| Article 57 | A Mainland commercial bank or Mainland-funded bank that meets the following requirements may apply to the Competent Authority for approval to establish a representative office in Taiwan Area:
1. The bank is in compliance with the law, is soundly managed and has not committed any major regulatory violation within three (3) years prior to application;
2. The bank is ranked, in terms of capital or assets, among the top one thousand banks in the world within one year prior to application;
3. The bank has good credit standing and a sound financial structure, and has been approved by the financial authority at the place of registration to establish a representative office in Taiwan Area; and
4. The bank has established a branch and operated business in a member country of OECD for two years or longer.
A Mainland commercial bank or Mainland-funded bank can establish only one representative office in Taiwan Area. |
| Article 58 | A Mainland commercial bank or Mainland-funded bank intending to establish a representative office in Taiwan Area shall submit the following documents to the Competent Authority for approval:
1. Application;
2. A feasibility study;
3. The bank’s ranking among the world’s leading banks by capital or assets for the year before application;
4. A self-assessment regarding the bank’s compliance with laws and regulations and the integrity of its business operations;
5. Documents verifying that the proposed representative meets the qualification requirements set forth in Paragraph 2 hereof;
6. A document issued by the financial authority at the place of registration approving the establishment of a representative office in Taiwan Area;
7. Minutes of the board resolution approving the filing of an application to establish a representative office in Taiwan Area; and
8. Such other information or documents as may be required by the Competent Authority.
The proposed representative mentioned in the preceding paragraph should have good moral character and professional leadership ability, and is free of the situations set forth in Article 3 of the Regulations Governing Qualification Requirements, and comply with the provisions in Paragraph 3 Article 3-1 of the same Regulations.
Documents mentioned in Subparagraphs 5 to 7 in Paragraph 1 shall be certified by a notary public or a notarization institution at the bank’s place of registration. In addition, documents produced in a third area must be authenticated by a ROC embassy and consulate, representative office, office and/or other agency authorized by the Ministry of Foreign Affairs (collectively referred to as “Overseas mission” hereunder); documents produced in Mainland Area must be authenticated or verified by the institution set up or designated, or by the private organization entrusted by the Executive Yuan.
All documents referred to in Paragraph 1 hereof must be attached with a traditional Chinese counterpart. |
| Article 59 | A Mainland commercial bank or Mainland-funded bank shall, within six (6) months after receiving approval from the Competent Authority to establish a representative office, apply to the Ministry of Economic Affairs (“MOEA”) for permission in accordance with the Act, and submit a photocopy of the MOEA permission document and report the planned date of establishment and location of the representative office to the Competent Authority and MOEA for recordation before the date of establishment; otherwise the Competent Authority may annul the approval granted.
A Mainland commercial bank or Mainland-funded bank shall promptly inform the Competent Authority and comply with the following provisions after it has established a representative office in Taiwan Area:
1. If the representative office has a material contingent or fraud incident, the bank shall handle and report it according to the provisions set forth by the Competent Authority;
2. The bank shall input all relevant information on the representative office into an information reporting system designated by the Competent Authority and update the information if changes occur;
3. Before replacing its representative, the bank shall submit documents verifying that the newly appointed representative meets the qualification requirements set forth in Paragraph 2 of the preceding article to the Competent Authority for approval; and
4. Before changing the address of the representative office or closing the representative office, the bank shall report to the Competent Authority for approval. |
| Article 60 | Matters not specified in these Regulations with respect to the administration of the representative offices of Mainland commercial banks or Mainland-funded banks in Taiwan Area shall be governed by provisions in the Banking Act governing the representative offices of foreign banks.
The Competent Authority may designate a person(s) to examine the activities and other related matters of the representative office at any time or order the representative office to submit a report on its activities and other related information within a specified period. |
| Article 61 | Unless it is otherwise provided by the Competent Authority, the representative offices of Mainland commercial banks or Mainland-funded banks in Taiwan Area may only engage in the collecting of finance-related information, liaison activities, researching financial-related business intelligence and other non-business activities.
