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

Chapter 2　　Commencement of Foreign Exchange Business

Article 6

　A banking enterprise shall apply to the Central Bank of the Republic of China 
（Taiwan）(hereinafter referred to as the Bank) for engaging in foreign exchange 
 business, and may engage in the said business only after being issued a 
 certificate of authorization or a letter of approval.

　Foreign exchange business may not be operated without the approval of the Bank.

Article 7

　A bank may apply for engaging in all or part of the business categories
listed in Paragraph 1 of Article 4.

　Credit cooperatives, the credit departments of farmers' or fishermen's
associations may apply for purchasing and selling foreign currency cash
and traveler's checks.

　The Chunghwa Post Co., Ltd. may apply for engaging in international
remittances , purchasing and selling foreign currency cash and traveler's
checks.

Article 8

 Unless otherwise provided by these Regulations or other laws and regulations,
domestic and foreign banks within the territory of the Republic of China that 
apply to the Bank for engaging in foreign exchange business (hereinafter 
referred to as authorized banks) shall comply with the following provisions:

　1.Domestic banks shall:
　　(1)Maintain capital to risk-weighted assets ratio at 8% or above;
　　(2)Deploy sufficient experienced personnel for conducting foreign exchange
　　　 business;
　　(3)Participate in joint processing of foreign exchange business with other
　　　 authorized banks for an accumulated amount up to United States dollars 
　　　 400 million or up to 7,000 transactions; and
　　(4)Maintain a sound financial position for the last three years.

　2.Foreign banks shall be approved by Financial Supervisory Commission, 
　　Executive Yuan (hereinafter referred to as "FSC") to establish branches in 
　　Taiwan.

　When a bank applies to FSC for establishing a foreign department to engage in 
foreign exchange business, FSC shall forward the application to the Bank to 
review qualifications prescribed in Subparagraph 1 of the preceding Paragraph.

　Foreign banks approved to engage in foreign exchange business within the 
territory of the Republic of China may remit inwardly or outwardly capital or 
working capital only after having obtained a separate approval from FSC.

Article 9

　Banks intending to become authorized banks shall submit written applications 
with the following documents to the Bank for approval:

　1.Documents evidencing FSC's approval for registered establishment;

　2.Scope of foreign exchange business;

　3.Names and locations of overseas correspondent banks;

　4.Name and address of the statutory responsible person within the territory 
　　of the Republic of China;

　5.Capital and working capital to be remitted to the territory of the Republic 
　　of China, as well as the categories and amounts of foreign exchange funding 
　　sources; and

　6.Other data or documents specified by the Bank.

Article 10

　When engaging in foreign exchange business listed in Subparagraphs 1
through 6, Paragraph 1, Article 4, the operations and auditing personnel
of an authorized bank shall hold foreign exchange business licenses or
meet the following qualifications:

　1.An operations personnel shall have at least three-month experience in
　　the relevant foreign exchange business.

　2.An auditing personnel shall have at least six-month experience in the
　　relevant foreign exchange business.

Article 11
　For the branches of an authorized bank to engage in the foreign exchange
business listed in Subparagraphs 1 through 6, Paragraph 1, Article 4, the
bank's head office shall apply to the Bank for approval by submitting
documentation detailing the intended scope of business, and attaching
photocopies of the bank's business license and the curriculum vitae of
operations and auditing personnel..

Article 12

　 When engaging in foreign exchange derivatives business listed in
Subparagraph 7, Paragraph 1, Article 4, the operations and management
personnel of an authorized bank shall meet at least one of the following
qualifications:

　1.To have completed courses on derivatives and risk management held by 
　　domestic or foreign financial training institutions, the total amount
　　time spent on attending the courses shall be at least 3 months;

　2.To hold a foreign exchange derivatives business license;

　3.To have one year training or internship in foreign exchange derivatives
　　business at a domestic or foreign financial institution;

　4.To have at least six-month working experience in foreign exchange
　　derivatives business at domestic or foreign financial institutions.

