Taiwan Banks Face Fines for Failure to Disclose Executive Pay

The Financial Supervisory Commission (FSC) has introduced a new regulation requiring Taiwanese banks to disclose the remuneration of their executives and senior managers. This move aims to promote transparency in the banking industry and prevent excessive risk-taking.

Disclosure Requirements

Under the new rule, banks must disclose the aggregate remuneration information for each:

Director
Supervisor
General Manager
Vice General Manager
Chairperson of the Board
General Manager rehired as consultants

The names and corresponding remuneration amounts must be included for each individual in their annual report.

Consequences of Non-Compliance

Failure to comply with the disclosure requirement will result in an administrative fine ranging from NT$500,000 to NT$10 million.

Strengthened AML/KYC Regulations

The FSC has also strengthened its Anti-Money Laundering (AML) and Know-Your-Customer (KYC) regulations. Banks are now required to:

Conduct due diligence on both new and existing customers
Verify customer identity
Understand the source of funds

Under a higher-risk circumstance, banks must conduct enhanced customer due diligence and regularly update information to ensure compliance with their risk profile.

Enhanced Depositor Protection Regime

The Central Deposit Insurance Corporation (CDIC) has been established to manage the deposit insurance system in Taiwan. The CDIC provides compensation up to NT$3 million for deposits in insured institutions that are unable to pay off their deposits.

Bank Secrecy Requirements Maintained

The Banking Act requires banks to keep customer information and transaction records confidential, ensuring the protection of sensitive financial data.

Conclusion

The FSC’s new regulations demonstrate its commitment to promoting transparency, stability, and security in the Taiwanese banking industry. The measures aim to prevent excessive risk-taking and ensure that banks operate with integrity and fairness.