule to Annex I or II is covered by this Chapter.
4, (a) Article 17.3 (National Treatment) does not apply to a measure that falls within an exception to, or derogation from, the obligations which are imposed by:
(i) Article 20.8 (National Treatment), or
(ii) Article 3 of the TRIPS Agreement, if the exception or derogation relates to matters not addressed by Chapter 20 (Intellectual Property Rights).
(b) Article 17.4 (Most-Favored-Nation Treatment) does not apply to a measure that falls within Article 5 of the TRIPS Agreement, or an exception to, or derogation from, the obligations which are imposed by:
(i) Article 20.8 (National Treatment), or
(ii) Article 4 of the TRIPS Agreement.
Article 17.11. Exceptions
1. Notwithstanding the other provisions of this Agreement except for Chapter 2 (National Treatment and Market Access for Goods), Chapter 3 (Agriculture), Chapter 4 (Rules of Origin), Chapter 5 (Origin Procedures), Chapter 6 (Textiles and Apparel), Chapter 7 (Customs Administration and Trade Facilitation), Chapter 9 (Sanitary and Phytosanitary Measures), Chapter 10 (Trade Remedies), and Chapter 11 (Technical Barriers to Trade), a Party is not prevented from adopting or maintaining a measure for prudential reasons, (6) including for the protection of investors, depositors, policy holders, or persons to whom a fiduciary duty is owed by a financial institution or cross-border financial service supplier, or to ensure the integrity and stability of the financial system. If the measure does not conform with the provisions of this Agreement to which this exception applies, the measure must not be used as a means of avoiding the Party's commitments or obligations under those provisions.
2. Nothing in this Chapter, Chapter 14 (Investment), Chapter 15 (Cross- Border Trade in Services), Chapter 18 (Telecommunications) including specifically Article 18.26 (Relation to Other Chapters), or Chapter 19 (Digital Trade), applies to a non-discriminatory measure of general application taken by a public entity in pursuit of monetary and related credit policies or exchange rate policies. This paragraph does not affect a Party's obligations under Article 14.10 (Performance Requirements) with respect to a measure covered by Chapter 14 (Investment), under Article 14.9 (Transfers) or Article 15.12 (Cross Border Trade in Services, Payments and Transfers).
3. Notwithstanding Article 14.9 (Transfers) and Article 15.12 (Payments and Transfers), as incorporated into this Chapter, a Party may prevent or limit a transfer by a financial institution or a cross-border financial service supplier to, or for the benefit of, an affiliate of or person related to that institution or supplier, through the equitable, non-discriminatory and good faith application of a measure relating to maintenance of the safety, soundness, integrity, or financial responsibility of financial institutions or cross-border financial service suppliers. This paragraph does not prejudice any other provision of this Agreement that permits a Party to restrict transfers.
4. For greater certainty, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining a measure necessary to secure compliance with laws or regulations that are not inconsistent with this Chapter, including those relating to the prevention of deceptive and fraudulent practices or to deal with the effects of a default on financial services contracts, subject to the requirement that the measure is not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties or between Parties and non- Parties where like conditions prevail, or a disguised restriction on investment in financial institutions or cross-border trade in financial services as covered by this Chapter.
Article 17.12. Recognition
1. A Party may recognize prudential measures of another Party or a non-Party in the application of a measure covered by this Chapter. That recognition may be:
(a) accorded autonomously;
(b) achieved through harmonization or other means; or
(c) based upon an agreement or arrangement with another Party or a non-Party.
2. A Party that accords recognition of prudential measures under paragraph 1 shall provide adequate opportunity to another Party to demonstrate that circumstances exist in which there are or would be equivalent regulation, oversight, implementation of regulation and, if appropriate, procedures concerning the sharing of information between the relevant Parties.
3. If a Party accords recognition of prudential measures under paragraph 1(c) and the circumstances set out in paragraph 2 exist, that Party shall provide adequate opportunity to another Party to negotiate accession to the agreement or arrangement, or to negotiate a comparable agreement or arrangement.
4. For greater certainty, nothing in Article 17.4 (Most-Favored-Nation Treatment) requires a Party to accord recognition to prudential measures of any other Party.