Article 13

　An authorized bank may engage in foreign exchange forward and swaps
transactions without application. However, to engage in any other foreign
exchange derivatives business, an authorized bank shall submit the
following documents according to the type of business intended and
apply to the Bank for approval:

　1.Foreign exchange derivatives business involving the New Taiwan dollar 
　　exchange rate: Submit a statement of regulatory compliance, resolution 
　　of board of directors to apply for foreign exchange derivatives business 
　　for domestic banks or letter of authorization from the head office or 
　　regional command centers for foreign banks, product profiles, operational 
　　guidelines, risk management, risk disclosure statements, and curriculum 
　　vitae of the relevant personnel.

　2.Any structure combination of foreign exchange derivatives business in the 
　　preceding item with other business already authorized by the Bank or other 
　　competent authorities: Submit documents listed in the preceding subparagraph.

　3.Foreign exchange derivative business not involving the New Taiwan dollar 
　　exchange rate: For first time application by an authorized bank to engage in 
　　foreign exchange derivatives business or new financial products not yet 
　　approved by the Bank, documents listed in Item 1 shall be submitted.

　4.Foreign exchange derivatives business (not involving the New Taiwan dollar 
　　exchange rate) already approved by the Bank and further structure 
　　combinations thereof: Before engaging in this business, submit a statement 
　　of regulatory compliance, resolution of board of directors to apply for 
　　foreign exchange derivatives business for domestic banks or letter of 
　　authorization from the head office or regional command centers for foreign 
　　banks, risk disclosure statement, and curriculum vitae of the relevant 
　　personnel. However an authorized bank may engage in structure combination 
　　of foreign exchange derivatives that involve products in the same 
　　categories and that are created through the same transaction contracts 
　　without application.

　When an authorized bank, which has been approved to conduct derivatives 
business pursuant to the preceding regulation, engages in the foreign exchange 
derivatives business not involving the New Taiwan dollar, it should submit to 
the Bank a product profile, product introduction, and the documents required 
under Item 4 of the preceding paragraph within one week after such business 
has commenced for record. If within three (3) weeks after receiving such report
, the Bank does not object thereto, the Bank's silence shall be deemed an 
approval for record.

　The scope of the afore-mentioned foreign exchange derivatives business not 
involving the New Taiwan dollar shall be determined by the Bank separately.

Article 14
 An authorized bank that has been approved by FSC to engage in money trust 
business shall submit the following documents regarding outward and inward 
remittance of trust funds to the Bank to apply for engaging in New Taiwan 
dollar or foreign currency specific money trusts earmarked for investing 
in securities denominated in foreign currencies :
1.Documents evidencing FSC's approval for engaging in money trust business;
2.To apply for the afore-mentioned business with the resolution of board of   
　directors for domestic banks or letter of authorization from the head office 
　or regional command centers for foreign banks;
3.Statement of foreign exchange regulatory compliance;
4.Descriptions of which currency shall be received and redeemed and foreign   
　exchange settlement procedures;
5.Other documents specified by the Bank.

Article 15
　To offer foreign currency automatic teller machine (ATM) services, an
authorized bank shall apply to the Bank by submitting relevant
operational guidelines and identifying the names of the offices
controlling the ATM, a list of locations, and risk control measures.

Article 16

　To engage in electronic business involving foreign exchange, authorized
banks shall submit a description of relevant procedures when applying to
the Bank. Authorized banks applying for engaging in foreign exchange
receipts and disbursements or transactions with values equal to or over
New Taiwan dollars 500,000 on the Internet shall first pass the test of the
Online Civil Outward/Inward Remittances Declaration Yearly Aggregate
Settlement Amount Query System, and also be capable of performing
computerized review of transaction contents such as classification of
remittances.

