(b) "cross-border trade in financial services" or "cross-border supply of financial services" means the supply of a financial service:
(i) from the territory of one Party into the territory of the other Party; or
(ii) in the territory of one Party to a service consumer of the other Party; such supply of a financial service does not include the supply of a financial service in the territory of one Party by an investment in that territory;
(c) "financial institution" means any financial service supplier that carries out a financial service if that supplier is authorised to do business, regulated or supervised as a financial institution under the law of the Party in whose territory the supplier is located, including a branch in the territory of the Party of the financial service supplier whose head office is located in the territory of the other Party;
(d) "financial institution of the other Party" means a financial institution located in the territory of a Party that is controlled by a person of the other Party;
(e) "financial service" means any service of a financial nature including all insurance and insurance-related services, and all banking and other financial services (excluding insurance); covering the following activities:
(i) insurance and insurance-related services:
(A) direct insurance including co-insurance:
(1) life;
(2) non-life;
(B) reinsurance and retrocession;
(C) insurance intermediation, such as brokerage and agency; and
(D) services auxiliary to insurance, such as consultancy, actuarial, risk assessment, and claim settlement services; and
(ii) banking and other financial services (excluding insurance):
(A) acceptance of deposits and other repayable funds from the public;
(B) lending of all types, including consumer credit, mortgage credit, factoring, and financing of commercial transactions;
(C) financial leasing;
(D) all payment and money transmission services, including credit, charge and debit cards, travellers checks, and bankers drafts;
(E) guarantees and commitments;
(F) trading for own account or for account of customers, whether on an exchange, in an over-the-counter market, or otherwise, the following:
(1) money market instruments including checks, bills, certificates of deposits;
(2) foreign exchange;
(3) derivative products including, futures and options;
(4) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;
(5) transferable securities; and
(6) other negotiable instruments and financial assets, including bullion;
(G) participation in issues of all kinds of securities, including underwriting and placement as agent (whether publicly or privately) and provision of services related to such issues;
(H) money broking;
(I) asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository, and trust services;
(J) settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;
(K) provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; and
(L) advisory, intermediation, and other auxiliary financial services on all the activities listed in subparagraphs A to K, including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy;
(f) "financial service supplier" means a person of a Party that seeks to supply or supplies a financial service within the territory of that Party but does not include a public entity;
(g) "investment" means an investment as defined in paragraph 2 of Article 10.1 (Definitions) except that with respect to loans and other debt instruments referred to in that definition:
(i) a loan to, or debt instrument issued by, a financial institution is covered by the term investment if it is treated as regulatory capital by the Party in whose territory the financial institution is located, regardless of its maturity; and
(ii) a loan granted, or debt instrument owned, by a financial institution, other than a loan to or debt instrument of a financial institution referred to in subparagraph (i) is not covered by the term investment;
for greater certainty, a loan granted by, or debt instrument owned by, a cross-border financial service supplier other than a loan to or debt instrument issued by a financial institution, is an investment for the purposes of Chapter 10 (Investment), provided that loan or debt instrument meets the criteria for investments set out in Article 10.1 (Definitions);
(h) "investor of a Party" means an investor of a Party as defined in Article 10.1 (Definitions).
(i) "new financial service" means a service of a financial nature, including services related to existing and new products or the manner in which a product is delivered, which is not supplied by any financial service supplier in the territory of a Party but which is supplied in the territory of the other Party;
(j) "public entity" means:
(i) a government, a central bank or a monetary authority, of a Party, or an entity owned or controlled by a Party, that is principally engaged in carrying out governmental functions or activities for governmental purposes, not including an entity principally engaged in supplying financial services on commercial terms; or
(ii) a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those functions; and
(k) "self-regulatory organisation" means any non-governmental body, including any securities or futures exchange or market, clearing agency, or other organisation or association, that exercises regulatory or supervisory authority over financial service suppliers by statute or delegation from a Party.
Article 18.2. Scope
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) financial institutions of the other Party;
(b) investors of the other Party, and investments of those investors, in financial institutions in the Party's territory; and
(c) cross-border trade in financial services.
2. For greater certainty, Chapter 10 (Investment) applies to measures adopted or maintained by a Party:
(a) relating to investors of a Party and investments of those investors in financial service suppliers which are not financial institutions; and
(b) other than measures relating to the supply of financial services, relating to investors of a Party or investments of those investors in financial institutions.
