Amendment to the Capital Adequacy Management Measures for Financial Holding Companies

General Explanation of the Amendment

To regulate the capital adequacy ratio calculated on a consolidated basis by financial holding companies, our country promulgated the "Capital Adequacy Management Measures for Financial Holding Companies" (hereinafter referred to as these Measures) on October 31, Year 90 (2001), pursuant to the authorization of Article 40 of the Financial Holding Company Act. Since then, these Measures have undergone six amendments in response to the implementation of Financial Accounting Standard No. 34, to accommodate the practical circumstances of financial holding companies in our country, to align with international methods for calculating eligible capital for financial groups, and to establish a calculation method for the statutory capital requirements of financing lease subsidiaries.

Given that the "Capital Adequacy Management Measures for Insurance Companies" has been amended to align with the Insurance Capital Standard (ICS) issued by the International Association of Insurance Supervisors (IAIS) on December 5, Year 113 (2024), and to support the policy direction of our country's new generation solvency regime for the insurance industry (Taiwan Insurance Solvency, TIS), the minimum capital requirements, capital tier classification standards, and composition of various capital items have been revised. These new rules are stipulated to take effect starting from Year 115 (2026). Accordingly, these Measures are amended to align with the new system implemented by the insurance industry.

The current text of these Measures consists of nine articles. This amendment revises five articles. The key points of the revision are listed below:

Given that the Class I restricted capital instruments defined in the "Capital Adequacy Management Measures for Insurance Companies" are similar in nature to the Other Tier 1 Capital (non-common equity) of banks, to ensure clarity and consistency in the application of regulations, insurance industry Class I restricted capital instruments are added to the list of capital tools excluded from the total cap on preferred shares and subordinated bonds of financial holding companies. Related article citations are adjusted in conjunction with amendments to the "Capital Adequacy and Capital Tier Management Measures for Banks." (Revised Articles 2 and 4)
In light of the complexity of the new system implemented by the insurance industry starting from Year 115 (2026), which requires more time for financial holding companies to calculate capital adequacy ratios and for accountants to perform audits, a proviso is added to the preamble of the reporting schedule. It stipulates that if the competent authority has other provisions, those provisions shall prevail. This preserves flexibility to extend the reporting deadline during the initial implementation of the new system. (Revised Article 6)
To assist financial holding companies with insurance subsidiaries in coping with the impact on group capital adequacy ratios and financing planning during the initial phase of aligning with the new generation solvency regime and related transitional measures implemented by the insurance industry in Year 115 (2026), it is clarified that financial holding companies may calculate the group capital adequacy ratio based on the eligible capital and statutory capital requirements of insurance subsidiaries adjusted for the application of transitional measures. Relevant capital adjustment mechanisms are established. (Revised Article 8)
It is clarified that these Measures take effect on January 1, Year 115 (2026). (Revised Article 9)

Comparison Table of Revised Articles of the Capital Adequacy Management Measures for Financial Holding Companies