　Before offering services in foreign exchange receipts and disbursements
or transactions on the Internet, an authorized bank shall first request the
customer to visit the bank in person to apply for and follow the
procedures stipulated. The authorized bank shall verify the customer's
identification documents or basic registration information when
processing an application.

Article 17

　To engage in foreign exchange business outside business hours, an
authorized bank shall submit a description of relevant procedures when
applying to the Bank, and shall comply with the following rules:

　1.The amount of each foreign exchange settlement shall be limited to
　　New Taiwan dollars 500,000 or its equivalent in foreign currency; and

 2.Foreign exchange transactions conducted outside business hours shall
　　be included in the "Daily Transaction Report" and "Daily Foreign
　　Exchange Position Report" on the following business day.

Article 18
　Where the authorized bank has established its own domestic foreign
exchange processing center to process relevant foreign exchange back office 
work, the bank shall submit the relevant operational guidelines and procedures 
to the Bank within one week after the commencement of its operation. In the 
event that the authorized banks use other methods to assign third parties to 
process the relevant foreign exchange back office work, the banks shall apply 
to the Bank for approval by submitting the operational plans for outsourcing. 
If the Bank has not expressed a negative opinion within 15 days from the day 
following receipt of the application, the bank may proceed to process the work
automatically.

Article 19
　 Where there is a need to engage in purchasing and selling foreign currency 
cash and traveler's checks by the branches of an authorized bank, or the banks 
and their branches that have not been authorized by the Bank to engage in 
foreign exchange business (hereinafter referred to as non-authorized banks), 
the bank's head office shall submit to the Bank a description of the scope of 
the intended business, a photocopy of the bank's business license (or a 
photocopy of establishment letter issued by FSC) and the curriculum vitae of 
operations and auditing personnel, except for the branches of an authorized 
bank which only engage in the money exchange of foreign currency.

Article 20
　Operations and auditing personnel at the branches of authorized banks and 
at non-authorized banks and their branches who engage in the purchasing and 
selling of foreign currency cash and traveler's checks shall possess at least 
one-week (five business days) experience in foreign exchange business.

Article 21

　The provisions of Item 1 of Article 17 shall apply, mutatis mutandis, when
branches of authorized banks and non-authorized banks and their branches have 
been authorized by the Bank to engage in the purchasing and selling of foreign 
currency cash and traveler's checks outside business hours.

　Transactions conducted under the afore-mentioned business shall be included 
in the "Daily Transaction Report" and "Daily Foreign Exchange Position Report"
on the following business day by the branches of authorized banks. Non-authorized
banks and their branches shall include the transactions in the "Daily Transaction 
Report" on the following business day.

Article 22
　 When a Credit Cooperative (head office or branch) first applies for approval 
to purchase and sell foreign currency and traveler's checks, the head office of 
the credit cooperative shall submit a written application together with a 
photocopy of the credit cooperative's business license, the curriculum vitaes of 
the operations and auditing personnel, the balance sheet and income statement of 
the previous fiscal year, and shall truthfully explain the status of any 
sanctions imposed on it for violation of financial regulations within the past 
twelve (12) months.

Article 23
　For the credit departments of farmers' or fishermen's associations or their
branches to apply for the purchasing and selling of foreign currency cash
and traveler's checks, the farmers' or fishermen's association shall submit
a written application along with a photocopy of the business license,
curriculum vitae of operations and auditing personnel to be reviewed by to the 
local competent authorities, who shall then forward the application to the 
central competent authorities and then to the Bank.

Article 24
　For a post office under the Chunghwa Post Co., Ltd. to apply for international 
remittances, to purchase and sell the foreign currency cash and traveler's checks
, the company's head office shall submit a written application along with a 
photocopy of FSC's approval letter (for the post offices which were established 
after January 1, 2003), and curriculum vitae of operations and auditing personnel 
to the Bank for approval.

