Public entity means a central bank or monetary authority or any institution of a public nature in the financial system of a Party which is owned or controlled by it when it is not performing commercial functions;
Financial institution means any financial intermediary or other undertaking that is authorized to provide financial services and is regulated or supervised as a financial institution under the law of the Party in whose territory it was incorporated;
Financial institution of another Party: a financial institution, incorporated in the territory of a Party owned or controlled by persons of another Party;
Investment: means "investment" as defined in Article 3.01 (Definitions), except that, with respect to "loans" and "debt instruments" referred to in that Article:
A loan granted to a financial institution or a debt instrument issued by a financial institution is an investment only when it is treated as regulatory capital by the Party in whose territory the financial institution is located; and
A loan granted by a financial institution or a debt instrument owned by a financial institution, other than a loan or debt instrument of a financial institution referred to in subparagraph (a), is not an investment;
For greater certainty, a loan from a cross-border financial service provider or a debt instrument owned by a cross-border financial service provider, other than a loan to a financial institution or a debt instrument issued by a financial institution, Is an investment if such loan or debt instrument meets the criteria for investments set forth in Article 3.01 (Definitions);
Investor of a Party: as defined in Article 3.01 (Definitions);
New financial service: a financial service not provided in the territory of the Party which is provided in the territory of another Party, and includes any new form of
Provision of a financial service, or sale of a financial product that is not sold in the territory of the Party;
Self-regulatory bodies: any non-governmental entity, including any stock or futures exchange, clearing house or any other association or organization exercising an own or delegated regulatory or supervisory authority over financial institutions or providers of cross-border financial services;
Person: a "person" as defined in Article 2.01 (Definitions of general application), but does not include a branch of a business of a non-Party;
Provision of cross-border financial services or cross-border trade in financial services:
The provision of a financial service from the territory of one Party to the territory of another Party;
In the territory of a Party by a person of that Party to a person of another Party; Or by a national of a Party in the territory of another Party;
But does not include the provision of a financial service in the territory of a Party by an investment in that territory;
A financial service provider of a Party: a person of a Party engaged in the business of providing financial services in its territory;
Provider of cross-border financial services of a Party: a person from a Party engaged in the business of providing financial services in its territory and seeking to carry out or perform the provision of cross-border financial services; and
Financial service: any financial service. Financial services comprise all insurance and insurance-related services and all banking and other financial services (excluding insurance), as well as ancillary or auxiliary services to a financial service. Financial services include the following activities:
Insurance and insurance related services
a) Direct insurance (including coinsurance):
(i) life insurance;
(ii) non-life insurance;
b) Reinsurance and retrocession;
c) Insurance intermediation activities, for example those of brokers and insurance agents; Y
d) Services auxiliary to insurance, for example consultants, actuaries, risk assessment and claims compensation.
Banking and other financial services (excluding insurance)
e) Acceptance of deposits and other repayable funds from the public;
f) Loans of all kinds, including personal loans, mortgage loans, factoring and financing of commercial transactions;
g) Leasing services;
h) All payment and money transfer services, including credit, payment and similar cards, traveler's checks and bank drafts;
i) Guarantees and commitments;
j) Trading for own account or clients, whether in a stock exchange, an over-the-counter market or otherwise, of the following:
Money market instruments (including checks, bills of exchange and certificates of deposit);
Foreign exchange;
Derivatives, including but not limited to futures and options;
Exchange and money market instruments, for example, swaps and forward interest rate agreements;
Transferable values;
Other negotiable instruments and financial assets, including metal;
k) Participation in issues of all kinds of securities, including subscription and placement as agents (publicly or privately) and the provision of services related to such issues;
l) Correction of changes;
m) Asset management, for example, cash or securities portfolio management, collective investment management in all its forms, pension fund administration, depository and custody services, and fiduciary services;
n) Payment and clearing services for financial assets, including securities, derivatives and other negotiable instruments;
o) Provision and transfer of financial information, financial data processing and related software by suppliers of other financial services; and
p) Advisory and intermediation services and other auxiliary financial services in respect of any of the activities referred to in subparagraphs (e) to (o), including credit reports and analysis, investment and securities portfolio studies and advice, and advice on Acquisitions and on corporate restructuring and strategy.
6.02. Scope of Application and Extent of Obligations
1. This Chapter applies to measures adopted or maintained by a Party relating to: financial institutions of another Party;
Cross-border trade in financial services; and
Investors of another Party and investments of such investors in financial institutions in the territory of the Party.
2. Chapters Three (Investment) and Four (Cross-Border Trade in Services) apply to the measures described in paragraph 1, only to the extent that these Chapters or Articles of said Chapters are incorporated into this Chapter.
