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

Article1 These Regulations are adopted pursuant to Article 17, paragraphs 1 and 2, of the Financial Holding Company Act ("the Act").
Article2 These Regulations are adopted to better implement corporate governance by strengthening the professional management performance of responsible persons of a financial holding company and the management efficiency of responsible persons holding a concurrent position in a subsidiary, and by improving the check and balance mechanisms between duties.
Article3 For the purposes of these Regulations, the term "responsible person" means any director, supervisor, general manager, assistant general manager, deputy assistant general manager, manager, or person in an equivalent position.
Article4 A person having any of the following situations may not serve as a promoter or responsible person of a financial holding company:
1. Having no legal capacity or having limited legal capacity or is subject to the order of the commencement of assistance that has not been revoked yet.
2. Having been convicted of a crime under the Organized Crime Act.
3.Having been sentenced to imprisonment for counterfeiting currency or valuable securities, misappropriation, fraud or breach of trust and the sentence has not been completed or ten (10) years have not elapsed since the date of sentence completion, the expiration of probation period, or the pardon of such punishment.
4. Having been sentenced to imprisonment for forging instruments or seals, offence against privacy, usury, impairing the rights of creditors or violating the Tax Collection Act, Trademark Act, Patent Act or other laws governing industrial or commercial activity and the sentence has not been completed or five (5) years have not elapsed since the date of sentence completion, the expiration of probation period, or the pardon of such punishment.
5. Having been sentenced to imprisonment for embezzlement and the sentence has not been completed or five (5) years have not lapsed since the date of sentence completion, the expiration of probation period, or the pardon of such punishment.
6. Having been sentenced to imprisonment for violating the Act, Banking Act , Trust Enterprise Act, Act Governing Bills Finance Business, Financial Assets Securitization Act, Real Estate Securitization Act, Insurance Law, Securities and Exchange Act, Futures Trading Act, Securities Investment Trust and Consulting Act, Foreign Exchange Control Act, Credit Cooperatives Act, Agricultural Finance Act, Farmers’ Association Act, Fishermen’s Association Act, Money Laundering Control Act or other laws regulating financial activity, and the sentence has not been completed or five (5) years have not elapsed since the date of sentence completion, the expiration of probation period or the pardon of such punishment.
7. Having been adjudicated bankrupt, and rights and privileges have not been reinstated.
8. Having been the responsible person of a legal entity at the time such legal entity was adjudicated bankrupt and five (5) years have not elapsed since the closure of the bankruptcy or the terms of bankruptcy settlement have not yet been fulfilled.
9. Having been denied service by the bills clearing house and the denial status has yet to be removed, or there remains a record of dishonored check(s) due to insufficient funds in three (3) years since the denial status has been removed.
10. Having an ongoing event that seriously damages his or her credit worthiness or five (5) years have not elapsed since the closure of such an event.
11. Five (5) years have not elapsed since being replaced or discharged from duties by order of the competent authority due to a violation the Act, Banking Act, Trust Enterprise Act, Act Governing Bills Finance Business, Financial Assets Securitization Act, Real Estate Securitization Act, Insurance Law, Securities and Exchange Act, Futures Trading Act, Securities Investment Trust and Consulting Act, Credit Cooperatives Act, Farmers’ Association Act, Fishermen’s Association Act, Agricultural Finance Act, or other laws regulating financial activity.
12. Having been ordered to enter a reformatory or having been ordered to perform compulsory labor due to the offense of larceny or receiving stolen property and the sentence has not been completed or five (5) years have not elapsed since the sentence completion.
13. Serving as the responsible person of another financial holding company, except where it is necessitated for facilitation of a merger and has been approved by the competent authority.
14. There is factual proof that the person has engaged in or otherwise been involved with any other dishonest or improper activities which indicate that she/he is unfit to serve as a promoter or responsible person of a financial holding company.
Where the government or a juristic person is a shareholder, the provisions of the preceding paragraph shall apply mutatis mutandis to any authorized representative, or to any natural person appointed to exercise on its behalf the duties of its position, who is to act as a director or supervisor.
