{"id":130066,"date":"2026-03-10T14:08:40","date_gmt":"2026-03-10T14:08:40","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=130066"},"modified":"2026-03-10T14:08:40","modified_gmt":"2026-03-10T14:08:40","slug":"taiwan-banking-finance","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/taiwan-banking-finance\/","title":{"rendered":"Taiwan: Banking &amp; Finance"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-130066","comparative_guide","type-comparative_guide","status-publish","hentry","guides-banking-finance","jurisdictions-taiwan"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Lee and Li, Attorneys-at-Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/03\/Firm-Logo_Lee-and-Li.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Lee and Li, Attorneys-at-Law<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/03\/Firm-Logo_Lee-and-Li.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Banking &amp; Finance laws and regulations applicable in Taiwan<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the national authorities for banking regulation, supervision and resolution in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Taiwan, the Financial Supervisory Commission (FSC) is the government body regulating all financial products and services. There are four bureaux established under the FSC, which are the Banking Bureau (BB), the Securities and Futures Bureau (SFB), the Insurance Bureau (IB) and the Financial Examination Bureau (EB) (collectively the Bureaux). Among the four Bureaux, the BB is the national authority for regulation and supervision and banking related activities, and the EB is in charge of financial inspection and audits of financial institutions regulated by the FSC, including banks.<\/p>\n<p>The Central Bank of the Republic of China (Taiwan), Taiwan\u2019s central bank, regulates monetary and credit policies. It also manages official foreign exchange reserves, issues currency, adjusts reserve ratios and inspects banks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which type of activities trigger the requirement of a banking license?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Taiwan, conducting banking-related activities generally requires a license from the FSC. Such banking-related activities include, without limitation: deposit taking, remittance, credit card issuance, etc.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your regulatory regime know different licenses for different banking services?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally speaking, a bank needs to specify clearly the specific banking businesses\/services it wishes to carry out when filing the license application with the FSC, while services such as deposit taking, lending and remittance are considered core functions that every local commercial bank will generally have.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a banking license automatically permit certain other activities, e.g., broker dealer activities, payment services, issuance of e-money?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. If a bank wishes to conduct broker-dealer activities, it needs to apply to the SFB for the license for securities firm, while businesses falling within the scope of &#8220;electronic payment&#8221; will require a license of &#8220;electronic payment&#8221; from the BB.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a \"sandbox\" or \"license light\" for specific activities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To promote fintech services and companies, the Taiwan government promulgated a law for the fintech regulatory sandbox, the FinTech Development and Innovation and Experiment Act (Sandbox Act), which took effect on 30 April 2018. The Sandbox Act was promulgated to enable fintech businesses to test their financial technologies in a controlled regulatory environment.<\/p>\n<p>Pursuant to the Sandbox Act, an applicant needs to obtain an approval from the FSC before entering the sandbox and beginning the experiment. During the experiment period, the experimental activities may enjoy exemptions from certain laws and regulations (such as FSC licensing requirements and certain legal liability exemptions). After completion of the approved experiments, the FSC will analyze the results of the experiments. If the result is positive, the FSC may review the existing financial laws and regula-tions and explore the possibility of amending such existing rules that pose obstacles to the experimented financial innovation if put in the real world. Note, however, that, depending on the review result of the FSC, the sandbox entity or individual might still be required to apply for a relevant license or approval from the FSC in order to formally conduct the activities as previously tested in the sandbox.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory restrictions or authorisation requirements apply to banks engaging in the issuance, custody or provision of services relating to cryptoassets or other digital assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In a FSC press release issued in 2014, the FSC ordered that local banks neither accept bitcoin as a payment method nor provide any other services related to bitcoin (e.g., the exchange of bitcoins for fiat currency). Such ruling is considered as the general prohibition on financial institutions providing any crypto-related services. As such, FSC licensed entities (e.g., banks) may not engage in the issuance, custody or provision of services relating to cryptoassets or other digital assets under current Taiwan laws and regulations.