(v) Transferrable securities;
(vi) Other financial trading instruments and assets, including metal;
(g) Participation in issuing securities of any type, including underwriting and placement as agents (either publicly or privately), and supply of services related to those issuances;
(h) Money broking;
(i) Asset administration, for example cash or portfolio management, all forms of collective investment management, pension fund administration, custodial, depository and trust services;
(j) Settlement and clearing services relating to financial assets, including securities, derivative products and other negotiable instruments;
(k) Provision and transfer of financial information and processing of financial data and related software, by providers of other financial services; and
(l) Mediation and advisory services and other auxiliary financial services related to any of the activities listed in subparagraphs (e) to (0), including credit reports an analyses, studies and advice on investments and portfolios, and advice on acquisitions, restructuring and company strategy;
Financial services provider from a Party refers to a person from one Party whose business it is to provide a financial service in the territory of that Party;
Investment refers to an "investment" as defined in Article 10.1 (Definitions), unless, with regards to "loans" or "debt instruments" mentioned in this Chapter:
(a) A loan awarded to a financial institution or a debt instrument issued by a financial institution is an investment only when treated as capital used for regulatory purposes by the Party in whose territory the financial institution is located; and
(b) A loan awarded to a financial institution or a debt instrument issued by a financial institution owned by a financial institution, which is different from a loan or debt instrument of a financial institution mentioned in subparagraph (a), is not an investment;
For greater certainty:
(a) A loan awarded to a Party, or a debt instrument issued by a Party or state enterprise, is not an investment; and
(b) A loan awarded by a cross-border financial services provider, or a debt instrument owned by the same, which is not a loan to a financial institution, or a debt instrument issued by the former, is an investment if said loan or debt instrument meets the criteria for investments established in Article 10.1 (Definitions);
Investor from a Party refers to an "investor from a Party" as defined in Article 10.1 (Definitions);
New financial service refers to a financial service not available in the territory of one Party but which is available in the territory of another Party, including any new form of distribution for a financial service or the sale of a new financial product;
Person from a Party refers to a "person from a Party" as defined in Article 2.1 (General Definitions) and, for greater certainty, does not include branches of companies from non-Party states;
Public entity refers to a central bank or monetary authority of a Party, or any financial institution or entity, either owned or controlled by a Party;
Self-regulated entity refers to any non-governmental entity, including any market, stock exchange or financial derivatives, clearing house or other body or association that itself or on behalf of another entity exercises regulatory or supervisory authority over suppliers of cross- border financial services or financial institutions.
Article 11.2. Scope of Application
1. This Chapter applies to the measures adopted and maintained by the Parties with regards to:
(a) Financial institutions of another Party;
(b) Investors of another Party and the investments of these investors in financial institutions in the territory of the Party; and
(c) Cross-border trade in financial services.
2. In the event of incompatibility between the provisions of this Chapter and any other provision of this Additional Protocol, the provisions made in this Chapter shall prevail to the extent of the incompatibility.
3. Chapters 9 (Cross-border Trade in Services) and 10 (Investment) shall apply to the measures described in paragraph 1, solely in the extent that said Chapters or Articles of said Chapters are included in this Chapter.
4. Articles 9.16 (Benefits Denial), 10.11 (1) (Transfers), 10.12 (Expropriation and Compensation), 10.13 (Benefits Denial), 10.14 (Special Formalities and Requests for Information) and 10.31 (Investment and Measures on Health, the Environment and other Regulatory Objectives) are included in this Chapter and are an integral part of the same, mutatis mutandis.
5. Section B (Dispute Resolution between one Party and an investor from another Party) of Chapter 10 (Investment) is included in this Chapter and is an integral part of the same solely in claiming that a Party has violated Articles 10.11 (Transfers), 10.12 (Expropriation and Compensation), 10.13 (Benefits Denial) or 10.14 (Special Formalities and Requests for Information) in the terms in which they are included in this Chapter.
6. Article 9.13 (Transfers and Payments), including its footnote, is included in this Chapter and is an integral part of the same insofar as such cross-border trade in financial services may be subject to obligations pursuant to Article 11.6.
7. This Chapter does not apply to the measures adopted and maintained by the Parties with regards to:
(a) Activities or services that form part of public retirement plans, or legally established social security systems; or
(b) Activities or services carried out on behalf of or with the guarantee of the Party or using its financial resources, including its public entities;
Notwithstanding, this Chapter shall apply to the activities or services mentioned in subparagraphs (a) or (b) which the Party shall allow to be carried out by its financial institutions in accordance with a public entity or financial institution.
