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

Article 37

　Authorized banks shall comply with the following regulations when engaging in 
foreign exchange derivatives business not involving the New Taiwan dollar exchange
rate:

　1.Foreign currency margin trading business:
　　(1)May not be conducted with foreign currency loans, and the bank shall set a 
　　　 separate line of credit for each customer.
　　(2)Without the approval of the Bank, authorized banks may neither provide full 
　　　 discretionary account management nor "joint account" in conducting the 
　　　 business. Regulations governing full discretionary account management shall 
　　　 be separately provided by the Bank.
　　(3)Certificates of deposit or other collateral not under the name of the 
　　　 customer may not be pledged to the authorized bank as collateral for foreign 
　　　 currency margin trading.

　2.Foreign exchange derivatives business involving stock prices or stock indices:
　　(1)The "underlying products" shall mean foreign currencydenominated, foreign
　　　 market related stock prices, stock beneficiary certificates, or stock 
　　　 indices.
　　(2)The underlying products shall not include any stock indices, stock prices, 
　　　 or stock beneficiary certificates listed on any stock exchange in Taiwan or 
　　　 Mainland China.

　3.Forward and swaps business between foreign currencies:
　　The prices of rollover transactions shall be based on the current market
　　exchange rates rather than the rates of the original contracts.

　4.Cross currency swaps business between foreign currencies:
　　When providing this service, after settlement, the appropriate "
　　remittance classification and code number" shall be indicated on other
　　transaction certificates and included in the foreign exchange
　　transaction daily report.

　5.Structured products business linked to deposits:
　　(1)When providing "structured deposits" linked to foreign exchange
　　　 derivatives products with principal protection, or "structured
　　　 products" linked to foreign exchange derivatives products without 
　　　 principal protection, the underlying targets are limited to foreign 
　　　 exchange derivatives products already approved by the Bank.
　　(2)The business shall be conducted in compliance with the respective 
　　　 restrictions or regulations governing each type of businesses that 
　　　 have been structured into this business.

　6.Structured business linked to loans:
　　(1)For "structured loans" linked to foreign currency loans, the underlying
　　　 targets are limited to foreign exchange derivatives products already 
　　　 approved by the Bank.
　(2)The business shall be conducted in compliance with provisions of the "
　　 Directions Governing Banking Enterprises for Operating Foreign Exchange 
　　 Business", as well as the respective restrictions or regulations governing 
　　 each type of businesses that have been structured into this business.