| Chapter 3 Supervision and Administration |
Section 1 Specialized Electronic Payment Institutions |
| Article 16 |
The balance of stored value funds deposited by each user and the amount of the domestic and international small-amount remittance made by each user with a specialized electronic payment institution shall be prescribed by the competent authority in consultation with the Central Bank.
Where necessary, the competent authority may limit the transaction amount of businesses prescribed in Paragraph 1, Article 4 herein operated by specialized electronic payment institutions, and the amounts of limit shall be determined by the competent authority in consultation with the Central Bank. |
| Article 17 |
A specialized electronic payment institution shall deposit the funds received from users into a dedicated deposit account in the same currency opened by it with a financial institution and accurately record the amounts of payment and transfer of funds in payment accounts.
The financial institution prescribed in the preceding paragraph shall manage the deposit, transfer, withdrawal, and utilization of funds deposited by a specialized electronic payment institution and periodically report the relevant data of the dedicated deposit account to the competent authority.
Regulations governing restrictions on the opening of dedicated deposit accounts prescribed in the first paragraph hereof, its management, operating methods, and other compliance matters shall be prescribed by the competent authority. |
| Article 18 |
Except when court judgments or other regulations provide otherwise, a specialized electronic payment institution shall carry out the transfer of payments according to the payment instructions agreed by users in advance or instantly without any delay, and nor shall it accept a request from a third party for the suspension of payment or remittance, or other similar requests. |
| Article 19 |
When a user intends to withdraw the funds or a specialized electronic payment institution remits funds to a contracted institution, the specialized electronic payment institution shall not pay by cash and shall transfer the funds into a same-currency deposit account of the user or contracted institution in a financial institution. However, where the competent authority has other regulations, such regulations shall apply.
When a user intends to store value in a foreign currency, the specialized electronic payment institution shall transfer the stored value funds from the deposit account of the user's deposit account in a financial institution or the electronic payment account of the same electronic payment institutions, or methods approved by the competent authority in consultation with the Central Bank. |
| Article 20 |
A specialized electronic payment institution shall deposit a sufficient amount of reserve when its received NTD and foreign currency funds combined reach a certain amount. Regulations governing the certain amount, percentage for depositing the reserve, method of deposit, adjustment, audit, and other compliance matters shall be prescribed by the Central Bank in consultation with the competent authority. |
| Article 21 |
Specialized electronic payment institutions shall entrust to a trustee in full or obtain a full performance guarantee from a bank for the stored value funds, deducting the required deposited reserve, and funds collected/paid as an agent.
A specialized electronic payment institution shall appoint an accountant to conduct quarterly audits of the state of compliance with the preceding paragraph and submit the accountant's audit report to the competent authority for record within one (1) month after the end of each quarter.
The term " entrust to a trustee" referred to in Paragraph 1 hereof means entering into a trust deed with the financial institution where it opens the dedicated deposit account to designate the dedicated deposit account as a trust account.
The mandatory and prohibitory provisions to be included in the trust agreement shall be prescribed by the competent authority.
The provisions of the trust agreement referred to in Paragraph 3 hereof which violate the mandatory and prohibitory provisions announced by the competent authority are invalid. Mandatory provisions announced by the competent authority that are not included in the trust agreement shall still constitute a part of the agreement.
The term "full performance guarantee from a bank" referred to in Paragraph 1 hereof means entering into a full performance guarantee agreement with a bank where the bank undertakes the performance guarantee responsibility for the specialized electronic payment institution towards its users.
A specialized electronic payment institution shall complete the contract renewal or enter a new contract two (2) months before the expiration of the trust agreement or the performance guarantee agreement and report by letter to the competent authority for record.
A specialized electronic payment institution that fails to conform to the preceding paragraph shall not accept new users’ registration, enter into contracts with contracted institutions, or accept more funds from existing users. |
| Article 22 |
A specialized electronic payment institution may not draw or instruct the financial institution at which it opens its dedicated deposit account to draw on the payment funds, except for any of the following circumstances:
1. To transfer funds according to the payment instruction of a user.
2. Users withdrawing funds or transferring funds to a contracted institution.
3. To utilize payment funds in accordance with Paragraph 2 or Paragraph 3 hereof and to dispense or collect profits or other revenue derived thereof.
