Regulations Governing Internal Operating Systems and Procedures for Banks Conducting Financial Derivatives Business Article 7

A bank that has obtained approval to conduct financial derivatives business (approval must also be obtained in accordance with the Futures Trading Act if the business in question is futures trading business) may begin to offer financial derivatives and combinations thereof, provided that within fifteen (15) days after commencement of business it shall submit a description of each product's characteristics, a statement of regulatory compliance, and a risk disclosure statement to the Commission for reference. Notwithstanding the foregoing, the offering of the following products shall comply with the provisions of Paragraphs 2 ~ 5 hereof and Article 8 herein:1. Products involving contracts derived from either exchange-traded commodities or indexes related to domestic stock or futures exchanges other than equity derivatives linked to Taiwan stocks (referred to as "Taiwan equity-linked derivatives" hereunder).2. New types of Taiwan equity-linked derivatives.3. Complex high-risk products that are not yet deregulatedor have been deregulatedfor less than half a yearand are notforex-relatedoffered to customers other than professional institutional investors and high net worth corporate investors.4.Forex-related products that are required to file application with the Central Bank of the Republic of China (Taiwan) (called the "Central Bank" hereunder) for approval or to report to the Central Bank for recording..Once the Commission has granted approval to a bank to offer products under Subparagraph 1 of the preceding paragraph, other banks may proceed to offer the same type of products, provided the Commission does not raise any objection within ten (10) days from the next day following the date on which their application documents are delivered to the Commission. However, such a bank may not conduct the business under application until that 10-day period has elapsed.Once the Commission has granted approval to a bank to offer products under Subparagraph 2 of Paragraph 1 hereof, other banks may proceed to offer the same type of products, provided they submit relevant documents to the Commission for reference within fifteen (15) days from the date of commencement.Once the Commission has granted approval to a bank to offer a product under Subparagraph 3 of Paragraph 1 hereof and such product has been deregulated by the Commission for more than half a year, , other banks offering such product shall submit a letter with relevant documents to the Commission for recording within seven (7) days after conducting the first transaction and may proceed with the next transaction after receiving an approval letter from the Commission.A bank that intends to offer products under Subparagraph 4 of Paragraph 1 hereof shall directly file applications with the Central Bank for approval or report to the Central Bank for recording. Where the product is a forex-related complex high-risk product, the bank shall submit copies of applications to the Commission.