Revised Article	Current Article	Explanation
Article 1	These Measures are promulgated pursuant to Article 40 of the Financial Holding Company Act (hereinafter referred to as this Act).	This article is not revised.
Article 2	Definitions of terms used in these Measures:<br><br>1. Capital Adequacy Ratio of the Group (Group CAR): Refers to the Group Eligible Capital Net Amount divided by the Group Statutory Capital Requirement.<br>2. Group Eligible Capital Net Amount: Refers to the sum of the eligible capital of the financial holding company and the eligible capital of each subsidiary calculated according to its shareholding ratio (Total Group Eligible Capital), minus the deduction amounts specified in Article 4.<br>3. Eligible Capital of the Financial Holding Company: Refers to the balance after deducting goodwill and other intangible assets, deferred assets, and treasury shares from the sum of common stock, preferred shares, subordinated bonds, prepaid capital, reserves, accumulated profits and losses, and other equity of the financial holding company.<br>4. The preferred shares and subordinated bonds mentioned in the preceding paragraph shall meet the following conditions:<br> (1) The issuance amount of each issuance shall be fully paid up.<br> (2) The financial holding company, subsidiaries of the financial holding company that are not allowed to hold shares of the financial holding company under Article 38 of this Act, or investment enterprises shall not provide guarantees, collateral, or other arrangements to enhance the priority of claim of the holders.<br> (3) The issuance term shall be seven years or more, with a reduction of at least 20% per year in the last five years.<br> (4) If the redemption date agreed upon for preferred shares or subordinated bonds is earlier than the issuance term, the "issuance term" refers to the agreed redemption date.<br> (5) The total amount of preferred shares and subordinated bonds included in eligible capital shall not exceed one-third of the eligible capital of the financial holding company. This does not include Other Tier 1 Capital (non-common equity) meeting the conditions of Article 10 of the "Capital Adequacy and Capital Tier Management Measures for Banks" or Class I restricted capital instruments meeting the conditions of Article 2 of the "Capital Adequacy Management Measures for Insurance Companies," provided they do not exceed the statutory quota limit. The calculation method for the statutory quota limit is as follows:<br> 1. The calculation basis is the balance after deducting the eligible capital of non-bank and non-insurance subsidiaries and the total amount of preferred shares and subordinated bonds issued by the financial holding company from the eligible capital of the financial holding company.<br> 2. The statutory quota limit is the amount obtained by dividing the calculation basis in the preceding item by 85% and then multiplying by 15%.<br> (6) If the payment of dividends or interest or the repayment of principal on preferred shares or bonds causes the group capital adequacy ratio of the financial holding company to fall below the minimum requirement, the payment of
dividends or interest and principal shall be deferred.<br>5. Subsidiary: Refers to the subsidiaries specified in Paragraph 1, Item 4 of Article 4 of this Act.<br>6. Eligible Capital of a Subsidiary: Refers to the eligible capital of the subsidiary calculated in accordance with Paragraph 1 of Article 3.<br>7. Group Statutory Capital Requirement: Refers to the sum of the statutory capital requirement of the financial holding company and the statutory capital requirements of each subsidiary calculated according to its shareholding ratio, minus the deduction amounts specified in Article 4.<br>8. Statutory Capital Requirement of the Financial Holding Company: Refers to the balance after deducting cash (including cash equivalents), receivable taxes (including receivable tax refunds), prepaid taxes, the book value of short-term fund utilization under Paragraph 1 of Article 39 of this Act, goodwill and other intangible assets, and deferred assets from the total assets of the financial holding company.<br>9. Statutory Capital Requirement of a Subsidiary: Refers to the statutory capital requirement of the subsidiary calculated in accordance with Paragraph 2 of Article 3.<br>10. Capital Surplus: Refers to the positive difference between the eligible capital and the statutory capital requirement calculated by each company under these Measures.<br>11. Capital Deficit: Refers to the negative difference between the eligible capital and the statutory capital requirement calculated by each company under these Measures.	Given that the Class I restricted capital instruments defined in the "Capital Adequacy Management Measures for Insurance Companies" are similar in nature to the Other Tier 1 Capital (non-common equity) of banks, to ensure clarity and consistency in the application of regulations, provisions related to the insurance industry are added to the nature of capital tools excluded from the total cap on preferred shares and subordinated bonds of financial holding companies. Related article citations are adjusted in conjunction with amendments to the "Capital Adequacy and Capital Tier Management Measures for Banks," and the text is slightly revised.
Article 3	The eligible capital of subsidiaries of financial holding companies shall be calculated separately by industry and method as follows:<br><br>1. Banking, bill finance companies, securities firms, and insurance companies: Calculated based on the net eligible own capital, own capital, or equivalent amount calculated in accordance with the relevant regulations on capital adequacy of each industry.<br>2. Trust companies, futures companies, venture capital enterprises, and financing lease companies: Calculated based on book net value.<br>3. Credit card companies: Calculated by reference to the banking industry.<br>4. Foreign financial institutions: Unless otherwise stipulated by the supervisory authority in the place of location, calculated by reference to trust companies, futures companies, and venture capital enterprises.<br>5. Other financial-related enterprises: Unless approved by the competent authority to be calculated by reference to the relevant industry, calculated by reference to trust companies, futures companies, and venture capital enterprises.