prop · GN03108 · 2000-01-01 00:00:00 — P: The services of venture capital may not be provided by branches of venture capital companies having their head office in a non- EC country. Broker-dealer services on the may be provided by broker and dealer companies incorporated in or by branches of investment firms authorised in another EC country and authorised in their home country to provide those services. Broker and dealer services in the and in the OTC market may not be provided by branches of non-EC broker/dealer companies. Pension fund management may be provided only by companies incorporated in and by insurance companies established in and authorised to take up the life insurance business. UK: Inter-dealer brokers, which are a category of financial institutions dealing in Government debt, are required to be established in Economic Area and separately capitalised. S: Undertakings not incorporated in may establish a commercial presence only through a branch, and in case of banks, also through a representative office. S: A founder of a banking company shall be a natural person resident in Economic Area or a foreign bank. A founder of a savings bank shall be a natural person resident in Economic Area. 4) Presence of natural persons Unbound except as indicated in the horizontal section and subject to the following specific limitations: F: d investissement à capital fixe: condition of nationality for the president of , the Directors-General and no less than two thirds of the administrators, and also, when the securities firm has a or Council, for the members of such board or its Director- General, and no less than two thirds of the members of the supervisory Council. GR: Credit institutions should name at least two persons who are responsible for the operations of the institution . Condition of residency applies to these persons. I: Condition of within the territory of a of Communities for promotori di servizi finanziari (financial salesmen). Sector or subsector Mode of supply subject to reserve Description of the measure FINANCIAL SERVICES A) All insurance and insurance-related services (a) Life, accident and health insurance services (CPC 8121) (b) Non-life insurance services (CPC 8129) , Cross Border Established insurance companies may carry out insurance and insurance-related services. Foreign investors may hold up to 49 per cent of the paid-up capital. Foreign investment by governments and official agencies is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. (c) Reinsurance and retrocession services (CPC 81299*) , Cross Border This activity may be carried out by established insurance institutions. Foreign investors may hold up to 49 per cent of the paid-up capital. Foreign investment by governments and official agencies is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. Foreign reinsurance companies may participate in reinsurance operations. According to the applicable regulations, such companies are required to register with the Credit (SHCP), which may authorise or refuse registration. Foreign reinsurance companies, which are enrolled in the register kept by the SHCP, may establish representative offices in the country with the prior authorisation of the SHCP. Representative offices of foreign reinsurance companies, according to the applicable regulations, may not act directly or through an intermediary in direct insurance operations. (d) Services auxiliary to insurance such as: - insurance broking and agency services (CPC 8140) , Cross Border Foreign investors may hold up to 49 per cent of the paid-up capital. The National Foreign Investment Commission (CNIE) can authorise a greater percentage. Foreign investment by governments and official agencies is not allowed. Effective control of the enterprise by the Mexican shareholders is required. Currently, under the insurance law, it is prohibited to contract with foreign companies: 1).- Insurance of persons when the person is located in at the time the contract is celebrated; 2).- Insurance of hulls of ships or airships and of any class of vehicles, against risks proper to the and transport class of insurance, when these ships, airships or vehicles are registered in or are property of persons resident in ; 3).- Credit insurance, when the insured is subject to to to Mexican legislation; 4).- Insurance against civil liability, derived from events that may occur in ; and 5).- Other of insurance against risks that may occur in Mexican territory. Insurance contracted abroad by non-residents to cover their persons or their vehicle risks during their temporary visit to the Mexican territory are not subject to these restrictions. The SHCP can make an exemption in the following cases: Foreign insurers, with a previous authorisation from the SHCP and complying with the requirements that it establishes, may enter into insurance contracts in Mexican territory to cover risks that occur in foreign territory in which they are authorised to provide insurance services. Only in these cases, foreign insurers are exempt from the restriction related to offering (soliciting) insurance in . The SHCP with the previous opinion of the National Bonding and Insurance Commission (CNSF), can revoke such authorisation, when it is considered that the interests of the insurance are endangered, previous hearing of the insurance company affected; and When no authorised insurance company can or deems convenient to carry out a certain proposed insurance operation, the SHCP, prior verification of these circumstances, may discretionary grant a specific authorisation so that it may be contracted directly with a foreign insurer or through a local insurance company. B) Banking and other financial services (excluding insurance). (a) Acceptance of deposits and other repayable funds from the public (CPC 81115-81119) , Cross Border This activity is restricted to established commercial banks. Foreign investment by persons exercising governmental functions is not allowed. In accordance with the applicable financial legislation, representative offices of banking institutions are excluded from this activity. (b) Lending of all types, including consumer credit, mortgage credit, factoring and financing of financial transactions (CPC 8113) , Cross Border Established commercial banks may carry out lending activities of all types, including consumer credit, mortgage credit, credit discounting and financing of commercial transactions. Foreign investment by persons exercising governmental functions is not allowed. In accordance with the applicable financial legislation, representative offices of banking institutions are excluded from this activity. - Development Banks - , Cross Border Foreign investments in development banks and credit unions are not allowed. The following activities are reserved solely to Mexican development banks: (a) acting as custodians of securities and cash funds deposited by or in the administrative or judiciary authorities, and acting as custodian of goods that have been seized according to Mexican measures; and (b) managing the savings funds, retirement plans and any other funds or property of the personnel of the , and the Mexican armed forces, and performing other financial activities pertaining to the financial resources of such personnel. - Savings and , Cross Border Foreign investment by persons exercising governmental functions is not allowed. - Limited scope financial institutions - Financial factoring companies Established limited scope financial institutions may carry out only one of the financing activities such as personal credit, consumer credit, mortgage credit or commercial credit. Foreign investors may hold up to 49 per cent of capital stock. Foreign investment by persons exercising governmental functions is not allowed. