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

When a securities enterprise intends to engage in wealth management business by means of non-discretionary individually managed money trust with the underlying products denominated in foreign currencies (hereinafter referred to as “wealth management business involving non-discretionary money trust”), the securities enterprise shall apply to the Bank for approval by submitting documents provided in Article 6 herein and a business plan (including business description, business counterparties, framework of trust account, receipt/payment principles and filing of foreign exchange settlement).

Securities enterprises that have been approved by the Bank to engage in wealth management business involving non-discretionary money trust that subsequently increase or decrease the number of branches to handle the business shall, within seven days after obtaining approval from the competent authority, report to the Bank for record.

When a securities enterprise engages in wealth management business involving non-discretionary money trust, related receipt/ payment shall be handled according to the following rules:

1.Foreign currency non-discretionary money trust: Receipt/payment of trust money and repayment of trust principal and income between a securities enterprise and the principal shall be made in foreign currency. The trust assets may only be invested in foreign products or products denominated in foreign currency, and the foreign currency funds may not be converted to NTD through exchange settlement.

2.NTD non-discretionary money trust with investment in foreign products or products denominated in foreign currency:

(1)Receipt/payment of trust money and repayment of trust principal and income between a securities enterprise and the principal shall be made in NTD. Proceeds from the sale of foreign product or products denominated in foreign currency shall be exchanged into NTD and deposited into the NTD trust asset deposit account – principal sub-account. Foreign currency deposits shall be used exclusively for settlement purpose.

(2)When the purchase or sale of foreign product or product involving foreign exchange through the same trust account involve exchange settlement against NTD, the securities enterprise shall carry out gross settlement through an authorized bank without offsetting or settling on a net basis. However, for accounts receivable or payable arising from the purchase or sale of underlying assets or sale first and then buyback before the settlement of the sale through the same trust account on the same date, the securities enterprise may, according to the principal's instruction, combine and net off all the received (paid) money in the same currency and then exchange the net received (paid) amount into NTD.

When a securities enterprise conducts wealth management business involving non-discretionary money trust, the qualifications of the principal shall meet the criteria set out in Subparagraph 2 of Point 9 and Subparagraph 4 of Point 10 of the Operating Directions.

When the trust assets are invested in foreign products or products denominated foreign currency, such products must be denominated in foreign currency and not linked directly or indirectly domestic products.

There shall be no transfer of funds between the NTD and foreign currency non-discretionary money trust accounts of the same principal. And there shall be no transfer of funds between the discretionary money trust accounts of different principals.