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I. According to Paragraph 3 of Article 7 of the Regulations Governing the Capital Adequacy and Capital Category of Banks amended and promulgated on December 23, 2019, domestic systemically important banks are determined based on the importance of domestic banks in terms of the following indicators and weights:
(I) Size: Total assets account for 25%.
(II)Interconnectedness: Assets related to other financial institutions, liabilities related to other financial institutions, and total amount of issued securities account for 25%.
(III) Substitutability: Deposits and remittances, discounted bills and loans, settlements and liquidation transaction volume, and custodian businesses account for 25%.
(IV) Complexity: financial assets measured at fair value through profit or loss, financial liabilities measured at fair value through profit or loss, financial assets measured at fair valuethrough other comprehensive income, notional amounts outstanding of derivatives, total overseas exposure, and total non-bank assets of the respective financial holding company account for 25%.
II.Banks designated as systemically important banks by the FSC shall meet the following enhanced supervision requirements starting from the next year after the designated date.
(I)Additional capitalrequirement:
1.2% additionalregulatory capital requirements provided in Paragraph 1 of Article 7 of the aforementioned Regulations.
2.2% additionalinternal capitalrequirement that isonly applicable to stand-alone capital adequacy ratio of the bank.Systemically important banks shall report the restoration plan to the FSC while unable to meet the above requirement due to the changes of the economy or adjustments in the bank’s business operations.
3.The aforementioned additional capital requirements shall meet withCommon Equity Tier 1 Capital and must be achievedbefore the end of each of the four years equally starting from thenextyear after the designated date.
(II)Banks shall conduct two-year scenario stress test and pass the testin accordance with the Pillar 2 supervisory review principles each year.
(III) Banks shall stipulateresponse measures for inadequatecapital situation in the “contingency plan for business crisis” specified in the “Guidelines for Dealing WithBusiness Crises of Financial Institutions”, andshall report the planto the FSC and the Central Deposit Insurance Corporation when submitting information related to the Pillar 2 supervisory review principles each year.
III.Systemically important banks that meet the aforementioned enhanced supervisionrequirements may be subject to the following measures:
(I)Banks’ applications for investments in financialrelated businesses in accordance with Article 74 of the Banking Act with the amount ofinvestment under NT$50 million and compliance with total invest amount limitationand other related regulations may be automatically approved.
(II)Compliance with the requirements is consideredas a favorable item whenapplyingfor establishment of domestic branches.
(III)Where applyingfor establishment offoreign or Mainland branches, the bank will be prioritized for approval.
(IV)Banks’ applications for pilotbusinesses will be expedited for approval.
(V)Banks’ applications for new businesses will be expedited for approval. In addition, where an extension is requested during the processing period, the extension will be automatically approved if there are no seriousdeficiencies.
IV.Abank that is not designated as a systemically important bank by the FSC can applyfor the adoption of the enhanced supervisionrequirements set forthin Point 2, and may be subject to the measures specified in the preceding point after the requirementsfulfilled.
V. This Order shall become effective on the date of promulgation. |