Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business Article 11
A bank conducting financial derivatives business shall establish a risk management system for the management of procedures with respect to identification, measurement, monitoring and reporting of risks, and comply with the following provisions:1. A bank's financial derivatives business shall be subject to a review through appropriate procedures, and senior management and relevant business executives shall work together to formulate a risk management system. Risk tolerance and limits for each business conducted shall be regularly reviewed and submitted to the board of directors (council members) for review and approval.2. Personnel shall not concurrently engage in both trading and settlement of financial derivatives transactions. A bank shall establish a risk management unit independent from its trading division to carry out such tasks for risk identification, measurement, monitoring and control. The risk management unit shall report regularly position risks and valuations of gains and losses to senior management.3. A bank shall set the frequencies of position assessment on financial derivatives in light of the nature of each type of position. In the case of trading positions, assessments shall in principle be carried out immediately or based on daily market prices. For hedging transactions conducted for bank's own business needs, assessments shall be carried out at least once every month.4. A bank shall adopt rules for internal review of new financial derivatives products, and form a product review team consisting of managerial officers in charge of finance, accounting, compliance, risk control, products or business units to review new financial derivatives products according to the aforementioned rules before the products are launched. When the new product is a complex high-risk product, the product review team shall examine and submit it to the board of directors(council members)or the board of managing directors for approval. The bank's rules for internal product review shall cover at least the following items:(1)Review of the nature of product.(2)Review of operational strategies and business policies.(3)Review of risk management.(4)Review of internal controls.(5)Review of accounting methods.(6)Review of safeguards of customer rights and interests.(7)Review of regulatory compliance status and required legal documents.5. A bank shall adopt a remuneration and reward system as well as performance assessment principles for business personnel conducting the financial derivatives business. The system and principles shall avoid a direct link with the sales performance of specific financial products, and shall incorporate non-financial indicators that include items such as whether there is any violation of applicable laws and regulations, self-regulatory rules, or operating rules, deficiency discovered in an audit, customer dispute, and faithful implementation of know-your-customer (KYC) procedures; the system and principles shall be approved by the board of directors(council members).6. When formulating its pricing policy for financial derivatives, a bank shall take into consideration factors such as position valuation, risk cost, and operating cost of the financial derivatives, and shall establish internal operating procedures to carefully review the reasonableness of the prices at which the bank conducts financial derivative transactions with customers.7. A bank shall establish and maintain an effective assessment and control mechanism for financial derivatives to prudently review the reasonableness of the transaction quotation and mark-to-market value of products.The branch of a foreign bank in Taiwan may implement the risk management system in accordance with the rules of the head office, provided that it shall still comply with the provisions of the preceding paragraph.
中文原文 銀行辦理衍生性金融商品業務內部作業制度及程序管理辦法第11條
銀行辦理衍生性金融商品業務，應建立風險管理制度，對於風險之辨識、衡量、監控及報告等程序落實管理，並應遵循下列規定辦理：
一、銀行辦理衍生性金融商品，應經適當程序檢核，並由高階管理階層及相關業務主管共同參考訂定風險管理制度。
對風險容忍度及業務承作限額，應定期檢討提報董（理）事會審定。
二、辦理衍生性金融商品業務之交易及交割人員不得互相兼任，銀行應設立獨立於交易部門以外之風險管理單位，執行風險辨識、衡量及監控等作業，並定期向高階管理階層報告部位風險及評價損益。
三、關於衍生性金融商品部位之評價頻率，銀行應依照部位性質分別訂定；其為交易部位者，應以即時或每日市價評估為原則；其為銀行本身業務需要辦理之避險性交易者，至少每月評估一次。
四、銀行須訂定新種衍生性金融商品之內部審查作業規範，包括各相關部門之權責，並應由財務會計、法令遵循、風險控管、產品或業務單位等主管人員組成商品審查小組，於辦理新種衍生性金融商品前，商品審查小組應依上開規範審查之。
新種複雜性高風險商品，應經商品審查小組審定後提報董（理）事會或常務董（理）事會通過。
銀行內部商品審查作業規範之內容至少應包含下列各項：
（一）商品性質之審查。
（二）經營策略與業務方針之審查。
（三）風險管理之審查。
（四）內部控制之審查。
（五）會計方法之審查。
（六）客戶權益保障事項之審查。
（七）相關法規遵循及所須法律文件之審查。
五、銀行應訂定衍生性金融商品業務人員之酬金制度及考核原則，應避免直接與特定金融商品銷售業績連結，並應納入非財務指標，包括是否有違反相關法令、自律規範或作業規定、稽核缺失、客戶紛爭及確實執行認識客戶作業（KYC）等項目，且應經董（理）事會通過。
六、銀行應考量衍生性金融商品部位評價、風險成本及營運成本等因素，訂定衍生性金融商品定價政策，並應建立內部作業程序，審慎檢核與客戶承作衍生性金融商品價格之合理性。
七、銀行應建立及維持有效之衍生性金融商品評價及控管機制，審慎檢核商品交易報價及市價評估損益之合理性。
外國銀行在臺分行得依總行規定執行風險管理制度，惟仍應遵循前項規定辦理。
一、銀行辦理衍生性金融商品，應經適當程序檢核，並由高階管理階層及相關業務主管共同參考訂定風險管理制度。
對風險容忍度及業務承作限額，應定期檢討提報董（理）事會審定。
二、辦理衍生性金融商品業務之交易及交割人員不得互相兼任，銀行應設立獨立於交易部門以外之風險管理單位，執行風險辨識、衡量及監控等作業，並定期向高階管理階層報告部位風險及評價損益。
三、關於衍生性金融商品部位之評價頻率，銀行應依照部位性質分別訂定；其為交易部位者，應以即時或每日市價評估為原則；其為銀行本身業務需要辦理之避險性交易者，至少每月評估一次。
四、銀行須訂定新種衍生性金融商品之內部審查作業規範，包括各相關部門之權責，並應由財務會計、法令遵循、風險控管、產品或業務單位等主管人員組成商品審查小組，於辦理新種衍生性金融商品前，商品審查小組應依上開規範審查之。
新種複雜性高風險商品，應經商品審查小組審定後提報董（理）事會或常務董（理）事會通過。
銀行內部商品審查作業規範之內容至少應包含下列各項：
（一）商品性質之審查。
（二）經營策略與業務方針之審查。
（三）風險管理之審查。
（四）內部控制之審查。
（五）會計方法之審查。
（六）客戶權益保障事項之審查。
（七）相關法規遵循及所須法律文件之審查。
五、銀行應訂定衍生性金融商品業務人員之酬金制度及考核原則，應避免直接與特定金融商品銷售業績連結，並應納入非財務指標，包括是否有違反相關法令、自律規範或作業規定、稽核缺失、客戶紛爭及確實執行認識客戶作業（KYC）等項目，且應經董（理）事會通過。
六、銀行應考量衍生性金融商品部位評價、風險成本及營運成本等因素，訂定衍生性金融商品定價政策，並應建立內部作業程序，審慎檢核與客戶承作衍生性金融商品價格之合理性。
七、銀行應建立及維持有效之衍生性金融商品評價及控管機制，審慎檢核商品交易報價及市價評估損益之合理性。
外國銀行在臺分行得依總行規定執行風險管理制度，惟仍應遵循前項規定辦理。