A specialized electronic payment institutions may utilize the payment funds or instruct the financial institution at which it opens its dedicated deposit account to utilize it up to a certain percentage in any of the following manners:
1. Bank deposits.
2. Purchase government bonds.
3. Purchase treasury bills or bank negotiable certificates of deposit.
4. Purchase other financial products approved by the competent authority.
The financial institution at which the dedicated deposit account is opened shall dispense the profits or other revenue derived from the trust property, less costs, necessary expenses, and loss, to the specialized electronic payment institution according to the trust agreement in the year of income generation.
A specialized electronic payment institution shall set aside a certain percentage of the profits or other revenues derived from the utilization of payment funds and deposit them in a dedicated account opened with the financial institution at which the dedicated deposit account is opened to pay back users or use it for other purposes prescribed by the competent authority.
The certain percentage referred to in Paragraph 2 hereof and the preceding paragraph shall be prescribed by the competent authority.
When the total value of payment funds utilized by a specialized electronic payment institution in accordance with Paragraph 2 hereof, as assessed according to the generally accepted accounting principles, falls below the original paid-in amount, the institution shall immediately make up the shortfall.
A specialized electronic payment institution shall appoint an accountant to conduct audits of the state of compliance with Paragraph 1, Paragraph 2, Paragraph 4 hereof, and the preceding paragraph every half business year, and submit the accountant's audit report to the competent authority for record in two (2) months after the end of every half business year.
The claims of the users and contracted institutions over their payment funds shall have precedence over the claims of other creditors of the specialized electronic payment institutions. |
| Article 23 |
For onshore businesses conducted by specialized electronic payment institutions, the payments between contracted institutions shall be settled and cleared in NTD.
For cross-border businesses, businesses specified in Subparagraph 4, Paragraph 1, Article 4 hereof, or related activities approved by the competent authority in accordance with Paragraph 2, Article 15 operated by specialized electronic payment institutions, the payments between onshore users and contracted institutions may be settled and cleared in NTD or foreign currency, whereas offshore payments shall be collected, paid, settled, and cleared in foreign currency.
Specialized electronic payment institutions that operate businesses specified in the preceding paragraph and the subparagraphs of Paragraph 1 and Paragraph 2, Article 4 involving exchanges between different currencies shall disclose the exchange rates offered by the bank which they use as reference and the names of cooperating banks on their websites. |
| Article 24 |
If deemed necessary, the competent authority may limit the multiple of the total balance of funds received by specialized electronic payment institutions to the institution's paid-in capital or net worth.
When the multiple of the total balance of funds received by a specialized electronic payment institution to the institution's paid-in capital or net worth does not meet the limitation set forth by the competent authority pursuant to the preceding paragraph, the competent authority may order the institution to increase capital or reduce the total balance of funds received within a specified period, and other dispositions or restrictions. |
| Article 25 |
Specialized electronic payment institutions shall establish a user and contracted institution identity verification mechanism and retain the data obtained in the identification process. The user and contracted institution identification process shall adopt a risk-based approach and include a review of beneficial owners.
The retention period for data obtained in the user and contracted institution identification process referred to in the preceding paragraph shall be at least five (5) years after the termination of the business relationship.
Regulations governing the manner of establishment and process for user and contracted institution identification mechanism referred to in Paragraph 1 hereof, its management, the scope of data obtained in the user and contracted institution identification process prescribed in the preceding paragraph, and other related matters shall be prescribed by the competent authority in consultation with the Ministry of Justice and the Central Bank. |
| Article 26 |
Specialized electronic payment institutions shall retain necessary transaction records, including the user's stored value card numbers, electronic payment account numbers, transaction items, dates, amounts, and currencies. The same applies to any uncompleted transactions.
The necessary transaction records referred to in the preceding paragraph shall be retained for at least five (5) years after the termination or completion of the transaction. Other regulation that requires a longer retention period shall apply.
