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

Article 4 amended and Article 11-1 and Article 13-1 added per order of Financial Supervisory Commission No. Jing-Guan-Ying-(1)-Zi-No. 09710000900 dated March 14, 2008

Article 4 Financial activities engaged in by the overseas branches and offshore banking units (OBUs) of Taiwan Banks in accordance with these Regulations shall include:1. Accepting deposits;2. Outward and inward remittances;3. Export-related foreign exchange business, including export bill negotiation, export bill collections, advice of letters of credit and bonding business;4. Import-related foreign exchange business, including issuance of letters of credit, acceptance of drafts, import foreign exchange settlements, and import bill collections;5. Acting as a collecting and paying agent;6. Credit extension business;7. Factoring business;8. Interbank transactions related to business specified in the preceding seven subparagraphs; and9. Other activities approved by the Competent Authority.Overseas branches and OBUs of Taiwan Banks shall comply with the following provisions when engaging in credit extension business under Subparagraph 6 of the preceding paragraph:1. The customers shall be limited to those approved to make investments under Paragraph 1, Article 35 of the Act (called “Taiwan businesses in the Mainland Area” hereinafter), and branch companies of third-region juristic persons in Mainland Area as well as their subsidiaries in Mainland Area in which they hold at least 50% of shares issued and outstanding. The term “third-region juristic person” excludes juristic persons established overseas by individuals, juristic persons, groups or other organizations in Mainland Area; and 2. A thorough check of the borrower’s credit status and repayment ability shall be conducted in order to protect the bank’s interests.The aggregate amount of credit that the overseas branches and OBUs of a Taiwan Bank extend in the business in Subparagraph 6 of Paragraph 1 hereof plus the aggregate amount of credit they extend to third-region juristic persons in which the credit line or funds are transferred for use by any Taiwan business in the Mainland Area may not exceed 30 percent (30%) of the combined net assets of the Taiwan Bank’s overseas branches and OBUs after the closing of the books in the previous fiscal year. However, the amounts of short-term trade financing and international syndicated loans are not included in the calculation.

Article 11-1 If the overseas banking subsidiary of a financial holding company or bank in Taiwan Area meets the following requirements, the financial holding company or bank may apply to the Competent Authority for permission to invest in banks in Mainland Area by said overseas banking subsidiary: 1. Having been complying with laws and regulations, having sound operations, and free of material violations in the past three years prior to the time of application; and 2. The ratio of its equity capital to risky assets in the most recent half fiscal year is at least 8%. The total shares of a Mainland Bank held by an overseas banking subsidiary of a financial holding company or bank in Taiwan Area shall not exceed twenty percent (20%) of said bank's total shares issued and outstanding. A financial holding company or bank in Taiwan Area that makes an application under Paragraph 1 hereof shall submit an application form and the following documents: 1. Investment purpose and investment plan:(1) Shareholder structure of the target bank.(2) The business scope, business principles and directions, and business development plan of the target bank. (3) Evaluation of the financial status of the target bank in the next three years and investment benefit and feasibility analysis. 2. Calculation sheet showing the ratio of the overseas banking subsidiary’s equity capital and risky asset in the most recent half fiscal year. 3. Description of the overseas banking subsidiary’s compliance with the regulations of the local competent authority regarding bank investment.4. Other information or documents as required by the Competent Authority.The Competent Authority may deny the application made by a financial holding company or bank in Taiwan Area in accordance with Paragraph 1 hereof provided facts show that such investment might be adverse to the sound operation of the financial holding company or bank, or such investment is incongruous with government policy. The Competent Authority may also order a financial holding company or bank approved to make investment to dispose the shares of a Mainland Bank held by its overseas banking subsidiary within a prescribed period of time.

Article 13-1 When the overseas banking subsidiary of a financial holding company or bank in Taiwan Area has received the approval of the financial authorities in Mainland Area to invest in a bank in Mainland Area, the financial holding company or bank in Taiwan Area shall report the same to the Competent Authority for recordation. If the Mainland Bank in which the overseas banking subsidiary invests as mentioned in the preceding paragraph has any of the following situations, the financial holding company or bank in Taiwan Area shall immediately report the matter and submit relevant information to the Competent Authority: 1. Dissolved or suspended business. 2. Undergoing reorganization, liquidation or bankruptcy proceedings. 3. Committing a material violation or business license being revoked by the financial supervisory authority in Mainland Area. 4. Changing the bank’s name. 5. Merging, transferring, or assuming all or an essential part of assets or business. 6. Sustaining huge losses. 7. Other incidents that require reporting as stipulated by the Competent Authority. A financial holding company or bank in Taiwan Area shall obtain the approval of the Competent Authority when its overseas banking subsidiary mentioned in Paragraph 1 hereof increases or decreases investment in a Mainland Bank.