3. This Chapter does not apply to measures adopted or maintained by a Party relating to:
(a) activities or services forming part of a public retirement plan or statutory system of social security; or
(b) activities or services conducted for the account or with the guarantee or using the financial resources of the Party, including its public entities,
except to the extent that a Party allows any of the activities or services referred to in subparagraphs (a) or (b) to be conducted by its financial institutions in competition with a public entity or financial institution.
4. This Chapter does not apply to government procurement of financial services.
5. Nothing in this Agreement applies to activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange rate policies.
6. The provisions of Chapters 10 (Investment) and 11 (Cross-Border Trade in Services) apply to measures within the scope of this Chapter only to the extent that those provisions are incorporated into and made part of this Chapter.
7. The following provisions are hereby incorporated and made part of this Chapter and apply mutatis mutandis to measures adopted or maintained by a Party relating to financial institutions of the other Party, investors of the other Party and investments of those investors in financial institutions in the Party's territory:
a) Articles 10.11 (Formal Requirements), 10.14 (Investment and Regulatory Objectives and Measures), 10.15 (Treatment of Investors and of Covered Investments), 10.16 (Transfers), 10.17 (Compensation for Losses), 10.18 (Expropriation and Compensation), 10.19 (Subrogation), 10.52 (Denial of Benefits) and 11.9 (Denial of Benefits); and
b) Section D of Chapter 10 (Resolution of Investment Disputes) solely for claims that a Party has breached Articles 18.3 or 18.4 with respect to the operation of a financial institution or of an investment in a financial institution, or has breached Articles 10.11 (Formal Requirements), 10.15 (Treatment of Investors and of Covered Investments), 10.16 (Transfers), 10.17 (Compensation for Losses), 10.18 (Expropriation and Compensation), 10.52 (Denial of Benefits) or 11.9 (Denial of Benefits).
8. If an inconsistency arises between this Chapter and any other provision of the Agreement, this Chapter shall prevail to the extent of the inconsistency.
Article 18.3. National Treatment
1. Article 10.7 (National Treatment) is hereby incorporated into and made part of this Chapter and applies to investors and financial institutions of the other Party and their investments in financial institutions.
2. The treatment accorded by a Party to its own investors and investments of its own investors pursuant to Article 10.7 (National Treatment) means treatment accorded to its own financial institutions and investments of its own investors in financial institutions.
Article 18.4. Most-Favoured-Nation Treatment
1. Article 10.8 (Most-Favoured-Nation Treatment) is hereby incorporated into and made part of this Chapter and applies to measures adopted or maintained by a Party relating to investors and financial institutions of the other Party and their investments in financial institutions.
2. The treatment accorded by a Party to investors of a third country and investments of investors of a third country pursuant to Article 10.8 (Most-Favoured-Nation Treatment) means treatment accorded to financial institutions of a third country and to investors of a third country and their investments in financial institutions.
Article 18.5. Market Access
1. A Party shall not adopt or maintain with respect to a financial institution of the other Party or with respect to market access through establishment of a financial institution by an investor of the other Party, either on the basis of its entire territory or on the basis of a territorial subdivision, a measure that:
(a) imposes limitations on:
(i) the number of financial institutions, 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; or
(iv) the total number of natural persons that may be employed in a particular financial services sector or that a financial institution may employ and who are necessary for, and directly related to, the performance of a specific financial service in the form of numerical quotas or the requirement of an economic needs test; or
(b) restricts or requires specific types of legal entity or joint venture through which a financial institution may perform an economic activity.
2. For greater certainty, this Article shall not be construed as preventing a Party from requiring a financial institution to supply certain financial services through separate legal entities if, under the law of that Party, the range of financial services supplied by the financial institution may not be supplied through a single entity.
Article 18.6. Senior Management and Board of Directors
Article 10.10 (Senior Management and Board of Directors) is hereby incorporated into and made a part of this Chapter and applies to measures adopted or maintained by Party relating to financial institutions.
Article 18.7. Cross-Border Trade In Financial Services
1. Articles 11.4 (Market Access) and 11.6 (National Treatment), are hereby incorporated into and made part of this Chapter and apply to measures adopted or maintained by a Party relating to cross-border financial service suppliers of the other Party supplying the financial services specified in Annex 18-A (Cross-Border Trade in Financial Services).