If the representative office of a Mainland commercial bank or Mainland-funded bank in Taiwan Area violates the preceding paragraph, the Competent Authority may annul the approval granted. |
| Article 62 | A Mainland commercial bank or Mainland-funded bank that meets the following requirements may apply to the Competent Authority for approval to establish a branch in Taiwan Area:
1. The bank is in compliance with the law, soundly managed and has not committed any major regulatory violation within five (5) years prior to application;
2. The bank is ranked, in terms of capital or assets, among the top two hundred banks in the world within one year prior to application;
3. The bank has established a representative office in Taiwan Area for at least two years and is free of any violation record. However if the economic cooperation agreement between Taiwan Area and Mainland Area provides otherwise, such agreement shall prevail;
4. The bank engages in international banking business with a sound financial structure and its financial ratios comply with the standards prescribed by the competent authority;
5. The appointed branch manager has sufficient experience in international finance and the management of international banking operations, and meets the qualification requirements set forth in the Regulations Governing Qualification Requirements for Responsible Persons of Banks in Taiwan Area;
6. The bank has established a branch and operated business in a member country of OECD for five years or longer; and
7. No other facts indicate that the sound business operations of the bank may be hindered. |
| Article 63 | A Mainland commercial bank or Mainland-funded bank intending to establish a branch in Taiwan Area shall submit the following documents to the Competent Authority for approval:
1. Application;
2. A feasibility study;
3. Particulars of the bank;
4. The bank’s ranking among the world’s leading banks by capital or assets for the year before application;
5. A self-assessment regarding the bank’s compliance with laws and regulations and the integrity of its business operations, as well as an explanation of any regulatory violations, frauds, or disciplinary actions imposed on the bank within the last five years;
6. The internal control and audit systems, operations management, and performance evaluation method for the branch to be established in Taiwan Area;
7. A document issued by the financial authority at the place of registration approving the establishment of a branch in Taiwan Area;
8. A document issued by the financial authority at the place of registration confirming the soundness of the bank’s business and financial conditions;
9. A letter of undertaking issued by the head office of the bank promising to provide necessary (contingent) liquidity and financial support to branches in Taiwan Area;
10. The business plan of the branch;
11. The resume and relevant evidentiary documents of the proposed manager for the branch in Taiwan Area;
12. The minutes of the board resolution approving the filing of an application to establish a branch in Taiwan Area;
13. A calculation worksheet for the bank’s ratio of equity capital to risk-weighted assets, non-performing loan ratio and loan loss coverage ratio for the latest fiscal half year certified by a practicing accountant at the place of registration;
14. A power of attorney issued by the responsible person of the bank authorizing a lawyer or certified public accountant to file the application;
15. The CPA-certified income statements and balance sheets of the bank for the last three years;
16. Documentation proving the due incorporation and existence of the bank as a legal entity and the banking license issued by the financial regulator at the place of registration;
17. The bank’s articles of incorporation;
18. A power of attorney of designating an agent for litigious and non-litigious matters in Taiwan Area;
19. A declaration of the agent for litigious and non-litigious matters in Taiwan Area; and
20. Such other information or documents as may be required by the Competent Authority.
The proposed branch manager mentioned in the preceding paragraph should have good moral character and professional leadership ability, is free of the situations set forth in Article 3 of the Regulations Governing Qualification Requirements, and complies with the provisions in Paragraph 1, Article 3-1 and Paragraph 1, Article 5 of the same Regulations.
Documents mentioned in Subparagraphs 7, 8 to 11, and 18 in Paragraph 1 shall be certified by a notary public or a notarization institution at the bank’s place of registration. In addition, documents produced in a third area must be authenticated by a Overseas mission; documents produced in Mainland Area must be authenticated or verified by the institution set up or designated, or by the private organization entrusted by the Executive Yuan.
All documents referred to in Paragraph 1 hereof must be attached with a traditional Chinese counterpart. |
| Article 64 | A Mainland commercial bank or Mainland-funded bank shall, within six months from the date the establishment of branch is approved, complete the following procedures:
1. Remittance of operating capital for the branch;
2. Submission of an Application for Approved Branch Business Items to the Competent Authority for approving business items of the branch;
3. Applying to the Ministry of Economic Affairs for permission to establish a branch company and registration of branch company in accordance with the Act and obtaining an approval letter therefor and a capital verification document; and
4. Closing the existing representative office.
One extension to the time period specified in the preceding paragraph may be granted upon application if there is an extraordinary event. If the bank fails to complete the aforementioned procedures before the specified deadline, the Competent Authority may annul the approval granted. |
| Article 65 | A Mainland commercial bank or Mainland-funded Bank shall, after completing the procedures set out in Paragraph 1 of the preceding article, apply for issuance of a bank license by submitting an Application for Business License and relevant documents to the Competent Authority and pay the license fees.
