Data Source:Laws and Regulations Retrieving System of the Banking Bureau

Article 48 of Financial Holding Company Act deleted and Articles 3 ~ 5, 16, 17, 30, 36, 37, 43, 46, 59, 60, 62, and 69 of the same Act amended per Presidential Decree Hua-Zong-Yi-Yi-Zi No. 09800010881 dated January 21, 2009.

Article 3
The term “Competent Authority” as used in this Act shall mean the Financial Supervisory Commission, Executive Yuan.

Article 4
The terms as used in this Act shall have the following meanings:
1. “Controlling interest” shall mean holding twenty-five percent (25%) or more of the outstanding voting shares or capital stock of a bank, insurance company or securities firm, or otherwise having the direct or indirect power to elect or designate the majority of the directors of a bank, insurance company or securities firm.

2. “Financial holding company” shall mean a company established in accordance with this Act and having a controlling interest in a bank, insurance company and/or securities firm.

3. “Financial institution” shall mean any of the following banks, insurance companies or securities firms:
(1) “Bank” shall mean banks and bills finance companies as defined in the Banking Act and other entities designated by the Competent Authority;

(2) “Insurance company” shall mean insurance enterprises established in accordance with the Insurance Law and organized as companies limited by shares; and

(3) “Securities firm” shall mean securities firms engaging in securities underwriting, proprietary trade and brokering or securities finance companies engaging in the securities finance business.

4. “Subsidiaries” shall mean any of the following entities:
(1) “Bank subsidiary” shall mean a bank in which the financial holding company has a controlling interest;

(2) “Insurance subsidiary” shall mean an insurance company in which the financial holding company has a controlling interest;

(3) “Securities subsidiary” shall mean a securities firm in which the financial holding company has a controlling interest; and

(4) Any other entity in which the financial holding company holds more than fifty percent (50%) of its outstanding voting shares or capital stock, or otherwise has the direct or indirect power to elect or designate the majority of its directors.

5. “Converted” shall mean transfer of business operation or swap of shares.

6. “Foreign financial holding company” shall mean a company established under foreign law which has a controlling interest in a bank, insurance company, and/or securities firm.

7. “Same person” shall mean the same natural or juridical person.

8. “Same concerned person” shall mean persons related to the same natural or juridical person.

9. “Affiliate” shall mean an enterprise to which Articles 369-1 through 369-3, Article 369-9 and Article 369-11 of the Company Law apply.

10. “Major shareholder” shall mean a natural or juridical person holding five percent (5%) or more of the outstanding voting shares or capital stock of a financial holding company or any of its subsidiaries; if the major shareholder is a natural person, the number of shares held by his/her spouse and children under twenty years of age shall be aggregated into the principal’s share holding.

Persons related to the same natural person referred to in Subparagraph 8 of the preceding paragraph include:
(1) The principal, his/her spouse and relatives by blood within the second degree of kinship.

(2) An enterprise in which the persons referred to in the preceding subparagraph hold more than one third (1/3) of its outstanding voting shares or more than one third of its capital stock.

(3) An enterprise or a foundation in which the persons referred to in Subparagraph (1) hereof act as its chairman, president or directors representing the majority of directors.

Persons related to the same juridical person referred to in Subparagraph 8 of the preceding paragraph include:
(1) The same juridical person and its chairman and president as well as the spouse and relatives by blood within second degree of kinship of the chairman and president.

(2) Enterprises in which the same juridical person and natural persons referred to in the preceding subparagraph hold more than one third (1/3) of their outstanding voting shares or capital stock, or enterprises or foundations in which the same juridical person and natural persons referred to in the preceding subparagraph act as their chairman, president or directors representing the majority of directors.

(3) The affiliates of the same juridical person.

Article 5
In determining the number of shares or the amount of capital of a financial holding company, bank, insurance company or securities firm held by the same person or same concerned person, the following shares or capital shall be excluded
1. Shares acquired by a securities firm during the underwriting period of the securities and disposed of during the period prescribed by the Competent Authority.

2. Shares acquired by a financial institution under a collateral pledge or security agreement and four years have not elapsed since the date of acquisition.