Article 11.3. National Treatment
1. Each Party shall award investors from another Party treatment no less favourable than it would award, under similar circumstances, to its own investors, with regards 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 award the financial institutions of another Party and the investments of investors from another Party in the Party's financial institutions, treatment no less favourable than it would award, under similar circumstances, to its own financial institutions and the investments of its own investors in financial institutions with regards to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of financial institutions and investments.
3. For the purposes of the national treatment obligations laid out in Article 11.6.1, a Party shall award cross-border financial services providers from another Party, treatment no less favourable than it would award, under similar circumstances, its own financial services providers, with regards to the supply of the relevant service.
4. The treatment a Party must award in accordance with paragraphs 1, 2 and 3 means, with regards to the measures adopted or maintained by a regional or state government, treatment no less favourable than the most favourable treatment awarded, under similar circumstances, by that regional or state government to the financial institutions, investors in financial institutions, the investments of investors in financial institutions and cross-border financial services providers from the Party of which they form part.
Article 11.4. Most Favoured Nation Treatment
Each Party shall award the investors of another Party, the financial institutions of another Party the investments of investors from another Party in financial institutions of the Party and cross- border financial services providers from another Party, treatment no less favourable than it would award, under similar circumstances, the investors of another Party, the financial institutions of another Party the investments of investors from another Party in financial institutions of the Party and cross-border financial services providers from a non-Party state.
Article 11.5. Right of Establishment
1. A Party shall allow an investor from another Party, to establish in its territory a financial institution through any method of establishment and operation permitted by its legislation at the time it is established, without imposing numerical restrictions or specific types of legal requirements. This obligation against the imposition of requirements to adopt a specific legal code does not prevent a Party from imposing conditions or requirements relating to the establishment of a particular kind of entity chosen by an investor from another Party.
2. For greater certainty, a Party shall allow an investor from another Party which controls or is the owner of a financial institution in the territory of the Party, to establish additional financial institutions necessary for the supply of the full range of financial services in accordance with the legislation of the Party at the moment the additional financial institutions are established. Subject to the provisions of Article 11.3, a Party may impose, at the time a financial institution is established, terms and conditions pertaining to the establishment of additional financial institutions and determining the institutional and legal form that shall be used for the supply of specific financial services or to carry out specific activities.
3. The right to establishment, in accordance with paragraphs 1 and 2 shall include the acquisition of existing entities.
4. Subject to the provisions of Article 11.3, a Party may prohibit the use of a specific financial service or particular activity. Said prohibition shall not apply to all the financial services of an entire subsector of financial services, such as banking activities.
5. For the purposes of this Article, "numerical restrictions" refers to limits imposed, whether on the basis of a regional subdivision or over the whole territory of a Party, ina number of financial institutions, whether it be in the form of numerical quotes, monopolies, exclusive service providers or through demanding a test of economic necessities.
Article 11.6. Cross-border Trade
1. Each Party shall allow, in accordance with the terms and conditions used to award national treatment, the cross-border financial services providers from another Party to provide the services described in Annex 11.6.
2. Each Party shall allow persons located in its territory and its nationals, wherever they are, to acquire financial services from cross-border financial services providers of another Party located in the territory of another Party. This does not mean that a Party is obliged to allow said cross-border financial services providers to conduct business or advertise themselves in its territory. Each Party may define "conduct business" and "advertise themselves" for the purposes of this obligation, on the condition that said definitions are not incompatible with paragraph 1.
3. Notwithstanding other methods of prudential regulation of cross-border trade in financial services, a Party may demand the registry or authorisation of the cross-border financial services providers from another Party and financial instruments.
Article 11.7. New Financial Services
1. Each Party shall allow a financial institution from another Party, to provide whatever new financial service whose provision the Party would allow, under similar circumstances, its own financial institutions, in accordance with its legislation, on the condition that the introduction of that financial service does not require new legislation or the modification of an existing law. (2)
2. Each Party may determine the legal and institutional form through which the new financial service shall be supplied and may subject the supply of the same to authorisation and notification. When authorisation is required, the decision shall be made within a reasonable period of time and may only be denied for prudential reasons.
3. None of what is established in this Article prevents a financial institution from one Party from requesting that another Party authorise the supply of a financial service that is not provided in the territory of any of the Parties. Said request shall be subject to the legislation of the Party of whom the request is made and, for greater certainty, shall not be subject to the obligations of this Article.
Article 11.8. Treatment of Certain Information
No provision in this Chapter obliges a Party to divulge or allow access to:
(a) Information pertaining to financial deals and the accounts of individual clients in financial institutions or cross-border financial services providers; or
(b) Any confidential information whose disclosure could impede compliance with its legislation or in some other way be against the public interest or harm the legitimate commercial interests of a specific person.
