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Financial Supervisory Commission (FSC), Executive Yuan
Date：11 August 2005
Ref. Jin-Kuan-Yin-(V)-0945000575
Subject:
In order to guarantee the rights and interests of customers and strengthen financial supervision, a bank that is performing, on an insourcing basis, services relating to banking business for its direct subsidiary bank, overseas branch, overseas affiliate, or any other bank, shall do so in accordance with the Statement hereunder. Please be advised and inform all member institutions.
Statement:
1. The scope of services insourced by a bank shall comprise services related to the services that are already listed on its business license, and that may be legally operated, and include services to banks that are its direct subsidiary banks, overseas branches, overseas affiliates, or other banks. Insourcing between different branches of a single incorporated banking entity shall be deemed a division of labor by a single bank, and does not fall within the scope of insourcing herein.
2. A bank shall submit the documentation listed below to the FSC for recordation regarding services it accepts for insourcing:
(1) Minutes of the board of directors (or trustees) meeting resolution, or an approval letter issued by an authorized employee (for an ROC branch of a foreign bank, an approval letter issued by an employee authorized by the head office is permitted).
(2) For insourced operations involving overseas elements, the bank shall submit an approval letter issued by the local competent authority, or other relevant document sufficient to verify the legality thereof (including the confidentiality of customer information).
(3) Operations plan:
(i) Insourced items and scope
(ii) Operational method and process flow
(iii) Risk management
(iv) Internal control principles
(v) Security controls
(vi) Principles guaranteeing customer rights and interests: including confidentiality of customer information, firewall installation (documents related to the handling of insourcing and customer data shall be segregated from bank documents)
(vii) Documents verifying the relevant operational experience or professional training of employees responsible for these services.
(viii) Other data and documents as required by the FSC.
3. A bank performing insourced operations shall comply with the following:
(1) A bank performing insourced operations shall ensure the control and management of those operations, and faithfully fulfill its custodial responsibilities as a third-party provider.
(2) Income generated by a bank's insourcing of services shall be truly reflected under that item of its financial statement. |