Order of the Financial Supervisory Commission (FSC)

Issue date: 18 February 2014
Issue no.: Financial-Supervisory-Securities-Firms-1030003244

1. This Order is issued pursuant to Article 13, paragraph 1, subparagraphs 1 and 2 of the Offshore Banking Act Enforcement Rules and Article 7, paragraph 1 of the Regulations Governing Offshore Securities Branches.
2. When a securities firm, pursuant to Article 13, paragraph 1, subparagraph 1 of the Offshore Banking Act Enforcement Rules, applies to establish an offshore securities branch in the Republic of China (Taiwan) to conduct the types of business specified in the subparagraphs of Article 22-4, paragraph 1 of the Offshore Banking Act, its net worth stated in the CPA audited and attested financial report for the most recent period shall be not less than NTD10 billion. If the offshore securities branch will conduct only the types of business specified in Offshore Banking Act Article 22-4, paragraph 1, subparagraphs 1 to 4 and the business under subparagraph 7 of, in connection with securities business, on behalf of customers, conducting trading across foreign currencies and conducting foreign currency derivatives business other than exchange rate derivatives, then the securities firm's net worth stated in the CPA audited and attested financial report for the most recent period shall be not less than NTD4 billion.
3. In Article 13, paragraph 1, subparagraph 2 of the Offshore Banking Act Enforcement Rules, the term "the securities firm's financial condition meets the standards set by the FSC" means the following:
(1) The securities firm's CPA audited and attested financial report for the most recent period shows no accumulated deficit.
(2) The total amount of the securities firm's liabilities to others shall not exceed four times the amount of its net worth; the total amount of its current liabilities shall not exceed the total amount of its current assets.
4. In Article 13, paragraph 1, subparagraph 2 of the Offshore Banking Act Enforcement Rules, the term "the securities firm's regulatory capital adequacy ratio meets the standard set by the FSC" means that its capital adequacy ratio is not lower than 150 percent.
5. During the period in which the securities firm engages in offshore securities business, its net worth, financial ratios, and regulatory capital adequacy ratio shall continue to be maintained at the amounts or the ratios specified in Points 2 to 4.
6. The format of the application form and the list of business items to be approved  under Article 14, paragraph 1, subparagraph 1 of the Offshore Banking Act Enforcement Rules are as attached.
7. This Order is effective from this day forward.

Originals: To be posted on the public notice boards of the FSC and the Securities and Futures Bureau, FSC
Copies: Central Bank of the Republic of China (Taiwan); Legal Affairs Committee, Executive Yuan; Taiwan Stock Exchange Corporation; GreTai Securities Market; Taiwan Depository & Clearing Corporation; Taiwan Securities Association; Securities Investment Trust and Consulting Association of the ROC; Bankers Association of the ROC; Trust Association of the ROC; Lex Data Information Inc.; FSC (Financial Examination Bureau; Banking Bureau; Department of Legal Affairs; Department of Information Management)