A Mainland commercial bank or Mainland-funded bank shall, before its branch in Taiwan Area commences business, submit a report on the date on which the branch will commence business, detailed address of the branch and the name of branch manager to the Competent Authority for recordation, and comply with the following provisions after the branch has commenced business:
1. If the branch has a material contingent or fraud incident, the bank shall handle and report it according to the provisions set forth by the Competent Authority;
2. When the branch reports to the financial authority at the place of registration according to the local financial regulations, the bank shall promptly report same to the Competent Authority for recordation;
3. The bank shall input the basic and operating information of the branch into an information reporting system designated by the Competent Authority, and update the information when changes occur;
4. The branch shall undertake internal audit in accordance with the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries. The bank shall submit the business audit report, independent auditor’s report, and financial examination report on its branch prepared by the financial authority at the place of registration to the Competent Authority for recordation;
5. Before changing the business address of the branch, the bank shall report to the Competent Authority for prior approval; and
6. Before replacing the branch manager, the bank shall first submit documents verifying that the new branch manager appointee meets the qualification requirements set forth in Paragraph 2 of Article 63 herein to the Competent Authority for approval. |
| Article 66 | The business items that the branch of a Mainland commercial bank or Mainland-funded bank in Taiwan Area (referred to as “branch of Mainland bank” hereunder) may apply for shall be limited to those a commercial bank may operate under the Banking Act and those approved by the Competent Authority, and must be recorded on the branch’s business license before such business items are operated.
The NTD deposit business of individuals a branch of Mainland bank may engage in shall be limited to NTD time deposit over NT$3,000,000.
Where the business items that a branch of Mainland bank applies for involve foreign exchange business, the approval of the Central Bank is also required. |
| Article 67 | A branch of Mainland bank shall allocate a minimum operating capital of NT$250,000,000.
The allocated operating capital mentioned in the preceding paragraph may not be remitted out without the approval of the Competent Authority. A Mainland commercial bank or Mainland-funded bank intending to increase the operating capital of its branch shall obtain the prior approval of the Competent Authority. |
| Article 68 | The net worth of a branch of Mainland bank shall not be less than two thirds (2/3) of the minimum operating capital required by the Competent Authority. If the net worth falls below such minimum level, the bank’s agent for litigious and non-litigious matters in Taiwan Area shall promptly report to the Competent Authority.
The Competent Authority may order a Mainland commercial bank or Mainland-funded bank having the situation described in the preceding paragraph to remit in sufficient funds to meet the required level of the operating capital of its branch in Taiwan within a prescribed period of time. If the bank fails to comply accordingly, the Competent Authority may order the branch of Mainland bank to suspend business and take other necessary measures pursuant to the Banking Act. |
| Article 69 | Branches of Mainland banks shall comply with the following financial management requirements:
1. Its current ratio (current assets to current liabilities) is not below 25%;
2. The combined total of allocated NTD operating capital and NTD reserve is not below 8% of NTD risk-weighted assets;
3. Thirty (30) percent of the allocated operating capital are kept in the form of assets designated by the Competent Authority; and
4. The net borrowing from NTD interbank call loan market is not more than two times of the allocated operating capital.
If deemed necessary, the Competent Authority may remove the financial management requirements set out in the preceding paragraph for branches of Mainland banks in part or in whole through an administrative order. |
| Article 70 | Matters not specified in these Regulations with respect to the administration of branches of Mainland banks shall be governed by the provisions in Banking Act governing the branches of foreign banks. |
| Article 71 | If deemed necessary, the Competent Authority may order a branch of Mainland bank to submit a report or information on the business or financial conditions of its head office. |
| Article 72 | A Mainland commercial bank or Mainland-funded bank that meets the following requirements may apply to the Competent Authority for approval to make equity investment in a financial institution in Taiwan Area:
1. The bank is in compliance with the law, soundly managed and has not committed any major regulatory violation within five (5) years prior to application;
2. The bank is ranked, in terms of capital or assets, among the top two hundred banks in the world within one year prior to application;
3. The bank engages in international banking business with a sound financial structure and its financial ratios comply with the standards prescribed by the competent authority;