The regulations on matters such as the scope and method of retaining necessary transaction records shall be prescribed by the competent authority in consultation with the Ministry of Justice, the Ministry of Finance, and the Central Bank.
The tax authority or the customs may, out of business needs, request a specialized electronic payment institution to provide necessary transaction records prescribed in Paragraph 1 hereof and data obtained in the user and contracted institution identification process provided in Paragraph 1 of the preceding article, which the specialized electronic payment institution may not refuse. The regulations governing the scope of the necessary transaction records or data, methods of provision, the determination of the refusal to provide information, and other related matters shall be prescribed by the Ministry of Finance in consultation with the competent authority. |
| Article 27 |
The reporting of currency transactions exceeding a certain amount or suspicious money laundering transactions by specialized electronic payment institutions and the exemption from confidentiality obligations and penalties for violating the reporting regulations of specialized electronic payment institutions and related personnel shall follow the regulations under the Money Laundering Control Act. |
| Article 28 |
A specialized electronic payment institution shall obtain the approval of the competent authority to incorporate overseas branch institution. The competent authority shall consult the Central Bank and obtain the consent before granting the approval. |
| Article 29 |
Specialized electronic payment institutions shall establish mechanisms for handling customer complaints and dispute settlement. |
| Article 30 |
The terms and conditions of the standard contract prepared by a specialized electronic payment institution for its electronic payment business shall comply with the mandatory and prohibitory provisions contained in the standard form contract promulgated by the competent authority. The protection of user rights and interests therein shall not be less than those contained in the template of the standard form contract for electronic payment businesses prescribed by the competent authority. |
| Article 31 |
Specialized electronic payment institutions shall keep the transaction data and other related information of the users and contracted institutions confidential unless other laws or the competent authority provides otherwise. |
| Article 32 |
A specialized electronic payment institution shall ensure the privacy and security of the transaction data and maintain the accuracy of data transmission, exchange, or processing.
A specialized electronic payment institution shall establish an information system that meets certain requirements. The standards for information system and security management procedure guidelines of its businesses shall be prepared by the trade association specified in Paragraph 1 of Article 44 or the Bankers Association of the Republic of China ("Bankers Association"), and reported to the competent authority for approval; the same applies to their amendments. |
| Article 33 |
A specialized electronic payment institution shall establish an internal control and audit system; regulations governing the objectives, principles, policies, operating procedures, qualification requirements for internal auditors, the scope of internal control audits undertaken by appointed certified public accountants, and other compliance matters shall be prescribed by the competent authority. |
| Article 34 |
Specialized electronic payment institutions shall report the data related to their businesses in accordance with the rules prescribed by the competent authority and the Central Bank.
Specialized electronic payment institutions shall periodically submit detailed schedule of their account operations to the financial institutions at which they open their dedicated deposit account for these institutions to check the deposit, transfer, drawing and utilization of the payment funds. |
| Article 35 |
A specialized electronic payment institution shall prepare the business report and CPA-audited and certified financial report or other financial documents designated by the competent authority within four (4) months after the end of a fiscal year, and report the same to the competent authority and announce them in fifteen (15) days after those reports have been passed in the board of directors' meeting. |
| Article 36 |
Rules governing the business management and operating mode of specialized electronic payment institutions, user and contracted institution management, ways for users’ payment instructions, procedures for processing electronic payment accounts or stored value cards involving users’ suspiciously illegal or obviously irregular transactions, applications for permission to set up offshore branch institutions and their management, conditions for mandatory public issuance of stock, business outlets, outsourcing operations, restrictions on investment, approval and reporting of material financial, business, and operational matters, and other compliance matters shall be prescribed by the competent authority in consultation with the Central Bank.
The guidelines for the qualification requirements for the responsible persons of specialized electronic payment institutions, restrictions on concurrent posts, training, and other compliance matters shall be prescribed by the competent authority.