2. The treatment accorded by a Party to its own services and service suppliers pursuant to Article 11.6 (National Treatment) means treatment accorded to its own financial services and financial service suppliers.
3. The measures which a Party shall not adopt or maintain with respect to services and service suppliers of the other Party pursuant to Article 11.4 (Market Access) means measures relating to cross-border financial service suppliers of the other Party supplying financial services.
4. Article 11.7 (Most-Favoured-Nation Treatment) is hereby incorporated into and made part of this Chapter and applies to measures adopted or maintained by a Party regarding cross-border financial service suppliers of the other Party.
5. The treatment accorded by a Party to services and service suppliers of a third country pursuant to Article 11.7 (Most-Favoured-Nation Treatment) means treatment accorded to financial services of a third country and financial service suppliers of a third country.
6. Article 11.5 (Local Presence) is hereby incorporated into and made part of this Chapter and applies to cross-border financial service suppliers of the other Party supplying the financial services specified in Annex 18-A (Cross-Border Trade in Financial Services).
7. Each Party shall permit persons located in its territory, and its nationals wherever located, to purchase financial services from cross-border financial service suppliers of the other Party located in its territory. This obligation does not require a Party to permit such suppliers to do business or solicit in its territory. A Party may define "doing business" and "solicitation" for the purposes of this obligation provided that those definitions are not inconsistent with paragraph 1.
8. This Article shall not be construed as preventing a Party from adopting or maintaining a measure that prescribes formal requirements in connection with the supply of a cross-border financial service, such as the registration or authorisation of cross-border financial service suppliers and of financial instruments provided that those requirements are not applied in a discriminatory manner.
Article 18.8. Performance Requirements
1. The Parties shall jointly determine disciplines on performance requirements such as those set out in Article 10.9 (Performance Requirements) that shall apply to investments in financial institutions.
2. Within 180 days following the joint determination of the performance requirement disciplines pursuant to paragraph 1, the Joint Council shall modify by a decision paragraph 1 in order to integrate those disciplines into this Article and may modify, as appropriate, the reservations and non-conforming measures of each Party in Annex VI (Financial Services).
3. Article 18.12 applies to measures listed with respect to the performance requirement disciplines referred to in paragraph 1.
Article 18.9. Financial Services New to the Territory of a Party
1. A Party shall permit a financial institution of the other Party to supply any new financial service that the former Party would permit to be supplied by its own financial institutions in accordance with its domestic law in like situations without adopting a law or modifying an existing law.
2. Notwithstanding Article 18.8(1) in conjunction with Article 11.4 (Market Access), a Party may determine the institutional and legal form through which the new financial service may be supplied and may require authorisation for the supply of the service. If that authorisation is required, a decision shall be made within a reasonable time and the authorisation may only be refused for prudential reasons.
Article 18.10. Review Clause on Data Flows
The Parties shall reassess within three years of the date of entry into force of this Agreement the need for inclusion of provisions on the free flow of data for conducting the activities that are within the scope of this Chapter.
Article 18.11. Treatment of Information
Nothing in this Agreement shall be construed as requiring a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
Article 18.12. Reservations and Non-Conforming Measures
1. Articles 18.3 to 18.7 do not apply to:
(a) any existing non-conforming measure that is maintained by a Party at the level of:
(i) the European Union, as set out in Appendix VI-A (List of the EU) to Annex VI (Financial Services);
(ii) a central government, as set out by that Party in Section A of the List in its Appendix to Annex VI (Financial Services);
(iii) a regional government, as set out by that Party in Section A of the List in its Appendix to Annex VI (Financial Services); or
(iv) a local government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any 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 Article 18.3, 18.4, 18.5, or 18.6; or
(ii) on the date of entry into force of the Agreement, with Article 18.7.
2. Articles 18.3 to 18.7 do not apply to any measure that a Party adopts or maintains with respect to sectors, subsectors or activities, as set out by that Party in Section B of the List of its Appendix to Annex VI (Financial Services).
3. A reservation of a Party to Articles 10.6 (Market Access), 10.7 (National Treatment), 10.8 (Most-Favoured-Nation Treatment), 10.10 (Senior Management and Board of Directors), 11.4 (Market Access), 11.5 (Local Presence), 11.6 (National Treatment) or 11.7 (Most-Favoured-Nation Treatment) listed in its Appendix to Annexes I or II also constitutes a reservation to Articles 18.3, 18.4, 18.5, 18.6 or 18.7, as the case may be, to the extent that the measure, sector, subsector or activity set out in the reservation is within the scope of this Chapter.