3. Shares acquired by inheritance or bequest and two years have not elapsed since the date of inheritance or bequest.

Article 16
When a financial institution is converted into a financial holding company, a same person or same concerned person who singly, jointly or collectively holds more than ten percent (10%) of the financial holding company’s outstanding voting shares shall report such fact to the Competent Authority.
After a financial holding company has been established, a same person or same concerned person who singly, jointly or collectively holds more than five percent (5%) of the financial holding company’s outstanding voting shares shall report such fact to the Competent Authority within ten (10) days from the day of holding; the preceding provision applies to each cumulative increase or decrease in the shares of the same person or same concerned person by more than one percent (1%) thereafter.
After a financial holding company has been established, a same person or same concerned person who intends to singly, jointly or collectively acquire more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of the financial holding company’s outstanding voting shares shall apply for prior approval of the Competent Authority.
A third party who holds shares of a financial holding company on behalf of the same person or same concerned person in trust, by mandate or through other types of contract, agreement or authorization shall fall within the purview of the same concerned person.
The regulations governing the qualifications and requirements for the same person or same concerned person who applies for approval pursuant to Paragraph 3 hereof, required documentation, shares to be acquired, purpose of acquisition, sources of funding, state of pledging of shares held, existing shareholding, and the reporting and announcement of changes in other important events, and other matters to be complied with shall be prescribed by the Competent Authority.
The same person or same concerned person who holds more than ten percent (10%) of the outstanding voting shares of a financial holding company shall not pledge his or her shares to a subsidiary of the financial holding company. The preceding provision does not apply to shares of a financial holding company already pledged to a financial institution before the financial institution was converted into its subsidiary, provided the original pledge continues to be in effect.
If a same person or same concerned person referred to in Paragraph 1 hereof does not meet the qualifications or requirements stipulated in the regulations as referred to in Paragraph 5 hereof, the same person or concerned person may continue to hold shares of such companies, but may not increase his or her shareholding.
The application referred to in Paragraph 3 hereof shall be deemed approved if the Competent Authority does not object thereto within fifteen (15) business days from the next day following the receipt of such application.
The same person or same concerned person who singly, jointly or collectively holds more than five percent (5%) but less than ten percent (10%) of a financial holding company’s outstanding voting shares prior to the implementation of the amendment to the Act on December 30, 2008 shall report such fact to the Competent Authority within six (6) months from the implementation date of the said amendment.
Where the same person or same concerned person who holds voting shares issued by a financial holding company without filing a report with the Competent Authority or obtaining approval from the Competent Authority in accordance with the provisions set forth in Paragraphs 2 or 3, the excess shares held by such same person or same concerned person shall not have voting rights and shall be disposed of within the given period prescribed by the Competent Authority.

Article 17
The guidelines with respect to the qualifications of the promoters and responsible persons of a financial holding company, the restrictions on concurrent posts held by the responsible persons and other matters to be complied with shall be prescribed by the Competent Authority.
A person not meeting the qualifications set forth in the guidelines referred to in the preceding paragraph shall not act as the responsible person of a financial holding company; any such person who currently acts as the responsible person of a financial holding company shall be ipso facto discharged.
The responsible person of a financial holding company who concurrently holds a position in a subsidiary of the financial holding company owing to an investment relationship, or the responsible person of a subsidiary of a financial holding company who meets the qualifications set forth by the Competent Authority to concurrently hold a position in another subsidiary of the financial holding company is not subject to the restrictions set out in the front section of Paragraph 3, Article 11 of Act Governing Bill Finance Business.
The responsible person or any employee of a financial holding company shall not accept, under any pretense, commissions, rebates and other unwarranted benefits from a transaction counterparty or a customer of the financial holding company or its subsidiaries.

Article 30
Where a financial holding company issues new shares for the business of its subsidiary, the employees of such subsidiary may subscribe the shares of the financial holding company, and in which case Paragraphs 1, 2, 4, 5 and 6 of Article 267 of the Company Law shall apply mutatis mutandis.
Where a financial holding company holds all outstanding shares or capital stock of a subsidiary, such subsidiary is not subject to the restrictions set out in Paragraph 1, Article 267 of Company Law when it issues new shares.