<br><br>The statutory capital requirement of subsidiaries of financial holding companies shall be calculated separately by industry and method as follows:<br><br>1. Banking industry: Calculated based on the total risk-weighted assets multiplied by the statutory minimum capital adequacy ratio in accordance with the relevant provisions of the "Capital Adequacy and Capital Tier Management Measures for Banks."r>2. Bill finance companies, securities firms, and insurance companies: Calculated based on the total risk-weighted assets, equivalent amount of operational risk, risk capital, and the statutory minimum standard ratio multiplied by each other, or the equivalent amount, in accordance with the relevant regulations on capital adequacy of each industry.<br>3. Trust companies, futures companies, and venture capital enterprises: 50% of the total own assets minus receivable taxes (including receivable tax refunds) and prepaid taxes.<br>4. Financing lease companies: 10% of the total own assets minus receivable taxes (including receivable tax refunds) and prepaid taxes.<br>5. Credit card companies: Calculated by reference to the banking industry.<br>6. Foreign financial institutions: Unless otherwise stipulated by the supervisory authority in the place of location, calculated by reference to trust companies, futures companies, and venture capital enterprises.<br>7. Other financial-related enterprises: Unless approved by the competent authority to be calculated by reference to the relevant industry, calculated by reference to trust companies, futures companies, and venture capital enterprises.	This article is not revised.
Article 4	The Group Eligible Capital Net Amount is the balance after deducting the following amounts from the Total Group Eligible Capital:<br><br>1. The balance of the book value of the financial holding company's investment in the equity of subsidiaries and other eligible capital, minus the already reduced amount, that can be included in capital.<br>2. The capital surplus of subsidiaries whose eligible capital and statutory capital requirements are calculated in the manner of trust companies, futures companies, venture capital enterprises, and financing lease companies.<br>3. For subsidiaries whose eligible capital is calculated in the manner of the banking industry or bill finance companies, one-half of the amount of the capital surplus from subordinated bonds of such subsidiaries (excluding those meeting the conditions of Other Tier 1 Capital (non-common equity) under Article 10 of the "Capital Adequacy and Capital Tier Management Measures for Banks") after supplementing the capital deficit of other banking industry or bill finance companies.<br>4. For subsidiaries whose own capital is calculated in the manner of the insurance industry, one-half of the amount of the capital surplus from capital nature bonds of such subsidiaries (excluding those meeting the conditions of Class I restricted capital instruments under Article 2 of the "Capital Adequacy Management Measures for Insurance Companies") after supplementing the capital deficit of other insurance companies.<br><br>The book value of investment already deducted from the Total Group Eligible Capital in the preceding paragraph shall no longer be included in the Group Statutory Capital Requirement.	1. In conjunction with the amendment of the "Capital Adequacy and Capital Tier Management Measures for Banks," the original Article 8 citation is changed to Article 10, and the citation in Item 3 of Paragraph 1 is revised.<br>2. Given that the Class I restricted capital instruments defined in the "Capital Adequacy Management Measures for Insurance Companies" are similar in nature to the Other Tier 1 Capital (non-common equity) of banks, the regulations cited in Item 4 of Paragraph 1 are amended accordingly.
Article 5	If the common stock, preferred shares, and subordinated bonds issued by the financial holding company fall under any of the following circumstances, they shall be deemed as unissued capital instruments when calculating the eligible capital of the financial holding company:<br><br>1. The financial holding company holds such capital instruments in entities over which it has significant influence.<br>2. Subsidiaries of the financial holding company hold such capital instruments.<br><br>Except for the provisions of the preceding paragraph, if the common stock, preferred shares, and subordinated bonds issued by the financial holding company diminish the substantive benefit of the financial holding company using them as eligible capital, they shall be presumed to be non-eligible capital when calculating the eligible capital of the financial holding company.	Article number changed; content not revised.
Article 6	Financial holding companies shall report the capital adequacy ratio to the competent authority in accordance with the calculation methods and forms issued by the competent authority, and according to the following provisions. However, if the competent authority has other provisions, those provisions shall prevail:<br><br>1. Within three months after the end of each business year, report the group capital adequacy ratio reviewed by an accountant, along with relevant materials.<br>2. Within two months after the end of each half business year, report the group capital adequacy ratio reviewed by an accountant, along with relevant materials.<br>3. Within two months after the end of each business year and each half business year, report information related to the group capital adequacy ratio in accordance with the regulations on reporting data by financial holding companies to the competent authority via the internet.<br><br>The competent authority may, when necessary, order financial holding companies to fill out and report the group capital adequacy ratio at any time, along with relevant materials.	1. Article number changed.<br>2. Considering that the new generation solvency regime (Taiwan Insurance Solvency, TIS) implemented by the insurance industry starting from Year 115 (2026) is relatively complex, and it takes longer for insurance subsidiaries of financial holding companies to calculate capital adequacy ratios and for accountants to perform audits, which will affect the reporting of the group capital adequacy ratio of their parent companies, a proviso is added to the preamble of Paragraph 1. It stipulates that if the competent authority has other provisions regarding the reporting schedule, those provisions shall prevail. An explanatory order will be issued, allowing financial holding companies with insurance subsidiaries to extend the reporting schedule of Paragraph 1 to preserve flexibility in extending the reporting deadline during the initial implementation of the new system.