4. A Party shall not adopt any measure covered by a reservation listed in its respective Appendix to Annex II (Future Measures) that requires directly or indirectly an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
Article 18.13. Prudential Carve-Out
1. Nothing in this Agreement shall be construed as preventing a Party from adopting or maintaining measures for prudential reasons, (6) including to:
(a) protect investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier; or
(b) ensure the integrity and stability of the financial system of that Party.
2. Where such measures do not conform to the other provisions of this Agreement, they shall not be used as a means of avoiding the commitments or obligations of a Party under this Agreement.
Article 18.14. Recognition
1. A Party may recognise prudential measures of the other Party or a third country in determining how the measures of the former Party relating to financial services shall be applied. Such recognition may be achieved either autonomously, through harmonisation or based on an agreement or other arrangement.
2. If a Party recognises a prudential measure of a third country in accordance with paragraph 1, that Party shall afford adequate opportunity to the other Party to demonstrate that the circumstances in which the Party recognised the prudential measure of the third country exist in the other Party and that under those circumstances there are or would be equivalent regulation, oversight and implementation in the other Party as well as, if appropriate, procedures for exchanging information between the Parties.
3. Nothing in this Agreement shall be construed as requiring a Party to recognise a prudential measure of the other Party.
Article 18.15. International Standards
Each Party shall endeavour to ensure that internationally agreed standards for regulation and supervision in the financial services sector and for the fight against avoidance and evasion of taxes are implemented and applied in its territory. Those internationally agreed standards include, among others, those adopted by the G20, the Financial Stability Board (FSB), the Basel Committee on Banking Supervision (BCBS), the International Association of Insurance Supervisors (IAIS), the International Organisation of Securities Commissions (IOSCO), the Financial Action Task Force (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes of the OECD.
Article 18.16. Self-Regulatory Organisations
If a Party requires a financial institution or a cross-border financial service supplier of the other Party to be a member of, participate in, or have access to, a self-regulatory organisation in order to provide a financial service in or into its territory, the former Party shall ensure that the self‑regulatory organisation complies with the obligations set out in Articles 18.3, 18.4 and 18.7.
Article 18.17. Payment and Clearing Systems
Each Party shall grant to financial institutions of the other 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 under terms and conditions that accord national treatment. This Article does not confer access to the Party's lender of last resort facilities.
Article 18.18. Domestic Regulation and Transparency
1. Chapters 13 (Domestic Regulation) and 28 (Good Regulatory Practices) do not apply to measures adopted or maintained by a Party relating to the scope of 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. For the purposes of paragraph 2, each Party shall, to the extent practicable and in a manner consistent with its law:
(a) publish in advance its proposed laws and regulations related to matters within the scope of this Chapter, or publish in advance documents that provide sufficient details about such potential new laws and regulations to allow interested persons and the other Party to assess whether and how their interests could be significantly affected;
(b) provide interested persons and the other Party a reasonable opportunity to comment on the proposed measures or documents referred to in subparagraph (a); and
(c) consider comments received in accordance with subparagraph (b).
4. If a Party requires an authorisation for the supply of a financial service, the competent authorities of that Party shall:
(a) permit an applicant, to the extent practicable, to submit an application at any time;
(b) allow a reasonable period of time 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 authorisation;
(d) provide, to the extent practicable, an indicative timeframe for processing of an application;
(e) endeavour to accept applications in electronic format;
(f) accept copies of documents which are authenticated in accordance with the law of the Party, in place of original documents, unless the presentation of original documents is required for protecting the integrity of the authorisation process;
(g) provide, at the request of the applicant, without undue delay information concerning the status of the application;
(h) if an application is considered complete for processing under the law of the Party, ensure that the processing of an application is finalised, and that the applicant is informed of the decision within a reasonable period of time after the submission of the application, to the extent possible in writing;(7)
(i) if an application is considered incomplete for processing under the law of the Party, within a reasonable period of time and to the extent practicable:
(i) inform the applicant that the application is incomplete;
(ii) provide, at the request of the applicant, guidance on why the application is considered incomplete;
(iii) provide the applicant with the opportunity (8) to submit the additional information that is required to complete the application; and