4. The bank has established a branch and operated business in a member country of OECD for five years or longer;
5. The bank has comprehensive internal control systems and transparent financial and business information;
6. The sources of funds for investment are clear; and
7. No other facts indicate that the sound business operations of the bank may be hindered.
The term “financial institution in Taiwan Area” as used in the preceding paragraph is limited to banks and financial holding companies. However if the economic cooperation agreement between Taiwan Area and Mainland Area provides otherwise, such agreement shall prevail. |
| Article 73 | A Mainland commercial bank or Mainland-funded bank intending to make equity investment under these Regulations shall submit the following documents to the Competent Authority for approval:
1. Application;
2. Investment plan, including the strategic objective and method of investment, expected benefits, sources of funds and fund utilization plan;
3. Particulars of the bank;
4. The bank’s ranking among the world’s leading banks by capital or assets for the year before application;
5. Documents describing sources of funds, regulatory compliance, financial integrity, and past investment experience of the bank;
6. Minutes of the board resolution approving the filing of an application to invest in Taiwan Area;
7. A document issued by the financial authority at the place of registration approving the equity investment in a financial institution in Taiwan Area; and
8. Such other information or documents as may be required by the Competent Authority.Documents mentioned in Subparagraphs 6 and 7 in the preceding paragraph shall be certified by a notary public or a notarization institution at the bank’s place of registration. In addition, documents produced in a third area must be authenticated by a Overseas mission; documents produced in Mainland Area must be authenticated or verified by the institution set up or designated, or by the private organization entrusted by the Executive Yuan.
All documents referred to in Paragraph 1 hereof must be attached with a traditional Chinese counterpart. |
| Article 74 | The cumulative investment of a Mainland commercial bank or Mainland-funded bank in a single financial institution in Taiwan Area shall not exceed 5 percent of said institution’s total outatanding voting shares or capital.
The total investment of a Mainland commercial bank or Mainland-funded bank and the investment of Mainland Area Investors in a same financial institution in Taiwan Area combined shall not exceed 10 percent of said institution’s total voting shares outstanding or total capital.
The term “Mainland Area Investors” as used in the preceding paragraph are limited to those defined in the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors. |
| Article 75 | Before a Mainland commercial bank or Mainland-funded bank (with equity investment in Taiwan Area) elect or appoint a director of the invested financial institution in Taiwan Area, the relevant evidentiary information and documents shall be submitted to the Competent Authority for approval.
If deemed necessary, the Competent Authority may order the Mainland commercial bank or Mainland-funded bank to provide necessary information and documents or assign a person to the Competent Authority to answer questions. |
| Article 76 | A Mainland commercial bank or Mainland-funded bank that has been approved to make equity investment in Taiwan Area shall remit in the funds within the time period approved by the Competent Authority and report same to the Competent Authority after the remittance. The aforementioned bank will be denied future investment if it fails to remit in the funds within the approved time period. However, before expiration of the approved time limit, an application may be filed with the Competent Authority for an extension if there is a legitimate reason. |
| Article 77 | When a Mainland commercial bank or Mainland-funded bank with equity investment in a financial institution in Taiwan Area under the approval of the Competent Authority intends to transfer its shares, the transferor and the transferee shall jointly apply to the Competent Authority for approval.
If a Mainland commercial bank or Mainland-funded bank violates the provisions in the preceding paragraph, the Competent Authority may annul the approval for its investment or take other necessary measures. |
| Article 78 | A Mainland commercial bank or Mainland-funded bank may apply for exchange settlement for the dividends or earnings distribution it has earned from its investment in Taiwan Area.
If a Mainland commercial bank or Mainland-funded bank has transferred its shares with the approval of the Competent Authority or its invested financial institutions undergoes capital decrease, such bank may apply for exchange settlement for the total amount of investment as approved by the Competent Authority. The same provisions apply to any capital gain derived from the investment.
A Mainland commercial bank or Mainland-funded bank may not transfer its right of exchange settlement under these Regulations, unless it is otherwise approved by the Competent Authority in consultation with the Central Bank. |
| Article 79 | A Mainland commercial bank or Mainland-funded bank (with equity investment in Taiwan Area) shall promptly report to the Competent Authority if it has any of the following situations:
1. Dissolved or suspended business.
2. Undergoing reorganization, liquidation or bankruptcy proceedings, or its business permit has been revoked or annulled by the financial authority at the place of registration.
3. Merging, transferring, or assuming all or an essential part of assets or business of another financial institution.
4. Has incurred losses which exceed one third (1/3) of its capital.
5. Changing the name of bank.
6. Other matters required reporting by the Competent Authority. |
| Article 80 | An invested financial institution in Taiwan Area shall input the basic and shareholding information of the Mainland commercial bank or Mainland-funded bank into an information reporting system designated by the Competent Authority, and update such information when changes occur. |