The chairperson or general manager of a financial holding company may not concurrently serve in the position of chairperson or general manager in another company that is not a finance-related enterprise, except that this restriction shall not apply for an incorporated foundation or other not-for-profit incorporated association.
A promoter of a financial holding company may not concurrently serve as a promoter of another financial holding company.
The provisions of paragraph 1 and the preceding paragraph shall not apply to a promoter of a financial holding company incorporated by conversion from a financial institution who is a shareholder of the former financial institution.
Article5 The general manager of or a person in an equivalent position in a financial holding company shall be of upstanding character, have leadership ability and the ability to effectively manage the financial holding company, and possess any one of the following qualifications:
1.Have worked for not less than nine years in a financial institution or financial holding company as defined in the Act, and have served for not less than five years in the position of manager or in an equivalent position at the head office, and have performed with excellence in such position.
2.There is other factual evidence sufficient to prove that he/she has leadership ability and professional financial expertise and is capable of sound and effective operation of the business of the financial holding company.
A person may not serve as a general manager of or otherwise hold an equivalent position in a financial holding company until the relevant qualification documents have been submitted to and approved by the competent authority.
Article6 An assistant general manager, deputy assistant general manager, manager, or person in an equivalent position in a financial holding company shall be of upstanding character, have leadership ability and the ability to effectively manage the financial holding company, and possess any one of the following qualifications:
1.Have worked for not less than five years in a financial institution or financial holding company as defined in the Act, and have served for not less than three years in the position of assistant manager or in an equivalent position at the head office, and have performed with excellence in such position.
2.There is other factual evidence sufficient to prove that he/she has the ability to manage the financial holding company, by which to operate the business of the financial holding company in a sound and effective manner, and his/her qualification has been reported to and recognized by the competent authority in advance.
Article7 A supervisor's spouse, blood relative within the second degree, or relative by marriage within the first degree, may not serve as a director or manager at the same financial holding company.
The provisions of the preceding paragraph shall also apply to a natural-person representative of the government or of a juristic person.
Article8 The board of directors of a financial holding company is responsible for electing managers, and shall realistically review whether a manager meets the qualification requirements, and also is responsible for monitoring whether a manager maintains the required qualifications and otherwise remains suitable for the office.
Article9 A director of a financial holding company shall be of upstanding character; any one of the following qualifications shall be possessed by at least two directors if there are five directors or less, and by another one director for each additional four directors, if there are more than five directors; and by at least two managing directors, if such positions are established:
1.Have worked for not less than five years in a financial institution or financial holding company as defined in the Act, and have served for not less than three years in the position of assistant manager or in an equivalent position at the head office, and have performed with excellence in such position.
2.Have worked for not less than five years in financial administration or management, and have served in the position of intermediate civil service employee at grade 8 or higher or in an equivalent position, and have performed with excellence in such position.
3.There is other factual evidence sufficient to prove that he/she has the ability to manage the financial holding company, and to operate the business of the financial holding company in a sound and effective manner.
The chairperson of a financial holding company shall possess any of the qualifications set out in the preceding paragraph.
Among the supervisors of a financial holding company, at least one supervisor shall possess any of the qualifications set forth in paragraph 1 or have not less than five years of auditing experience in a financial institution or financial holding company as defined in the Act, and have performed with excellence in such position.
A financial holding company shall, within 10 days following any election of chairperson or a director or supervisor possessing the qualification set forth in paragraph 1, subparagraph 3, report the election and submit relevant qualification documents to the competent authority for recognition; where any of that person's qualifications has not been recognized by the competent authority, the competent authority may order the financial holding company to make an adjustment within a designated time limit.
Where a financial holding company has concerns about whether the provision of paragraph 1, subparagraph 3, applies to a candidate for director or supervisor, it may file a report with the competent authority for recognition before the election.
