Directions Governing Authorized Banks for Operating Foreign Exchange Businesses through Electronic and Communications Equipment

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Title：

Directions Governing Authorized Banks for Operating Foreign Exchange Businesses through Electronic and Communications Equipment

Inactive Regulations

Amended Date： Prescribed on January 4, 2018（Effective from January 6, 2018 ）

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(Applicable regulations)

1.

1. Authorized banks operating foreign exchange businesses through electronic and communications equipment shall observe these Directions in addition to complying with the Regulations Governing Foreign Exchange Businesses of Banking Enterprises, Directions Governing Banking Enterprises for Operating Foreign Exchange Businesses, Regulations Governing the Declaration of Foreign Exchange Receipts and Disbursements or Transactions (hereinafter referred to as Regulations for Declaration) and Directions for Banking Enterprises while Assisting Customers to Declare Foreign Exchange Receipts and Disbursements or Transactions.

(Scope of businesses requiring reporting for record)

2.

2. When an authorized bank engages for the first time in foreign exchange businesses involving the foreign exchange settlement against NTD with the value equal to or over an equivalent of NT$500,000 through electronic and communications equipment within the scope provided below, the authorized bank shall, after passing the test of connection with the Bank’s Foreign Exchange Data Processing System, report to the Bank for record two weeks before commencing the business:

(1) Businesses already approved by the Bank or reported to the Bank for record:

A. Foreign currency deposit business:

a. Transfer of funds between the customer’s NTD account and foreign currency account at the same authorized bank.

b. Same currency or cross-foreign currency transfer of funds between the customer’s own accounts at the same authorized bank or between the customer’s account and a third-party account at the same authorized bank.

c. Order watch transactions of cross-foreign currency transfer of funds.

B. Outward and inward remittance business (including purchase and sale of foreign currency cash and traveler’s checks).

C. Export-related foreign exchange business.

D. Import-related foreign exchange business.

E. Foreign currency loan business.

F. Foreign currency guarantee business.

(2) Counterparties: Companies, limited partnerships, firms, associations and individuals defined in Article 3 of the Regulations for Declaration.

(3) Service hours: 9:00AM to 3:30PM on banking days.

(4) Electronic and communications equipment: Online banking or mobile banking.

(5) Foreign exchange receipts and disbursements or transactions involving the foreign exchange settlement against NTD: Foreign exchange receipts and disbursements or transactions provided in Article 4, and Subparagraphs 1, 2 and 4, Article 5 of the Regulations for Declaration.

When an authorized bank, which has reported to the Bank for record or has been approved by the Bank before these Directions take effect to engage in the business mentioned in the preceding paragraph involving foreign exchange receipts and disbursements or transactions provided in Article 4 of the Regulations for Declaration, subsequently expands its business to cover foreign exchange receipts and disbursements or transactions provided in Subparagraph 1, 2 or 4, Article 5 of the Regulations for Declaration, the authorized bank shall report to the Bank for record two weeks before commencing the expanded business.

An authorized bank, which has reported to the Bank for record or has been approved by the Bank before these Directions take effect to engage in the business mentioned in Paragraph 1 hereof, may engage in the business within the scope provided in Subparagraphs 1 to 4, paragraph 1 hereof and the code of remittance classification set out in Direction 7 herein without making an application.

(Scope of businesses without making an application )

3.

3. An Authorized bank may engage in foreign exchange businesses within the scope provided below that does not involve the foreign exchange settlement against NTD or that involves the foreign exchange settlement against NTD with the value less than an equivalent of NT$500,000 through electronic and communications equipment without making an application:

(1) Businesses already approved by the Bank or reported to the Bank for record:

A. Businesses meeting the provisions of Subparagraph 1, paragraph 1 of the preceding Direction.

B. Foreign currency gold passbook or account business (including order watch transactions not involving the foreign exchange settlement against NTD).

C. NTD or foreign currency non-discretionary money trust business investing in foreign-currency denominated securities.

D. Other foreign-currency denominated trust businesses except the business mentioned in the preceding subparagraph that does not involve the foreign exchange settlement against NTD.

(2) Counterparties:

A. Companies, limited partnerships, firms, associations and individuals defined in Article 3 of the Regulation for Declaration.

B. Individuals under the age of 20 who have applied for the household registration and received the national identification card of the Republic of China or hold the household certificate or household certificate transcript, or have received the Resident Certificate of Taiwan Area or Alien Resident Certificate valid for no less than one year.

C. Non-resident natural persons holding the Resident Certificate of Taiwan Area or Alien Resident Certificate valid for less than one year.

D. Non-resident natural persons holding the identification card issued by the Ministry of Foreign Affairs in accordance with the Directions for Issuing Identification Cards to the Staff of Diplomatic Missions in the Republic of China (Taiwan) and Their Family Members.

(3) Service hours: 24 hours a day (including holidays).

(4) Electronic and communications equipment: Online banking, mobile banking and telephone system.

(5) Foreign exchange receipts and disbursements or transactions involving the foreign exchange settlement against NTD: Foreign exchange receipts and disbursements or transactions meeting the provisions of Subparagraph 5, paragraph 1 of the preceding Direction.

(Scope of businesses without making an application - sending transaction instructions)

4.

