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

Chapter 1　　General Principles

Article 1 
These Regulations are prescribed pursuant to Paragraph 2, Article 35 of “the 
Central Bank of the Republic of China (Taiwan) Act.”

Article 2 
The provisions of these Regulations shall govern the foreign exchange business 
of securities enterprises. Matters not provided herein shall be subject to 
provisions under other relevant laws and regulations.

Article 3 
The term "securities enterprises" as used in these Regulations shall mean 
securities firms and financial institutions, concurrently engaging in 
securities business, approved to establish and issued a license by the 
Financial Supervisory Commission (hereinafter referred to as “FSC") in 
accordance with the “Securities & Exchange Act” and the “Standards 
Governing the Establishment of Securities Firms”.
The term “domestic securities firm approved to conduct spot foreign exchange 
transaction business” (hereinafter referred to as “DSF") as used in these 
Regulations shall mean a securities firm approved by the Central Bank of the 
Republic of China (Taiwan) (hereinafter referred to as “the Bank”) to conduct 
businesses set out in Subparagraph 2, Paragraph 1 of Article 4 herein.
The provisions of Article 4 of the Regulations Governing Foreign Exchange
Business of Banking Enterprises shall apply mutatis mutandis to the definitions 
of the terms "foreign exchange derivatives”, “complex high-risk foreign 
exchange derivatives”, “structured product”, “professional customer”, 
“professional institutional investor” and “high net worth corporate investor”
used in these Regulations.

Article 4 
The term "foreign exchange business" as used in these Regulations comprises the 
following categories:
1. Securities related businesses involving foreign exchange：
(1) Foreign currency denominated international bonds business;
(2) Proprietary trading of foreign securities business;
(3) Issuance of call (put) warrants business involving foreign exchange ;
(4) Business of accepting orders to trade foreign securities ;
(5) Business of trading foreign bonds as an agent;
(6) Business of acting as a participating dealer of an offshore exchange traded 
　　fund;
(7) Business involving domestically issued foreign currency denominated 
　　exchange traded funds;
(8) Business of acting as the master agent of an offshore fund institution;
(9) Business of acting as a local mandated agent of an offshore fund institution
　　; and
(10)Business of conducting wealth management involving foreign exchange by means 
　　of trust.
2. Spot foreign exchange transactions in connection with securities businesses.
3. Foreign exchange derivatives business.
4. Other foreign exchange businesses related to the securities business approved 
　 by the Bank.
When any of the businesses mentioned in the preceding paragraph involves foreign 
securities or offshore funds, such foreign securities or offshore funds shall 
not be denominated in New Taiwan dollar (NTD) and shall not involve or be linked 
to NTD exchange rate or NTD interest rate indices.

Article 5  
Unless otherwise provided by other laws or the competent authorities, a 
securities enterprise shall maintain the confidentiality of customer information 
gathered from foreign exchange business and shall adopt proper security measures 
in compliance with Paragraph 1, Article 27 of the “Personal Information 
Protection Act” if personal information is involved.

Chapter 2　　General Provisions – Operation and Management of Foreign Exchange Business

Section 1　　Application and Commencement of Foreign Exchange Business

Article 6 
Unless otherwise provided in these Regulations or by the Bank, a securities 
enterprise may engage in foreign exchange business only after its head office, 
or a branch within the territory of the Republic of China in the case of a 
foreign securities firm, has submitted an application to the Bank and been 
issued a letter of approval.
A securities enterprise may apply to engage in all or some of the business 
categories mentioned in the subparagraphs of Paragraph 1 of Article 4 herein, 
and the Bank will grant approval to each business category individually. The 
Bank may also prescribe other rules or state those rules in the letter of 
approval for business categories approved under Subparagraph 4 of the same 
paragraph and article.
Unless otherwise provided in these Regulations or by the Bank, a securities 
enterprise shall report the date of commencement to the Bank for record 
within seven (7) days after commencing its foreign exchange business.
Unless otherwise provided in these Regulations or by the Bank, securities 
enterprises shall not conduct any foreign exchange business without the approval 
of the Bank.

Article 7 
A securities enterprise that applies for approval to engage in foreign exchange 
business shall submit a written application with the following documents:
1.A photocopy of the certificate of security business license;
2.A photocopy of the business license or qualification document for relevant 
　business evidencing the approval of the FSC or the consent of the Taipei 
　Exchange (hereinafter referred to as “TPEx”) for the securities enterprise 
　to engage in the business;
3.A resolution of the board of directors resolving to apply for the business or 
　a letter of authorization from the head office or regional command center in 
　the case of a foreign securities firm; and
4.A statement of regulatory compliance.
When a securities enterprise applies to engage in foreign exchange businesses 
provided in Item 2 of Subparagraph 1, Subparagraph 2 or 3, Paragraph 1 of 
Article 4 herein, it shall simultaneously apply for a foreign currency risk 
upper limit and the exclusion of overseas long-term equity investment, real 
estate and equipment from such limit. This does not apply to authorized foreign 
exchange banks (hereinafter referred to as "authorized banks") concurrently 
engaging in securities business. 
When a change in the approved foreign currency risk upper limit and exempt items 
mentioned in the preceding paragraph occurs, a securities enterprise shall 
submit a FSC approval document or other relevant documents to the Bank for 
consent.

Article 8   
A securities enterprise that applies for foreign exchange business will be 
granted a designated period for providing supplementary information or making 
corrections if the documentation or information submitted were found to be 
incomplete or insufficient. The Bank may reject the application if supplementary 
information or corrections are not submitted within the designated period.

Article 9  
The Bank may reject a securities enterprise’s application for foreign exchange 
business in the event of any of the following:
1.Qualifications of the applicant do not comply with the requirements;
2.The applicant has failed to assist declarants to fill out the Declaration 
　Statement of Foreign Exchange Receipts and Disbursements or Transactions 
　(hereinafter referred to as “Declaration Statement”) as required.
3.A high error rate in the certificates, reports and forms prepared by the 
　applicant;
4.The applicant has violated the provisions of these Regulations or relevant 
　rules in the past year and the violation is of a serious nature; the 
　applicant was ordered to rectify the situation by the Bank, but has failed to 
　do so within the period specified by the Bank; or 
5.Other facts that are sufficient to indicate that the applicant may hinder 
　sound operations of the business, or that the applicant is unable to meet 
　financial policy requirements.
When a securities enterprise reporting a foreign exchange business to the Bank 
for record with false documents or reporting a foreign exchange business which 
is not required to report to the Bank for record according to these Regulations, 
the Bank may, depending on the severity of the situation, impose the following 
sanctions: 
1.Demand the securities enterprise to take remedial action;
2.Suspend the application of the securities enterprise for new foreign exchange 
　business or for adding branches to conduct foreign exchange business for a 
　specified period of time;
3.Suspend specific foreign exchange businesses of the securities enterprise for 
　a specified period of time; or
4.Withdraw the securities enterprise’s privilege of commencing a foreign 
　exchange business that requires reporting for record according to these 
　Regulations by reporting the business to the Bank for record.