<\/p>\n<p>But please note that Taiwan\u2019s FSC has now launched a \u201cpilot program\u201d for virtual asset custody services, allowing banks to apply. According to reports, several banks have already been approved by the FSC to participate in the pilot. Therefore, from a policy perspective, if the FSC believes that banks in Taiwan are capable of providing virtual asset custody, it is possible that in the future the FSC may promote law amendments to allow banks to engage in virtual asset custody services (or other virtual asset-related businesses).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can cryptoassets or digital assets constitute \"deposits\" or equivalent protected funds under applicable law, and are they capable of benefiting from depositor protection, client asset safeguarding or segregation regimes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No based on the current laws and regulations as well as the relevant court precedents.<\/p>\n<p>But please note that there have been more and more discussions on whether taking &#8220;stablecoins&#8221; should be considered taking &#8220;deposits&#8221; without a banking license, but such interpretation would be subject to the potential challenge under the principle of &#8220;no penalty without a law.&#8221;<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If cryptoassets are held by the licensed entity, what are the related capital requirements (risk weights, etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As advised under Question 6 above, in a FSC press release issued in 2014, the FSC ordered that local banks neither accept bitcoin as a payment method nor provide any other services related to bitcoin (e.g., the exchange of bitcoins for fiat currency). Such ruling is considered as the general prohibition on finan-cial institutions providing any crypto-related services. As such, FSC licensed entities (e.g., banks) may not hold crypto assets under current Taiwan laws and regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the general application process for bank licenses and what is the average timing?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The major steps for setting up a bank in Taiwan are as follows: (i) application to the BB for establishment permit; (ii) company set-up (incorporation); and (iii) application to the BB for banking license. The prior approval from the Investment Commission may also be required if one or more shareholders are foreigners.<\/p>\n<p>The timing required would be six months to one year, or even longer, depending on the individual circum-stances.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent may foreign or overseas banks conduct cross-border banking activities into the jurisdiction without establishing a local presence or obtaining local authorisation, and what limitations or conditions apply?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally speaking, foreign or overseas banks (which are not licensed by the FSC in Taiwan) need to apply for the relevant licenses to the FSC in order to carry out its banking business in Taiwan. Without a banking license, a foreign or overseas bank (without establishing a local presence and obtaining local authorisation) may only conduct its business offshore.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What legal forms are permitted to operate banks in the jurisdiction (e.g. public company, private company, subsidiary or branch), and what are the key regulatory considerations associated with each structure?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to the Taiwan&#8217;s Banking Act, a bank shall be a company and the legal form shall be a company limited by shares unless it has been established with special approval obtained prior to the amendment and enforcement of the Taiwan&#8217;s Banking Act or otherwise provided by law. For such bank (i.e., a bank formed in the form of a company limited by shares), generally it is required by Taiwanese law to register itself as a \u201cpublic company\u201d. However, the \u201cpublic company\u201d here does not mean it publicly issues shares or has its shares listed and traded on any stock exchanges\u2014 it simply means that it is subject to more disclosure obligations (compared to non-public company), therefore being more transparent to the general public.<\/p>\n<p>It is also permitted for a foreign bank to establish an FSC-licensed local Taiwan branch office to conduct banking business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the jurisdiction impose any structural separation or ring-fencing requirements on banks or banking groups, and what practical challenges do these create for group structures and operations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Taiwan law, obtaining a banking license does not mean it may carry out, for example, securities related services. As advised in Question 4 above, if a bank wishes to conduct broker-dealer activities, it needs to apply to the SFB for the license for securities firm.<\/p>\n<p>In Taiwan, there is also a regime under the Financial Holding Company Act, where a financial holding company may have subsidiaries in banking, securities, and insurance, each of which is an independent legal entity.<\/p>\n<p>Also, the concept of &#8220;separation of banking and commerce&#8221; is generally reflected in the policies of the FSC regarding the regulation of financial institutions\u2014particularly banks\u2014in Taiwan. These policies are designed to maintain the independence of banks from their controlling shareholders, especially when those shareholders are non-financial entities. The aim is to prevent conflicts of interest or other situations that could negatively affect the bank or its other shareholders. For instance, such policies include re-quirements for obtaining prior approval from the FSC before acquiring certain relevant percentages of shares in a bank, as well as certain restrictions on simultaneously holding positions in both a bank and a non-financial enterprise.