Newsletter
"Terms of Relevant Transactions Shall Not Be More Favorable Than Offered to Similarly Situated Customers" under Article 45 of the Financial Holding Company Act
According to Article 45 of the Financial Holding Company Act, when a financial holding company or its subsidiary engages in transactions other than credit extension with the persons specified in such Article, the terms of such transactions shall not be more favorable than offered to similarly situated customers, and such transactions require the concurrence of at least three-quarters of all of such financial holding company's or subsidiary's directors present at a meeting of Board of Directors attended by at least two-thirds of the directors. In addition, according to a letter issued by the Financial Supervisory Commission (FSC), Ref. No. Jin-Guan-Yin-(Six)-Zi-0946000269 dated 8 July 2005, the management shall submit the documents evidencing "terms of relevant transactions not being more favorable than offered to similarly situated customers" for Board of Directors' reference. However, the FSC issued a letter, Ref. No. Jin-Guan-Yin-Fa-Zi-10510002860 dated 19 August 2016 providing that under the following circumstance, the management may evaluate the reasonableness of the transaction price by themselves without providing the documents evidencing "terms of relevant transactions not being more favorable than offered to similarly situated customers" for each transaction to theBoard of Directors:
1. Spot foreign exchange transactions among the financial holding company's bank subsidiary, insurance subsidiary and securities subsidiary if the terms of said transactions are in line with the market practice without deviating from the inter-bank spot foreign exchange market prices. The designated foreign exchange banks dealing in such transactions shall stipulate certain bargain criteria for conducting relevant transactions with their related parties and submit the same to the Board of Directors for approval.
2. Small-sum transactions in amounts under NT$10,000.
3. Transactions charging standardized and non-negotiable fees, such as public transport fares (e.g., High Speed Rail fares), telecommunications network fees, and public utility costs.