Financial Service 1. Definition under the Services Sectoral Classification List W/120, Section 7

 A. All insurance and insurance-related services a.Life, accident and health insurance services a.Life, accident and health insurance services b.Non-life insurance services b.Non-life insurance services c.Reinsurance and retrocession c.Reinsurance and retrocession d.Services auxiliary to insurance (including broking and agency services) d.Services auxiliary to insurance (including broking and agency services)  B.Banking and other financial services (excl. insurance) a.Acceptance of deposits and other repayable funds from the public a.Acceptance of deposits and other repayable funds from the public b.Lending of all types, incl., inter alia, consumer credit, mortgage credit, factoring and financing of commercial transaction b.Lending of all types, incl., inter alia, consumer credit, mortgage credit, factoring and financing of commercial transaction c.Financial leasing c.Financial leasing d.All payment and money transmission services d.All payment and money transmission services

e.Guarantees and commitments e.Guarantees and commitments f.Trading for own account or for account of customers, whetheron an exchange, in an over-the-counter market or otherwise, the following: f.Trading for own account or for account of customers, whetheron an exchange, in an over-the-counter market or otherwise, the following: - money market instruments (cheques, bills, certificate of deposits, etc.) - money market instruments (cheques, bills, certificate of deposits, etc.) - foreign exchange - derivative products incl., but not limited to, futures and options - exchange rate and interest rate instruments, inclu. products such as swaps, forward rate agreements, etc. - transferable securities - other negotiable instruments and financial assets, incl. bullion g.Participation in issues of all kinds of securities, incl. under- writing and placement as agent (whether publicly or privately) and provision of service related to such issues g.Participation in issues of all kinds of securities, incl. under- writing and placement as agent (whether publicly or privately) and provision of service related to such issues

h. Money broking 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 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, incl. securities, derivative products, and other negotiable instruments j. Settlement and clearing services for financial assets, incl. securities, derivative products, and other negotiable instruments k. Advisory and other auxiliary financial services on all the activities listed in Article 1B of MTN.TNC/W/50, incl. credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy k. Advisory and other auxiliary financial services on all the activities listed in Article 1B of MTN.TNC/W/50, incl. credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy l. Provision and transfer of financial information, and financial data processing and related software by providers of other financial services l. Provision and transfer of financial information, and financial data processing and related software by providers of other financial services C. Other

2. Why should financial services be important for electronic commerce?

Technological advances have had major impacts on the financial services industry and effect a whole new range of competitors to financial services markets. Most of the world ‘s major securities and derivatives exchanges provide electronic transactions are also done electronically, for example, the world’s major banks yet provide on- line banking services and it will replace agents and telephone services because electronic commerce is much easier and less costly through the Internet.

3. What is the main function of the Annex on Financial Services?3. What is the main function of the Annex on Financial Services?

For the purposes of this Annex: (a) A financial service is any service of a financial nature offered by a financial service supplier of a Member. Financial services include all insurance and insurance-related services, and all banking and other financial services (excluding insurance). Financial services include the following activities: Insurance and insurance-related services (i) Direct insurance (including co-insurance) :(i) Direct insurance (including co-insurance) : (A) life(A) life (B) non-life(B) non-life (ii) Reinsurance and retrocession;(ii) Reinsurance and retrocession; (iii) Insurance intermediation, such as brokerage and agency;(iii) Insurance intermediation, such as brokerage and agency; (iv) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.(iv) Services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services.

Banking and other financial services (excluding insurance) (v) Acceptance of deposits and other repayable funds from the public;(v) Acceptance of deposits and other repayable funds from the public; (vi) Lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction;(vi) Lending of all types, including consumer credit, mortgage credit, factoring and financing of commercial transaction; (vii) Financial leasing;(vii) Financial leasing; (viii) All payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts;(viii) All payment and money transmission services, including credit, charge and debit cards, travellers cheques and bankers drafts; (ix) Guarantees and commitments; (x) Trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following:(ix) Guarantees and commitments; (x) Trading for own account or for account of customers, whether on an exchange, in an over-the-counter market or otherwise, the following: (A) money market instruments (including cheques, bills, certificates of deposits) ;(A) money market instruments (including cheques, bills, certificates of deposits) ; (B) foreign exchange;(B) foreign exchange;

(C) derivative products including, but not limited to, futures and options;(C) derivative products including, but not limited to, futures and options; (D) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements;(D) exchange rate and interest rate instruments, including products such as swaps, forward rate agreements; (E) transferable securities;(E) transferable securities; (F) other negotiable instruments and financial assets, including bullion.(F) other negotiable instruments and financial assets, including bullion. (xi) 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;(xi) 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; (xii) Money broking;(xii) Money broking; (xiii) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services; (xiv) Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;(xiii) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services; (xiv) Settlement and clearing services for financial assets, including securities, derivative products, and other negotiable instruments;

(xv) Provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services;(xv) Provision and transfer of financial information, and financial data processing and related software by suppliers of other financial services; (xvi) Advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy.(xvi) Advisory, intermediation and other auxiliary financial services on all the activities listed in subparagraphs (v) through (xv), including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy. (b) A financial service supplier means any natural or juridical person of a Member wishing to supply or supplying financial services but the term "financial service supplier" does not include a public entity. (c) “Public entity” means: (i) a government, a central bank or a monetary authority, of a Member, or an entity owned or controlled by a Member, 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(i) a government, a central bank or a monetary authority, of a Member, or an entity owned or controlled by a Member, 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 fu(ii) a private entity, performing functions normally performed by a central bank or monetary authority, when exercising those fu

 4. What are the four types of government intervention or involvement that could have an impact on the financial services sector?

In chapter II of WTO (1997) 1.Macroeconomic policy management; 2.Prudential regulations; 3.Non-prudential regulation to pursue various public policy objectives other than that falling under 4 and 4.Trade restrictions concerning market access or national treatment.

 5. What are the most common market access and national treatment limitations imposed by WTO members on commitments in financial services? Would these limitations have the same effect on financial services delivers on-line?

 Licensing and authorization requirements in financial services are the most common market access and national treatment.  Licensing and authorization requirement are not included in on- line transactions.