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What governance, risk management and internal control requirements apply to banks, including expectations regarding board composition, management oversight, committee structures and organisational culture?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Taiwan, the FSC has established a rigorous and internationally aligned legal framework for governance, risk management, and internal controls in the banking industry. The main legal sources include Taiwan&#8217;s Banking Act and the Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks.<\/p>\n<p>In terms of the composition of the board of directors, the FSC emphasizes the professionalism, independence, and diversity of the board, viewing these as the core of governance. In terms of management oversight and committee structure, banks must establish clear hierarchical authorization and strengthen supervision through functional committees. The functional committees currently include the Audit Committee, the Risk Management Committee, and the Compensation Committee. In terms of organizational culture, emphasis is placed on the board and management leading by example to shape good values and behaviors. Banks are also required to establish whistleblowing systems and focus on the protection of financial consumers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What operational resilience requirements apply to banks, including expectations relating to critical or important business services, impact tolerances, and the management of operational disruptions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Taiwan, the FSC is shifting its supervision of banks&#8217; operational resilience from traditional &#8220;disaster recovery&#8221; to a more comprehensive &#8220;service continuity&#8221; approach. This is mainly reflected in the &#8220;Information Security Protection Standards for Financial Institutions&#8221; and the FSC-promoted &#8220;Financial Cyber-security Action Plan 2.0.&#8221;<\/p>\n<p>Regarding critical business services, banks must identify which services, if disrupted, would have a significant impact on customers, financial market stability, or the bank&#8217;s financial condition. They must also clarify the five key elements supporting these critical services: personnel, information systems, data, facilities (such as data centers), and third-party service providers (such as cloud services). Regarding impact tolerance, the FSC requires banks to set clear interruption tolerance limits for critical operations, typically centered on &#8220;time&#8221; (e.g., core payment system outages must not exceed 2 hours), but also in-cluding &#8220;data loss amount&#8221; (RPO) and &#8220;service recovery time&#8221; (RTO). Regarding operational disruption management, when preventive measures fail, the bank&#8217;s response and recovery capabilities are supervi-sory focal points, such as contingency plans, offsite backups and redundancy, and notification mecha-nisms.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory expectations apply to banks\u2019 outsourcing arrangements, including the use of cloud service providers and reliance on critical third-party service providers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Taiwan, the regulatory expectations for banks regarding outsourcing arrangements \u2013 including the use of cloud service providers and reliance on critical third-party service providers \u2013 are primarily governed by the FSC. The FSC has issued specific guidelines and regulations that govern outsourcing arrangements by banks, including the Regulations Governing Internal Operating Systems and Procedures for the Out-sourcing of Financial Institution Operation (the Outsourcing Regulations). Pursuant to the Outsourcing Regulations, a bank shall conduct outsourcing operations in accordance with its internal outsourcing rules approved by its board of directors under the premises that outsourcing will not affect the sound operation of the financial institution, the interests of customers, or regulatory compliance. And, the bank&#8217;s out-sourced operations are limited to those specified in the Outsourcing Regulations (or other operations approved by the FSC).<\/p>\n<p>The Outsourcing Regulations provide more detailed and specific requirements and considerations for various types of outsourced operations. Specifically, when outsourcing operations involve the use of cloud services, there are more concrete requirements. For example, banks should establish policies and principles for using cloud services, implement appropriate risk control measures, and pay attention to adequately diversifying the cloud service providers to whom operations are outsourced. Banks bear the ultimate supervisory responsibility over cloud service providers and should possess the professional ex-pertise and resources to oversee the execution of entrusted operations by these providers. Additionally, banks may, as needed, engage professional third parties to assist in supervising these operations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do environmental, social and governance (ESG) and climate-related regulatory requirements affect banks, including governance, risk management, disclosures and prudential supervision?