Article 10
The Bank may suspend, revoke or cancel its approval in part or in whole the 
foreign exchange business engaged by a securities enterprise, or suspend the 
application of the securities enterprise for new foreign exchange business or 
for adding branches to conduct foreign exchange business in the event of any of 
the following: 
1.The securities enterprise fails to commence operation within six months after 
　being issued a letter of approval. The applicant may request for an extension 
　with valid reasons. If agreed by the Bank, the securities enterprise may have 
　an one-time extension of no more than three months;
2.The securities enterprise did not engage in a foreign exchange business again 
　within one year after reporting to the Bank the date of commencing the 
　business; 
3.The securities enterprise has violated the provisions of these Regulations or 
　other relevant laws and regulations and the violation is of a serious nature, 
　or was asked by the Bank to rectify the situation within the period specified 
　by the Bank, but has failed to do so;
4.After the securities enterprise has been approved to engage in various foreign 
　exchange businesses, its original application documents were found to contain 
　false information or misrepresentation of a serious nature; 
5.The securities enterprise suspends operations, is dissolved, or declares 
　bankruptcy; or
6.Other facts that are sufficient to indicate that the securities enterprise 
　may hinder sound operations of the business, or that the securities enterprise 
　is unable to meet financial policy requirements.
For the securities enterprise whose approval is revoked or cancelled according 
to the preceding paragraph, the Bank will announce to nullify the approval.
A securities enterprise that is ordered by the Bank or the relevant competent 
authority to suspend or stop applying for business for a specified period of 
time shall not commence any foreign exchange business that requires reporting 
for record according to these Regulations by reporting the business to the Bank 
for record if the suspension period has not expired, if it fails to propose 
proper and concrete improvement measures during the suspension period, or if its 
proposed improvement measures have not been accepted by the competent authority.

Section 2　　Management of Foreign Exchange Business

Article 11  
Securities enterprises engaging in foreign exchange business shall first verify 
the identity and primary registration information of the customer and ensure 
that supporting documents comply with these Regulations before processing the 
transaction. In addition, securities enterprises shall comply with the “Money 
Laundering Control Act”, “Terrorist Financing Prevention Act”, “Directions 
Governing Anti-money Laundering and Countering Terrorism Financing of the 
Securities and Futures Sector” and the relevant rules. 
Securities enterprises shall properly retain customer information and 
transaction records for at least five (5) years after the completion of the 
transaction or the closing of customer’s account.

Article 12  
When engaging in foreign exchange business, securities enterprises shall carry 
out internal control and risk management in accordance with relevant rules and 
regulations of the competent authority. Securities enterprises shall also 
disclose fully to the customers foreign exchange related risks, and shall not 
offer predictions on the future movements of the NTD exchange rates.
The Bank’s letter of approval or acknowledgement to reporting for record is 
merely a certificate for the securities enterprise to engage in relevant foreign 
exchange businesses, which shall not be publicized as the Bank's endorsement for 
the safety or performance of related business or used in other inappropriate 
ways.

Article 13
A securities enterprise’s coverage of foreign exchange positions arising from 
its foreign exchange business shall be carried out by its head office through 
an authorized bank, an offshore banking unit or an overseas financial 
institution.
A securities enterprise shall heed its foreign exchange risk and draft its own 
foreign exchange risk management rules based on the foreign exchange business 
conducted. After the rules have been passed by its board of directors (council 
members) or the head office (or regional headquarter) in the case of a foreign 
securities firm, all its offices shall abide by these rules and conduct audits 
regularly.

Article 14 
When a securities enterprise has a demand for a certain foreign currency arising 
out of its securities-related foreign exchange business, the securities 
enterprise may raise the foreign currency funds through the following means:
1.The securities enterprise may engage in foreign exchange swaps or cross 
　currency swaps between NTD and the foreign currency with authorized banks;
2.A securities enterprise that engages in the following foreign exchange 
　businesses may borrow money directly from an overseas financial institution 
　or obtain a foreign currency loan from an authorized bank according to the 
　following rules, but the borrowed funds may not be used as working capital:
(1)Acting as a participating dealer of an offshore ETF: For hedging transactions 
　 to cover equity risk associated with offshore ETF positions held, the 
　 securities enterprise may obtain a foreign currency loan with the foreign 
　 transaction document or the Bank’s business approval letter.
(2)Acting as a liquidity provider for domestically issued foreign currency 
　 denominated ETF: The securities enterprise may obtain a foreign currency 
　 loan with the Bank’s business approval letter.
(3)Proprietary trading of foreign currency securities: The securities enterprise 
　 may obtain a foreign currency loan with the transaction confirmation or 
　 document from the counterparty. For such a loan, the securities enterprise 
　 shall sign an affidavit undertaking that “proceeds from the sale of the 
　 original purchased foreign currency security will be used directly to repay 
　 the lender and will not be used for other purposes.” 
(4)Underwriting of an international bond: When underwriting on a firm commitment 
　 basis or a standby commitment basis, the securities enterprise may use the 
　 underwritten bond as collateral to obtain a foreign currency loan with the 
　 Bank’s business approval letter or related underwriting contractual 
　 documents and relevant documents evidencing the payment of the settlement 
　 amount by the enterprise. The loan should be repaid no later than the 
　 maturity date of the underwritten bond or when the bond is sold.
3.A securities enterprise may obtain a foreign currency call loan from an 
　authorized bank, an offshore banking unit or an overseas financial 
　institution.
When acquiring a foreign currency loan or a call loan, securities enterprises 
shall also comply with the following rules:
1.The total balance of foreign currency loans plus foreign currency call loans 
　from other financial institutions shall not exceed 100% of its net worth as 
　shown in its CPA audited or certified financial statements plus the balance 
　of unsold committed underwritten foreign currency bonds;
2.The total balance of foreign currency loans plus foreign currency call loans 
　mentioned in the preceding subparagraph shall include those foreign currency 
　loans and call loans obtained by its offshore securities unit (OSU), but 
　excluding transactions between the OSU and its head office;
3.The tenor of foreign currency call loans handled by securities enterprises 
　shall not be longer than one year; and
4.Proceeds from foreign currency loans and call loans may not be sold for NTD, 
　and unless with the Bank’s approval, the sources of fund for loan repayment 
　may not come from foreign exchange against NTD.

Article 15  
Securities enterprises may not exchange the foreign currency fund they receive 
from repo trade of foreign currency securities into NTD, and the sources of 
fund for settlement payment upon expiration may not come from foreign exchange 
against NTD.

Article 16   
Securities enterprises that have been approved by the Bank to engage in 
securities-related foreign exchange business may, within the scope of its 
permitted businesses, handle the offshore securities business and related tax 
matters on behalf of an OSU of the same securities firm. Such business handled 
by the securities firm shall be booked on the account books of the OSU.
When handling the services on behalf of an OSU mentioned in the preceding 
paragraph, the securities enterprise shall observe the “Offshore Banking Act”,
“Enforcement Rules of the Offshore Banking Act”, “Regulations Governing 
Offshore Securities Units”, as well as other applicable regulations.

