TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
ance companies, etc) have their own sets of out - sourcing regulations. Generally speaking, financial services compa - nies conducting outsourcing should supervise the service providers (ie, outsourced entities), and there are provisions that are required to be specified in the outsourcing agreement. In the case of banks, for example, a bank’s outsourc - ing agreement shall specify the following con - tents: • The scope of outsourcing and the responsi - bilities of service provider. • A provision requiring the service provider to comply with certain laws and regulations. • Consumer protection, including the confi - dentiality of customer data and adoption of security measures. • A requirement for the service provider to carry out consumer protection, risk manage - ment, and internal control and internal audit in accordance with its standard operating procedures established under the supervision of the bank. • Consumer dispute resolution mechanisms, including the timetable and procedure for handling disputes, and remedial measures. • Management of a service provider’s employ - ees, including employee recruitment, promo - tion, performance reviews and discipline. • Material events that lead to the termination of an outsourcing agreement with the service provider, including a provision on termination or revocation of the agreement if so instruct - ed by the competent authority. • An agreement by the service provider to allow the competent authority and the Central Bank to access relevant data or reports and conduct financial examinations with respect to the outsourced items, or to provide rel - evant data or reports within a prescribed time
period pursuant to an order of the competent authority or the Central Bank. • An agreement by the service provider not to use the name of the outsourcing bank in the course of handling the outsourced items, nor to use untruthful advertising or charge the customers any fees when marketing loan services. • A requirement for the service provider to inform the bank if the outsourced operation involves any material irregularities or deficien - cies. 2.9 Gatekeeper Liability In Taiwan, the term “gatekeeper” lacks an offi - cial definition, but within the area of capital mar - kets/IPOs, securities underwriters are commonly regarded as fulfilling the gatekeeper role. The regulation of securities underwriters falls under the Securities and Exchange Act, and there is currently no legislation specifically addressing securities underwriters in the context of fintech. It is important to highlight, as mentioned in 6.1 Permissible Trading Platforms and 6.7 Rules of Payment for Order Flow , that as to security tokens/security token offerings (STOs), the plat - form operator is required to obtain a securities dealer licence rather than a securities under - writer licence. According to the STO regulations, after receipt of the application for issuance of an STO, a platform operator (ie, securities dealer) will need to conduct a due diligence investiga - tion and confirm that the issuer meets certain conditions, which include, among others, the fol - lowing: (a) the issuer has established an internal control system and implements it effectively; (b) the accounting treatment complies with the Business Entity Accounting Act; (c) the fundrais - ing items and the business items operated by the issuer comply with the law; (d) the fundraising plan and its effects/benefits are necessary, rea -
846 CHAMBERS.COM
Powered by FlippingBook