Press Release
Amendment of Article 18 of the "Regulations Governing Foreign Bank Branches and Representative Offices"
2022-12-21
December 21, 2022
Amendment of Article 18 of the "Regulations Governing Foreign Bank Branches and Representative Offices"
The Financial Supervisory Commission (FSC) stated that regulations in Article 18 of the "Regulations Governing Foreign Bank Branches and Representative Offices" (hereinafter referred to as the Regulations) shall be amended in order to set a suitable increase of the credit extension and investment capacity of foreign banks' branches in Taiwan based on the source of fund of their head offices and other overseas branches. The period of public comments of the draft was completed and the amendment will soon be promulgated. The key points of the amendment are as follows:
1. With regard to the basis of calculation of total amount of deposits of a foreign bank branch subject to mutatis mutandis application of Article 72 (limitations on total balance of medium-term loans) and Article 74-1 (restrictions on investments in securities) of the Banking Act, the term "actual drawdowns under credit lines from its head office" includes short-term loans of one-year or less received from the head office and shall additionally include short-term loans of one-year or less received from other overseas branches of the head office. (Article 18, Paragraph 2 of the amended article)
2. To facilitate the implementation of the aforementioned amendment, the FSC added requirements in Paragraph 3 to require foreign banks' branches to establish management mechanisms for the maturity and allocation of related assets and liabilities and liquidity risk management mechanisms. (Article 18, Paragraph 3 of the amended article)
The FSC stated that the amendment of the Regulations is intended to address the practice of multinational banking. For multinational banks with regional head offices or fund management centers, the amendment provides flexibility and efficiency of funding for a foreign bank’s branch in Taiwan while meeting risk management requirements.
Contact unit: Foreign Banks Division, Banking Bureau
Telephone: (02) 8968-9783
If you have any questions, please send an email to:
https://fscmail.fsc.gov.tw
Amendment of Article 18 of the "Regulations Governing Foreign Bank Branches and Representative Offices"
The Financial Supervisory Commission (FSC) stated that regulations in Article 18 of the "Regulations Governing Foreign Bank Branches and Representative Offices" (hereinafter referred to as the Regulations) shall be amended in order to set a suitable increase of the credit extension and investment capacity of foreign banks' branches in Taiwan based on the source of fund of their head offices and other overseas branches. The period of public comments of the draft was completed and the amendment will soon be promulgated. The key points of the amendment are as follows:
1. With regard to the basis of calculation of total amount of deposits of a foreign bank branch subject to mutatis mutandis application of Article 72 (limitations on total balance of medium-term loans) and Article 74-1 (restrictions on investments in securities) of the Banking Act, the term "actual drawdowns under credit lines from its head office" includes short-term loans of one-year or less received from the head office and shall additionally include short-term loans of one-year or less received from other overseas branches of the head office. (Article 18, Paragraph 2 of the amended article)
2. To facilitate the implementation of the aforementioned amendment, the FSC added requirements in Paragraph 3 to require foreign banks' branches to establish management mechanisms for the maturity and allocation of related assets and liabilities and liquidity risk management mechanisms. (Article 18, Paragraph 3 of the amended article)
The FSC stated that the amendment of the Regulations is intended to address the practice of multinational banking. For multinational banks with regional head offices or fund management centers, the amendment provides flexibility and efficiency of funding for a foreign bank’s branch in Taiwan while meeting risk management requirements.
Contact unit: Foreign Banks Division, Banking Bureau
Telephone: (02) 8968-9783
If you have any questions, please send an email to:
https://fscmail.fsc.gov.tw
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- Update： 2022-12-28