Article 17  
Unless otherwise provided in these Regulations, a securities enterprise that 
engages in foreign exchange business involving outward and inward remittance 
of fund or foreign exchange settlement against NTD shall deal with an authorized 
bank in accordance with the “Regulations Governing the Declaration of Foreign 
Exchange Receipts and Disbursements or Transactions” (hereinafter referred to 
as the “Regulations for Declaration”), “Directions Governing Banking 
Enterprises for Operating Foreign Exchange Business” (hereinafter referred to 
as “Operating Directions”), and “Directions for Banking Enterprises on 
Assisting Customers to Declare Foreign Exchange Receipts and Disbursements or 
Transactions”.
Unless special provisions apply to the foreign exchange settlement, securities 
enterprises shall observe the following rules when handling receipt/payment 
associated with their foreign exchange business:
1.Where the receipt/payment of the foreign exchange business is in foreign 
　currency, the customer shall carry out foreign exchange settlement at an 
　authorized bank in accordance with the “Regulations for Declaration”, or 
　the payment may be transferred from the customer’s foreign exchange deposit 
　account;
2.When accepting orders to trade foreign securities, conducting wealth 
　management business involving foreign exchange by means of trust, or acting 
　as a master agent or its mandated sub-distributors of an offshore fund 
　institution to purchase or redeem offshore funds in NTD, the securities 
　enterprise shall carry out foreign exchange settlement at an authorized bank 
　in accordance with the “Regulations for Declaration”; and
3.Foreign exchange settlement shall be carried out at an authorized bank based 
　on the exact amount of the transaction. Unless with the Bank’s approval, 
　settlement on a net basis after offset of receipt/payment is not allowed.

Article 18   
Securities enterprises that engage in foreign exchange business shall, for each 
category of business, submit relevant reports to the Bank’s Department of 
Foreign Exchange and ensure the completeness and accuracy of the contents of the 
reports. The instructions for filling the application form, required attachments 
and methods of submission of the reports shall be prescribed separately by the 
Bank. 
The timetable for securities enterprises to submit relevant reports to the 
Department of Foreign Exchange of the Bank is as follows:
1.Daily report：Before 12:00 noon on the next business day.
2.Monthly report：Within ten (10) days after the end of each month.
If deemed necessary, the Bank may ask a securities enterprise to submit other 
relevant reports.
With regard to the review of reports submitted by securities enterprises, the 
Bank may dispatch personnel to inspect the relevant account books and documents, 
or request securities enterprises to provide truthful and relevant documents or 
information within a prescribed period of time if deemed necessary.

Chapter 3　　Detailed Provisions – Operation and Management of Foreign Exchange Business

Section 1　　Securities Related Business Involving Foreign Exchange

Subsection 1　　Foreign Currency Denominated International Bond Business

Article 19  
Securities enterprises that have obtained the qualification to engage in 
proprietary trading of domestic bonds may also engage in proprietary trading 
of foreign currency denominated international bonds without making an 
application.

Securities enterprises that have obtained the qualification to underwrite 
domestic bonds may also offer financial planning, evaluation and consulting 
services relating to foreign currency denominated international bonds in 
accordance with the following rules without making an application:
1.The securities enterprise may not engage in underwriting on a firm commitment 
　basis or a standby commitment basis;
2.The securities enterprise may not be involved in receipt/payment between the 
　issuer and the investors.
3.The securities enterprise may not report the commencement of underwriting 
　foreign currency denominated international bonds business by offering 
　financial planning, evaluation and consulting services relating to foreign 
　currency denominated international bonds.

Article 21 
A securities enterprise that intends to engage in the underwriting of foreign 
currency denominated international bonds shall apply to the Bank for approval 
by submitting documents provided in Article 7 herein and documents evidencing 
its qualifications as specified below: 
1.Having the qualification to underwrite domestic securities.
2.Meeting one of the criteria below:
(1)Having a long-term credit rating of BBB (or equivalent) or higher for the 
　 latest year from a credit rating agency approved or recognized by the FSC 
　 or an internationally known credit rating agency; or
(2)For a branch of a foreign securities firm in Taiwan, its head office has 
　 practical experience in underwriting foreign securities.
3. The regulatory capital adequacy ratio shall meet one of the following 
　 requirements:
(1)For domestic securities firms, the regulatory capital adequacy ratio in the 
　 six months before the date of application shall be at least 200%; for banks 
　 and bills finance companies engaging concurrently in securities business, 
　 the regulatory capital adequacy ratio shall reach the statutory ratio;
(2)For branches of foreign securities firms in Taiwan, their head office shall 
　 meet the criteria provided in the preceding item or Paragraph 3, Article 59 
　 of the “Regulations Governing Securities Firms”.
4. Free of any of the following sanctions:
(1)Any sanction imposed by the FSC during the preceding one year acting pursuant 
　 to any of Subparagraphs 2 ~ 4, Article 66 of the “Securities and Exchange 
　 Act”; and
(2)Any sanction during the preceding one year whereby the TPEx, acting pursuant 
　 to its operating rules or bylaws, has suspended or restricted the firm's 
　 trading privileges.
5. No accumulated loss as shown in its latest CPA audited or certified financial 
　 statements.

Article 22  
When a securities enterprise engages in the underwriting of a foreign currency 
denominated international bond, receipt/payment between the enterprise and the 
investors/issuer shall always be made in the denominated currency of the 
international bond.

Section 2　　Proprietary Trading of Foreign Securities Business

Article 23   
A securities enterprise that has obtained the qualification to engage in 
proprietary trading of domestic bonds may also engage in proprietary trading of 
foreign securities without making an application. However if such trading is 
neither an investment of proprietary funds nor done to meet hedging purposes, 
the securities enterprise shall apply to the Bank for approval by submitting 
documents provided in Article 7 herein and photocopies of the latest CPA 
audited or certified financial statements, procedures for handling 
receipt/payment, process description and other documents required by the Bank.

Article 24  
When a securities enterprise engages in business mentioned in the preceding 
article, related receipt/payment shall always be made in the denominated 
currency of the security.

Subsection 3　　Offshore or Foreign Currency Warrant Business

Article 25 
The business scope of call (put) warrant issued by securities enterprises 
involving foreign exchange (hereinafter referred to as “offshore or foreign 
currency warrant business”) includes the following:
1.For domestic call (put) warrants involving foreign securities or indices of 
　foreign securities markets, the scope of the underlying shall conform to 
　relevant regulations stipulated by the FSC.
2.For offshore call (put) warrants involving domestic securities or indices, 
　the scope of the underlying shall be limited to domestic stocks or baskets of 
　stocks, domestic exchange traded securities investment trust funds, offshore 
　ETFs, and Taiwan depositary receipts.

Article 26 
A securities enterprise that intends to engage in offshore or foreign currency 
warrant business shall apply to the Bank for approval by submitting documents 
provided in Article 7 herein, and in addition, documents specified below:
1.Qualification certificates issued by the FSC and the competent authority in 
　the place where the offshore warrants will trade; and
2.Business plan (including product profiles, operational guidelines and risk 
　management).

Subsection 4　　Business of Accepting Orders to Trade Foreign Securities

Article 27   
A securities enterprise that intends to accept orders to trade foreign 
securities for the first time shall apply to the Bank for approval by 
submitting documents provided in Article 7 herein, and in addition, a business 
plan (including operational principles and business practice, procedures of 
handling of receipt/payment and operating process).
When a securities enterprise already approved by the Bank to accept orders to 
trade foreign securities with receipt/payment of settlement and fees in foreign 
currency intends to engage in receipt/payment in NTD, the securities enterprise 
only needs to submit the following additional documents to the Bank to apply for 
approval:
1.A photocopy of the Bank’s letter of approval for the securities enterprise to 
　accept orders to trade foreign securities with receipt/payment of settlement 
　and fees in foreign currency;
2.A photocopy of letter of approval from the FSC;
3.A statement supporting that the applicant’s computer system is able to meet 
　the requirements set out in Article 28 herein regarding receipt/payment in 
　different currencies; and
4.A description of the controls for receipt/payment of settlement and fees in 
　different currencies.