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. Established financial factoring companies may carry out factoring activities. Foreign investors may hold up to 49 per cent of the paid-up capital. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. (c) Financial leasing services (CPC 8112) , Cross Border Established financial leasing companies may carry out financial leasing activities. Foreign investors may hold up to 49 per cent of paid-up capital. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. - Commercial banks , Cross Border Established commercial banks may also carry out financial leasing activities. Foreign investment by persons exercising governmental functions is not allowed. (d) Trading on own or '''' account on a stock exchange, over-the- counter or otherwise, in: - Money market instruments (checks, bills, certificates of deposit, etc.) (CPC 81339**) , Cross Border Established securities firms and established securities specialists may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. - Foreign exchange (CPC 81333) , Cross Border Established commercial banks may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. - Foreign exchange firms , Cross Border Established foreign exchange firms may also carry out this activity. Foreign investors may hold up to 49 per cent of the paid-up capital. Foreign investment by persons exercising functions of authority is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. - Transferable securities (CPC 81321*) , Cross Border Established securities firms and established securities specialists may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. - Other negotiable instruments and financial assets, including bullion (CPC 81339**) , Cross Border Established commercial banks may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. (e) 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 (CPC 8132) , Cross Border Established securities firms and established securities specialists may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. (f) Money broking (CPC 81339**) - Commercial banks , Cross Border Established commercial banks may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. (g) Asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, and trust services (CPC 81323*) , Cross Border Established investment companies may carry out activities such as asset management, cash or portfolio management and all forms of collective investment management. Foreign investors may hold up to 49 per cent of overhead capital. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. - Managing companies of investment companies , Cross Border Established managing companies of investment companies may carry out the administration of investment companies. Foreign investors may hold up to 49 per cent of the capital stock. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. - Pension fund management companies , Cross Border Established pension fund management companies may carry out pension fund management activities. Foreign investors may hold up to 49 per cent of the capital stock. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. The following activities are reserved solely to Mexican development banks: (a) acting as custodians of securities and cash funds deposited by or in the administrative or judiciary authorities, and acting as custodian of goods that have been seized according to Mexican measures; and (b) managing the savings funds, retirement plans and any other funds or property of the personnel of the , and the Mexican armed forces, and performing other financial activities pertaining to the financial resources of such personnel. - Commercial banks , Cross Border Established commercial banks may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. - Securities firms and securities specialists , Cross Border Established securities firms and established securities specialists may carry out this activity. Foreign investment by persons exercising governmental functions is not allowed. (h)Advisory and other auxiliary financial services, including credit reporting and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy (CPC 8133) , Cross Border Investment consultants may carry out activities such as investment and portfolio analysis, research and advice, advice on acquisitions and on corporate restructuring and strategy. Foreign investors may hold up to 49 per cent of the capital stock. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by Mexican shareholders is required. - Credit information companies , Cross Border Established credit information companies () may carry out credit reporting activities. Foreign investors may hold up to 49 per cent of the paid-up capital stock. Effective control of the enterprise by the Mexican shareholders is required. The CNIE can authorise a greater percentage. Foreign investment by persons exercising governmental functions is not allowed. Foreign investment by persons exercising governmental functions is not allowed. Established guarantee institutions may carry out guarantee services. Foreign investors may hold up to 49 per cent of the paid-up capital of established guarantee institutions. Foreign investment by governments and official agencies is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. Currently, under the guarantee law, it is prohibited to contract with foreign companies guarantees to assure acts of persons that must fulfill obligations in Mexican territory, except in re-guarantee operations and when they are received as surety by Mexican guarantee institutions. The guarantee operations celebrated in violation of the previously mentioned will not produce any legal effect. However, when none of the established guarantee institutions, estimates convenient to practice certain proposed operations, the SHCP, previous confirmation of these circumstances, can discretionally authorise the person to contract the service with a foreign guarantee institution, directly