| 2008.11.17 |
Regulations Governing Securities Investment of Credit Cooperatives
[Chinese]
|
Article 2
Credit cooperatives may invest in the following types of securities:
(1) Domestic and foreign government bonds.
(2) Domestic short-term notes.
(3) Domestic bank debentures.
(4) Domestic corporate bonds.
(5) Beneficiary certificates of domestic securities investment trust funds.
(6) Negotiable certificates of deposit and savings bonds issued by the Central Bank of the ROC.
(7) Domestic beneficial securities and asset-backed securities.
(8) Domestic listed stocks.
(9) Foreign securities under designated-purpose money trust.
(10) Other securities approved by the central competent authority.
Where the corporate bonds or bank debentures in the preceding paragraph are convertible, exchangeable or come with warrants, they may not be converted or exchanged into stock or their warrant may not be exercised unless the underlying stocks are issued by a domestic listed company as provided in Paragraph 3 hereof.
The types of stocks referred to in Paragraph 1 hereof include:
1. Common shares of constituent stocks of TSEC Taiwan 50 Index, common shares of constituent stocks of TSEC Taiwan Mid-Cap 100 Index and TSEC Taiwan Technology Index.
2. Common shares of constituent stocks of MSCI Taiwan Index.
Article 4
A credit cooperative that meets the following criteria may invest in the beneficiary certificates of securities investment trust funds:
1. It has allocated sufficient valuation reserve to meet the potential asset losses as stated on the latest financial examination report; and
2. Non-performing loans and non-accrual loans that are two years or longer past the payoff period less the estimated recoverable amount have been written off as bad debt.
Where nonconformity with either one of the criteria specified in the preceding paragraph occurs after a credit cooperative has made the aforementioned investment, the credit cooperative shall promptly stop such investment, and resume investment only after it complies with those criteria again.
The fund management company for the investment of a credit cooperative as mentioned in Paragraph 1 hereof shall meet the following criteria:
1. Having established for more than two years with total fund assets under its management exceeding NT$20,000,000,000 and owning a management and research team well experienced in investment; and
2. Free of incidence in the past two years of being banned from engaging in certain business due to violation of financial laws or regulations, or having its responsible person or fund manager dismissed under the order of government authority, or being involved in major fraud.
Article 6
A credit cooperative that meets the criteria provided in Paragraph 1 of Article 4 herein and has capital adequacy ratio exceeding 10% may invest in domestic listed stocks, subject to the following limits:
1. At the time of investment, if the bad debt reserve coverage ratio of the credit cooperative is above 40% at the end of the previous month, the aggregate amount of the original acquisition costs for such investment shall not exceed 3% of its calculation basis.
2. At the time of investment, if the bad debt reserve coverage ratio of the credit cooperative is below 40% at the end of the previous month, the aggregate amount of the original acquisition costs for such investment shall not exceed 2% of its calculation basis.
A credit cooperative’s total investment in the shares of a domestic listed company shall not exceed 5% of the company’s total shares issued and outstanding.
Where nonconformity with either one of the criteria specified in Paragraph 1 hereof occurs after a credit cooperative has made the aforementioned investment, the credit cooperative shall promptly stop such investment, and resume investment only after it complies with those criteria again.
If the bad debt reserve coverage ratio of the credit cooperative drops to the point where its aggregate amount of the original acquisition costs for the investments described in Paragraph 1 hereof exceeds the applicable limit, the credit cooperative shall not make additional investment.