Article 28  
When a securities enterprise accepts orders to trade foreign securities, the 
securities enterprise shall comply with the following rules with regard to 
receipt/payment of settlement and fees with customers:
1.When a customer designates the settlement to be made in a foreign currency, 
　the related receipt/payment shall be made in the foreign currency; and
2.When a customer designates the settlement to be made in NTD, the related 
　receipt/payment shall be made in NTD.

Subsection 5　　Business of Trading Foreign Bonds as an Agent

Article 29  
A securities enterprise that intends to trade foreign bonds as an agent shall 
apply to the Bank for approval by submitting documents provided in Article 7 
herein, and in addition, a business plan (including business profile, operating
process and risk management).

Article 30  
When a securities enterprise trades foreign bonds as an agent, payment shall 
be remitted by the buyer directly into an account designated by the foreign 
financial institution. The receipt/payment for investment, redemption, and 
settlement, fees charged by the foreign financial institution and other fees 
shall be made in foreign currency.

Subsection 6　　Business of Acting as a Participating Dealer of an Offshore Exchange Traded Fund

Article 31  
When a securities enterprise intends to act as a participating dealer for an 
offshore exchange traded fund (hereinafter referred to as “ETF”) to process 
(on a brokerage basis) or engage in (on a proprietary basis) purchase or 
redemption of an offshore ETF in Taiwan (hereinafter referred to as “offshore 
ETF participating dealer business), the securities enterprise shall apply to 
the Bank for approval or report to the Bank for record by submitting the 
following documents before commencing the business:
1.When acting as a participating dealer of an offshore ETF for the first time, 
　the securities enterprise shall apply to the Bank for approval by submitting 
　documents provided in Article 7 herein, and in addition, documents evidencing 
　approval from or completing effective registration with the FSC for the ETF 
　and a business plan (including business profile, operating process, 
　receipt/payment procedure, and hedging arrangements).
2.When the securities enterprise subsequently intends to act as a participating 
　dealer for another offshore ETF, it only needs to report to the Bank for 
　record before commencement by submitting documents evidencing approval from 
　or completing effective registration with the FSC for that ETF.

Article 32  
When a securities enterprise engages in Offshore ETF Participating Dealer 
Business, receipt/payment between the participating dealer and investors 
shall always be made in the denominated currency of that offshore ETF as 
listed on the centralized securities exchange market.

Subsection 7　　Business Involving Domestically Issued Foreign Currency Denominated ETFs

Article 33  
When a securities enterprise intends to act as a participating dealer for a 
domestically issued foreign currency denominated ETF to process (on a brokerage 
basis) or engage in (on a proprietary basis) purchase or redemption of foreign 
currency denominated ETFs, the securities enterprise shall apply to the Bank for 
approval or report to the Bank for record by submitting the following documents 
before commencing the business:
1.When acting as a participating dealer for a domestically issued foreign 
　currency denominated ETF for the first time, the securities enterprise shall 
　apply to the Bank for approval by submitting documents provided in Article 7 
　herein, and in addition, the following documents:
(1)Qualification approval letter from the Taiwan Stock Exchange (hereinafter 
　 referred to as “TWSE”);
(2)Participation contract of that foreign currency denominated ETF; and
(3)A business plan (including business profile, foreign exchange settlement 
　 matters involved in the planning for the foreign currency funds, and 
　 hedging arrangements).
2.When the securities enterprise subsequently intends to act as a participating 
　dealer for another domestically issued foreign currency denominated ETF, it 
　only needs to report to the Bank for record before commencement by submitting 
　documents provided in Items (1) and (2) of the preceding paragraph.

Article 34  
For a securities enterprise to act as a liquidity provider for a domestically 
issued foreign currency denominated ETF, the provisions of the preceding article 
shall apply mutatis mutandis to the procedure and documentation required for 
applying for the business. Notwithstanding the foregoing, the documents 
provided in Item (2), Subparagraph 1 of the preceding article shall be 
substituted with the liquidity contract on the domestically issued foreign 
currency denominated ETF.

Article 35
Securities enterprises that have obtained the qualification to engage in 
proprietary trading of securities or to accept orders to trade securities 
on the centralized securities exchange market may also engage in proprietary 
or broker trading of foreign currency denominated ETFs without making an 
application.
When engaging in the business mentioned in the preceding paragraph, a 
securities enterprise shall comply with the following rules:
1.Receipt/payment between the securities enterprise and investors regarding 
　the purchase and sale of a foreign currency denominated ETF shall be made in 
　the denominated currency of that ETF.
2.A foreign currency denominated ETF may not be an underlying product in margin 
　purchase and short sales, securities borrowing and lending, borrowing or 
　lending money in connection with securities business, or borrowing or lending 
　money without specific purposes by securities firms, and other relevant 
　businesses.
3.NTD denominated ETF positions acquired through margin purchase or borrowing 
　may not be converted into foreign currency denominated ETFs.
4.When the trading order of an investor to buy a foreign currency denominated 
　ETF fails to be executed and if the securities broker has collected payments 
　from the investor in advance, the securities broker shall return the advance 
　payments no later than the next business day following the trading day.
5.When an investor’s amount receivable is greater than the amount payable on 
　the same settlement day, the securities enterprise may sign an intra-day 
　overdraft contract with the settlement bank to facilitate timely settlement 
　with the investor.
6.In the case of out-trade, an investor default on a sale, or an overseas 
　Chinese or foreign investor requesting a delay in settlement, the securities 
　enterprise may apply to TWSE for borrowing securities to cover the settlement.

Subsection 8　　Offshore Fund Master Agency Business

Article 36
A securities enterprise that intends to act as the master agent of an offshore 
fund institution in the offering and sale of its funds in Taiwan (hereinafter 
referred to as the “offshore fund master agency business”) shall apply to the 
Bank for approval by submitting documents provided in Article 7 herein, and in 
addition, the following documents:
1.A photocopy of document evidencing the approval from or effective registration 
　with the FSC for offering and sale of offshore funds in Taiwan;
2.Business plan (including business profile, operating process and 
　receipt/payment procedure); and
3.List of sub-distributors and a statement supporting the qualifications of 
　those sub-distributors.
When a securities enterprise acts as the master agent of an offshore ETF that 
is listed in NTD, the securities enterprise shall apply to the Bank for approval 
on a case-by-case basis.