Article 36
A financial holding company shall ensure the sound management of the business activities of its subsidiaries. The business of a financial holding company shall be limited to investment in, and management of, its invested enterprises.
A financial holding company may apply to the Competent Authority for approval to invest in the following enterprises:
1. Financial holding companies;

2. Banking enterprises;

3. Bills finance enterprises;

4. Credit card businesses;

5. Trust enterprises;

6. Insurance enterprises;

7. Securities enterprises;

8. Futures enterprises;

9. Venture capital enterprises;

10. Foreign financial institutions which have been approved for investment by the Competent Authority; and

11. Other enterprises for which the Competent Authority determines to be financial related.

The term “banking enterprise” as used in Subparagraph 2 of the proceeding paragraph shall include commercial banks, specialty banks and investment and trust companies; the term “insurance enterprise” as used in Subparagraph 6 of the preceding paragraph shall include property insurance companies, personal insurance companies, re-insurance companies, insurance agents and brokers; the term “securities enterprises” as used in Subparagraph 7 of the preceding paragraph shall include securities firms, securities investment trust enterprises, securities investment consulting enterprises and securities finance enterprises; the term “futures enterprises”, as used in Subparagraph 8 of the preceding paragraph shall include futures commission merchants, leverage transaction merchants, futures trust enterprises, futures investment management enterprises and futures advisory enterprises.
In the event that a financial holding company applies to invest in any of the enterprises listed in Subparagraphs 1 through 9, or Subparagraphs 10 and 11 of Paragraph 2 hereof, the application shall be deemed approved if the Competent Authority does not object thereto within fifteen (15) business days or thirty (30) business days, respectively, from the next day following the receipt of such application. Except in the case where a financial enterprise makes investment in accordance with the laws and regulations governing the industry the financial enterprise belongs to, a financial holding company and its directly or indirectly controlled affiliates shall not engage in any investment activity they apply for before it is approved by the Competent Authority. Violators of the preceding provision shall be subject to fines pursuant to Article 62 herein, and the shares acquired by the violator thereof either before or after the amendment of the Act, shall not carry voting rights and shall not be counted in the total shares issued. In addition, the Competent Authority should order the violating financial holding company to dispose the unlawful investment within a prescribed period of time.
If the business or investment of the subsidiary of a financial holding company exceeds that which is permitted by laws and regulations upon establishment of the financial holding company, or the business or investment of a financial institution exceeds that which is permitted by laws and regulations upon its conversion into a subsidiary of a financial holding company, the Competent Authority shall require such financial holding company to make adjustment within a prescribed period of time.
The prescribed period of time mentioned in the preceding paragraph shall not be more than three (3) years. If necessary, the financial holding company may apply for an extension of such prescribed period twice; provided, that each extension shall not be more than two (2) years.
The responsible persons or employees of a financial holding company shall not act as the manager of an enterprises in which the venture capital subsidiary of the financial holding company invests.
The subsidiaries of a financial holding company must apply to the Competent Authority for prior approval before they undergo capital decrease. The regulations governing the required documentation for the application, application procedure, review criteria, and other matters to be complied with shall be prescribed by the Competent Authority.

Article 37
A financial holding company may apply to the Competent Authority for approval to invest in enterprises other than those prescribed in Paragraph 2 of the preceding Article; provided that the financial holding company and its representative do not act as the director or supervisor of such enterprise, or designate a person to be the manager of such enterprise, unless it is otherwise approved by the Competent Authority.
In applying for approval to invest in the aforesaid enterprises, the application shall be deemed approved if the Competent Authority does not object thereto within thirty (30) business days from the next day following the receipt of such application; provided, that the financial holding company shall not proceed with the relevant investment until such period has elapsed.
The total amount of investment in all of other enterprises mentioned in Paragraph 1 hereof by the financial holding company shall not exceed fifteen percent (15%) of the financial holding company’s net worth.
The shares of any of other enterprises mentioned in Paragraph 1 hereof held by the financial holding company shall not exceed five percent (5%) of the total issued and outstanding voting shares of such enterprise.
The combined total of shares of any of other enterprises mentioned in Paragraph 1 hereof held by the financial holding company and its subsidiaries shall not exceed fifteen percent (15%) of the total issued and outstanding voting shares of such enterprise, with exceptions to the following:
1. Higher shareholding by the subsidiary of the financial holding company is allowed pursuant to the laws and regulations governing the industry the subsidiary belongs to; or

