Commentary on Proposals for Liberalisation in Financial Services

Specific Priorities

The trade agreement should achieve the following goals for financial services:

Foreign investors should have the right to establish through a wholly owned presence or

other form of business ownership, and to operate competitively through established vehicles

available to national businesses. Thus, limits to investment in joint ventures and domestic

financial institutions should be lifted and fully owned subsidiaries, branches and

representative offices should be allowed for foreign providers.  In addition, arbitrary

 economic needs tests  and restrictions on regional and product specific activity should be

abolished.

Foreign direct investors should have the same access to domestic and international markets

as domestic companies. They should be treated for regulatory and other purposes on the same

basis as domestic companies.

Unnecessary restrictions on cross border financial services business and consumption of

services abroad should be removed, to encourage trade without requiring establishment,

particularly taking into account technological advancement, including electronic commerce.

The temporary posting of key business personnel should be facilitated by the creation of a

system of easily obtained and renewable permits.

Existing investments should be grandfathered by countries that did not commit to do so in the

1997 Agreement.

In order to ensure that market access and national treatment commitments achieve their

promised objectives, there is a pressing need to supplement them with new commitments on

improved transparency and, in addition, domestic regulatory reform as necessary and

appropriate for each specific sector.

Transparent domestic rules and administrative procedures are an essential part of liberalising

financial services. Clear and reliable information about a country s financial services laws

and practices promotes equitable trade and competition.  Regulatory regimes, even restrictive

ones, should be made more transparent.

To encourage private savings for retirement countries should commit to lock in and improve

market access in the provision of pension and asset management products and services.

The dissemination and processing of financial information to provide clients with

competitive services necessary for the conduct of ordinary business should be permitted.

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