Financial Crime World

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Banking Regulations and Laws in Taiwan

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Taiwan’s banking regulations and laws are designed to ensure the stability, security, and integrity of its financial system. Here are some key aspects of the country’s banking regulations:

Corporate Governance

Overview

The Banking Act and the Securities and Exchange Act govern corporate governance for banks in Taiwan.

Key Requirements

  • Listed banks must have at least 3 independent directors on their board.
  • A majority of directors must be non-executive directors.

Executive Compensation Disclosure

Overview

Banks are required to disclose aggregate remuneration information of managers rehired as consultants.

Key Disclosure Requirements

  • The name(s) indicated for each remuneration bracket or the name of each individual and corresponding remuneration amount must be disclosed in the annual report.

Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT)

Overview

The Investigation Bureau under the Ministry of Justice and the Financial Supervisory Commission (FSC) are responsible for AML/CFT regulations.

Key Requirements

  • Banks must conduct due diligence on new and existing customers, verify customer identity and beneficial ownership, and keep records of all relevant information.
  • Enhanced customer due diligence is required in higher-risk circumstances.
  • Suspicious transactions must be reported to the Investigation Bureau using a prescribed form.

Depositor Protection

Overview

The Deposit Insurance Act governs depositor protection in Taiwan.

Key Features

  • The Central Deposit Insurance Corporation (CDIC) manages the deposit insurance system.
  • Checking accounts, demand deposits, time deposits, and other approved deposits are covered by deposit insurance up to NTD3 million.

Bank Secrecy

Overview

Banks must keep customer information and transaction records confidential.

Exceptions

  • Exceptions may apply for government departments or fund arrangements between financial institutions.