2. Such other enterprise is not listed on Taiwan Stock Exchange or Gretai Securities Market, and among the financial holding company and its subsidiaries, only the venture capital subsidiary invests in the enterprise and the investment does not exceed a specific amount.
The specific amount mentioned in Subparagraph 2 of the preceding paragraph and investment-related matters to be complied with shall be prescribed by the Competent Authority.
Where the shares of any of other enterprises mentioned in Paragraph 1 hereof held by a financial holding company and its subsidiaries do not comply with the provisions in Paragraph 5 hereof prior to the implementation of the amendment to the Act on December 30, 2008, the Competent Authority shall require such financial holding company to make adjustment within a prescribed period of time after the amendment takes effect.
The prescribed period of time mentioned in the preceding paragraph shall not be more than two (2) years. If necessary, the financial holding company may apply for an extension of such prescribed period once; provided, that each extension shall not be more than one (1) year.
With respect to the application of a financial holding company to the Competent Authority for approval to invest in an enterprise mentioned in Paragraph 1 hereof or Paragraph 2 of the preceding Article, the regulations governing the required documentation for the application, application procedure, review criteria, and other matters to be complied with shall be prescribed by the Competent Authority.

Article 43
A financial holding company shall apply to the Competent Authority for prior approval before its subsidiaries may engage in co-selling activities among themselves, and shall make sure that such activities will not harm the interests of customers.
When the subsidiaries of a financial holding company engage in co-selling activities, their respective business, service personnel and services shall be made easily identifiable by the customers. Except for the personal basic data of customers, the subsidiaries of the financial holding company shall acquire the prior written consent of the customer with regard to sharing his or her dealing or transaction records and other relevant information with other subsidiaries, and shall not gather or use the customer data for purposes other than the designated use. Upon receiving a customer’s notice to stop sharing his or her personal basic data, dealing or transaction records, or other relevant information with other subsidiaries, the subsidiaries of the financial holding company shall comply immediately.
The regulations governing the requirements for the application for approval mentioned in Paragraph 1 hereof, required documentation, application procedure, scope of businesses allowed, sharing of information, sharing of facilities, premises, or personnel management and other matters to be complied with shall be prescribed by the Competent Authority.
When the subsidiary of a financial holding company signs a product or service contract with a customer, the subsidiary shall explicitly disclose the important clauses of the contract and associated transaction risk, and note on the contract, by the nature of the product or service, whether the transaction is protected by deposit insurance, Insurance Stabilization Fund, or other protection mechanisms in place. The aforesaid contract shall be submitted to the Competent Authority or an institution designated by the Competent Authority for reference, and post on the websites of the financial institutions, unless it is otherwise stipulated by other laws.

Article 46
Where the aggregate transactions taken place between all subsidiaries of a financial holding company and any of the following counterparties reach a certain amount or a certain percentage, the financial holding company shall, within thirty (30) days after the end of each quarter in each fiscal year, report to the Competent Authority, and disclose the same via public announcement, the Internet, or other means designated by the Competent Authority:
1. Same natural person or same juridical person.

2. Same natural person and his/her spouse and relatives by blood within the second degree of kinship, as well as enterprises in which the principal or his/her spouse is the responsible person.

3. Same affiliate.

The transactions mentioned in the preceding paragraph include:
1. Lending;

2. Guarantee or endorsement of short-term notes or bills;

3. Transaction of notes, bills, or bonds with reverse repurchase agreement;

4. Investment in or purchasing securities issued by any party mentioned in the preceding paragraph;

5. Transactions of financial derivatives; and

6. Other transactions as prescribed by the Competent Authority.
The certain amount, certain percentage, content and format of reporting and disclosure referred to in Paragraph 1 hereof, and other matters to be complied with shall be prescribed by the Competent Authority.

Article 48 (deleted).

Article 59
The responsible person or employee of a financial holding company who violates Paragraph 4 of Article 17 herein by accepting commissions, rebates or other unwarranted benefits shall be punishable by imprisonment for not more than three (3) years, detention, and/or a fine of not more than Five Million New Taiwan Dollars (NT$5,000,000).

