Common use of Prudential Principle on Financial Services Clause in Contracts

Prudential Principle on Financial Services. 1. Notwithstanding any other provisions of this Agreement, one side shall not be prevented from taking or maintaining measures relating to financial services for prudential reasons. These prudential reasons include the protection of investors, depositors, policy holders or persons to whom a fiduciary obligation is owed by a financial service supplier, or to ensure the integrity and stability of the financial system4. 2. No provisions of this Agreement shall apply to non-discriminatory measures of general application in implementing 4 The term “prudential reasons” shall be interpreted as including the security, stability, integrity and financial responsibility of a single financial institution or a financial system, as well as protecting the security of payment and clearing system and the stability of finance and operation. monetary or related credit policies or exchange rate policies5. 3. The term “financial service” shall bear the same meaning of financial service as defined in paragraph 5(a) of the Annex on Financial Services to the WTO General Agreement on Trade in Services and the term "financial service supplier" contained in that paragraph also includes public entity as defined in paragraph 5(c) of the Annex on Financial Services. 4. To avoid ambiguity, this Agreement shall not be construed as preventing one side from adopting measures that are applicable to a financial institution, or from enforcing measures in a financial institution, relating to the service suppliers of the other side or covered services necessary to ensure compliance with laws or regulations that are consistent with the provisions of this Agreement, including measures relating to the prevention of false and fraudulent practices or measures to deal with the effects of default on financial services contracts, provided that the manner in which such measures are applied would not constitute a means of arbitrary or unjustifiable discrimination to countries (or regions) where like conditions prevail or a disguised restriction on the investment of the financial institution. 5. Each side reserves the right to implement restrictive measures 5 To avoid ambiguity, measures of general application in implementing monetary or related credit policies or exchange rate policies do not include measures which expressly declare invalid or modify a contract term stipulating the denomination in a currency or exchange rate of a currency. for any sectors not clearly covered in existing regulations.

Prudential Principle on Financial Services. 1. Notwithstanding any other provisions of this Agreement, one side shall not be prevented from taking or maintaining measures relating to financial services for prudential reasons. These prudential reasons include the protection of investors, depositors, policy holders or persons to whom a fiduciary obligation is owed by a financial service supplier, or to ensure the integrity and stability of the financial system4system3. 2. No provisions of this Agreement shall apply to non-discriminatory measures of general application in implementing 4 3 The term “prudential reasons” shall be interpreted as including the security, stability, integrity and financial responsibility of a single financial institution or a financial system, as well as protecting the security of payment and clearing system and the stability of finance and operation. monetary or related credit policies or exchange rate policies5policies4. 3. The term “financial service” shall bear the same meaning of financial service as defined in paragraph 5(a) of the Annex on Financial Services to the WTO General Agreement on Trade in Services and the term "financial service supplier" contained in that paragraph also includes public entity as defined in paragraph 5(c) of the Annex on Financial Services. 4. To avoid ambiguity, this Agreement shall not be construed as preventing one side from adopting measures that are applicable to a financial institution, or from enforcing measures in a financial institution, relating to the service suppliers of the other side or covered services services, necessary to ensure compliance with laws or regulations that are consistent with the provisions of this Agreement, including measures relating to the prevention of false and fraudulent practices or measures to deal with the effects of default on financial services contracts, provided that the manner in which such measures are applied would not constitute a means of arbitrary or unjustifiable discrimination to countries (or regions) where like conditions prevail or a disguised restriction on the investment of the financial institution. 5. Each side reserves the right to implement restrictive measures 5 4 To avoid ambiguity, measures of general application in implementing monetary or related credit policies or exchange rate policies do not include measures which expressly declare invalid or modify a contract term stipulating the denomination in a currency or exchange rate of a currency. for any sectors not clearly covered in existing regulations.