Article 7	Subsidiaries of financial holding companies shall comply with the relevant regulations on capital adequacy of each industry. The group capital adequacy ratio calculated and reported by financial holding companies in accordance with these Measures shall not be less than 100%.<br><br>If the group capital adequacy ratio of a financial holding company does not reach the standard of the preceding paragraph, in addition to penalties under Article 60 of this Act, profits shall not be distributed in cash or other property. The competent authority may, depending on the severity of the circumstances, take the following actions:<br><br>1. Order the financial holding company or its person in charge to submit a capital reconstruction or other financial business improvement plan within a specified time limit.<br>2. Restrict the addition of or order the reduction of statutory capital requirements, total risk-weighted assets, equivalent amount of operational risk, and risk capital.<br>3. Restrict payments of remuneration, bonuses, compensation, car allowances, and other payments to directors and supervisors.<br>4. Restrict investments under Articles 36 and 37 of this Act.<br>5. Restrict the establishment of or order the限期 closure of branches or departments of subsidiaries.<br>6. Order the disposal of shares held in invested enterprises within a specified period.<br>7. Remove directors and supervisors, and notify the company registration authority to note this in the registration matters. If necessary, order the election of new directors and supervisors within a specified time limit.<br>8. Replace managers.	Article number changed; content not revised.
Article 8	If the insurance subsidiaries of financial holding companies are approved by the competent authority to apply the "Notes on Selective Transitional Measures for Eligible Capital and Risk Capital of Insurance Companies" (hereinafter referred to as Selective Transitional Measures), during the application period, the financial holding company may calculate the group capital adequacy ratio in accordance with the following provisions:<br><br>1. Calculate the group capital adequacy ratio based on the eligible capital and statutory capital requirements of the insurance subsidiaries adjusted for the application of Selective Transitional Measures.<br>2. The Total Group Eligible Capital shall not deduct the capital surplus of insurance subsidiaries specified in Item 4 of Paragraph 1 of Article 4. However, starting from Year 115 (2026), the amount exempted from deduction shall be reduced proportionally based on the remaining transitional years, and the calculation provisions of that item shall be restored.<br>3. If an insurance subsidiary terminates the application of Selective Transitional Measures early, the financial holding company shall stop applying the provisions of the preceding two items from the date the subsidiary terminates the application.<br><br>(Note: The original Article 7, which dealt with a transitional period for banks' Tier 1 capital conditions affecting financial holding companies, is deleted as the adjustment period has completed.)	1. Article number changed.<br>2. The original article was to avoid the impact of the amendment to the "Capital Adequacy and Capital Tier Management Measures for Banks" on November 26, Year 101 (2012) on the calculation of group capital adequacy ratios. It stipulated a five-year transition period starting from Year 102 (2013). Since the adjustment period is complete, this transitional provision is deleted.<br>3. To facilitate the insurance industry's alignment with the new generation solvency regime in Year 115 (2026) and to maintain financial market stability, the competent authority issued the "Notes on Selective Transitional Measures for Eligible Capital and Risk Capital of Insurance Companies." To allow the calculation of group capital adequacy ratios for financial holding companies to align with the selective transitional measures of insurance subsidiaries, Item 1 is added, clarifying that financial holding companies may calculate the group capital adequacy ratio based on the adjusted eligible capital and statutory capital requirements of insurance subsidiaries.<br>4. To support financial holding companies in meeting the capital strengthening needs of insurance subsidiaries during the initial alignment phase and to moderately alleviate the impact of capital limit regulations, Item 2 is added. However, considering regulatory consistency and stability, it is clarified that starting from Year 115 (2026), a mechanism of "proportional reduction based on remaining transitional years" will
be adopted to guide financial holding companies to gradually adjust their capital structure.<br>5. Considering that the speed of financial adjustment varies among individual financial holding companies and their insurance subsidiaries, some institutions may strengthen their capital structure and achieve alignment goals early. Item 3 is added, clarifying that if an insurance subsidiary is approved by the competent authority to terminate the selective transitional measures early, the calculation of the group capital adequacy ratio of the financial holding company shall synchronously return to the provisions of Articles 3 and 4 of these Measures.
Article 9	These Measures take effect on January 1, Year 115 (2026).	1. Article number changed.<br>2. The main purpose of this amendment is to align with the amendment of the "Capital Adequacy Management Measures for Insurance Companies" on December 24, Year 114 (2025), which takes effect on January 1, Year 115 (2026). Therefore, it is clarified that the revised articles of these Measures take effect on January 1, Year 115 (2026).