Article 11.9. Senior Managers and Boards of Directors (3)
1. No Party may demand that the financial institutions of another Party employ people of a certain nationality for executive positions or essential roles.
2. No Party may demand that more than a minority of the members of the Board of another Party's financial institution be composed of the Party's nationals, nationals whose residence is the territory of the Party or a combination of both.
Article 11.10. Noncompliant Measures
1. Articles 11.3, 11.4, 11.5, 11.6 and 11.9 shall not apply to:
(a) Any existing noncompliant measure maintained by a Party:
(i) At central or federal government level, such as that Party establishes in Section A of its list in Annex III;
(ii) At regional or state government level, such as that Party establishes in Section A of its list in Annex III; or
(iii) At local government level;
(b) The continuation or immanent renewal of any noncompliant measure referred to in subparagraph (a); or
(c) An amendment of any noncompliant measure referred to in subparagraph (a) as long as said modification does not diminish compliance, to the extent that it was already in force:
(i) Immediately prior to the amendment, with articles 11.3, 11.4, 11.5 and 11.9; or
(ii) On the date that this Additional Protocol enters into force, with Article 11.6.
2. Articles 11.3, 11.4, 11.5, 11.6 and 11.9 do not apply to any measure adopted by a Party in relation to the sectors, subsectors or activities indicated in Section B of its Schedule in Annex Ill.
3. Any measure set out by a Party in its Schedule in Annexes I or II which does not comply with Articles 10.4 (National Treatment), 10.5 (Most Favoured Nation Treatment), 9.3 (National Treatment) or 9.4 (Most Favoured Nation Treatment), shall be treated as a noncompliant measure not subject to Article 11.3 or 11.4, as applicable, while that measure, sector, subsector or activity established in the noncompliant measure is covered in this Chapter.
Article 11.11. Exceptions
1. None of the provisions of this Additional Protocol may be construed to prevent a Party from adopting or maintaining measures for prudential reasons for such purposes as:
(a) Protecting investors, depositors or other creditors, policy holders or policy beneficiaries or persons with whom a financial institution or cross-border financial services provider has a fiduciary duty;
(b) Maintaining the financial security, solvency, integrity or responsibility of individual financial institutions or cross-border financial services providers; or
(c) Guaranteeing the integrity or stability of the financial system.
Where such measures do not comply with the provisions of this Additional Protocol, they may not be used to evade the commitments or obligations entered into by the Parties in accordance with said provisions.
2. No provision of this Additional Protocol shall apply to the generally applicable non- discrimination measures adopted by any public entity in accordance with monetary and related credit and exchange policies. This paragraph shall not affect one Party's obligations in accordance with Article 10.8 (Performance Requirements) with respect to the measures covered in Chapter 10 (Investment) or in accordance with Article 10.11 (Transfers) or 9.13 (Transfers and Payments).
3. Notwithstanding the provisions of Article 10.11 (Transfers) and Article 9.13 (Transfers and Payments), in the terms included in this Chapter, a Party may prevent or limit transfers from a financial institution or cross-border financial services provider to, or for the benefit of, any person linked or related to said institution or provider, through the fair, non-discriminatory and good faith application of measures related to the maintenance of financial security, solvency, solidity, integrity or responsibility of the financial institutions or cross-border providers of financial services. This paragraph shall be applied without prejudice to any other provision of this Additional Protocol which allows a Party to restrict transfers.
4. For greater certainty, no provision of this Chapter may be construed to prevent a Party from adopting or applying those measures necessary to ensure the observance of laws or regulations which are not incompatible with this Chapter, including those related to the prevention of practices which lead to error and fraudulent practices or to address the effects of non-compliance of financial services contracts, subject to the demands of said measures, are not applied in such a way that they may constitute a means of arbitrary or unjustified discrimination between countries in which similar conditions prevail or a disguised restriction on investment in financial institutions or cross-border trade in financial services, such as are covered by this Chapter.
Article 11.12. Recognition and Harmonisation
1. In applying the measures laid out in this Chapter, a Party may recognise the prudential measures of another Party or a non-Party state. Such recognition may be:
(a) Unilaterally awarded;
(b) Achieved through harmonisation or other methods; or
(c) Awarded on the basis of an agreement or accord between another Party and a non-Party state.
2. Any Party awarding recognition to prudential measures in accordance with paragraph 1 shall offer the other Parties suitable opportunities to demonstrate that there are circumstances in which there are or will be regulation, supervision and application of the equivalent regulation and, where appropriate, that there are or will be processes put in place to share information between the relevant Parties.