Articles 3.10 (Transfers), 3.11 (Expropriation and Compensation), 3.12 (Specialties Formalities and Information Requirements), 3.13 (Denial of Benefits), 3.14 (Environmental Measures) and 4.14 (Denial of Benefits) are incorporated into this Chapter And form an integral part thereof.
Section B of Chapter Three (Investor-State Dispute Settlement) is incorporated into and made a part of this Chapter only for claims that a Party has breached Article 3.10, 3.11, 3.12, or 3.13, as incorporated into this Chapter.
Article 4.13 (Transfers and Payments) is incorporated into and made a part of this Chapter to the extent that cross-border trade in financial services is subject to the obligations under Article 6.06.
3. This Chapter does not apply to measures taken or maintained by a Party relating to:
Activities or services that are part of a public retirement plan or a legal social security system; or
Activities or services performed on behalf of or with the Party's guarantee or using the financial resources of the Party, including its public entities,
However, this Chapter shall apply if a Party permits any of the activities or services referred to in subparagraph (a) or (b) to be performed by its financial institutions in competition with a public entity or a financial institution.
4. In case of incompatibility between the provisions of this Chapter and any other provision of this Agreement, the provisions of this Chapter shall prevail to the extent of the incompatibility.
6.03. National Treatment
1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords in similar circumstances to its own investors with respect to the establishment, acquisition, expansion, administration, 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 investments of investors of another Party in financial institutions treatment no less favorable than that it accords, under similar circumstances, to its own financial institutions and investments of its own investors In financial institutions, with respect to the establishment, acquisition, expansion, administration, conduct, operation and sale or other disposition of financial institutions and investments.
3. For the purposes of the national treatment obligations of Article 6.06.1, a Party shall accord to providers of financial services of another Party treatment no less favorable than that it accords, under similar circumstances, to its own service providers With respect to the provision of the relevant service.
6.04. Most-favored-nation Treatment
Each Party shall accord to investors of another Party, to the financial institutions of another Party, investments by investors in financial institutions and to cross-border financial service providers of another Party, treatment no less favorable than that which it grants, in Similar circumstances, to investors, financial institutions, investors' investments in financial institutions and to cross-border financial service providers of any other Party or a non-Party.
6.05. Market Access for Financial Institutions
No Party shall adopt or maintain, with respect to financial institutions of another Party, measures that:
Impose limitations on:
The number of financial institutions, whether in the form of numerical quotas, monopolies, exclusive service providers or by requiring an economic needs test;
The total value of financial services assets or transactions in the form of numerical quotas or the requirement of an economic needs test;
The total number of financial services operations or the total amount of production of financial services, expressed in numerical units
In the form of quotas or by requiring an economic needs test; or
The total number of natural persons that can be used in a particular financial services sector or which a financial institution may employ and which are necessary for the provision of a specific financial service and are directly related to it in the form of numerical quotas Or by requiring an economic needs test; or
Restrict or prescribe specific types of legal person or joint venture through which a financial institution may provide a service.
For the purposes of this Article, "financial institutions of another Party" includes financial institutions that investors of another Party intend to establish in the territory of the Party.
6.06. Cross-border Trade
1. Each Party shall permit, on terms and conditions giving national treatment, that cross-border financial service providers of another Party provide the services specified in Annex 6.06.
2. Each Party shall permit persons located in its territory and its nationals wherever located to purchase financial services from cross-border financial service providers of another Party located in the territory of that other Party or of any other Party. This does not oblige a Party to allow such providers to do business or advertise on its territory. Each Party may define "do business" and "advertise" for the purposes of this obligation, subject to such definitions not inconsistent with paragraph 1.
3. Without prejudice to other means of prudential regulation of cross-border trade in financial services, a Party may require the registration of cross-border financial service providers of another Party and of financial instruments.
6.07. Self-regulatory Bodies
Where a Party requires a financial institution or a provider of cross-border financial services of another Party to be a member, participates, or has access to a self-regulated entity to provide a financial service within or towards its territory, the Party shall ensure that that body complies With the obligations of Article 6.03 and Article 6.04.
6.08. Recognition and Harmonization
1. In applying the measures covered by this Chapter, a Party may recognize the prudential measures of another Party or of a non-Party. Such recognition may be granted unilaterally, achieved through harmonization or other means; Or on the basis of an agreement or arrangement of another Party or with the non-Party.
2. A Party granting recognition of prudential measures in accordance with paragraph 1 shall provide appropriate opportunities to any other Party to demonstrate that there are circumstances under which there are or will be equivalent regulations, supervision and enforcement, and, if applicable, Procedures for sharing information between the Parties.
