Regulations Governing the Administration of Negotiable Instrument Clearing Business by the Central Bank of China

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Title：

Regulations Governing the Administration of Negotiable Instrument Clearing Business by the Central Bank of China

Inactive Regulations

Announced Date： December 29, 1980

Amended Date： July 31, 2002

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Article 1

These Regulations are prescribed pursuant to Article 32 of the Central Bank of the Republic of China (Taiwan) Act.

Article 2

The administration and supervision of the negotiable instruments clearing business by the Central Bank of the Republic of China (Taiwan) ( hereinafter referred to as the "Bank") shall be conducted in accordance with the provisions of these regulations; matters not provided for herein shall be conducted in accordance with the provisions of other relevant laws and regulations

Article 3

"Negotiable instruments clearing business," as used in these regulations, refers to the conduct of exchange and clearing of negotiable instruments and other relevant business between financial enterprises.

Institutions that engage in the clearing of negotiable instruments shall be called clearinghouses

The term "Clearinghouses" as referred to in these Regulations shall include those clearinghouses already established prior to the prescription and promulgation of these regulations.

Article 4

Clearinghouses in each local area shall each individually set up Executive Committees under the direction and supervision of the Bank for deliberation on the following:

1.The negotiable instruments clearing business;

Applications by financial enterprises to participate in clearing and applications by financial enterprises ( hereinafter referred to as "clearing entity" ) to withdraw from clearing;

3.Negotiable instrument clearing bonds and processing fees;

4.Clearing times for negotiable instruments and dishonored negotiable instruments;

5.Handling of regulatory violations in the clearing of negotiable instruments;

6.Preliminary and final accounting matters;

7.Matters relating to the merger of clearinghouses and other organizational changes; and

8.Disposal of assets.

Article 5

The Executive Committee shall be composed of the following members:

1.Banks and credit cooperatives participating in clearing operations, regardless of whether they have branch offices, may recommend one representative to the Executive Committee.

2.From among farmers' or fishermen's associations that have been approved to conduct checking deposit business, the Taiwan Cooperative Bank shall each year select three associations from a given district on a rotating basis to each appoint one representative to the Executive Committee.

Article 6

The Executive Committee shall convene one or two meetings monthly, which shall be chaired by the committee chairman. The chairman shall designate another committee member to serve as acting chairman in the event of absence. The chairman may convene a special session of the committee as needed or at the request of two ormore committee members.

Article 7

Resolutions of the Executive Committee shall require a quorum of more than one-half of members and be passed by vote of a simple majority of those members present. When voting is deadlocked, the chairman shall cast the deciding vote.

Article 8

Minutes of the Executive Committee meetings shall be recorded and reported to the Bank in timely fashion for approval or record before being sent to each clearinghouse for recordation.

Article 9

Clearinghouses shall have one executive director, appointed by the Bank. Where the executive director is appointed by a correspondent bank, the appointment shall be reported to the Bank for approval and record.Where new employees are engaged due to operational necessity, such engagements shall be made within the limits of the authorized workforce.

Appointments to director, deputy director and specialist posts shall be reported to the Bank for record.Where a branch office of a correspondent bank makes such appointments, they shall be reported to the headquarters of the correspondent bank for record.

Article 10

Operating expenses of clearinghouses shall be borne jointly by each clearing entity. In addition to revenue support approved by the Bank, half of the amount of any shortfalls shall be equally borne by all the local clearing entities. The remaining half [of any shortfall] shall be distributed among clearinghouses in proportion to the total number of paid-in negotiable instruments [transactions]. The clearinghouse shall settle distribution of expense payments once each fiscal year and notify each clearing entity of the amounts to be paid. If a transfer of funds is required as a result of operating expense payments, such funds may be borrowed from the Bank or its correspondent bank.

Article 11

The fiscal year for clearinghouses shall begin on 1 January and end on 31 December.

Article 12

A clearinghouse already established prior to the prescription and promulgation of these regulations shall, within the time period specified by the Bank, amend its registration to conform to the definition of a single foundation, and upon that basis shall reorganize as a single clearinghouse.

Article 13

In applying under the provisions of the preceding Article for incorporation of a foundation,the entire group of persons who have stated a willingness to serve as director must apply to the Bank for approval of incorporation, submitting three copies of each of the following documents:

1.Application for approval of incorporation as a foundation;

2.Articles of incorporation (original document);

3.Inventory of donated properties, and documentation there of;

4.Statements by contributors that they agree to transfer ownership of donated properties to the foundation once the registration of the foundation has bee approved;

5.Minutes of contributor meetings;

6.A list of directors and supervisors, and photocopies of their national identity certificates;

7.Statements of agreement from persons who have agreed to serve as director or supervisor;

8.A specimen impression of the foundation’s seal, and either specimen seal impressions or specimen signatures of the directors;

9.Minutes of the board of directors’ founding meeting;

10.A document explaining the foundation’s operations plan; and

11.Other documents designated by the Bank.