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Tai-Tsai-Rong-(4)-Zi-N0. 0938010341
Direction
MINISTRY OF FINANCE
From : Ministry of Finance ("MOF")
Date : March 12, 2004
Ref. No. : Tai-Tsai-Rong-(4)-Zi-N0. 0938010341
Explanation:
1. When banks act as an originator under the Financial Assets Securitization Act ("FASA"), banks shall not extend unsecured credit under Articles 32 and 33-2 of the Banking Act and securitize such unsecured credit pursuant to the FASA; provided, that the following shall not be subject to such prohibition:
a. Consumer loans within the amount limit prescribed by the competent authority; and
b. Government loans.
2. When banks act as an originator under the FASA, subject to the following, from the date that the debt obligations are entrusted to a trustee or transferred to a special purpose company, the amount thereof shall no longer be subject to the lending limits on the credit amount and the aggregation amount of such credit extension under Articles 33 and 33-2 of the Banking Act.
a. MOF approval for the subject entrustment of assets to trustee or transfer of assets to a special purpose company under the FASA must be obtained;
b. An evaluation report must be issued by a certified public accountant, clearly stating therein that from the date such rights are entrusted/transferred such asset may be removed from the [bank's] balance sheet;
c. A credit review must be completed prior to the securitization of such assets and handled in accordance with the credit extension conditions and procedures under Article 33 of the Banking Act; and
d. The relevant beneficial securities or asset-backed securities should not be held by the bank.
3. When banks act as an originator under FASA, subject to the following, from the date that the debt obligations are entrusted to a trustee or transferred to a special purpose company, the amount thereof shall no longer (i) be counted towards the total amount of medium-term loans [extended by a commercial bank, which shall not exceed the total amount of time deposits] under Article 72 of the Banking Act, (ii) be subject to the lending restrictions applicable to the single customer and same related enterprise under Article 33-3 of the Banking Act, or, (iii) be subject to the New Taiwan Dollar single customer lending limits under Article 14, Paragraph 1, of the Regulations for Applications to Establish Foreign Bank Branches or Representative Offices.
a. MOF approval for the subject entrustment of assets to a trustee or transfer of assets to a special purpose company under the FASA must be obtained;
b. An evaluation report must be issued by a certified public accountant, clearly stating therein that from the date such rights are entrusted/transferred such assets may be removed from the [bank's] balance sheet; and
c. A credit review must be completed prior to the securitization of such assets.
4. If any credit asset as described in Articles 33 and 33-2 of the Banking Act is included in the asset pool, such fact must be disclosed in the information memorandum.
5. The MOF letter, dated July 31, 2003 (Ref. No. Tai-Tsai-Rong-(5)-Zi-No. 0928011172) shall no longer apply.
If the translations of the texts differ from the original Chinese texts, the original texts are preferential.
Last Updated:March 18, 2005 |