3. Where a Party grants recognition to prudential measures in accordance with paragraph 1 and the circumstances set forth in paragraph 2 exist, that Party shall provide adequate opportunities to another Party to negotiate accession to the agreement or arrangement or to negotiate an agreement or similar arrangement.
6.09. Exceptions
1. Nothing in this Chapter shall be construed as an impediment for a Party to adopt or maintain prudential measures for reasons such as:
To protect borrowers, investors, depositors or other creditors, holders or beneficiaries of policies or persons liable for fiduciary obligations by a financial institution or a provider of cross-border financial services;
Maintain the security, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers; and
Ensure the integrity and stability of that Party's financial system.
2. Nothing in this Chapter applies to non-discriminatory measures of general application adopted by a public entity in the conduct of monetary policies or related credit policies or exchange rate policies. This paragraph shall not affect the obligations of any Party arising from investment performance requirements with respect to measures covered by Chapter 3 (Investment).
3. A Party may prevent or limit transfers from a financial institution or a provider of cross-border financial services to or for the benefit of a subsidiary or a person related to that institution or to that service provider through the application Fair and non-discriminatory nature of measures relating to the maintenance of the security, soundness, integrity or financial responsibility of financial institutions or cross-border financial service providers. This paragraph is without prejudice to any other provision of this Chapter that allows a Party to restrict transfers.
4. Article 6.03 shall not apply to the granting of exclusive rights by a Party to a financial institution to provide one of the financial services referred to in Article 6.02.3 a).
5. For greater certainty, no provision in this Chapter shall be construed to prevent a Party from adopting or enforcing the measures necessary to ensure observance of laws or regulations that are not inconsistent with this Chapter, including those relating to prevention Misleading practices and fraudulent practices or to deal with the effects of a default of financial services contracts, subject to the requirement that such measures be not applied in a manner that could constitute a means of arbitrary or unjustifiable discrimination between countries where similar conditions prevail or a disguised restriction on investment in financial institutions or Cross-border trade in financial services.
6.10. Transparency
1. The Parties recognize that transparent regulations and policies governing the activities of financial institutions and cross-border providers of financial services are important in facilitating foreign financial institutions and foreign providers of cross-border financial services, both market access for each Party, and to their operations therein. Each Party undertakes to promote regulatory transparency in financial services.
2. Instead of Article 10.03 (Publication), each Party, to the extent practicable:
Publish in advance any regulations of general application relating to the subject matter of this Chapter that it intends to adopt; and
Will provide interested parties and Parties with a reasonable opportunity to comment on the proposed regulations.
3. In adopting definitive regulations, a Party shall, to the extent practicable, consider in writing substantive comments received from interested parties with respect to the proposed regulations.
4. To the extent practicable, each Party shall allow a reasonable period to elapse between the publication of the final regulations and their entry into force.
5. Each Party shall ensure that rules of general application adopted or maintained by self-regulating organizations of the Party are published in a timely manner or are otherwise available in such a way that the persons concerned may become aware of them.
6. Each Party shall maintain or establish appropriate mechanisms to respond to inquiries of interested parties regarding measures of general application covered by this Chapter.
7. The regulatory authorities of each Party shall make available to the persons concerned the requirements, including any necessary documentation, for completing applications related to the provision of financial services.
8. At the request of an interested party, the regulatory authority of a Party shall inform it of the status of its request. Where the authority requires additional information from the applicant, it shall notify it without undue delay.
9. Within one hundred and twenty (120) days, the regulatory authority of a Party shall make an administrative decision on a full application by an investor in a financial institution, financial institution or cross-border financial service provider of another Party Related to the provision of a financial service and shall promptly notify the applicant of the decision. An application will not be considered complete until all relevant hearings have been held and all necessary information has been received. When it is not practicable to take a decision within a period of one hundred and twenty (120) days, the regulatory authority shall notify the interested party without undue delay and attempt to take the decision thereafter within a reasonable time.
6.11. Payment and Compensation Systems
Each Party shall accord, on terms and conditions that accord national treatment, to the financial institutions of another Party established in its territory, access to the payment and compensation systems administered by public entities, and to the official means of financing and refinancing available in the course Of normal commercial operations. This paragraph is not intended to provide access to the facilities of the Party's lender of last resort.
6.12. Domestic Regulation
Except in connection with the non-conforming measures listed in its Schedule III of Annex III (Financial Services), each Party shall ensure that all measures of general application to which this Chapter applies are administered in a reasonable, objective and impartial manner.
6.13. Expedited Availability of Insurance Services
The Parties recognize the importance of maintaining and developing regulatory procedures to expedite the provision of insurance services by authorized providers.
6.14. Senior Management and Boards of Directors
1. No Party may require financial institutions of another Party to employ personnel of any particular nationality to hold senior management positions or other essential positions.