Appendices

Appendix 1: Group Capital Adequacy Ratio Calculation Table (I) of Financial Holding Companies (Deleted) (Revised)

[Revision Explanation]

This table is deleted.
Relevant appendices to these Measures will be issued separately by explanatory order.

Appendix 1: Group Capital Adequacy Ratio Calculation Table (I) of Financial Holding Companies (Revised Before)

Group Capital Adequacy Ratio Calculation Table (I) of Financial Holding Companies
Date: Year Month Day
Report Number: A08-1 Unit: New Taiwan Dollars (in thousands) Reporting Unit:
Supervisor: Reporter: Contact Phone:

Item	Company	(1) Shareholding Ratio of Financial Holding Company	Group Eligible Capital	Group Statutory Capital Requirement
			(2) Eligible Capital of Each Company	(4) Statutory Capital Requirement of Each Company
			(3) Amount<br>(3)=(1)×(2)	(5) Amount<br>(5)=(1)×(4)
Financial Holding Company	-	-	-	-
Subsidiaries	-	-	-	-
(6) Total Group Eligible Capital:			$ ●(6)=Σ(3)
(7) Total Group Statutory Capital Requirement:				$ ●(7)=Σ(5)
Deduction Items:			Amount
(8) Book value of investment in equity of subsidiaries and other eligible capital by the financial holding company
(9) Adjustment add-back: Eligible capital of subsidiaries to be reduced, amount already reduced by subsidiaries 1
(10) For subsidiaries whose eligible capital is calculated in the manner of trust companies, futures companies, venture capital enterprises/financing lease companies, the total amount of capital surplus of such subsidiaries 2
(11) For all subsidiaries whose eligible capital is calculated in the manner of the banking industry/bill finance companies, one-half of the amount of capital surplus from subordinated bonds after supplementing the capital deficit of other banking industry or bill finance companies 3
(12) For all subsidiaries whose own capital is calculated in the manner of the insurance industry, one-half of the amount of capital surplus from capital nature bonds after supplementing the capital deficit of other insurance companies 3
(13) Subtotal:
(14) Net Group Eligible Capital:			$ ●(14)=(6)-(13)
(15) Group Statutory Capital Requirement:				$ ●(15)=(7)-[(8)-(9)]
(16) Group Capital Adequacy Ratio:			% ●(16)=(14)／(15)

Notes:

Refers to the eligible capital items (e.g., 5-year subordinated bonds and preferred shares of bank subsidiaries) invested by the parent company in subsidiaries, adjusted by the investment ratio to the amount of eligible capital already reduced by the subsidiary, to avoid excessive deduction in item (8).
Refers to value E in Table 2.
(11)=Max【1/2（A＋B）, 0】; A, B are values from Table 2, and A value is negative.
(12)= Max【1/2（C＋D）, 0】; C, D are values from Table 2, and C value is negative.

