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

Inactive Regulations

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

Amended Date： Fabruary 15, 2019（Effective from Fabruary 17, 2019）

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[Related Regulations]

(Applicable Regulations)

1.

1. 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)

2.

2. 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 10 of the Regulations for Declaration.

(Scope of Businesses without Making an Application)

3.

3. 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 that do not involve the declaration of foreign exchange settlement against NTD through the Internet. However, 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 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).

An authorized bank may engage in the abovementioned foreign exchange businesses with the following counterparties:

(1)Companies, limited partnerships, firms, associations, representative offices, business offices, and individuals defined in Article 3 of the Regulations for Declaration.

(2)Individuals under the age of 20 who have applied for the household registrations and received the national identification cards of the Republic of China or hold the household certificates or household certificate transcripts, or have received the Resident Certificates of Taiwan Area or Alien Resident Certificates valid for no less than one year.

(3)Non-resident natural persons holding the Resident Certificates of Taiwan Area or Alien Resident Certificates valid for less than one year.

(4)Non-resident natural persons holding the identification cards 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.

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

4.

4. 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)

5.

5. An authorized bank engaging in foreign exchange businesses through electronic or 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 automatic 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 verification of supporting documents in accordance with the Regulations for Declaration and other applicable regulations.

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

(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, when the combined settlement amount reaches an equivalent of NTD 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 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 count 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 combined settlement amount of the same customer in a single or multiple transactions of the same nature of remittance 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 foreign exchange receipts and disbursements or transactions that fall under Subparagraph 3 to 5, 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 Remittance and Verification Mechanism)

6.

6. 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)

7.

7. 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.

(Position Covering during Business Hours)

8.

8. An authorized bank that engages in foreign exchange businesses through electronic or communications equipment shall assign its own personnel for position covering within the bank's business hours.

(Compliance Verification before the Commencement of Business)

9.

9. 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)

10.

10. 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)

11.

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