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

Subsection 10　　Business of Conducting Wealth Management involving Foreign Currencies by Means of Trust  

Article 41 
A securities enterprise concurrently conducting trust business that engages in 
wealth management business by means of non-discretionary or semi-discretionary 
individually managed money trust involving foreign exchange (hereinafter 
referred to as “wealth management business involving non-discretionary or 
non-discretionary individually managed money trust”) shall apply to the Bank 
for approval by submitting documents provided in Article 7 herein and a 
business plan (including business description, business counterparties, trust 
framework, receipt/payment principles and declaration of foreign exchange 
settlement).
When a securities enterprise that has been approved by the Bank to engage in 
wealth management business involving non-discretionary or semi-discretionary 
individually managed money trust subsequently increases or decreases the 
number of branches handling the business, the securities enterprise shall 
report to the Bank for record within seven (7) days after obtaining approval 
from the competent authority.

Article 42 
When a securities enterprise engages in business under the preceding article, 
related receipt/ payment shall be handled according to the following rules:
1.Foreign currency non-discretionary or semi-discretionary money trust: 
　Receipt/payment of the trust funds between a securities enterprise and the 
　trustor or the beneficiary shall only be handled in foreign currency and not 
　paid in NTD. 
2.NTD non-discretionary or semi-discretionary money trust with investments in 
　products involving foreign exchange: 
(1) Receipt/payment of trust funds between a securities enterprise and the 
　　trustor or the beneficiary shall only be handled in NTD. Proceeds from the 
　　sale of foreign currency denominated products invested by the trust shall 
　　be exchanged into NTD immediately and deposited into the NTD trust asset 
　　deposit account – trustor sub-account. Foreign currency deposits shall be 
　　used exclusively for settlement purpose only. 
(2) When the purchase or sale of foreign currency denominated products through 
　　the same trust account involves exchange settlement against NTD, the 
　　securities enterprise shall carry out gross settlement through an authorized 
　　bank or by itself if it is a DSF without offsetting or settling on a net 
　　basis. However, for accounts receivable or payable arising from the purchase 
　　or sale of underlying assets on the same date or sale first and then buyback 
　　before the settlement of the sale through the same trust account of the 
　　trustor, the securities enterprise may, according to the trustor's 
　　instruction, combine and net off all the received (paid) money in the same 
　　foreign currency and then exchange the net received (paid) amount into NTD.

Article 43
Before establishing a foreign currency denominated collective investment trust 
account for the first time, a securities enterprise concurrently conducting 
trust business that engages in foreign currency denominated collective 
investment trust account business shall apply to the Bank for approval by 
submitting documents provided in Article 7 herein, and in addition, the 
following documents:
1.A FSC approval letter, but exempted for the collective investment trust 
　accounts that accept funds from professional investors only, provided it is 
　stated so in the application letter and reported to the FSC for record in 
　accordance with the “Regulations Governing Management and Utilization of 
　Collective Investment Trust Funds”; 
2.A management and utilization plan for the foreign currency denominated 
　collective investment trust account; 
3.The risk level of the collective investment trust account and the risk 
　tolerance level of investors who could bear the risk of the account, but 
　exempted for the collective investment trust accounts that accept funds from 
　professional investors only, provided it is stated so in the application 
　letter; and
4.Terms and conditions of the collective investment trust account agreement.
A securities enterprise establishing a NTD denominated collective investment 
trust account that involves foreign exchange settlement against NTD shall apply 
to the Bank for permission to carry out foreign exchange settlement by 
submitting documents provided in Subparagraphs 1 and 4 of the preceding 
paragraph, a declaration statement and an account asset schedule.

Article 44 
Securities enterprises shall observe the following rules when handling 
receipt/payment associated with business under the preceding article:
1.Foreign currency denominated collective investment trust account: 
　Receipt/payment of trust funds between a securities enterprise and the 
　trustor or the beneficiary shall only be handled in foreign currency instead 
　of NTD. 
2.NTD denominated collective investment trust account with investments in 
　products involving foreign exchange:  Receipt/payment of trust funds between 
　a securities enterprise and the trustor or the beneficiary shall be handled in 
　NTD only.

Article 45  
When a securities enterprise concurrently conducting trust business that engages 
in wealth management business by means of non-discretionary or 
semi-discretionary individually managed money trust, the qualifications of the 
trustor shall meet the criteria set out in Subparagraph 1 of Point 9 and 
Subparagraph 1 of Point 10 of the “Operating Directions”.
There shall be no transfer of funds between the NTD and foreign currency 
denominated non-discretionary or semi-discretionary money trust accounts of the 
same trustor or different trustors. 
When a securities enterprise concurrently conducting trust business with 
investments in products involving foreign exchange, such products must be 
denominated in foreign currency and shall not involve or be linked to NTD 
exchange rate or NTD interest rate index.