Article  24-1

　If a relocation or name change is made by the branches of authorized banks, 
non-authorized banks and their branches, the head office of credit cooperatives 
and their branches, or the credit departments of farmer's or fishermen's 
associations and their branches that have been approved to engage in the foreign 
exchange business pursuant to Articles 11, 19, 22 and 23, depending on the type 
of situation, it is required for them to apply for a new certificate or notify 
the Bank within a week after the receipt of a business license or approval 
certificate. In the event of relocation, the curriculum vitae of operations and
auditing personnel shall also be submitted to the Bank.

　If the relocation or name change is made by the post offices under the
Chunghwa Post Co., Ltd., which have been permitted to engage in foreign exchange 
business pursuant to the preceding provisions, it is necessary for them to notify
the Bank within a week after the receipt of the letter issued by FSC or the letter 
issued by its head office. In the event of relocation, the curriculum vitae of 
operations and auditing personnel shall also be submitted to the Bank.

Article 25
　 The provisions of Article 10 shall apply, mutatis mutandis, to operations and 
auditing personnel performing international remittances business at post offices 
under Chunghwa Post Co., Ltd.

Article 26
　The provisions of Article 20 shall apply, mutatis mutandis, to operations and 
auditing personnel at credit cooperatives, the credit departments of farmers' 
or fishermen's associations and their branches and post offices under Chunghwa 
Post Co., Ltd. that engage in the purchasing and selling of foreign currency 
cash and traveler's checks.

Article 27

　 The provisions of Subparagraph 1 of Article 17 shall apply, mutatis mutandis, 
to credit cooperatives and the credit departments of farmers' or fishermen's 
associations and their branches that have been authorized by the Bank to engage 
in the purchasing and selling of foreign currency cash and traveler's checks, as 
well as to post offices under the Chunghwa Post Co., Ltd. that have been 
authorized by the Bank to engage in international remittances, purchasing and 
selling foreign currency cash and traveler's checks.

　Transactions conducted under international remittances and purchasing and 
selling of foreign currency cash and traveler's check transactions by the 
afore-mentioned banking enterprises outside business hours shall be included 
on the ''Daily Transaction Report'' or ''Daily Details Table''on the following 
business day.

Article 28
　Banking enterprises applying for foreign exchange business will be granted a 
designated period for providing supplementary information and making 
corrections if the documentations submitted were found to be incomplete. 
The Bank may reject the application if supplementary information and corrections 
were not submitted during the designated period.

Article 29

　The Bank may reject a banking enterprise's application for foreign exchange 
business in the event of any of the following:

　1.Qualifications of the applicant do not comply with regulations;

　2.The applicant has failed to fully assist declarants to fill out the
　　Declaration Statement of Foreign Exchange Receipts and Disbursements or 
　　Transactions（hereinafter referred to as Declaration Statement）;

　3.A high number of errors in the certificates, reports and forms prepared
　　by the applicant;

　4.The applicant had seriously violated the provisions of these Regulations and 
　　was rectified by the Bank, but has failed to improve within the period 
　　specified by the Bank;

　5.There is evidence indicating that the applicant may hinder sound operations 
　　of the business, or that the applicant is unable to meet financial policy 
　　requirements.

Article 30

　The Bank may revoke or cancel its approval to any banking enterprise engaging 
in foreign exchange business in the event of any of the following:

　1.The banking enterprise fails to commence operation within six months after 
　　being issued a certificate of authorization or letter of approval.
　　The applicant may request for an extension with appropriate reasons. If 
　　approved, the banking enterprise may have an extension of no more than three 
　　months. An institution may apply for extension only once;

　2.The banking enterprise has seriously violated the provisions of these 
　　Regulations and was rectified by the Bank, but has failed to rectify within
　　the period specified by the Bank;

　3.After being issued a certificate of authorization or letter of approval, or
　　after being approved to engage in various foreign exchange business, the 
　　banking enterprise was found to have provided false information in its 
　　application which is deemed a serious violation; or

　4.The banking enterprise suspends operations, is dissolved, or declares 
　　bankruptcy.