or through a Mexican guarantee institution. It is prohibited to carry out intermediation activities in those operations mentioned above, and also, in guarantee operations granted in an ordinary and onerous way by a natural or legal person, different to authorised guarantee institutions. Re-guarantee , Cross Border This activity may be carried out through established guarantee institutions. Foreign investors may hold up to 49 per cent of the paid-up capital. Foreign investment by governments and official agencies is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. Foreign re-guarantee companies may participate in re-guarantee operations. According to the applicable regulations, these institutions must register with the SHCP, which may authorise or refuse registration. General deposit warehouses , Cross Border Foreign investors may hold up to 49 per cent of the paid-up capital of the established general deposit warehouses. Foreign investment by persons exercising governmental functions is not allowed. Effective control of the enterprise by the Mexican shareholders is required. This percentage limit does not apply to investments in foreign financial affiliates as such term is defined in, and subject to terms and conditions under the Affiliates Section. Sector or subsector Mode of supply subject to reserve Description of the measure Firms , Cross Border If the sum of the authorised capital of foreign financial affiliates, measured as a percentage of the aggregate net capital of all financial institutions of such type in , reaches the percentage set forth in the chart in this paragraph for such type of institutions, then have the right, once until 1 January 2004 to freeze such aggregate capital percentage at its then existing level. If applied, such a restriction will have a duration not to exceed a period of three years. Until 1 January 2004, may deny a license to establish a foreign financial affiliate if the sum of the authorised capital of all foreign financial affiliates of the same type exceeds the applicable percentage limit described in the prior chart. If the sum of the authorised capital of foreign commercial bank affiliates (as such term is above mentioned), measured as a percentage of the aggregate capital of all commercial banks in , reaches 25 percent, may request consultations with the other Party on the potential adverse effects arising from the presence of commercial banks of the other Party in the Mexican market and the possible need for remedial action, including further temporary limitations on market participation. The consultations shall be completed expeditiously. In considering the potential adverse effects, the Parties shall take into account: (a) the threat that the Mexican payments system may be controlled by non-Mexican persons; (b) the effects foreign commercial banks established in may have on ''''s ability to conduct monetary and exchange rate policy effectively; and (c) the adequacy of the Chapter in protecting the Mexican payments system. All financial services , Cross Border retain discretion to approve, on a case-by-case basis, any affiliation of a commercial bank or securities firm with a commercial or industrial corporation that is established in , if determines that such affiliation is harmless and, in the case of commercial banks, either (a) not substantial, or (b) the financial- related activities of the commercial or industrial corporation account for at least 90 per cent of its annual income worldwide, and the non- financial activities of such commercial or industrial corporation are of a type that determines to be acceptable. Affiliation with a non-resident commercial or industrial corporation that is not established in will not be a reason for denial of an application to establish or acquire a commercial bank or securities firm in . All financial services , Cross Border may adopt measures that limit investors (together with its affiliates) to establish no more than one institution of the same type in . In determining what types of operations an investor of another Party is engaged in for purposes of the preceding paragraph, all types of insurance shall be considered to be only one type of financial service; but both life and non-life insurance operations may be conducted either by a single or separate foreign financial affiliates. Non-bank investors of another Party shall be permitted to establish one or more limited scope financial institutions in to provide separately consumer lending, commercial lending, mortgage lending or credit card services on terms no less favourable than those applied to like domestic firms under Mexican measures. may permit lending services closely related to the principal authorised business of a limited scope financial institution to be carried out by that institution. Such institutions shall be provided the opportunity to raise funds in the securities market for business operations subject to normal terms and conditions. may restrict such limited scope financial institutions from taking deposits. All financial services , Cross Border may restrict any foreign financial affiliate from establishing agencies, branches, or other direct or indirect subsidiaries in the territory of any other country. All financial services , Cross Border may adopt measures that limit eligibility to establish a foreign financial affiliate in to an investor of another Party that is, directly or through any of its affiliates, engaged in the same general type of financial services in the territory of the other Party. An investor of another Party that is authorised to establish or acquire, and establishes or acquires, a commercial bank or securities firm in may also establish a financial holding company in , and thereby establish or acquire other types of financial institutions in , under the terms of Mexican regulations. Insurance , Cross Border The activities and operations of the existing Mexican governmental insurance programs conducted by Aseguradora Mexicana, S.A. or Aseguradora Hidalgo, S.A. (including insurance for government employees, agencies, instrumentalities and public entities) are excluded from Articles of , Cross Border and National Treatment for so long as such firm is controlled by the Government of and for a commercially reasonable time after such governmental control ceases. All financial services , Cross Border In order to avoid impairment of the conduct of ''''s monetary and exchange rate policies, cross-border financial service providers of another Party shall not be permitted to provide financial services into the territory of or to residents of , and residents of may not purchase financial services from cross-border financial service providers of another Party, if such transactions are denominated in Mexican pesos. - Authorities responsible for financial services (REFERRED TO IN ARTICLE 23)