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

Subject:
 From the issuance date of this letter, an Authorized Bank is permitted to apply 
for engaging in the foreign currency climate options business. Please take 
note.
Explanations:
1.Each Authorized Bank shall submit the relevant documents to apply for engaging in 
　this business in accordance with Article 13 of the“Regulations Governing 
　Foreign Exchange Business of Banking Enterprises”announced by the Central Bank
　of China (“CBC”).2.When engaging in this business, the Authorized Bank is 
　required to comply with the followings:
　(1) Initially, counterparties shall be limited to domestic or foreign legal 
　　　entities, pricing must be done in foreign currencies and a Taiwan or 
　　　global climate index must be used the underlying index.
　(2) A climate index must meet the followings conditions: public, fair, objective 
　　　and characterized by information symmetry information. When taking the Taiwan
　　　climate index as the underlying index, the Authorized Bank is required to use 
　　　climate information confirmed by public, fair and objective institutions by 
　　　means of formal negotiations as a basis for the evaluation and clearing of 
　　　Taiwan climate options. The relevant documents shall be reviewed by lawyers 
　　　for authentication.
　(3) When engaging in this business, the Authorized Bank is required to establish 
　　　sound internal controls and audits, and the department responsible for risk 
　　　management shall control price making and subsequent evaluation measures to 
　　　enhance risk management. The accounting records shall be complied in 
　　　accordance with generally accepted accounting principles and related laws and 
　　　regulations, and the trading information shall be fully disclosed.
　(4) The Authorized Bank is required to make a risk disclosure to clients and to 
　　　fully notify clients of the contents and methods and other relevant points 
　　　regarding the determination of price and subsequent evaluation to reach an 
　　　agreement. The trader shall confirm in the risk disclosure statement that 
　　　he/she has obtained a full explanation and understanding of the calculated 
　　　price and subsequent evaluation methods regarding climate information, 
　　　parameters and indices and other relevant information regarding the 
　　　determination of price.
　(5) The trading volume for this business shall be filled out in the “other 
　　　matters” section in the “monthly report of new financial products business 
　　　in foreign currencies only” and the name of climate options shall be 
　　　specified.  The report shall be submitted to the Licensing Section of the 
　　　CBC.