Article 37
When a securities enterprise acting as a master agent for an offshore fund 
institution sells the funds or mandates its sub-distributors to handle the 
offering and sale of the offshore funds, the related receipt/payment shall be 
handled according to the following rules:
1.When the investor pays and receives funds directly to and from an offshore 
　account designated by the offshore fund institution, the related 
　receipt/payment for purchase and redemption between the investor and the 
　offshore fund institution shall be made in foreign currency.
2.When the investor purchases the offshore fund through the account opened by 
　the master agent at a domestic bank in the name of the offshore fund 
　institution, or a bank account designated by the centralized securities 
　depository enterprise, or a non-discretionary money trust managed by a trust 
　enterprise, or accepting orders to trade foreign securities by a securities 
　enterprise, the following applies:
(1)When the purchase is paid in NTD, relevant receipt/payment shall be made in 
　 NTD.
(2)When the purchase is paid in foreign currency, relevant receipt/payment shall 
　 be made in foreign currency.
(3)Upon receiving purchase payments and redemption proceeds that involve 
　 exchange settlement against NTD, the securities enterprise shall carry out 
　 exchange settlement promptly and remit the payments out to the offshore fund 
　 institution or remit the proceeds into the account designated by the investor.
3.When an investor purchases an offshore fund with foreign currency, and then 
　switches into another offshore fund with a different currency, the investor 
　may be paid with the fund with denominated currency at the time of redemption.

Article 38
When a master agent files a report with the FSC in events referred to in 
Article 12 of the “Regulations Governing Offshore Funds”, it shall notify 
the Bank.

Subsection 9　　Private Placement of Offshore Funds business

Article 39  
When a securities enterprise intends to act as the local mandated agent of an 
offshore fund institution and conduct private placement to specified 
counterparties (hereinafter referred to as “offshore fund private placement 
business”), the securities enterprise shall apply to the Bank for approval by 
submitting documents provided in Article 7 herein, and in addition, the 
following documents:
1.A statement to comply with the provisions in Article 52 of the “Regulations 
　Governing Offshore Funds”. Such statement is not required if the 
　counterparties are entities provided in Subparagraph 1, Paragraph 1, Article 
　52 of the Regulations.
2.Business plan (including business profile, primary information of the offshore 
　fund, operating process and receipt/payment procedure).

Article 40
When a local mandated agent of a privately placed offshore fund purchases fund 
shares from the offshore fund institution, it shall do so in the name of the 
counterparty, and the receipt/payment for settlement and fees shall be made in 
the denominated currency of that fund. 
When the agent reports to the institution designated by the FSC within five (5) 
days from the date that the price of the privately placed offshore funds has 
been paid in full, it shall notify the Bank.

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.

Section 2　　Spot Foreign Exchange Transactions in Connection with Securities Business

Article 46  
The scope of spot foreign exchange transactions that a DSF may carry out with 
its customers is limited to the following: 
1.The DSF is handling a business with the same customer under any subparagraph 
　other than Subparagraph 2 of Paragraph 1, Article 4 herein that has been 
　approved by the Bank;
2.The same securities firm acts as an recommending securities firm for an 
　emerging stock company and has foreign exchange settlement needs in order to 
　subscribe the stocks of foreign issuers as required by the competent 
　authority; and
3.The same securities firm acts as the lead underwriter, paying agent or 
　registrar agent for NTD denominated securities issued by a foreign issuer 
　in Taiwan under the approval of the competent authority and has related 
　foreign exchange settlement needs.
When carrying out spot foreign exchange transactions under Subparagraph 1 and 2 
of the preceding paragraph, a DSF shall also observe the following rules:
1.The amount of spot foreign exchange transaction shall not exceed the 
　transaction amount and fees of the related securities business;
2.The spot foreign exchange transaction shall be carried out only after the 
　customer concluding the transaction of related securities business and shall 
　be completed prior to the settlement date of the related securities business 
　transaction; 
3.The transaction is not on a leveraged, margined or financed basis; and 
4.When the business involves repo trade of foreign currency securities with 
　customers, only spot foreign exchange transaction between foreign currencies 
　may be carried out.

Article 47 
Only securities firms that are concurrently a securities underwriter, a 
securities dealer, and a securities broker provided under Article 16 of the 
“Securities and Exchange Act” may apply to engage in spot foreign exchange 
transaction business.
A securities firm that intends to engage in spot foreign exchange transaction 
business shall apply to the Bank for approval by submitting the following 
documents:
1.Documents provided under Article 7 herein;
2.Description of operations, including business hours and cutoff time for 
　accounting dates and ways to reconcile the “Daily Foreign Exchange Position 
　Report” submitted to the Bank’s Department of Foreign Exchange pursuant to 
　Paragraph 1 of Article 52 herein; 
3.Documents evidencing that the securities firm has been approved by the Bank 
　to engage in any business under the subparagraphs other than Subparagraph 2 
　of Paragraph 1, Article 4 herein and having a solid record of conducting such 
　business;
4.The net worth shown in the latest CPA audited or certified financial statement 
　meets the criteria prescribed by the FSC for a securities firm that applies 
　for the setup of an OSU in Taiwan to engage in all of the businesses provided 
　in the subparagraphs of Paragraph 1, Article 22-4 of the Offshore Banking Act; 
5.Documents evidencing compliance and sound operation: Free of sanction due to 
　serious violation of rules during the preceding three years before 
　application, or the securities enterprise with sanctioned violation has 
　effected specific improvement and has satisfied the competent authority or 
　the Bank; and
6.Documents evidencing that its operations and auditing personnel meet the 
　following qualification requirements:
(1)An operations personnel must have at least three months of working experience 
　 in relevant foreign exchange business, or have completed at least 12 hours of 
　 foreign exchange regulations related courses (including regulations on 
　 foreign exchange business and reporting of foreign exchange receipts, 
　 disbursements or transactions by securities enterprises and foreign exchange 
　 risk management) given by domestic financial training institutions and 
　 received certificates therefor and also have at least 20 business days of 
　 practical training in relevant foreign exchange business at an authorized 
　 bank.
(2)A controlling personnel must have at least six months of working experience 
　 in relevant foreign exchange business, or have attended courses provided in 
　 the preceding item and also have at least 40 business days of practical 
　 training in relevant foreign exchange business at an authorized bank.
A securities firm that has been approved by the Bank to engage in spot 
transactions between foreign currencies may apply to the Bank for approval to 
expand the business to spot foreign exchange transactions involving NTD by 
submitting the following documents:
1.A resolution of the board of directors resolving to apply for the business;
2.A statement of regulatory compliance; and
3.Documents provided in Subparagraphs 2 and 5 of the preceding paragraph.
Changes to the description of operations mentioned in Subparagraph 2 of 
Paragraph 2 herein shall be reported to and agreed by the Bank in advance.
The head office of a DSF that applies for its branches to engage in spot 
foreign exchange transaction business shall observe the following rules:
1.The head office of a DSF shall apply the business after it has been approved 
　by the Bank to engage in the business and has a solid record of conducting 
　such business; and
2.The head office shall apply to the Bank for approval by submitting a photocopy 
　of the branch’s license and documents evidencing the qualifications of its 
　operations and controlling personnel as provided in Subparagraph 6 of 
　Paragraph 2 hereof.  

Article 48 
A DSF shall set its total position limit for transactions between NTD and 
foreign currency which shall be submitted along with the resolution of the
board of directors to the Bank’s Department of Foreign Exchange for approval.
The position of NTD exchange rate options shall not exceed one-fifth of the 
afore-mentioned total position limit.