4. An authorized bank may accept the customer’s instruction for transactions not involving the direct transfer of funds or direct enquiry and count towards the annual aggregate settlement amount via fax, call-in, online banking or mobile banking without making an application within the scope provided below:

(1) Foreign exchange businesses involving the foreign exchange settlement against NTD with the value equal to or over an equivalent of NT$500,000: The transaction shall comply with the provisions of Subparagraphs 1 to 3 and Subparagraph 5, paragraph 1 of Direction 2.

(2) Foreign exchange businesses not involving the foreign exchange settlement against NTD or involving the foreign exchange settlement against NTD with the value less than an equivalent of NT$500,000: The transaction shall comply with the provisions of Subparagraphs 1 to 3 and Subparagraph 5 of the preceding Direction.

(Scope of businesses without making an application – non-electronic transfer of funds and non-transaction instruction)

5.

5. An authorized bank may handle the customer’s non-electronic transfer of funds and non-transaction instruction set out in the Standards for the Security Management Operation of Electronic Banking Business of Financial Institutions (hereinafter referred to as Standards for Security Management) by the Bankers Association of the Republic of China (hereinafter referred to as Bankers Association) through electronic and communications equipment without making an application.

(Control of breaking up the large settlement)

6.

6. An authorized bank engaging in foreign exchange businesses through electronic and communications equipment shall combine the settlement amounts against NTD carried out over the counter and through electronic and communications equipment (not including the settlement amounts of foreign currency cash withdrawals via foreign currency automated teller machines) by the same customer on the same contract day (i.e. transaction day) to prevent the customer from breaking up a large settlement amount into smaller ones to evade the declaration, enquiry and count towards the annual aggregate settlement amount, and the verification of supporting documents in accordance with the Regulations for Declaration and other applicable regulations.

An authorized bank engaging in foreign exchange businesses involving the foreign exchange settlement against NTD with the value equal to or over an equivalent of NT$500,000 through electronic and communications equipment shall abide by the following provisions in addition to the provisions of the preceding paragraph:

(1) Transactions via online banking or mobile banking:

A. Before the end of service hours on the contract day (i.e. transaction day), an authorized bank shall confirm a match for the customer’s electronic signature on the Declaration Statement of Foreign Exchange Receipts and Disbursements or Transactions (hereinafter referred to as Declaration Statement).

B. For transactions where the settlement amount shall be counted towards the customer’s annual aggregate settlement amount, when the combined settlement amount reaches an equivalent of NT$500,000, an authorized bank shall, after verifying the customer’s electronic signature on the Declaration Statement, immediately enquire and count the combined settlement amount towards the customer’s annual aggregate settlement amount, and keep the record with the Declaration Statement.

C. The bank’s online banking and mobile banking systems shall provide the function for the customer to print out the Declaration Statement.

(2) Sending transaction instructions via fax, call-in, online banking or mobile banking:

A. An authorized bank shall obtain the Declaration Statement signed by the customer on the contract day (i.e. transaction day); however if the Declaration Statement is received by fax, it shall request the customer to provide the original statement no later than the settlement date.

B. For transactions where the settlement amount shall be counted towards the customer’s annual aggregate settlement amount, when the combined settlement amount reaches an equivalent of NT$500,000, an authorized bank shall enquire and count the combined amount towards the customer’s annual aggregate settlement amount, and keep the relevant record to facilitate the post-transaction examination.

(3) When the combined settlement amount of the same customer in a single or multiple transactions of the same nature of remittances carried out over the counter or through electronic and communications equipment on the same contract day reaches the large settlement amount, an authorized bank shall immediately request and verify the relevant supporting documents.

(4) For transactions that fall under Subparagraph 4, Article 5 of the Regulations for Declaration, an authorized bank shall immediately request and verify the relevant supporting documents at the time of deciding the exchange rate with the customer.

(Nature of remittances and verification mechanism)

7.

7. The nature of remittances carried out via online banking and mobile banking of an authorized bank shall not exceed the content of the Code of Remittance Classification for Online Banking and Mobile Banking Transactions. The system of the authorized bank shall have the following functions and verification mechanism:

(1) When the nature of remittances falls under the category of “others”, the system of the authorized bank shall list the actual description or content of the remittances for its customer to select.

(2) The system of the authorized bank shall distinguish the nature of remittances applicable to different types of customers.

(3) The system of the authorized bank shall have the mechanism to verify the expiration date of the relevant certificates, such as the resident certificate and the identification card issued by the Ministry of Foreign Affairs.

The code of remittance classification mentioned in the preceding paragraph will be separately prescribed by the Bank.

(Exchange rate determination)

8.

8. The exchange rates offered by an authorized bank for foreign exchange businesses through electronic and communications equipment shall be decided according to the following rules:

(1) The authorized bank shall draw up the principle of exchange rate determination for currency conversions during standard business hours and non-standard business hours and provide reference exchange rates at the transaction interface.

(2) The exchange rate for a scheduled transaction shall be determined on the day the transaction is actually executed and shall not be determined at the time the transaction is scheduled.

(Compliance)

9.

9. Before an authorized bank engages in foreign exchange businesses through electronic and communications equipment, its compliance, audit and information departments shall make sure the operation of the businesses comply with the regulations set out in Direction 1 and the Standards for Security Management of Bankers Association, and step up the operation of customer due diligence, money laundering control, terrorist financing prevention and customer rights protection in accordance with the Money Laundering Control Act, Terrorism Financing Prevention Act and relevant regulations of internal control and audit set out by Financial Supervisory Commission.

The authorized bank shall include foreign exchange businesses through electronic and communications equipment into its internal audit and carry out audits.