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Taiwan banks are progressively integrating ESG and climate considerations into their governance frame-works, risk management practices, disclosure obligations, and prudential supervision, driven by both domestic regulators and international standards. Under the regulatory framework of the FSC, ESG trans-formation has been upgraded from &#8220;corporate social responsibility&#8221; to a core statutory obligation for banks.<\/p>\n<p>ESG requirements integrate sustainable development into the highest decision-making level, rather than being limited to the public relations department \u2013 the board of directors must be responsible for approving ESG strategies and climate-related risk appetite, and most banks have established the sustainability committees.<\/p>\n<p>Climate risk is regarded as a key variable for financial stability, and banks must incorporate it into their existing risk assessment systems (credit, market, operational risks).<\/p>\n<p>To prevent &#8220;greenwashing,&#8221; disclosure requirements have shifted from voluntary to highly standardized. In 2024, the FSC released the &#8220;Reference Guidelines for Financial Institutions to Prevent Greenwashing,&#8221; requiring financial institutions to adhere to five key principles when making external sustainability claims: truthfulness and accuracy, completeness and balance, clarity and simplicity, fair comparison, and regulatory compliance.<\/p>\n<p>The regulator (FSC) guides bank behavior through differentiated management and incentive mechanisms \u2014 the FSC conducts &#8220;Sustainable Finance Evaluations&#8221; for financial institutions, and banks with excellent evaluation results may receive priority approval or simplified procedures when applying for new business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory restrictions or requirements apply to banks' remuneration policies, including bonus caps, deferral, malus and clawback, and how are these enforced in practice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The FSC requires banks to establish a &#8220;sound remuneration policy&#8221; aimed at linking remuneration with risk management and customer interests, preventing the pursuit of performance at the expense of risk oversight. Core principles include board approval of the remuneration system, balanced consideration of financial and non-financial indicators (such as KYC, deficiencies, customer disputes), avoiding immediate full bonus payouts, and implementing fair customer treatment principles to ensure product suitability.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your jurisdiction implemented the Basel III framework with respect to regulatory capital? Are there any major deviations, e.g., with respect to certain categories of banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The FSC has issued the Regulations Governing the Capital Adequacy and Capital Category of Banks (&#8220;Capital Adequacy and Capital Category Regulations&#8221;) in 2012 (last amended on December 23, 2019) and implemented the Basel III framework. It includes the amendment of the composition of Regulatory Capital and the requirement of Minimum Capital Adequacy Ratio.<\/p>\n<p>According to the Regulations Governing the Capital Adequacy and Capital Category of Banks, the bank\u2019s calculation of its stand-alone and consolidated capital adequacy ratio shall meet the following standards:<\/p>\n<ol>\n<li>The common equity tier 1 ratio shall not be less than 7%<\/li>\n<li>The Tier 1 capital ratio shall not be less than 8.5%<\/li>\n<li>The total capital adequacy ratio shall not be less than 10.5%.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any requirements with respect to the leverage ratio?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to the Article 4 of the Capital Adequacy and Capital Category Regulations, the bank shall cal-culate its stand-alone leverage ratio. The minimum requirement of leverage ratio is no less than 3% and it shall be carried out in accordance with the calculation methods.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What liquidity requirements apply? Has your jurisdiction implemented the Basel III liquidity requirements, including regarding LCR and NSFR?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>By reference to the Basel III, the FSC issued the Standards Implementing the Liquidity Coverage Ratio of Banks (&#8220;Standards&#8221;) in 2014. Pursuant to the Standards, the term &#8220;liquidity coverage ratio&#8221; is calculated by dividing total amount of high-quality liquid assets by total net cash outflows over the next 30 calendar days and the liquidity coverage ratio calculated in accordance with the Standards shall not be less than 100%. The calculation of NSFR is implemented in 2018.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Which different sources of funding exist in your jurisdiction for banks from the national bank or central bank?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to the Central Bank of the Republic of China (Taiwan) Act,<\/p>\n<p>In practice, the CBC may provide funding to banks through the following methods:<\/p>\n<ul>\n<li><strong>Discounting:<\/strong> Banks can submit eligible securities (such as commercial paper) they hold to the CBC, which will provide funding to the banks using these securities as collateral.<\/li>\n<li><strong>Open Market Operations:<\/strong> The CBC can adjust the supply of money in the market by buying and selling government bonds. When the CBC purchases bonds, it injects funds into the banking system, increasing the available funds for banks; conversely, when the CBC sells bonds, it withdraws funds from the banking system.