Article 49 
A DSF that intends to participate in the interbank foreign exchange market 
involving NTD shall first make sure that it is free of the situations in 
Subparagraphs 2 ~ 5, Paragraph 1 of Article 9 herein and apply to the Bank 
for approval by submitting the following documents:
1.A statement of regulatory compliance;
2.Document evidencing that the DSF has been approved to engage in business 
　under Subparagraph 2, Paragraph 1 of Article 4 herein and a solid record of 
　conducting such business;
3.Document evidencing that the DSF is free of any sanction imposed by the FSC 
　pursuant to Subparagraphs 2 ~ 4, Article 66 of the “Securities and Exchange 
　Act” in the preceding one year; and
4.Document evidencing that the DSF has not been suspended or restricted from 
　trading by TWSE, TPEx or Taiwan Futures Exchange pursuant to their operating 
　rules or bylaws in the preceding one year.

Article 50 
A DSF may, in the capacity of a customer, purchase/sell foreign currency from/to 
selected cooperating authorized banks to cover its long or short foreign 
currency positions against NTD.
DSFs that have been approved by the Bank to carry out position covering in 
accordance with the preceding article may purchase or sell foreign currencies 
in the interbank foreign exchange market and be a counterparty to each other 
in the transactions of foreign currency position covering provided in 
Paragraph 1 of Article 13 herein and in raising foreign currency funds provided 
in Subparagraphs 1 and 3, Paragraph 1 of Article 14 herein.
A DSF may hold long or short positions within the total position limit mentioned 
in Paragraph 1 of Article 48 herein. 
A DSF participating in the interbank foreign exchange market shall comply with 
the trading rules formulated by the Taipei Foreign Exchange Market Development 
Foundation with reference to international practices after coordinating with 
the Bankers Association of the Republic of China and reported to the Bank for 
record.

Article 51 
A DSF shall draw up its position limits such as "transaction positions for 
individual currencies" and an "overnight position for each trader". All its 
units shall abide by these limits, and carry out audits regularly.

Article 52 
DSFs shall fill out a "Foreign Exchange Position Daily Report" for all foreign 
exchange transactions involving NTD on a daily basis. The reported foreign 
exchange positions shall be consistent with those recorded on the internal 
books or foreign exchange transaction datafile, and reconciled and checked on a 
daily basis.
DSFs shall report the estimated foreign exchange positions for the day to the 
Bank’s Department of Foreign Exchange by telephone at the end of each business 
day.

Article 53 
When the foreign exchange business provided in Subparagraph 2, Paragraph 1 of 
Article 4 herein conducted by a DSF involves exchange settlement against NTD or 
conversion between foreign currencies, the DSF shall handle the matter in 
accordance with the “Regulations for Declaration” and “Directions for 
Domestic Securities Firm Approved to Conduct Foreign Exchange Business while 
Assisting Customers to Declare Foreign Exchange Receipts and Disbursements or 
Transactions.”

Article 54 
A DSF shall issue a foreign exchange purchase (sale) memo for foreign exchange 
receipts and disbursements or transactions involving exchange settlement against 
NTD from its foreign exchange business and shall issue other transaction 
certificates if exchange settlement against NTD is not involved, and deliver 
such memo/certificate to customers or process them in a manner as agreed with 
the customer.
The “purchase (sale) memo or other transaction certificates” mentioned in the 
preceding paragraph may be made in electronic form.
DSFs shall transmit relevant data mentioned in Paragraph 1 hereof and the Daily 
Foreign Exchange Receipts (Disbursements) Transaction Report of the previous day 
to the Bank’s Foreign Exchange Data Processing System before 12:00 noon on the 
following business day.

Article 55  
When DSFs engage in large NTD spot, swap or cross currency swap transactions 
with customers, they shall transmit relevant data to the Bank’s Foreign 
Exchange Data Processing System pursuant to the following regulations:
1.When a DSF engages in foreign exchange purchase or sale with a company, 
　limited partnership or firm with the amount no less than an equivalent of 
　US$ 1,000,000 or with an individual or association with the amount no less 
　than an equivalent of US$500,000, the DSF shall transmit the data immediately 
　on the contract day after verifying relevant supporting documents.
2.When a DSF engages in a NTD swap or cross currency swap transaction with a 
　customer with the amount no less than an equivalent of US$1,000,000, the DSF 
　shall transmit the data before 12:00 noon on the next business day following 
　the contract day after verifying the relevant supporting documents.

Article 56 
The exchange rates used for foreign exchange transactions between a DSF and a 
customer may be solely determined by the DSF.
The NTD exchange rate for a single foreign exchange transaction with a customer
for an amount of less than US$10,000 shall be posted at the DSF's business 
premises before 9:30 AM on each business day and disclosed on a publicly
accessible website or made through other public means.

Article 57   
If a relocation or a name change is made by a DSF that has been approved to 
engage in spot foreign exchange transaction business, the securities 
enterprise shall report the change to the Bank for record within seven (7) days 
after the receipt of a new business license or permit from the competent 
authority. In the case of a relocation, the securities enterprise shall also 
submit the qualification documents of its operations and auditing personnel as 
provided in Subparagraph 6, Paragraph 2 of Article 47 herein.

Article 58 
To engage in electronic transaction business involving currency conversion with 
customers, the DSF shall apply to the Bank for approval by submitting a 
description of relevant operations related to the declaration of foreign exchange 
receipts and disbursements or transactions. 
The term "electronic transaction" referred to in the preceding paragraph shall 
mean transactions carried out with customers not over the counter but through 
various electronic and communications equipments.
A DSF that engages in the business mentioned in Paragraph 1 hereof with 
customers over the Internet shall observe the following provisions:
1.The Internet system shall be capable of performing computerized verification 
　of transaction details such as classification of foreign exchange receipts 
　(disbursements).
2.Before offering services in foreign exchange receipts and disbursements or 
　transactions over the Internet, a DSF shall verify the customer's 
　identification documents or basic registration information.
3.When applying to the Bank to engage in NTD exchange settlement with values 
　equal to or over an equivalent of NT$500,000, or large exchange settlement 
　transactions, the DSF’s Internet system shall conform to the provisions of 
　Article 59 herein.

Article 59 
The computer equipment and relevant operating environment of a securities firm 
must be capable of properly handling operations regulated in Articles 54 and 55 
herein and the query of aggregate settlement amount of the current year, and 
must pass the test of connection with the Bank’s Foreign Exchange Data 
Processing System before the securities firm apply to engage in spot foreign 
exchange transaction business.
A securities firm shall connect with the Bank’s Foreign Exchange Data 
Processing System by one of the means below:
1.If the securities firm opts to develop its own server for server-to-server 
　connection, it shall follow the interagency specifications for connection 
　operation of the Foreign Exchange Data Processing System. 
2.If the securities firm opts to use the Bank’s Foreign Exchange Data Reporting 
　System, it shall follow the user manual of the Foreign Exchange Data Reporting 
　System software.