Appendix 2: Consolidated Table of Capital Adequacy Ratios of Financial Holding Companies and Their Subsidiaries (II) (Deleted) (Revised)

[Revision Explanation]

This table is deleted.
Relevant appendices to these Measures will be issued separately by explanatory order.

Appendix 2: Consolidated Table of Capital Adequacy Ratios of Financial Holding Companies and Their Subsidiaries (II) (Revised Before)

Consolidated Table of Capital Adequacy Ratios of Financial Holding Companies and Their Subsidiaries (II)
Report Number: A08-2 Date: Year Month Day Unit: New Taiwan Dollars (in thousands)

Item	Statutory Minimum Capital Adequacy Ratio or Equivalent Calculation Ratio 1 (1)	Numerator (2)	Denominator (3)	Capital Adequacy Ratio (2)/(3)	Eligible Capital of Each Company (4)=(2)	Statutory Capital Requirement of Each Company (5)=(1)*(3)	Capital Surplus (6)=(4)-(5) [When (4)-(5)>0]	Capital Deficit (7)=(4)-(5) [When (4)-(5)≦0]
Financial Holding Company	100%
Calculated in the manner of the banking industry/bill finance companies 3
Subordinated bonds included in eligible capital of banking industry or bill finance companies (excluding Tier I 4) (8)
Capital surplus from subordinated bonds of banking industry or bill finance companies (excluding Tier I) (9)=Min[(6),(8)]
Bank Subsidiary	7% 5	65	1000	6.5%	65	70	-5
	8.5%	90	1000	9%	90	85	10=5-(65-70)
	10.5%	130	1000	13%	130	105	20=25-(90-85)
Subtotal 6							25=(-5)+10+20	30
Bill Finance Subsidiary	8%
Subtotal A							B
Calculated in the manner of securities firms 6
Subsidiary	150%
Subsidiary	150%
Calculated in the manner of insurance companies 6
Capital nature bonds included in own capital of insurance companies (excluding Tier I 7) (8)
Capital surplus from capital nature bonds of insurance companies (excluding Tier I) (9)=Min[(6),(8)]
Insurance Company	200%
Insurance Company	200%
Subtotal C							D
Calculated in the manner of trust companies, futures companies, venture capital enterprises/financing lease companies 7
Subsidiary	50%
Subsidiary	50%
Financing Lease Subsidiary	10%
Subtotal E
Other 8
Subsidiary
Subsidiary
Total

Reporting Unit: Supervisor: Reporter: Phone:

Notes:

Refers to the minimum requirement for capital adequacy ratio according to the relevant regulations of each industry. If there are no relevant regulations on capital adequacy ratio for that industry, refer to the equivalent calculation ratio specified in Article 3 of these Measures. This equivalent calculation ratio is for calculating the statutory capital requirement of subsidiaries of that industry. The minimum capital adequacy ratio of subsidiaries of each industry shall comply with the relevant regulations on capital adequacy of that industry. 2. For the eligible capital and statutory capital requirement of the financial holding company, please refer to the amounts in Appendix 3. 3. For those calculated by reference to the manner of the banking industry, bill finance companies, securities firms, or insurance companies, please attach the tables calculated and reported according to the regulations of each industry. If approved by the competent authority, please note the approval document number. 4. Tier I refers to subordinated bonds meeting the conditions of Other Tier 1 Capital (non-common equity) under Article 8 of the "Capital Adequacy and Capital Tier Management Measures for Banks." 5. The statutory minimum capital adequacy ratio of the banking industry refers to the three minimum capital adequacy ratios stipulated in Article 5 of the "Capital Adequacy and Capital Tier Management Measures for Banks." When calculating the statutory capital requirement of bank subsidiaries from 2013 to 2018, the minimum ratios for each year stipulated in Appendix 1 of the aforementioned Measures shall be used. 6. When calculating capital surplus or deficit for the banking industry, the three minimum capital adequacy ratios shall be calculated separately. The ratio with a surplus is filled in (6), and the ratio with a deficit is filled in (7). After calculating the surplus or deficit for each of the three ratios, they are offset against each other to calculate the net surplus (filled in Subtotal (6)) or net deficit (filled in Subtotal (7)) (calculation example detailed in the filled amounts in the report).
For those calculated in the manner of trust companies, futures companies, and venture capital enterprises, eligible capital is calculated based on book net value, and statutory capital requirement = [Total Own Assets - Receivable Taxes (including Receivable Tax Refunds) - Prepaid Taxes] * 50%. For those calculated in the manner of financing lease companies, eligible capital is calculated based on book net value, and statutory capital requirement = [Total Own Assets - Receivable Taxes (including Receivable Tax Refunds) - Prepaid Taxes] * 10%.