Article 17.13. Transparency and Administration of Certain Measures
1. Chapter 28 (Good Regulatory Practices) and Chapter 29 (Publication and Administration) do not apply to a measure relating to this Chapter.
2. Each Party shall ensure that all measures of general application to which this Chapter applies are administered in a reasonable, objective and impartial manner.
3. Each Party shall, to the extent practicable:
(a) publish in advance any regulation that it proposes to adopt and the purpose of the regulation; and
(b) provide interested persons and other Parties with a reasonable opportunity to comment on that proposed regulation.
4. At the time that it adopts a final regulation, a Party should, to the extent practicable, address in writing the substantive comments received from interested persons and other Parties with respect to the proposed regulation. For greater certainty, a Party may address those comments collectively on an official government website.
5. To the extent practicable, each Party should allow a reasonable period of time between publication of a final regulation of general application and the date when it enters into effect.
6. Each Party shall establish or maintain appropriate mechanisms for responding to inquiries from interested persons and other Parties regarding measures of general application covered by this Chapter.
7. If a Party requires authorization for the supply of a financial service, it shall ensure that its financial regulatory authorities:
(a) to the extent practicable, permit an applicant to submit an application at any time;
(b) allow a reasonable period for the submission of an application if specific time periods for applications exist;
(c) provide to service suppliers and persons seeking to supply a service the information necessary to comply with the requirements and procedures for obtaining, maintaining, amending, and renewing such authorization;
(d) to the extent practicable, provide an indicative timeframe for processing of an application;
(e) endeavor to accept applications in electronic format;
(f) accept copies of documents that are authenticated in accordance with the Party's law, in place of original documents, unless the financial regulatory authorities require original documents to protect the integrity of the authorization process;
(g) at the request of the applicant, provide without undue delay information concerning the status of the application;
(h) in the case of an application considered complete under the Party's laws and regulations, within a reasonable period of time taking into account the available resources of the competent authority after the submission of the application, ensure that the processing of an application is completed, and that the applicant is informed of the decision concerning the application, to the extent possible in writing;
(i) in the case of an application considered incomplete under the Partyâs law, within a reasonable period of time, to the extent practicable:
(i) inform the applicant that the application is incomplete,
(ii) at the request of the applicant, provide guidance on why the application is considered incomplete, and
(iii) provide the applicant with the opportunity (7) to provide the additional information that is required to complete the application; and
if none of the actions in subparagraphs (i) through (iii) is practicable, and the application is rejected due to incompleteness, ensure that the applicant is informed within a reasonable period of time;
(j) in the case of a rejected application, to the extent practicable, either on its own initiative or upon the request of the applicant, inform the applicant of the reasons for rejection and, if applicable, the procedures for resubmission of an application;
(k) with respect to an authorization fee (8) charged by financial regulatory authorities:
(i) provide applicants with a schedule of fees or information on how fee amounts are calculated, and
(ii) do not use the fees as a means of avoiding the Party's commitments or obligations under this Chapter; and
(l) ensure that authorization, once granted, enters into effect without undue delay.
Article 17.14. Self-Regulatory Organizations
If a Party requires a financial institution or a cross-border financial service supplier of another Party to be a member of, participate in, or have access to, a self-regulatory organization in order to provide a financial service in or into its territory, it shall ensure that the self- regulatory organization observes the obligations contained in this Chapter.
Article 17.15. Payment and Clearing Systems
Under terms and conditions that accord national treatment, each Party shall grant financial institutions of another Party established in its territory access to payment and clearing systems operated by public entities, and to official funding and refinancing facilities available in the normal course of ordinary business. This Article does not confer or require access to the Partyâs lender of last resort facilities.
Article 17.16. Expedited Availability of Insurance Services
The Parties recognize the importance of maintaining and developing regulatory procedures to expedite the offering of insurance services by licensed suppliers. These procedures may include: allowing introduction of products unless those products are disapproved within a reasonable period of time; not requiring product approval or authorization of insurance lines for insurance other than insurance sold to individuals or compulsory insurance; or not imposing limitations on the number or frequency of product introductions. If a Party maintains regulatory product approval procedures, that Party shall endeavor to maintain or improve those procedures, as appropriate, to expedite availability of insurance services by licensed suppliers.