Section 3　　Foreign Exchange Derivatives Business

Article 60 
A securities enterprise that applies for approval to engage in foreign exchange 
derivatives business involving exchange rates must be a DSF.
A DSF that engages in foreign exchange derivatives business involving exchange 
rates shall observe the following provisions:
1.The DSF shall only offer an individual derivative contract without structuring 
　it into a synthetic contract  or combining it with other derivatives products, 
　NTD or foreign currency principal, other products or businesses;
2.The DSF shall conduct the business based on the customer’s actual needs and 
　the related transaction documents for any Bank-approved business under 
　Subparagraphs 1 and 4, Paragraph 1 of Article 4 herein with the same customer; 
　and
3.Transaction documents for repo trade of foreign currency securities with 
　customers can only be used to undertake foreign currency swap between foreign 
　currencies.
In addition to the provisions in the preceding paragraph, the scope of business 
and other rules for a DSF conducting the foreign exchange derivatives business 
involving NTD exchange rate are as follows:
1. NTD foreign currency swap business (FX SWAP):
(1) FX swap is a simultaneous purchase and sale of identical amounts of one 
　　currency for another with two different value dates.
(2) Counterparties are limited to domestic legal entities, foreign natural 
　　persons and foreign legal entities.
(3) In the settlement of a FX swap, the DSF shall examine whether the customer 
　　has filled out a Declaration Statement in accordance with the Regulations 
　　for Declaration and whether the customer has entered information under the 
　　"Nature of Foreign Exchange Receipts and Disbursements or Transactions" of 
　　the Declaration Statement according to the nature of the actual transaction, 
　　and also note it as a "foreign exchange swap". In addition, the "foreign 
　　exchange receipts (disbursements) classification and code number" provided 
　　by the Bank’s Department of Foreign Exchange shall be indicated on the 
　　foreign exchange memo, and included in the Daily Foreign Exchange Receipts 
　　(Disbursements) Transaction Report along with the Declaration Statement; the 
　　preceding provision applies when the contract is rolled over. 
(4) When conducting the business under this subparagraph, the DSF shall also 
　　fill out a “Daily Report on FX Swap and Standard CCS Forward Positions.” 
(5) The SWAP Transaction amount need not be included in the aggregate settlement 
　　amount of the current year as specified in Subparagraph 3, Paragraph 1, 
　　Article 4 of the Regulations for Declaration.
(6) When the contract is rolled over, the price shall be set based on the 
　　current market exchange rates rather than the rates of the original 
　　contract.
2. NTD cross currency swap business (CCS):
(1) Counterparties are limited to domestic and foreign legal entities.
(2) NTD CCS shall be limited to exchange of principal both at inception and 
　　maturity. Both the principal and interest need not be included in the 
　　aggregate settlement amount of the current year as specified in 
　　Subparagraph 3, Paragraph 1, Article 4 of the Regulations for Declaration 
　　at the time of settlement.
(3) In the settlement of NTD cross currency swaps, the DSF shall examine whether 
　　the customer has filled out a Declaration Statement in accordance with the 
　　Regulations for Declaration and whether the customer has entered information 
　　under the "Nature of Foreign Exchange Receipts and Disbursements or 
　　Transactions" of the Declaration Statement according to the nature of the 
　　actual transaction, and also note it as a "cross currency swap transaction". 
　　In addition, the "foreign exchange receipts (disbursements) classification
　　and code number" provided by the Bank’s Department of Foreign Exchange 
　　shall be indicated on the foreign exchange memo, and included in the Daily 
　　Foreign Exchange Receipts (Disbursements) Transaction Report along with the 
　　Declaration Statement.
(4) When conducting the business under this subparagraph, the DSF shall also 
　　fill out a “Daily Report on FX Swap and Standard CCS Forward Positions.”
3.NTD exchange rate option business:
(1) Counterparties are limited to domestic and foreign legal entities.
(2) An option may be settled by net settlement or gross settlement, but the 
　　settlement method shall be specified in the contract.
(3) The currency used for option premium and settlement when the option is 
　　exercised may be either in the denominated foreign currency or NTD, but 
　　shall be specified in the contract.
(4) Only "plain vanilla" options may be transacted.
(5) When conducting the business under this subparagraph, the DSF shall also
　　fill out a “Daily Report on NTD Exchange Rate Option Transactions.”
When conducting foreign exchange derivatives business involving exchange rates 
between foreign currencies, a DSF shall observe the following provisions in 
addition to the provisions in Paragraph 2 hereof:
1.When a foreign exchange forward or swap contract is rolled over, the price 
　shall be reset based on the current market exchange rate rather than the 
　original contract rate. 
2.In carrying out FX swap or CCS transactions between foreign currencies, the 
　appropriate "foreign exchange receipts (disbursements) classification and code 
　number" should be indicated on other transaction certificates and included in 
　the Daily Foreign Exchange Receipts (Disbursements) Transaction Report at the 
　time of settlement.

Article 61  
A securities enterprise that engages in foreign exchange derivatives business 
not involving exchange rates shall observe the following provisions:
1. Credit default swap and credit default option business:
(1) Counterparties are limited to legal entities who are also professional 
　　customers.
(2) Where the counterparty is a domestic customer, unless the competent 
　　authority agrees it could be a protection seller, the domestic customer 
　　should be the protection buyer in a credit derivatives transaction.
(3) Where a domestic customer is the protection seller in a credit derivatives 
　　transaction, the reference entity shall meet the requirements set out by 
　　its competent authority and shall not be a government or company in Mainland 
　　China Area or any company directly or indirectly owned by which with at 
　　least 30% shares.
(4) Where the securities enterprise itself is the protection seller and the 
　　reference entity is an interested party, the terms of the transaction shall 
　　not be more favorable than those offered to other counterparties in the same 
　　category, and shall comply with relevant laws and regulations.
(5) Where the contracts under this subparagraph are combined into a structured 
　　product, the counterparties are limited to professional institutional 
　　investors and foreign legal entities who are also professional customers.
2.Where the foreign exchange derivative contracts are combined into a synthetic 
　contract or a structured product, restrictions and rules applicable to 
　individual products and underlyings shall be followed. 
3.Unless it is otherwise provided by the Bank, the business shall not be linked 
　to any of the following:
(1) Asset securitization related securities or products.
(2) Unlisted individual stocks, stock indices or exchange-traded funds in 
　　Mainland China Area.
(3) Securities privately placed domestically or abroad.
(4) Certificates of beneficial interest that are issued overseas by domestic 
　　securities investment trust enterprises and are not listed for trading on 
　　a securities market.
(5) Any Taiwan stock index compiled by a domestic or foreign institution and 
　　related financial products, but this restriction does not apply to an 
　　index compiled by TPEx or TWSE, or those two institutions in collaboration 
　　with another institution.
The underlying foreign securities and counterparties shall comply with the scope 
and relevant rules and guidelines of securities firms accepting orders to trade 
foreign securities as prescribed by the FSC, or other securities as approved by 
the FSC.