Appendix 3: Calculation Table of Eligible Capital and Statutory Capital Requirement of Financial Holding Companies (III) (Deleted) (Revised)

[Revision Explanation]

This table is deleted.
Relevant appendices to these Measures will be issued separately by explanatory order.

Appendix 3: Calculation Table of Eligible Capital and Statutory Capital Requirement of Financial Holding Companies (III) (Revised Before)

Calculation Table of Eligible Capital and Statutory Capital Requirement of Financial Holding Companies (III)
Date: Year Month Day
Report Number: A08-3 Unit: New Taiwan Dollars (in thousands)

Item	Amount
Eligible Capital
1. Common Stock
2. Prepaid Capital
3. Reserves 1
(1) Statutory Surplus Reserve
(2) Capital Reserve
(3) ○○ Reserve
4. Accumulated Profits and Losses
5. Other Equity
6. Preferred Shares 2
Meeting the conditions of Other Tier 1 Capital (non-common equity) under the "Capital Adequacy and Capital Tier Management Measures for Banks" 3
Other Preferred Shares
7. Subordinated Bonds 2
Meeting the conditions of Other Tier 1 Capital (non-common equity) under the "Capital Adequacy and Capital Tier Management Measures for Banks" 3
Other Subordinated Bonds
8. Less: Goodwill and Other Intangible Assets 4
9. Less: Deferred Assets
10. Less: Treasury Shares
Total Eligible Capital (= 1+2+3+4+5+6+7-8-9-10)
Statutory Capital Requirement
11. Total Assets
12. Less: Cash
13. Less: Receivable Taxes (including Receivable Tax Refunds) and Prepaid Taxes
14. Less: Book Value of Short-term Fund Utilization
15. Less: Goodwill and Other Intangible Assets 4
16. Less: Deferred Assets
Total Statutory Capital Requirement (= 11-12-13-14-15-16)

Reporting Unit: Supervisor: Reporter: Contact Phone:

Notes:

For Item 3 Reserves, please list the detailed items (1), (2), (3). If the table is insufficient, please add items yourself.
Relevant regulations for preferred shares or subordinated bonds that can be included in eligible capital:
  (1) The issuance term must be 7 years or more, with a 20% reduction each year in the last 5 years. The reduction ratio is (5 – Remaining Years) × 20%.
  (2) The amount of preferred shares and subordinated bonds included in eligible capital after reduction shall not exceed 1/3 of the eligible capital of the financial holding company.
  (3) When calculating the 1/3 limit, it does not include those meeting the conditions of Other Tier 1 Capital (non-common equity) under Article 8 of the "Capital Adequacy and Capital Tier Management Measures for Banks," but must be within the statutory quota limit.
Those meeting the conditions of Other Tier 1 Capital (non-common equity) under Article 8 of the "Capital Adequacy and Capital Tier Management Measures for Banks" must be within the statutory quota limit. The calculation method for the statutory quota limit is:
(1) The calculation basis is the balance after deducting the eligible capital of non-bank and non-insurance subsidiaries and the total amount of preferred shares and subordinated bonds issued by the financial holding company from the eligible capital of the financial holding company. (2) The statutory quota limit is the amount obtained by dividing the calculation basis in the preceding item by 85% and then multiplying by 15%.
Goodwill and other intangible assets (including right-of-use assets where "intangible assets" are the subject of the lease) shall be offset against related deferred tax liabilities, and the net amount shall be deducted from the eligible capital and statutory capital requirement of the financial holding company.

