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Financial Consulting Services Approved for Banking Enterprises
(14 December 2004)
Order Ref. Jin-Kuan-Yin-(VI)-0936000527 of the Financial Supervisory Commission, Executive Yuan
1.To facilitate the acquisition by business entities of efficient services in areas such as business financial planning, consultation, and business mergers and acquisitions, by enabling banks to offer diversified professional services of this kind, approval is hereby granted pursuant to Article 3, subparagraph 22, of the Banking Act to allow banks to provide financial consulting services.
2.To provide financial consulting services, a bank shall file an application with the Financial Supervisory Commission (FSC) together with the documents listed below; the application will be deemed approved if the FSC has not expressed any objection within 14 business days from the day following receipt of the application documents:
(1) Minutes of the board meeting in which the application was discussed and passed by the board of directors.
(2) Business plan (including at least organizational structure and departmental duties, business scope and objectives, procedural flows, internal controls and risk management, internal audit system, file management, handling of business disputes, and a profile of professional personnel).
(3) Internal operational guidelines and control procedures adopted for regulation of prohibited tie-in sales, confidentiality of information, and establishment of firewalls.
3. A bank shall faithfully comply with the following rules in the course of providing financial consulting services:
(1) Prohibition of tie-in sales. To avoid conflict of interest and to maintain fair market competition, a bank shall charge a dedicated department with the duties of providing financial consulting services that shall be operated independently and clearly segregated from other relevant business operations; the personnel performing such services may not make any commitments, such as with respect to loans or investments, or set them out as conditions, in the course of soliciting business, or solicit business on such terms.
(2) Confidentiality of information. A bank shall faithfully abide by the duty of maintaining the confidentiality of client information, and may not make use such information for any improper or unlawful purpose. The dedicated department shall be effectively segregated from other departments in terms of personnel staffing and information handling, and internal information control procedures and systems shall be set up for it to ensure the confidentiality of relevant information and to prevent improper disclosure or use of such information.
(3) Establishment of firewalls. A bank shall establish firewalls between departments and between group subsidiaries and, based on the characteristics of individual projects, monitor whether relevant personnel are duly performing their duties.
(4) Profile of professional personnel. A bank shall clearly disclose to its clients the qualifications, experience, and professional background of the personnel providing the services. In addition, if the provision of such services is subject to other acts and regulations such as those governing securities, the bank and the personnel performing such services shall obtain the relevant approvals, certificates, or qualifications required under those acts and regulations.
4.The 5 June 1997 Letter of the Ministry of Finance (Ref. Tai-Tsai-Rong-86623893) is repealed from this day onward. Notwithstanding the foregoing, a bank that has already obtained a permit to provide "financing-related financial consulting services" pursuant to that letter and that does not intend to enlarge the scope of such services is not required to further file the application hereunder.
In the event of any discrepancy between this English translation and the original Chinese text, the original text will take precedence. |