2. Neither Party may require that the Board of Directors or the Board of Directors of a financial institution of another Party be composed of nationals of that Party resident in its territory or a combination of both.
6.15. General Inquiries
1. Each Party may request consultations with another on any matter relating to this Treaty affecting financial services. The other Party shall give due consideration to the request. The Consultative Parties shall inform the Committee of the results of their consultations during the meetings of the Consultative Committee.
2. Officials of the competent authorities of each Party listed in Annex 6.14 shall participate in the consultations provided for in this Article.
3. Each Party may request that the regulatory authorities of another Party intervene in consultations pursuant to this Article to discuss measures of general application of that other Party that may affect the operations of financial institutions or providers of cross-border financial services in the territory of the Party which requested the consultation.
4. Nothing in this Article shall be construed to require regulatory authorities to engage in consultations under paragraph 3 to disclose information or to act in a manner that would interfere with particular matters of regulation, Administration or implementation of measures.
5. In cases where, for supervisory purposes, a Party needs information on a financial institution in the territory of another Party or on providers of cross-border financial services in the territory of another Party, the Party may refer to the responsible regulatory authority in the territory Of the other Party to request the information.
6. Nothing in this Article shall be construed to require a Party to repeal its relevant legislation in relation to the exchange of information between financial regulators or the requirements of an agreement or agreement between the financial authorities of two or more Parties.
6.16. New Financial Services and Data Processing (16)
1. Each Party shall permit a financial institution of another Party to provide any new financial service which that Party would be able to provide to its own financial institutions in similar circumstances without further legislative action by the Party. The Party may decide the institutional and legal modality through which such service is offered and may require authorization for the provision thereof. When such authorization is required, the respective decision shall be taken within a reasonable time and the authorization may only be denied for prudential reasons.
2. Each Party shall permit the financial institutions of another Party to transfer, for processing, information into or out of the territory of the Party, using any of the means authorized therein, where necessary to carry out the ordinary activities Of these institutions.
6.17. Treatment of Certain Types of Information
Nothing in this Chapter requires a Party to disclose or permit access to:
a) information relating to financial affairs and individual client accounts of financial institutions or cross-border financial service providers; or
b) any confidential information whose disclosure may impede compliance with the law or is otherwise contrary to the public interest or injures the legitimate business interests of particular companies.
6.18. Financial Services Committee
1. The Financial Services Committee is established, whose composition is indicated in Annex 6.18. Likewise, representatives of other institutions may participate when deemed appropriate by the responsible authorities.
2. Without prejudice to Article 9.04 (Functions of Committees), the Committee shall have, inter alia, the following functions:
Supervise the implementation of this Chapter and its further development;
Consider aspects of financial services submitted to it by a Party;
Participate in dispute settlement procedures in accordance with Article 6.21; and
To facilitate the exchange of information between national supervisory authorities and to cooperate in the field of advisory services on prudential regulation, with a view to harmonizing regulatory frameworks and other policies, where appropriate.
6.19. Reservations and Exceptions
1. Articles 6.03 to 6.06 and 6.14 do not apply to:
a) any existing non-conforming measure which is maintained by a Party in
(i) the central level government, as established by that Party in its Schedule of
(ii) a local level government;
b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
c) any amendment to any non-conforming measure referred to in subparagraph (a) provided that such amendment does not diminish the conformity of the measure, as it was in force immediately before the amendment, with Articles 6.03 to 6.05 or 6.14.
2. Annex 6.19.2 sets out certain specific commitments of each Party.
3. Annex 6.19.3 provides, for the purpose of transparency alone, additional information regarding certain aspects of financial services measures of a Party which it considers to be inconsistent with its obligations under this Chapter.
4. Articles 6.03 to 6.06 and 6.14 shall not apply to any measure that a Party adopts or maintains with respect to sectors, sub-sectors or activities, as set forth in its Schedule III of Annex III (Financial Services).
5. A non-conforming measure established in a Party's Schedule to Annex I (Non-Conforming Measures) or Annex II (Measures to the Future) as a measure to which Article 3.04 (National Treatment), 3.05 (Most-Favored-Nation Treatment), 4.03 (Most Favored Nation Treatment), 4.04 (National Treatment) or 4.06 (Market Access) shall not be treated as a non-conforming measure to which Section 6.03, 6.04 or 6.05, as the case may be, does not apply, To the extent that the measure, sector, subsector or activity set out in the Schedule is covered by this Chapter.
6.20. Future Liberalization
With a view to achieving a progressively higher level of liberalization and prior Council instruction, the Parties undertake to conduct future negotiations aimed at eliminating remaining non-conforming measures listed in accordance with Article 6.19.1.