3. Where a Party grants recognition to prudential measures in accordance with paragraph 1 (c) and the circumstances established in paragraph 2, the Party shall offer the other Parties suitable opportunities to negotiate accession to the agreement or accord, or to negotiate a similar agreement or accord.
Article 11.13. Transparency and Administration of Certain Measures
1. The Parties recognise that transparent regulations and policies governing the activities of financial institutions and financial services providers are important in facilitating such activities, both in respect of access to their respective markets and operations within them. Each party undertakes to promote regulatory transparency in financial services.
2. In place of Article 15.3 (Transparency), each Party shall, as much as is practicable and in accordance with its legislation:
(a) Publish in advance any generally applicable regulation relating to the subjects in this Chapter it proposes to adopt;
(b) Supply interested persons and other Parties a reasonable opportunity to make comments on the proposed regulations; and
(c) Supply a reasonable period of time between publishing the final regulations and their entry into force.
3. The regulatory authorities of each Party shall make all information pertaining to the requirements, including any necessary documentation, for the completion and submission of requests related to the supply of financial services available to the public.
4. Within a period of 120 days, the relevant authority of a Party shall take an administrative decision on any complete request from an investor in a financial institution, a financial institution or a cross-border financial services provider from another Party related to the supply of a financial service and shall notify the applicant promptly of its decision. A request shall 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 120 days, the relevant authority shall notify the applicant without unreasonable delay and shall seek to make its decision following this within a reasonable period of time.
5. Upon petition by an interested party, the relevant authority of a Party shall inform it of the status of its request. When the authority requires additional information of the applicant, the latter shall be notified of this fact without unreasonable delay.
6. Each Party shall maintain or establish appropriate mechanisms to respond to the questions of interested parties, as soon as practicable, with respect to generally applicable measures covered in this Chapter.
7. On adopting final regulations, the Party must, insofar as is practicable and in accordance with its legislation, give consideration in writing to substantive comments received from interested Parties with regards to the proposed regulations. (4)
8. Each Party shall ensure that the generally applicable norms adopted or maintained by self-regulated authorities of the Party are published promptly or are available through another means, so that interested persons may become acquainted with them.
9. Each Party shall ensure that all generally applicable measures to which this Chapter applies are administered reasonably, objectively and impartially.
Article 11.14. Self-regulated Entities
Where a Party requires that a financial institution or cross-border financial services provider another Party become a member of a self-regulated entity, participate in one or have access to it with the aim of providing a financial service in or to its territory, the Party shall ensure that said self-regulated entity fulfils the obligations laid out in Article 11.3 and 11.4.
Article 11.15. Payment and Compensation Systems
Each Party shall, in the terms and conditions used to award national treatment, grant the financial institutions of any other Party established in its territory, access to publicly- administered payment and compensation systems as well as access to official methods of financing and refinancing available in the course of normal commercial operations. The objective of this Article is not to grant access to the Party's lender of last resort facilities.
Article 11.16. Specific Commitments
Annex 11.16 establishes certain specific commitments for each Party.
Article 11.17. Data Processing
1. Subject to prior authorisation of the relevant regulator or authority, any Party, where required, shall allow financial institutions from any other Party to transfer information into and out of the Party's territory, using any of the authorised methods for processing thereof, where such a transfer may be necessary to carry out those institutions' normal business activities.
2. For greater certainty, when the information referred to in paragraph 1 is composed of or contains personal data, the transfer of such information shall be carried out in accordance with legislation concerning the protection of people with regards to the transfer and processing of personal data from the Party in or from whose territory the information is being transferred.
Article 11.18. Financial Services Committee
1. The Parties hereby establish the Financial Services Committee (hereinafter the "Committee"). The main representative from each Party shall be an official from the authority of each Party responsible for financial services as established in Annex 11.8. In addition, representatives of other institutions shall be able to participate when the competent authorities consider it appropriate.
2. The Committee:
(a) Will supervise the implementation of this Chapter and its subsequent development;
(b) Will consider affairs relating to financial services referred to it by a Party, including requests to review Section A of Annex Ill, with a view to greater liberalisation;
(c) Will participate in dispute resolution procedures in accordance with the provisions of Article 11.20; and
(d) Will facilitate the exchange of information between national supervisory authorities and will cooperate in the area of advice on prudential regulation.
3. The Committee shall meet once a year, or at a frequency agreed upon by the Committee, to review the function of this Additional Protocol in matters pertaining to financial services. The Committee shall inform the Free Trade Commission of the results of each meeting.