Article 60
Commission of any of the following acts shall be punishable by a fine of not less than Two Million New Taiwan Dollars (NT$2,000,000) and not more than Ten Million New Taiwan Dollars (NT$10,000,000):
1. Violation of Paragraph 1 of Article 6 herein by failing to apply for establishment of a financial holding company;

2. Violation of Paragraph 3 of Article 16 herein by holding shares without the approval of the Competent Authority;

3. Violation of Paragraph 1 or Paragraph 2 of Article 16 herein by failing to report to the Competent Authority, or violation of the proviso in Paragraph 7 of the same Article by increasing shareholding;

4. Violation of Paragraph 10 of Article 16 by failing to dispose within the time period prescribed by the Competent Authority;

5. Violation of regulations governing reporting or announcement prescribed by the Competent Authority in accordance with Paragraph 5 of Article 16 herein;

6. Violation of Paragraph 6 of Article 16 herein by creating pledge;

7. Violation of Paragraph 1 of Article 18 herein by undergoing merger, general assignment or general assumption (of assets and/or debt obligations) without approval;

8. Violation of Article 38 herein by holding shares of a financial holding company;

9. Violation of Paragraph 1 of Article 39 herein on the restricted use of short-term funds; or violation of Paragraph 2 of the same Article by investing in real estate or investing in real estate not for own use without approval;

10. Violation of regulations governing issuance terms or conditions prescribed by the Competent Authority in accordance with Paragraph 3 of Article 39 herein;

11. Violation of the ratios, requirements or restrictions prescribed by the Competent Authority in accordance with Article 40 or Article 41 herein;

12. Violation of Paragraph 1 of Article 42 herein by failing to keep data confidential;

13. Violation of Paragraph 1, Paragraph 2 or Paragraph 4 of Article 43 herein; or violation of the regulations governing the scope of businesses allowed, sharing of information, sharing of facilities, premises or personnel management prescribed by the Competent Authority in accordance with Paragraph 3 of Article 43 herein;

14. Violation of the restriction on trading terms or the manner in which the board of directors adopts resolution as stipulated in Paragraph 1 of Article 45 herein; or violation of the provision on percentage of amount stipulated in Paragraph 4 of the same Article;

15. Violation of Paragraph 1 of Article 46 herein by failing to report to the Competent Authority or make disclosure;

16. Violation of Article 51 herein by failing to establish an internal control or audit system or failing to duly implement such system;

17. Violation of Paragraph 1 or Paragraph 2 of Article 53 herein; or failure to remedy a capital deficit within the period of time prescribed by the Competent Authority in accordance with Paragraph 3 of the same Article;

18. Violation of orders issued by the Competent Authority in accordance with Paragraph 1 of Article 55 herein;

19. Violation of Paragraph 1 of Article 56 herein by failing to perform the obligation of assistance; or violation of orders issued by the Competent Authority in accordance with Paragraph 2 of the same Article; and

Article 62
Commission of any of the following acts shall be punishable by a fine of not less than One Million New Taiwan Dollars (NT$1,000,000) and not more than Five Million New Taiwan Dollars (NT$5,000,000):
1. Violation of the proviso in Paragraph 4 of Article 36 herein or Paragraph 2 of Article 37 herein by making an investment without approval;

2. Violation of Paragraph 5 of Article 36 or Paragraph 7 of Article 37 herein by failing to make adjustment within the period of time prescribed by the Competent Authority; or violation of Paragraph 7 of Article 36 herein where the responsible person or employee [concurrently] acting as managers of enterprises in which the venture capital subsidiary invests;

3. Violation of Paragraph 8 of Article 36 herein by undertaking capital decrease without the approval of the Competent Authority;

4. Violation of Paragraph 1 of Article 37 herein by making investment without the approval of the Competent Authority, or having itself or its representative acting as the director or supervisor of the invested enterprise, or designating a person to be the manager of such enterprise;

5. Violation of Paragraph 3, 4, or 5 of Article 37 herein by exceeding the investment limit or the restriction on shareholding; and

6. Violation of Paragraph 1, 2, or 4 of Article 68 herein by failing to report, apply for permission, adjust the shareholding, or apply for approval.

Article 69
This Act is in force in November 1, 2001.
Amended articles in this Act, except for those amended on May 5, 2006 that have taken effect since July 1, 2006, shall be implemented from the date of promulgation.