TAIWAN Law and Practice Contributed by: James Huang, Eddie Hsiung and Maggie Huang, Lee and Li, Attorneys-at-Law
tions where the capital is not sufficient. They are also required to conduct two-year stress tests and report the results to the FSC. However, there is no special resolution regime for systemically important banks in Taiwan. Insolvency Preference Rules Applicable to Deposits If the failing bank is ordered by the FSC to cease its business operations, deposit debts shall pre - cede non-deposit debts. To enhance environmental, social and govern - ance (ESG) information disclosure, the annual report of a bank should specify how it supports sustainable development. If the bank is listed on the Taiwan Stock Exchange or the Taipei Exchange, the annual report should also disclose any deviation from compliance with the Sustain - able Development Best Practice Principles for TWSE/TPEx Listed Companies. Under those Principles, listed companies are encouraged to report their carbon footprint, waste management practices, gender diversity, etc, to improve the availability of domestic ESG data for investors. The FSC has also promulgated: 9. ESG 9.1 ESG Requirements • the Guideline on Financial Disclosure of Climate Risks for Local Banks, under which banks should disclose financial information on climate-related risks from 2023; and • the Guideline for Preventing Greenwashing by Financial Institutions (the Greenwashing Prevention Guidelines) in May 2024. The Greenwashing Prevention Guidelines stip - ulate five principles for financial institutions to
implement for prevention of greenwashing. In particular, the statement issued by the financial institutions on sustainability should be: • true and correct; • supported by evidence that is sufficient, rel - evant and publicly verifiable when it is made; and • reviewed and updated regularly.
10. DORA 10.1 DORA Requirements
In 2022, the FSC released the Financial Cyber - security Action Plan 2.0, providing guidance on ensuring uninterrupted operation of the financial system and focusing on: • strengthening information security supervi - sion by competent authorities; • strengthening information security govern - ance of financial institutions; and • improving the resilience of financial institu - tions’ information security operations. Strengthening Information Security Supervision by Competent Authorities According to the Implementation Rules of Inter - nal Audit and Internal Control System of Finan - cial Holding Companies and Banking Industries, banks should assign a manager, ranked vice- president or above, or an individual with equiva - lent powers to serve concurrently as the chief information security officer, who shall oversee the implementation and co-ordination of the information security policy as well as resource allocation. A bank whose total assets of the previous year exceed NTD1 trillion should set up a dedicated information security office, and should appoint
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