Attachment: Calculation Examples (Deleted) (Revised)

[Revision Explanation]

This attachment is deleted.
This amendment deletes the original Article 7, so this attachment is deleted accordingly.

Attachment: Calculation Examples (Revised Before)

The group capital items of A Financial Holding Company at the end of Year 101 (2012) are as follows: (Unit: New Taiwan Dollars in thousands)

Item	Amount
Financial Holding Company Capital
Subordinated bonds issued before the end of Year 101 meeting the conditions of Bank Tier 1 Capital (Bond A) (Note)	40
Preferred shares and subordinated bonds not meeting the conditions of Bank Tier 1 Capital (Bond B)	30
Total of other capital	115
Eligible capital of non-bank and non-insurance subsidiaries	30

Note: These bonds no longer meet the standards for Other Tier 1 Capital (non-common equity) under Article 8 of the "Capital Adequacy and Capital Tier Management Measures for Banks" (hereinafter referred to as the Bank Capital Management Measures) as amended on November 26, Year 101 (2012).

The amount of Bond A and Bond B of A Financial Holding Company that can be included in the eligible capital of the group from the end of Year 101 to Year 106:

Date	End of Year 101	102/1/1	103/1/1
Bond A	15+25	8+31.74	0+32.9
Bond B	30	29.76	24.6
Total	70	69.5 (Note)	57.5

Note: The portion of A Financial Holding Company's preferred shares and subordinated bonds exceeding the one-third limit is [(32+30) - (115＋8)×1/3 ÷ 2/3] = 62－61.5＝0.5. The excess portion shall be deducted proportionally from Bond A and Bond B.

Calculation explanation for the preferred shares and subordinated bonds issued by A Financial Holding Company that can be included in the eligible capital of the group:

Item	End of Year 101	102/1/1 (Note 3)
Capital of A Financial Holding Company	185<br>(=40＋30＋115)	185<br>(=32＋38＋115) (Note 4)
Calculation Basis for Statutory Quota Limit (Note 1)	85<br>【=185-30-(40+30)】	85<br>【=185-30-（40+30）】
Statutory Quota Limit (Note 2)	15（=85 ÷ 85% × 15%）	15（=85 ÷ 85% × 15%）
Excess Amount	25（=40-15）	17（=32-15）
Maximum Amount of Preferred Shares and Subordinated Bonds Included in 1/3 of A Financial Holding Company's Eligible Capital	65<br>【= (115＋15)×1/3 ÷ 2/3】	65<br>【= (115＋15)×1/3 ÷ 2/3】
Total Amount of Preferred Shares and Subordinated Bonds Included in A Financial Holding Company's Eligible Capital	30＋25＝55<br>【55 < 65】	30＋8＋17=55<br>【55<65】
Total Amount of Preferred Shares and Subordinated Bonds (including amounts within the statutory quota limit) Included in A Financial Holding Company's Eligible Capital	70<br>（＝15＋25＋30）	70<br>（＝15＋17＋8＋30）

Note 1: Calculation Basis for Statutory Quota Limit = Financial Holding Company Eligible Capital - Eligible Capital of Non-Bank and Non-Insurance Subsidiaries - Total Amount of Preferred Shares and Subordinated Bonds Issued by the Financial Holding Company. Note 2: Statutory Quota Limit = Calculation Basis divided by 85%, then multiplied by 15%. That is, preferred shares and subordinated bonds of the financial holding company meeting the conditions of Bank Tier 1 Capital are not included in the maximum amount of preferred shares and subordinated bonds referred to in Item 5 of Paragraph 4 of Article 2 of these Measures. Note 3: Assume other eligible capital amounts remain unchanged. Note 4: The subordinated bonds originally meeting the conditions of Bank Tier 1 Capital issued by A Bank before the end of Year 101 no longer meet the standards for Other Tier 1 Capital (non-common equity) under Article 8 of the amended Bank Capital Management Measures on November 26, Year 101. Therefore, starting from Year 102, 20% shall be increased annually and included in the calculation of the one-third limit 【38 =(40×20%)+30】.