<\/li>\n<li><strong>Lending (such as overnight loans):<\/strong> The CBC usually provides short-term loans to commercial banks to meet their liquidity needs.<\/li>\n<li><strong>Reserve Requirement Policy:<\/strong> The CBC requires commercial banks to maintain a certain percent-age of reserves in their accounts. By adjusting this percentage, the CBC can influence the lending capacity and money supply of banks.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do banks have to publish their financial statements? Is there interim reporting and, if so, in which intervals?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The banks shall prepare and submit its annual report and business report, financial statements and other items designated by the FSC each year. The bank shall also prepare and submit its quarter report and financial statements on a quarterly basis. Such annual reports and financial statements are made avail-able to the public on a website designated by the FSC as well as their respective official websites.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does consolidated supervision of a bank exist in your jurisdiction? If so, what are the consequences?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The approach of consolidated supervision is not officially adopted under Taiwan law. However, where a bank is a subsidiary of a financial holding company, the FSC as a regulator supervising financial holding company would look into the whole group of the financial holding company. Also, in the event of an M&amp;A transaction involving acquisition of a bank, it is our observation that the FSC may tend to adopt similar approach to assess the acquirer during the approval process.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What reporting and\/or approval requirements apply to the acquisition of shareholdings in, or control of, banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to the Taiwan&#8217;s Banking Act,<\/p>\n<p>1. The same person or same concerned party who singly, jointly or collectively acquires more than five percent (5%) of a Bank\u2019s outstanding voting shares shall report such fact to the FSC within ten (10) days from the day of acquisition; the preceding provision applies to each cumulative increase or de-crease in the shares of the same person or same concerned party by more than one percent (1%) thereafter.<\/p>\n<p>2. The same person or same concerned party who intends to singly, jointly or collectively acquire more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of a Bank\u2019s outstanding voting shares shall apply for prior approval of the Competent Authority. The FSC shall also prescribe the regulations of qualifications, required documentation, shares to be acquired, purpose of acquisition, sources of funding, and other matters to be complied with.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your regulatory regime impose conditions for eligible owners of banks (e.g., with respect to major participations)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The FSC has a discretionary power to approve or disapprove a M&amp;A transaction involving acquisition of a bank, However, no specific conditions for eligible owners of banks have been promulgated by the FSC. On a related note, the FSC issued the Regulations Governing Qualification Requirements and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Banks. Such Regulations provide the qualifications and requirements for the responsible persons (including directors and executive officers) of the bank. The specific conditions of responsible person include necessary expertise, good moral character, and without any conflict of interests or any violation of the respective internal controls of the institutions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there specific restrictions on foreign shareholdings in banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Except for investors from China, there are no specific restrictions on foreign shareholders in banks. However, acquisition of Taiwanese bank may require the approval of the Department of Investment Review of the Ministry of Economic Affairs, the FSC and other competent authorities (such as the anti-trust authority, as the case may be).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a special regime for domestic and\/or globally systemically important banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Systemically important banks in Taiwan are required to meet 4% additional capital buffer requirements with their Common Equity Tier 1 capital. The 4% additional capital buffer includes a 2% additional regulatory capital buffer and a 2% bank\u2019s internal capital buffer.<\/p>\n<p>Systemically important banks in Taiwan are required every year to submit their contingency action plans for dealing with situations where the capital is not sufficient. They are also required to conduct and report two-year stress test results to the FSC.<\/p>\n<p>After estimating the size, interconnectedness, substitutability and complexity of each bank, the FSC has announced that CTBC Bank Co, Ltd, Cathay United Bank, Taipei Fubon Bank, Mega International Commercial Bank, Taiwan Cooperative Bank and First Commercial Bank are categorised as domestic systemically important banks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the sanctions the regulator(s) can order in the case of a violation of banking regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The FSC can impose sanctions on banks for misconduct. The actions include: (i) revocation of resolutions of statutory meetings; (ii) partial suspension of the bank\u2019s business; (iii) imposing restrictions on investments; (iv) ordering the bank to dispose of or transfer certain assets or prohibiting the bank from disposing of or transferring certain assets; (v) ordering the bank to close a branch or department within a prescribed period; (vi) ordering the bank to discharge managers or staff members or suspend them from performance of their duties for a specified period of time; (vii) discharging directors or supervisors; (viii) ordering the bank to set aside a certain amount of monetary reserve; and (ix) other necessary measures.