The impact of TPP seen from the Financial Services chapter

The Financial Services chapter has new commitments in the financial services industry and is also very welcomed by financial institutions in developed member countries such as the US, Canada and Australia where the financial industry has developed strongly and is actively seeking additional opportunities to penetrate deeper into regional markets with high growth potential such as Malaysia, Vietnam and Singapore. TPP is even more meaningful for countries with strengths in financial services such as Canada but do not have any bilateral free trade agreements with Malaysia, Vietnam and Singapore.

The Financial Services chapter reiterates member countries' commitment to comply with the core principles outlined in previous chapters, including national treatment, most favored nation treatment, and market access.

Regarding participants and types of cross-border financial services, this chapter stipulates that countries must allow, under national treatment provisions, cross-border financial service suppliers of another Member State to provide financial services in their territory. These financial services are covered in the Cross-Border Trade Annex to this chapter. A Member State must also permit its resident, non-resident nationals or persons within its territory to purchase financial services from cross-border financial service providers in another Member State.

With respect to the supply of a new financial service, this chapter requires that Member States must also permit financial institutions of other Member States to provide a new financial service as they permit their own financial institutions to provide it, in the same circumstances, without amending existing law or introducing new law. However, a member state is allowed to prescribe the legal and organizational form through which new financial services will be provided. They are also allowed to request these financial institutions to apply for permission to provide such services, but can only refuse permission for prudent reasons (ensuring the safety of the financial system).

For senior management personnel and members of the board of directors, theFinancial Services chapter prohibits member countries from imposing regulations such as being a person of a certain nationality, or being a citizen and/or residing in that country.

On non-conforming measures, this chapter stipulates a number of core principles such as national treatment, most favored nation, cross-border trade and senior personnel that do not apply to current non-conforming measures and their amendments according to the provisions in the annexes. Non-conforming measures specified in other chapters such as Investment, Cross-Border Trade in Services, and Intellectual Property may be different from the non-conforming measures in this chapter.

In order to balance the domestic regulatory autonomy for member governments, this chapter sets out exclusions and emphasizes that member states are free to introduce and maintain prudential measures such as safeguards for depositors, investors, policyholders… to ensure the safety and integrity of thefinancial system. This Chapter and certain other chapters also do not apply to generally non-discriminatory legal measures by the competent authorities of the host country to pursue exchange rate, credit, currency objectives, or sanctions to ensure compliance with laws that are not inconsistent with this chapter and are not arbitrary or discriminatory.

Regarding recognition, this chapter stipulates that countries applying the measures specified in this chapter can recognize the prudential measures of another country, and have a mechanism to share information between the parties.

On transparency and the management of certain measures, in this chapter members commit to ensuring regulatory transparency in financial services, and that measures of general application will be managed properly, objectively and fairly.

On payment and clearing systems, this chapter stipulates that member countries must allow financial institutions of other member countries to access payment and clearing systems operated by their authorities, and to access official funding sources under normal business conditions. However, this provision does not require access to the funds of the lender of last resort (for example, the central bank) of the host country.

Recognizing the importance of maintaining and developing legal procedures to help legitimate insurance service providers quickly offer insurance services, the parties commit in this chapter to develop legal procedures that: allow the introduction of products unless these products are prohibited within a reasonable period of time; Approval or authorization is not required for types of insurance other than insurance sold to individuals or mandatory insurance; or not impose limits on quantity or frequency of product launches. If a member country maintains mandatory product approval procedures, it must make every effort to maintain or improve these procedures.

To coordinately supervise the implementation of this chapter, as well as consider issues related to financial services raised by a party, as well as participate in resolving disputes, the parties agree to establish a committee called the Financial Services Committee, and each party appoints an official in the field of financial services as a member of this committee.

Regarding consultations, this chapter provides that a member has the right to request consultations in writing with another party on a matter relating to financial services, and the other party must actively consider the possibility of holding consultations. The results of the consultation will be reported to the Financial Services Commission.

Regarding dispute resolution, in most cases the provisions of the Dispute Resolution chapter will apply. This Financial Services Chapter also contains regulations relating to complaints by an investor in financial services, and who, or what organization, must receive, process and respond, and how.

In short, by lowering barriers to access and development, allowing the offering of new financial services, increasing transparency of regulations and laws, enhancing exchanges between the relevant authorities of the parties, establishing a Financial Services Commission to promote exchange and cooperation and prevent and resolve unnecessary access barriers, protecting financial services investors from risks such as expropriation, discriminatory treatment, and restrictions. regime in overseas remittances…the Financial Services chapter will bring new businesss and predictable business opportunities for financial services providers in the region.

On the other hand, this chapter still ensures the right of authorities to apply measures to protect the health of the financial system without violating TPP provisions, as well as ensuring the autonomy of authorities in setting requirements to limit financial institutions from accepting high risks in pursuit of profits, without harming depositors and maintaining the stability of the host member country's financial system. In addition, this chapter also establishes an effective framework for resolving disputes specific to the financial services industry.

TS. Phan Minh Ngoc

According to Young Intellectuals