Article 62 
A securities enterprise may engage in the following foreign exchange derivatives 
businesses without making an application:
1.Combinations of foreign exchange derivatives not involving exchange rate and 
　already approved by the Bank or reported to the Bank for record that are linked 
　to the same underlying asset with the same risk and combined through the same 
　transaction contract, but excluding complex high-risk foreign exchange 
　derivatives transactions entered with customers other than professional 
　institutional investors and high net worth corporate investors.
2.Foreign exchange derivatives transactions undertaken as a customer for 
　investing with its own funds or carrying out for hedging purposes with 
　authorized banks that have been approved by the Bank to engage in foreign 
　exchange derivatives business or foreign financial institutions.
3.Domestic and foreign futures contracts not involving NTD exchange rate traded 
　as a futures trader.
To engage in any foreign exchange derivatives business other than those provided 
in the preceding paragraph, a securities enterprise shall apply to the Bank for 
approval or report to the Bank for record based on the following criteria:
1.Application for approval before commencing:
(1)First-time application for foreign exchange derivatives business.
(2)Foreign exchange derivatives business not yet approved by the Bank or has 
　 been approved for less than six months, and foreign exchange derivatives 
　 linked thereof.
(3)Foreign exchange derivatives business involving exchange rates.
(4)The business of sales of foreign exchange derivatives products already 
　 approved by the Bank or reported to the Bank for record by the branch under 
　 the authorization of its head office.
2.Reporting for record after commencing: Only for securities enterprises that 
　have been approved to engage in any of the foreign exchange derivatives 
　businesses.
(1)Foreign exchange derivatives business approved by the Bank for over six 
　 months and not involving exchange rates.
(2)Foreign exchange derivatives business provided to professional institutional 
　 investors and high net worth corporate investors not involving exchange rates 
　 and not yet approved by the Bank or approved by the Bank for less than six 
　 months, which should comply with the relevant rules of the competent authority.
When a securities enterprise engages in business under this article with a 
professional institutional investor, if the professional institutional investor 
accepts trading orders, signing a trust agreement or discretionary investment 
services agreement, or offering privately placed funds, and carries out 
transactions provided in Item 2, Subparagraph 2 of the preceding paragraph as a
professional institutional investor, the customer/trustor/mandatory or 
subscriber shall also be a professional institutional investor or high net 
worth corporate investor.

Article 63  
A securities enterprise that applies for approval to engage in businesses under 
Items 1 and 2, Subparagraph 1, Paragraph 2 of the preceding article shall submit 
documents provided in Article 7 herein, and in addition, documents specified 
below:
1.Document evidencing that its financial derivatives business has not been 
　suspended or terminated by TPEx pursuant to the “Taipei Exchange Regulations 
　Governing Over-the-Counter Trading of Financial Derivatives by Securities 
　Firms” (hereinafter referred to as “Derivatives Trading Regulations”) 
　during the preceding six months; 
2.Curriculum vitae of operations and relevant managing personnel;
3.Risk disclosure statement;
4.Product profiles;
5.Operational guidelines; and
6.Risk management related documents. 
A DSF that applies for approval to engage in business provided in Item 3, 
Subparagraph 1, Paragraph 2 of the preceding article shall submit documents 
provided in the preceding paragraph, and in addition, documents evidencing 
compliance with Subparagraphs 2 and 5, Paragraph 2 of Article 47 herein, and 
the provisions of Articles 54, 55 and 59 applies mutatis mutandis to the 
application.
A securities enterprise that applies for approval to engage in business 
provided in Item 4, Subparagraph 1, Paragraph 2 of the preceding article 
shall submit documents provided in Article 7 herein, and in addition, 
documents specified below:
1.Authorization guidelines approved by the board of directors;
2.List of products to be sold; and
3.List of branches authorized to sell the product and the list of personnel 
　at each branch meeting the sales qualifications. 
Within one week of carrying out the first transaction under Subparagraph 2, 
Paragraph 2 of the preceding article, a securities enterprise shall report to 
the Bank for record with the following documents and may carrying out the next 
transaction only after receiving a letter of acknowledgement from the Bank:
1.Documents provided in Article 7 herein;
2.Product description of the first transaction (must be a product actually 
　transacted with the date of transaction, date of settlement, expiration date, 
　notional principal amount, exercise price or other relevant indexes and 
　parameters); and
3.Documents provided in Subparagraphs 1 ~ 4 of Paragraph 1 hereof.

Article 64 
Article 14 of the Regulations Governing Foreign Exchange Business of Banking 
Enterprises shall apply mutatis mutandis to the qualification and training 
requirements for personnel of securities enterprises handling foreign exchange 
derivatives business, wherein the provisions in the same article governing 
personnel handling the recommendation of foreign exchange derivatives apply to 
the personnel of securities enterprises handling the sales of foreign exchange
derivatives.

Article 65  
When a securities enterprise conducts foreign exchange derivatives business, 
the procedure for verifying that the counterparty meets the criteria for 
professional customers, trading rules, implementation of risk management, 
information disclosure, and the related internal control and audit systems 
shall be complied with relevant regulations set out by the FSC. In addition, 
the following rules shall apply:
1.Receipt/payment between the enterprise and its client related to settlement 
　and fees, and payment due to the early termination of a contract or 
　expiration of a contract shall be made in the denominated currency. Except 
　for payments that are transferred from the customer’s deposit account, the 
　customer shall carry out foreign exchange settlement against NTD through an 
　authorized bank or the securities enterprise if it is a DSF in accordance with 
　the “Regulations for Declaration”. The securities enterprise shall not be 
　entrusted with handling the foreign exchange settlement against NTD for the 
　customer. 
2.Securities enterprises shall not, either for themselves or for customers, 
　utilize foreign exchange derivatives to defer or hide losses, misrepresent or 
　recognize income earlier, or use other illicit means to engage in window 
　dressing or manipulate financial statements.
3.A head office authorizing its branch to carry out the sale of foreign exchange 
　derivatives products that have been approved by the Bank or reported to the 
　Bank for record shall comply with the provisions of the “Taipei Exchange 
　Directions Governing Sales of Financial Derivatives Products by Associated 
　Persons of Securities Firms Accepting Orders to Trade Securities”.
When the foreign exchange business under Subparagraph 3, Paragraph 1 of Article 
4 herein conducted by a DSF involves exchange settlement against NTD or 
conversion between foreign currencies, the DSF shall handle the matter in 
accordance with the “Regulations for Declaration” and “Directions for 
Domestic Securities Firm Approved To Conduct Foreign Exchange Business while 
Assisting Customers to Declare Foreign Exchange Receipts and Disbursements 
or Transactions.”

Article 66 
Securities enterprises shall forthwith inform the Bank when their financial 
derivatives business is suspended or terminated by the TPEx in accordance with 
the “Derivatives Trading Regulations” and when their business qualification 
is reinstated.

Chapter 4　　Operation and Management of Renminbi Business

Article 67  
When the foreign exchange business of a securities enterprise involves products 
denominated in Renminbi (RMB) or products with the underlying linked with 
Mainland Area, the securities enterprise shall observe the provisions of Article 
68 herein and the following rules, and relevant provisions in these Regulations 
shall also apply mutatis mutandis: 
1.Unless otherwise provided by the Bank, securities enterprises may not conduct 
　RMB exchange settlement or conversion on behalf of customers when engaging in 
　RMB-denominated investment products.
2.The provisions of Subparagraph 4, Article 52 of the “Regulations Governing 
　Foreign Exchange Business of Banking Enterprises” regarding limits on RMB 
　purchase or sale through the account of a natural person on a per person per 
　day basis shall apply mutatis mutandis. 
3.Other rules set out by the Bank for appropriate management of RMB business.

Article 68 
A securities enterprise may expand its foreign exchange business to RMB 
denominated products or products with the underlying linked with Mainland Area, 
provided the business has been approved by the Bank, reported to the Bank for 
record or may be commenced without making an application pursuant to these 
Regulations.   

Chapter 5　　Supplemental Provisions

Article 69 
These Regulations shall become effective on the date of promulgation.