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How active are banking regulators in enforcement against banks and senior individuals, and what recent trends can be observed in supervisory or enforcement action?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>According to statistics released by the FSC, the BB imposed a total of 17 penalties in 2025, with aggregate fines reaching NT$70.34 million. While the number of penalty cases decreased by one compared to the previous year, the total amount of fines increased by NT$27.595 million. Officials from the BB have attributed this rise in total fines primarily to a greater number of cases involving substantial penalties in 2025.<\/p>\n<p>A review of penalty records indicates that the main violations involved multiple instances of employee misappropriation of funds, as well as improper financial transactions between employees and customers, both of which resulted in significant fines. The legal basis for these penalties is primarily found in Taiwan&#8217;s Banking Act and the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries. Under these regulations, banks are required to establish and maintain robust internal control systems. Should a bank fail to properly establish or effectively implement such systems, the FSC is empowered to impose administrative fines ranging from NT$2 million to NT$50 million.<\/p>\n<p>Looking ahead, the FSC has announced the key points of financial examinations for 2026, which include: fraud prevention, anti-money laundering, financial consumer protection, and cyber resilience. When defi-ciencies are identified during financial examinations, the EB will refer these matters to the BB. The BB will then conduct a comprehensive assessment\u2014taking into account the severity of the deficiencies, the progress of corrective actions, and the specific measures implemented\u2014before determining whether to impose penalties or other disciplinary actions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are client\u2019s assets and cash deposits protected?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>All Taiwanese banks that are duly approved to accept deposits should participate in the deposit insurance programme of the Central Deposit Insurance Corporation of Taiwan (CDIC). If a bank is ordered to sus-pend its operations by the FSC, the CDIC will compensate each depositor up to NT$3 million. The types of deposits covered generally include deposits in current accounts (checking deposits), demand deposits, time deposits, deposits required by law to be deposited in certain financial institutions and any other de-posits as approved by the FSC.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What recovery and\/or resolution planning obligations apply to banks, and how are recovery and\/or resolution plans reviewed and assessed by supervisory authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Banks in Taiwan are subject to specific recovery and resolution planning obligations, particularly in circumstances where their financial health is compromised. According to Taiwan&#8217;s Banking Act, if a bank&#8217;s total capital adequacy ratio falls below 10.5%, the FSC shall order the bank or its responsible persons to propose a capital restructuring or other finance and business improvement plan within a prescribed timeframe. The FSC retains the authority to review and examine the implementation status of such plans at any time to ensure that corrective measures are being effectively executed.<\/p>\n<p>When necessary, the FSC may consult with relevant authorities or institutions and may also engage professional institutions to provide assistance in the review process, with the associated costs borne by the bank. In cases where the FSC has assigned personnel to supervise a bank, the supervised financial insti-tution is required to draft practical policies and obtain professional evaluation reports for any significant actions, such as capital increases or decreases, assignment of all or part of its business, assets, or liabili-ties, mergers with other banks or financial institutions, or other material matters as designated by the FSC. These documents must be submitted for FSC approval, with the supervisor being notified concur-rently. supervisor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction know a bail-in tool in bank resolution and which liabilities are covered? Does it apply in situations of a mere liquidity crisis (breach of LCR etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The law does not empower the FSC to bail creditors. If the FSC places a bank in receivership, the duties and powers of the bank&#8217;s shareholders&#8217; meeting, board of directors, directors, supervisors and audit committee shall be suspended. The receiver appointed by the FSC has the power to manage the bank&#8217;s business and dispose of the bank&#8217;s properties.