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

Subject:
From the issuance date of this letter, Authorized Banks may engage in OTC “New 
Taiwan Dollar Exchange Rate Options” business by reporting to the CBC enclosing 
the product brochure, operational rules, risk control documents and personnel 
qualification documents.  Please take note.
Explanations:
1.The specifications to handle this business are as follows:
　(1) Counterparties are limited to domestic and foreign legal entities.
　(2) Trading related documents are not required.
　(3) Both net settlement and gross settlement upon maturity are 
　　　allowed, but the settlement method shall be specified in the contracts.
　(4) The currency used for option premiums and settlement if the option is 
　　　exercised may be either in the denominated foreign currency or in 
　　　New Taiwan Dollars, but shall be specified in the contract.
　(5) If the payment and receipt of option premiums and settlement proceeds when 
　　　the option is exercised involve the purchase or sale of foreign exchange, 
　　　the “Regulations Governing the Declaration of Foreign Exchange Receipts and
　　　Disbursements or Transaction”and other relevant regulations shall apply.
2.The Delta positions of an Authorized Bank engaging in the said business shall be 
　included in the financial derivatives positions and reported to the CBC 
　(form attached) on a daily basis for the management of the foreign exchange 
　positions.