Article 17.17. Transfer of Information
No Party shall prevent a covered person from transferring information, including personal information, into and out of the Party’s territory by electronic or other means when this activity is for the conduct of business within the scope of the license, authorization, or registration of that covered person. Nothing in this Article restricts the right of a Party to adopt or maintain measures to protect personal data, personal privacy and the confidentiality of individual records and accounts, provided that such measures are not used to circumvent this Article.
Article 17.18. Location of Computing Facilities
1. The Parties recognize that immediate, direct, complete, and ongoing access by a Party's financial regulatory authorities to information of covered persons, including information underlying the transactions and operations of such persons, is critical to financial regulation and supervision, and recognize the need to eliminate any potential limitations on that access.
2. No Party shall require a covered person to use or locate computing facilities in the Party's territory as a condition for conducting business in that territory, so long as the Party's financial regulatory authorities, for regulatory and supervisory purposes, have immediate, direct, complete, and ongoing access to information processed or stored on computing facilities that the covered person uses or locates outside the Party's territory. (9)
3. Each Party shall, to the extent practicable, provide a covered person with a reasonable opportunity to remediate a lack of access to information as described in paragraph 2 before the Party requires the covered person to use or locate computing facilities in the Partyâs territory or the territory of another jurisdiction. (10)
4. Nothing in this Article restricts the right of a Party to adopt or maintain measures to protect personal data, personal privacy and the confidentiality of individual records and accounts, provided that these measures are not used to circumvent the commitments or obligations of this Article.
Article 17.19. Committee on Financial Services
1. The Parties hereby establish a Committee on Financial Services (Financial Services Committee). The principal representative of each Party must be an official of the Party's authority responsible for financial services set out in Annex 17-B (Authorities Responsible for Financial Services).
2. The Financial Services Committee shall supervise the implementation of this Chapter and its further elaboration, including by considering issues regarding financial services that are referred to it by a Party.
3. The Financial Services Committee shall meet as the Parties decide to assess the functioning of this Agreement as it applies to financial services. The Financial Services Committee shall inform the Commission of the results of any meeting. The Parties may invite, as appropriate, representatives of their domestic financial regulatory authorities to attend meetings of the Committee.
Article 17.20. Consultations
1. A Party may request, in writing, consultations with another Party regarding any matter arising under this Agreement that affects financial services. The other Party shall give sympathetic consideration to this request. The consulting Parties shall report the results of their consultations to the Financial Services Committee.
2. A Party may request information on an existing non-conforming measure of another Party as referred to in Article 17.10.1 (Non-Conforming Measures). Each Party's financial authorities specified in Annex 17-B (Authorities Responsible for Financial Services) shall be the contact point to respond to those requests and to facilitate the exchange of information regarding the operation of measures covered by those requests.
3. For greater certainty, nothing in this Article shall be construed to require a Party to derogate from its law regarding sharing of information between financial regulatory authorities or the requirements of an agreement or arrangement between financial regulatory authorities of the Parties, or to require a financial regulatory authority to take any action that would interfere with specific regulatory, supervisory, administrative or enforcement matters.
Article 17.21. Dispute Settlement
1. Chapter 31 (Dispute Settlement) applies as modified by this Article to the settlement of disputes arising under this Chapter.
2. For disputes arising under this Chapter or a dispute in which a Party invokes Article 17.11 (Exceptions), when selecting panelists to compose a panel under Article 31.9 (Panel Composition), each disputing Party shall select panelists so that:
(a) the chairperson has expertise or experience in financial services law or practice, such as the regulation of financial institutions, and meets the qualifications set out in Article 31.8.2 (Roster and Qualifications of Panelists); and
(b) each of the other panelists:
(i) has expertise or experience in financial services law or practice, such as the regulation of financial institutions, and meets the qualifications set out in paragraph (2)(b) through (2)(d) of Article 31.8.2 (Roster and Qualifications of Panelists); or
(ii) meets the qualifications set out in Article 31.8.2 (Roster and Qualification of Panelists).
3. If a Party seeks to suspend benefits in the financial services sector, a panel that reconvenes to make a determination on the proposed suspension of benefits, in accordance with Article 31.19 (Non-Implementation - Suspension of Benefits), shall seek the views of financial services experts, as necessary.