Regulations Governing the Banking Activity and the Establishment and the Investment by Financial Institution Between the Taiwan Area and the Mainland Area Article 12-1

For its business activities with any individuals, juristic persons, organizations, other institutions in Mainland Area or their branches in any country and area outside Mainland Area, a Taiwan bank shall have appropriate risk management mechanism and truly evaluate the risk of each transaction to ensure safety of its assets.For a Taiwan bank’s business activities in Mainland Area, its aggregate amount of credit, investment and interbank loan and deposit may not exceed 100 percent of the bank's net worth as of the end of the preceding fiscal year; The calculation methods shall be as prescribed by the Competent Authority after consultation with the Central Bank.Based on the economic or financial situation and actual needs, the above-mentioned ceiling may be adjusted by the Competent Authority after consultation with Central Bank.A Taiwan bank fails to comply with the provisions of Paragraph 2 hereof before the amendment of the Regulation on September 7, 2011 shall make adjustment within one (1) year from the implementation date of the said amendment.