Article 11.19. Consultations
1. A Party may request consultations with another Party in regards to any matter related to this Additional Protocol which may affect financial services. The other Party shall give due consideration to the request. The Parties shall promptly inform the Committee of the results of such consultations.
2. The consultations described in this Article shall include the participation of the authorities established in Annex 11.18.
3. A Party may request that a competent authority from another Party participate in the consultations being held in accordance with this Article. The other Party shall give all due consideration to said request.
4. None of the provisions of this Article may be construed to oblige the regulatory authorities participating in the consultations described in paragraph 1 to divulge information or act in such a way as to interfere in specific matters pertaining to the regulation, supervision, administration or application of measures.
5. None of the provisions of this Article may be construed to require a Party repeal its legislation in matters related to the exchange of information between financial regulators or to the requirements of an agreement or accord between the financial authorities of two or more Parties.
6. Where a Party requests information for the purpose of supervision related to a financial institution or a cross-border financial services provider in the territory of another Party, none of the provisions of this Article may be construed to prevent that Party from going to the competent authority in the territory of the other Party to request the information.
Article 11.20. Dispute Resolution between Parties
1. Chapter 17 (Dispute Resolution) applies, in modified terms in the context of this Article, to the resolution of such disputes as may arise by the application of this Chapter.
2. For the purposes of Article 17.13 (Choosing an Arbitral Tribunal), the arbiters, in addition to what is described in Article 17.12.1 (Arbiter Requirements) must have specialist knowledge or experience in financial law or the practice of financial services, which may include the regulation of financial institutions, unless the Parties agree otherwise.
3. For the effects of Article 17.13.2 (Choosing an Arbitral Tribunal), the period for the appointment of an arbiter and the nomination of candidates for the presidency of the arbitral tribunal shall be 30 days.
4. In any dispute in which the arbitral tribunal has determined that a measure is incompatible with the obligations of this Additional Protocol, when, as appropriate, the benefits referred to in Article 17.20 (Compensation or Suspension of Benefits) and the measure affects: (a) Only the financial services sector, the complaining Party may suspend benefits only in the financial services sector;
(b) The financial services sector and any other sector, the complaining Party may suspend benefits in the financial services sector which have an equivalent effect to the measure on the Party's financial services sector; or
(c) Only a sector other than the financial services sector, the complaining Party may not suspend benefits in the financial services sector.
Article 11.21. Dispute Resolution between a Party and an Investor from Another Party
1. Where an investor from one Party submits a request for arbitration in accordance with Section B (Dispute Resolution between a Party and an Investor from another Party) of Chapter 10 (Investment) and the defendant invokes Article 11.11 in its defence, the tribunal must refer the matter in writing to the Committee to be decided. (5) The tribunal may not go ahead until it receives a decision in accordance with this Article.
2. Where making a referral in accordance with paragraph 1, the Party of the complainant and the Party of the defendant shall decide whether and to what extent Article 11.11 is a valid defence against the investor's claim. These Parties shall send a copy of their decision to the Committee, the tribunal and the Free Trade Commission. The decision shall be binding on the tribunal.
3. Where the Party of the complainant and the Party of the claimant have not reached a decision within the period of 60 days following receipt of the referral in accordance with paragraph 1, the claimant Party or the defendant Party may request, within the following 10 day period, the establishment of an arbitrary tribunal in accordance with Article 17.7 (Establishing an Arbitrary Tribunal) with the aim of reaching a decision on the matter. The arbitrary tribunal shall be assembled in accordance with Article 17.13 (Choosing an Arbitrary Tribunal). In addition to the provisions of Article 17.16 (Final Decision of the Arbitral Tribunal), the arbitral tribunal shall send its final report to the Committee and the tribunal. The report shall be binding on the court.
4. When the establishment of an arbitrary tribunal, in accordance with paragraph 3, in the 10 day period following the 60 day period laid out in said paragraph, the tribunal can go ahead and reach a decision on the matter.
5. Each disputing Party shall carry out the steps necessary to ensure that the members of the arbitrary tribunal have the knowledge or experience described in Article 11.20.2. The knowledge or experience of these candidates with regards to financial services shall be taken into account, insofar as possible, when appointing the arbiter presiding over the arbitrary tribunal.
Annex 11.6. CROSS-BORDER TRADE
Insurance services and services related to insurance
1. Article 11.6 applies to the cross-border supply of or trade in financial services, as defined in subparagraph (a) in the cross-border supply of financial services in Article 11.1, with regards to:
(a) Insurance of risk relating to:
(i) International maritime shipping, international commercial aviation space launching and freight (including satellites), which may cover any or all of the following: the goods being transported, the vehicle transporting those goods and the civil responsibility that may evolve from the same; and