A person failing to meet the qualification requirements set forth in the guidelines prescribed in the preceding paragraph may not serve as a responsible person of a specialized electronic payment institution; where such person has taken the position, he/she shall be discharged. |
| Article 37 |
The competent authority may at any time appoint a designee or entrust an appropriate institution to examine the business, finance, or other relevant matters of a specialized electronic payment institution or order the specialized electronic payment institution to submit financial reports, inventory of property, or other relevant information and reports within a specified period.
If necessary, the competent authority may designate or request the specialized electronic payment institution to appoint professional experts or technical personnel to inspect the items, reports or information subject to examination according to the preceding paragraph and submit a report to the competent authority. The expenses thus incurred shall be borne by the inspected institution. |
| Article 38 |
If a specialized electronic payment institution violates laws or regulations, or its articles of incorporation, or engages in activities suspected to hinder sound operation, the competent authority may order it to correct or improve within a specified period and may, depending on the severity of the circumstances, take the following disciplinary actions:
1. Revoke the resolutions adopted at the shareholders' meetings, board of directors' meetings or other statutory meetings;
2. Repeal the approval for all or part of the businesses of the specialized electronic payment institution;
3. Order the specialized electronic payment institution to relieve its managers or employees of their offices;
4. Discharge its directors or supervisors or suspend them from their duties for a certain period;
5. Order the specialized electronic payment institution to set aside a certain amount of reserves or increase its capital; and
6. Take other necessary disciplinary actions.
If the competent authority discharges a director or supervisor of a specialized electronic payment institution pursuant to Subparagraph 4 of the preceding paragraph, it shall notify the competent authority of company registration to cancel the registration of such director or supervisor.
The two preceding paragraphs shall apply mutatis mutandis to non-electronic payment institutions that operate international small-amount remittances and related foreign currency trading businesses prescribed in Subparagraph 4, Article 4 as approved by the competent authority and violate laws or regulations, or the articles of incorporation, or engage in activities suspected to hinder sound operations. |
| Article 39 |
Where the accumulated loss of a specialized electronic payment institution exceeds one-half (1/2) of its paid-in capital, the institution shall promptly report the financial statements and reasons for the loss to the competent authority in writing.
The competent authority may require the specialized electronic payment institution in prescribed in the preceding paragraph to replenish its capital within a specified period or restrict its business operations; the competent authority may order the specialized electronic payment institution to cease its operation if the institution fails to replenish its capital within the specified period. |
| Article 40 |
If the business or financial conditions of a specialized electronic payment institution deteriorate significantly so that it is unable to pay its debts or that the interests of users might be adversely affected, the competent authority may notify the relevant authorities or institutions to prohibit the specialized electronic payment institution, its responsible persons, or employees from transferring, delivering, hypothecating or exercising other rights against their property, request immigration authorities to prohibit the responsible persons or employees from leaving the country with a letter, or order the specialized electronic payment institution to transfer its businesses to other electronic payment institutions.
When a specialized electronic payment institution is unable to continue its operation due to dissolution business cessation, business suspension, approval revocation or abolition, or ordered dissolution, it shall contact other electronic payment institution(s) to acquire its business, subject to the approval of the competent authority.
Where a specialized electronic payment institution fails to follow the provisions in the preceding paragraph, the competent authority shall designate other electronic payment institution(s) to acquire its businesses. |
| Article 41 |
To prevent specialized electronic payment institutions from damaging the rights and interests of consumers by failing to entrust the funds to a trustee or obtain full performance guarantee from a bank, specialized electronic payment institutions shall set aside funds to establish a sinking fund.
When a specialized electronic payment institution runs into financial difficulty, thereby becoming insolvent and breaching its contract, the sinking fund may, in the capacity of a third person, repay the consumers and, from the time of making repayment, assume the rights of the consumers within the extent of repayment.
Regulations governing the organization, management, repayment, and other matters of the sinking fund shall be prescribed by the competent authority.
Each specialized electronic payment institution shall set aside a certain percentage of its business revenue to the sinking fund; the certain percentage shall be prescribed by the competent authority in consideration of the economic and business conditions and the affordability of each specialized electronic payment institution. |