Laws and Regulations Database of the Central Bank of the Republic of China(Taiwan)

II.　　Establishment and Operation of Clearinghouse

Article 3
Institutions that engage in the business of negotiable instruments exchange 
and clearance of accounts among banks shall be called clearinghouses. The 
establishment of a clearinghouse shall obtain the approval of the Central Bank 
of the Republic of China (Taiwan) (hereafter referred to as "the Bank") and a 
clearinghouse must be an incorporated foundation.

Article 4

In applying under the provisions of the preceding Article for incorporation of a 
foundation, the entire group of persons who have stated a willingness to serve 
as director must apply to the Bank for approval of incorporation, submitting three 
copies of each of the following documents:

1.Application for approval of incorporation as a foundation;

2.Articles of incorporation (original document)

3.Inventory of donated properties, and documentation there of;

4.Statements by contributors that they agree to transfer ownership of donated properties 
　to the foundation once the registration of the foundation has bee approved;

5.Minutes of contributor meetings;

6.A list of directors and supervisors, and photocopies of their national identity 
　certificates;

7.Statements of agreement from persons who have agreed to serve as director or 
　supervisor;

8.A specimen impression of the foundation’s seal, and either specimen seal 
　impressions or specimen signatures of the directors;

9.Minutes of the board of directors’ founding meeting;

10.A document explaining the foundation’s operations plan; and

11.Other documents designated by the Bank.

Article 5

The articles of incorporation shall set forth the following particulars:

1.The foundation’s name and purpose, and the location of its main office and any branch 
　offices;

2.The type and monetary value of donated properties, and methods of safekeeping and 
　utilization  thereof;

3.Operations and methods of management thereof;

4.The number and term length of directors and supervisors, and the method of their 
　appointment;

5.The organizational structure, and the duties of the board of directors and the 
　supervisors;

6.Ownership of any property remaining after the foundation is dissolved or the 
　competent authority voids its approval of incorporation; and

7.The duration (if limited) of the foundation.

Article 6

After approval has been granted for incorporation of a foundation registration papers shall be 
filed with the court of jurisdiction within 30 days of receipt of the approval document, and a 
photocopy of the registration certificate shall be reported to the Bank for record within 30 
days of receipt of notice that registration has been completed.

When any item subject to the incorporation approval process is amended, application for 
approval of amendment shall be submitted, together with related documents, to the Bank within 
30 days of occurrence of the amendment. The provisions of the preceding paragraph shall apply 
mutandis to procedures for recording the registration amendment with the court of jurisdiction 
and with the Bank.

Article 7

The board of directors of a clearinghouse shall meet at least once every three months, 
and minutes of each meeting shall be reported to the Bank for recordation within one 
month after the conclusion of the meeting.

Resolutions adopted by the board of directors must be approved by a majority vote at a 
meeting attended by more than one-half of the directors. Where the articles of 
incorporation have more stringent provisions, said provisions shall apply.

Article 8
The chairman of the board, president, vice president or persons holding comparable 
positions of a clearinghouse shall in principle be fulltime positions. Notwithstanding 
the foregoing, such principle may be waived under special circumstances subject to the 
approval of the Bank.

Article 9
A clearinghouse may establish an advisory committee. The committee shall be composed of 
representatives appointed or recommended by the financial institutions participating in 
the clearing operations, and shall be responsible for studying and giving advice on
matters related to clearing operations, business development, regulatory affairs or other 
important matters.

Article 10
The remuneration or pay of directors, supervisors, and employees at each level of a 
clearinghouse may be set with reference to standards for government-run financial 
institutions; the remuneration or pay shall be reported to the Bank for recordation.

Article 11
In managing the foundation's properties and operations, a clearinghouse and its directors 
and supervisors shall rigorously abide by the intent of, and management procedures set 
forth in applicable laws and regulations and in the articles of incorporation.

Article 12

Where a clearinghouse is under any of the following circumstances below, the Bank may 
serve notice and demand remedial action within a given time period; in the event 
remediation is not made within the specified time period, the Bank may void its approval
and notify the court where the foundation filed its registration papers:

1.The board of directors adopts an illegal or improper resolution;

2.The clearinghouse fails to carry out operations in accordance with its operations plan, 
　or  engages in operations outside the permitted scope;

3.The clearinghouse fails to obtain legal documentation to substantiate its income 
　and/or expenditures, or fails to maintain complete accounting records;

4.The clearinghouse makes misrepresentations in reports related to its business, finance, 
　or other important matters; or

5.Other violations of the provisions of laws or regulations.

Article 13

The fiscal year for a clearinghouse shall begin on January 1 and end on December 31 of 
the same year.

A clearinghouse shall prepare its budget for the     following fiscal year and report the 
same to the Bank for recordation two months prior to the beginning of a fiscal year, and 
prepare its year-end business report and final accounting statements and report the same 
to the Bank for recordation within two months after the end of a fiscal year.