Slide 13 of 26
I would like to discuss certain “commonalities” (1) among financial products and services, and (2) between financial products and services and non-financial products and services.
As noted earlier, most nation states have traditionally distinguished among different types of financial services based on: (a) the legal character of the entity rendering the service (is it chartered as a bank, a savings bank, or a credit union?); (b) what is the legal classification of the service or product rendered (is it a loan, a deposit, a security or a contract of insurance?). It was noted that the barriers within this system are breaking down generally if only for the reason that these financial products and services have the commonality (I) that they are all evidenced by information in the form of digital files. Further, it is noted that traditional legal barriers to mixing “banking and commerce” are weakening generally for the same reason. It is highly efficient for a single organization to maintain large databases of customer and a wide variety of products and to market and cross-market them.
However, there are additional commonalities and this fact has significant effects for jurisdictional purposes and for the Jurisdiction Project. These additional commonalities can be articulated as follows: (II) the commonality that all products and services have the separate dimensions of legal formation and real world fulfillment; (III) the commonality that the formation process occurs “online” and the fulfillment process occurs “offline;” (IV) the commonality that products and services are applications as well as files; and (V) the commonality of substantive and transactional interdependence.
I would like to discuss each of these briefly as essential background to certain jurisdictional considerations and conclusions.