<\/p>\n<p>The FSC has the power to resolve failing banks in an orderly manner. In local practice, seven banks were placed under receivership from 2006 to 2008. The FSC divided their assets into non-performing assets and other assets\/liabilities (including obligations regarding deposits), and sold them separately. The non-performing assets were sold to asset management companies while the other assets\/liabilities were sold\/transferred to other banks, with a certain amount of compensation agreed to be paid by the FSC. The depositors, employees and non-deposit creditors suffered little hurt.<\/p>\n<p>The FSC implemented the liquidity coverage ratio (LCR) framework in 2015. The LCR is calculated by dividing a bank&#8217;s high-quality liquid assets by its total net cash flows over a 30-day period. Since 1 January 2019, banks incorporated under the laws of Taiwan must maintain an LCR of at least 100%. Banks whose LCR does not meet the minimum requirement should report to the FSC and the Central Bank of the Republic of China (Taiwan), including reasons and remedial actions to be taken.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for banks to hold gone concern capital (\"TLAC\")? Does the regime differentiate between different types of banks?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Tier 2 capital is considered to be gone concern capital. There is no statutory requirement for banks to hold gone concern capital provided that the total capital adequacy ratio (i.e., aggregate amount of net Tier 1 capital and net Tier 2 capital divided by total risk-weighted assets) shall be above 10.5%. The statutory regime does not differentiate between different types of banks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a special liability or responsibility regime for managers of a bank (e.g. a \"senior managers regime\")?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To develop a governance framework based on responsibility and to improve the accountability mechanisms for senior management, the FSC has urged the Bankers Association of the Republic of China to promulgate the &#8220;Self-Regulatory Rules of the Implementation of Responsibility Map in the Banking Industry.&#8221;<\/p>\n<p>Starting from 1 January 2025, banks in Taiwan should establish a responsibility mapping system, which should include a corporate governance structure chart, a table of authority and responsibility and an in-ternal reporting chart. Senior management should issue a statement of responsibility to ensure that they clearly understand their responsibilities in the event of a new appointment or a change in authority and responsibility. If there is any material failure in the operation or management of a bank, the accountability committee under the board of directors should initiate accountability procedures, and the responsibility map should be utilized to ascertain the invididuals accountable for the relevant failure.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What regulatory, supervisory or market developments are likely to have the most significant impact on the banking sector in the jurisdiction over the next 12 to 18 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To promote Taiwan as a leading asset management center in Asia, the FSC has collaborated with the Kaohsiung City Government to establish the &#8220;Kaohsiung Asset Management Zone&#8221; (Zone), which serves as the nation\u2019s first trial area benchmarked against international private banking practices. On 1 April 2025, the FSC promulgated the &#8220;Operation Directions for Financial Institutions Applying for Business Trials in Local Asset Management Zones&#8221;. The FSC encourages banks to establish business locations within the Zone and, under the premise of appropriate risk control, to collectively conduct trial programs for specific financial businesses and related cross-border financial services at designated locations. This initiative aims to foster a financial cluster, stimulate collective innovation, enhance overall financial competitiveness, and attract both domestic and foreign capital into local characteristic industries, thereby promoting Taiwan\u2019s economic development.<\/p>\n<p>As of the end of December 2025, 18 banks have established a presence in the Zone, attracting 2,269 high-net-worth clients and managing assets totaling approximately NT$273.2 billion. The Zone encom-passes four major categories of business: wealth management in collaboration with securities investment trust and consulting enterprises, credit and financing services, family office services, and cross-border financial services.<\/p>\n<p>The trail period for financial institutions conducting business within the Zone is generally set at six months to one year. Should the trial operations of banks within the Zone demonstrate positive contributions to market development, the FSC will, as appropriate, amend relevant legal provisions or self-regulatory rules to further implement the regulatory framework for these pilot businesses. The FSC aims to leverage the Zone\u2019s one-stop financial services, flexible capital utilization, and diversified financial offerings to at-tract more capital and investment opportunities to Taiwan.<\/p>\n<p>The establishment and ongoing development of the Zone represent a significant regulatory and market development that is expected to have a profound impact on the banking sector over the next 12 to 18 months. This initiative not only enhances Taiwan\u2019s competitiveness in the regional financial market but also serves as a catalyst for further innovation and growth in the financial industry.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5244<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/130066","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=130066"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}