TAIWAN Law and Practice Contributed by: James Huang, Eddie Hsiung and Maggie Huang, Lee and Li, Attorneys-at-Law
1. Legal Framework 1.1 Key Laws and Regulations Principal Laws and Regulations The principal laws and regulations governing the Taiwan banking sector include: • the Banking Act; • the Financial Holding Company Act; • the Central Bank of the Republic of China (Taiwan) Act; • the Regulations Governing Foreign Exchange Business of Banking Enterprises and the foreign exchange control-related laws and regulations; • the Consumer Protection Act; • the Financial Consumer Protection Act; and • other related laws and regulations. Moreover, for banks concurrently conducting other business such as acting as a trust enter - prise or electronic payment institutions, the rel - evant laws and regulations governing such busi - ness also apply. The Banking Act and the Financial Holding Company Act The Banking Act is the primary law governing the Taiwan banking industry and provides rules for conducting banking business, including: • the setting-up and dissolution of banks; • the scope of banking business; • compliance requirements for banks’ business, finance, internal control and other matters; and • administration and supervision by the regula - tor, etc. For banks that are subsidiaries of financial hold - ing companies, another major law is the Finan - cial Holding Company Act, which governs the
establishment, business, finance, administration and supervision of financial holding companies. The Central Bank of the Republic of China (Taiwan) Act, the Regulations Governing Foreign Exchange Business of Banking Enterprises and the foreign exchange control-related laws and regulations This legislation governs foreign exchange-relat - ed activity, which is regulated by the Central Bank of the Republic of China (Taiwan) (CBC). Such laws and regulations also govern banks’ business operations involving foreign exchange. For example, the Regulations Governing Foreign Exchange Business of Banking Enterprises cov - er the scope of (among others): • foreign exchange business; • requirements for managing foreign exchange business; and • administration and supervision by the regula - tor. The Consumer Protection Act and the Financial Consumer Protection Act The Consumer Protection Act provides the gen - eral rules and requirements for the protection of the interests of all consumers, and the Financial Consumer Protection Act focuses on the pro - tection of consumers who deal with banks and other financial institutions. Among other matters, the Financial Consumer Protection Act provides requirements regarding: • the advertising of financial products and services; • contracts with consumers; and • the procedures for financial consumer dispute resolution, in order to reasonably and effec - tively handle financial consumer disputes.
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