Ventures Dialogue

Foreign suppliers of financial information services in China can look forward to eased regulations in the coming year.  This is the outcome of a case formally requested for consultations at the World Trade Organization (WTO) by Canada, the United States, and the European Union, citing that the foreign suppliers of financial information services (e.g. Thomson Reuters, Dow Jones, Bloomberg, etc.) were experiencing market access restrictions and discriminatory requirements.

Among the concerns raised was that Chinese rulings require foreign financial information suppliers to use an agent chosen by the government news agency Xinhua News Agency of the China Economic Information Service (CEIS).  CEIS is one of Xinhua’s commercial enterprises and a direct competitor of foreign financial information suppliers. Chinese ruling also indicates that foreign financial information suppliers cannot obtain their own subscribers directly, but must use an intermediary.  Furthermore, to renew their licenses, foreign financial information suppliers must give financial information to a regulatory body within Xinhua, and also detailed and confidential information about their services and their customers.   Another concern also cited was that China appeared to prevent foreign financial information suppliers from developing a commercial presence in China other than limited representative offices.

Consultations were held in August and September resulting in the signing of Memorandum of Understanding in which China agrees that:

• A new, independent government body will be implemented to regulate the financial information services by January 31, 2009. The new regulator will not be a competitor for suppliers of financial information services.
• The new regulator will only require financial information when it is relevant to matters under the license.
• Foreign suppliers of financial information services will be able to supply those services without using an agent or intermediary.
• Financial information service providers will be treated in a non-discriminatory manner.

For more information about this WTO dispute settlement, please go here.