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

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[Related Regulations]

Title：

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

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

Amended Date： December 30, 2021

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[Related Regulations]

(Applicable Regulations)

2. Authorized banks operating foreign exchange businesses through electronic or communications equipment shall observe the Directions in addition to complying with the Regulations Governing Foreign Exchange Businesses of banking enterprises (hereinafter referred to as Governing Regulations), 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.

(Terms and Definitions)

3. The declaration of foreign exchange settlement against NTD through the Internet specified in the Directions refers to declarations made to the Central Bank of the Republic of China (Taiwan) (hereinafter referred to as the Bank) through electronic document in accordance with Paragraph 1, Article 11 of the Regulations for Declaration.

(Scope of Businesses without Making an Application)

4. An authorized bank may engage in foreign exchange businesses within the scope provided below through electronic or communications equipment without making an application:

(1)Foreign exchange businesses already approved by the Bank or reported to the Bank for record and meet the following conditions:

A.The business does not involve the declaration of foreign exchange settlement against NTD through the Internet.

B.When the customer is not an ROC citizen and does not hold a Taiwan Area Resident Certificate, Alien Resident Certificate or identification card issued by ROC's 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", or when the customer holds an ROC passport but has not been issued an ROC Identification Card and does not have household registration record, or when the customer is an offshore non-ROC legal entity, the businesses shall be limited to those not involving foreign exchange settlement against NTD.

C.Foreign exchange derivatives businesses shall be limited to those that do not involve the NTD exchange rate and those of the same kind of foreign exchange derivatives that are not traded for the first time.

(2)An authorized bank which has been approved by the Bank or reported to the Bank for record to engage in foreign exchange businesses through electronic or communications equipment within the scope of Point 4 of the Directions may provide customers with optional selections of the nature of remittance within the scope of Point 6 of the Directions.

(3)Non-electronic transfer and transaction instructions 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).

Order watch or the click-and-deal of spot exchange rate function provided by an authorized bank through electronic or communications equipment shall be limited to foreign exchange businesses not involving either foreign exchange derivatives or the NTD exchange rate.

The click-and-deal function of spot exchange rate specified in the preceding paragraph refers to foreign exchange spot transactions carried out through electronic or communications equipment with the operating procedures which set the foreign exchange rate before filling out relative information of foreign exchange receipts and disbursements or transactions.

(Scope of Businesses Requiring Reporting for Record)

5. When an authorized bank engages in foreign exchange businesses through electronic or communications equipment within the scope provided below, the authorized bank shall report to the Bank for record two weeks before commencing businesses:

(1)Foreign exchange businesses already approved by the Bank or reported to the Bank for record that involve the declaration of foreign exchange settlement against NTD through the Internet for the first time in accordance with Paragraph 1, Article 4 or Article 5 of the Regulations for Declaration. However, foreign exchange derivatives businesses shall be restricted to those that do not involve the NTD exchange rate and those of the same kind of foreign exchange derivatives that are not traded for the first time.

(2)An authorized bank which has been approved by the Bank or reported to the Bank for record to engage in foreign exchange receipts and disbursements or transactions involving the declaration of foreign exchange settlement against NTD through the Internet in accordance with Paragraph 1, Article 4 of the Regulations for Declaration expands its business to cover foreign exchange receipts and disbursements or transactions involving the declaration of foreign exchange settlement against NTD through the Internet in accordance with Article 5 of the Regulations for Declaration.

The service hours for an authorized bank to engage in foreign exchange businesses specified in the preceding paragraph are 9:00AM to 3:30PM on banking days.

(Control of Breaking up Large Settlements and Verification of Documents)

6. An authorized bank engaging in foreign exchange businesses through electronic or communications equipment shall add up the settlement amounts against NTD carried out over the counter and through electronic and communications equipment (excluding the settlement amounts of foreign currency cash deposits/withdrawals, and NTD/foreign currency cash exchange via automatic teller machines) by the same customer on the same contract day (i.e. transaction day), and when the total settlement amount is equal to or greater than an equivalent of NTD 500,000, the authorized bank shall abide by the following provisions:

(1)Transactions involving the declaration of foreign exchange settlement against NTD through the Internet:

A.Before 3:30PM 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, an authorized bank shall, after verifying the customer's electronic signature on the Declaration Statement, immediately enquire and add the transaction's settlement amount towards the customer's annual aggregate settlement amount with a remark of having accumulated the settlement amount on the Declaration Statement.

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

(2)Transactions not involving the declaration of foreign exchange settlement against NTD through the Internet:

A.An authorized bank shall accept the customer's instructions and obtain the Declaration Statement signed by the customer on the contract day (i.e. transaction day); if the original document of the Declaration Statement is not obtained on the contract date, 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 NTD 500,000, an authorized bank shall enquire and add the combined amount towards the customer's annual aggregate settlement amount on the contract day (i.e. transaction day), and keep the relevant record to facilitate the post-transaction examination.

(3)When the accumulated settlement amount of transactions of the same nature involving foreign exchange settlement against NTD carried out over the counter or through electronic and communications equipment by the same customer on the same contract day reaches a specific amount, an authorized bank, when confirming the trading price with the customer, shall immediately request and verify the relevant supporting documents.

(4)For foreign exchange receipts and disbursements or transactions that fall under Subparagraph 3 to 7, Article 5 of the Regulations for Declaration, an authorized bank shall immediately request and verify the relevant supporting documents at the time of agreeing the exchange rate with the customer.

(Nature of Remittance and Verification Mechanism)

7. The nature of remittance chosen by a customer through electronic or communications equipment of an authorized bank shall not exceed the content of the Authorized Banks' Code of Remittance Classification for Electronic or Communications Equipment. The system of an authorized bank shall have the following functions and verification mechanism:

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

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

(3)The standards for logic check on the customer's identity and various certificate numbers shall be established in accordance with the Guidelines for Computer Verification of Transaction Information prescribed by the Bank.

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

(Exchange Rate Determination)

8. The exchange rates offered by an authorized bank for foreign exchange businesses through electronic or 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 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.

9. (Deleted)

(Compliance Verification before the Commencement of Business)

10. Before an authorized bank engages in foreign exchange businesses through electronic or communications equipment, its compliance, audit and information departments shall make sure the operation of businesses complies with the regulations set out in Point 1, Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business established by the Financial Supervisory Commission (hereinafter referred to as the FSC), and self-regulation for Banks Conducting Financial Derivatives and 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, Counter-Terrorism Financing Act and relevant regulations of internal control and audit set out by the FSC.

(Internal Audit before Commencing Foreign Exchange Businesses)

11. An authorized bank shall include foreign exchange businesses through electronic or communications equipment as part of its internal audit and carry out such audit.

(Monthly Report on Electronic Banking Businesses in Operation)

12. An authorized bank shall fill out the monthly report on electronic banking businesses in operation in accordance with the format prescribed by the Bank.