Where a financial holding company has a banking subsidiary, at least one of its directors shall have worked for not less than five years in a bank and have served for not less than three years in the position of assistant manager or in an equivalent position at the head office, or have worked for not less than five years in financial administration or management and have served in the position of intermediate civil service employee at grade 8 or higher or in an equivalent position, and in such professional positions have performed with excellence; the same shall apply mutatis mutandis where a financial holding company has an insurance or securities subsidiary.
Article10 In order to determine whether a responsible person of a financial holding company possesses the qualifications prescribed in these Regulations, the competent authority may order the financial holding company to act within a specified time period by submitting necessary documents and information or by sending a designated person to appear before the competent authority for questioning.
Article11 A currently incumbent responsible person of a financial holding company who is promoted, or a person who is appointed to the position of responsible person after the issuance and enforcement of these Regulations, shall possess the qualifications prescribed in these Regulations. Anyone who holds a position of responsible person without possessing such qualifications shall ipso facto be dismissed.
Any circumstance set forth in a subparagraph of Article 4, paragraph 1, that arises after a responsible person of a financial holding company has assumed such position shall ipso facto cause his or her dismissal.
Article12 Where any circumstance under these Regulations that constitutes ipso facto cause for dismissal applies to a responsible person of a financial holding company, the party involved shall promptly notify the financial holding company.
Upon leaning of any circumstance that constitutes ipso facto cause for dismissal applies to a responsible person, a financial holding company shall promptly take the initiative to handle the circumstance, and report to the competent authority and notify the Ministry of Economic Affairs for revocation or voidance of the relevant registration.
Article13 A responsible person of a financial holding company may, due to the investment relationship, concurrently hold a position in a subsidiary.
The concurrent holding of positions under the preceding paragraph and the number of concurrently held positions shall be subject to the principle that the duties for the principal position and the concurrent position are both effectively discharged, and shall not exceed the extent necessary for maintaining the monitoring mechanisms between the financial holding company and the subsidiary.
The concurrent holding of positions under paragraph 1 may not result in any conflict of interest or any violation of the internal controls of the financial holding company and the subsidiary, and shall be made within the scope of the internal check-and-balance control mechanisms of the consortium and in a manner that safeguards the rights and interests of the shareholders.
Article14 A responsible person of financial holding company who, due to the investment relationship, concurrently holds a position in a subsidiary is not subject to the restrictions in Article 51 of the Securities and Exchange Act, provided that the responsible person holding such concurrent position shall still meet the relevant qualification requirements prescribed by the regulatory authority responsible for the supervision of that subsidiary.
The chairperson or general manager of a financial holding company may concurrently serve as chairperson of only one subsidiary. This restriction shall not apply, however, in circumstances where the chairperson of the financial holding company may concurrently serve as chairperson of one or more subsidiaries during a certain period of time as necessitated to facilitate a business merger or organizational restructuring for purposes of enhancing overall operating effectiveness and efficiency or as necessitated by other special factors, and with the approval of the competent authority.
A responsible person of a financial holding company may concurrently serve as a manager of only one subsidiary.
A financial holding company shall on a regular basis evaluate the performance of a responsible person concurrently holding a position in a subsidiary, having regards to its investment management needs, risk management policies, and the provisions of these Regulation; the evaluation results shall serve as an important reference to determine whether the concurrently held position(s) will be maintained or reduced in number.
Article15 A responsible person of a financial holding company may not, in his or her own capacity or in the capacity of a representative of a juristic person other than the financial holding company, hold a position in a subsidiary of the financial holding company.
Article16 A responsible person of a financial holding company who concurrently holds a position in a subsidiary due to the investment relationship may not, in his or her own capacity or in the capacity of a representative of a juristic person other than the financial holding company, simultaneously hold a position in another company operating the same type of business as the subsidiary.
Article17 Where a responsible person of a financial holding company who has served in that position since before the enforcement of the amendment to these Regulations fails to comply with the provisions of Article 4, paragraph 3, that person may serve in the concurrent position until the end of that current term.
Article18 The amended provisions of these Regulations shall enter into force from the date of issuance, except for the provisions of Article 4, paragraph 3, and Article 14, paragraph 2, which shall take force from 1 January 2006.