Regulations Governing Foreign Exchange Business of Banking Enterprises Article 41

(Issuance of Foreign Exchange Bank Debentures)When an authorized bank issues foreign exchange bank debentures, the authorized bank shall retain funds raised therefrom in foreign currency, and if necessary, convert the funds into NTD by means of swap or CCS transactions. The authorized bank shall also submit reports to the Bank according to the Bank-prescribed format.Unless it is otherwise provided by the Bank, foreign exchange bank debentures issued inside the ROC by an authorized bank that has been approved by the Bank to engage in foreign exchange derivatives business may be linked to a derivative or a structured note. However the derivatives that the bank debenture is linked to shall be limited to those already approved by the Bank under Article 12 herein and may not be linked to NTD exchange rate, a credit event, or underlyings provided in Subparagraphs 1~5, Paragraph 2 of Article 32 herein.The provisions of Paragraph 1 hereof do not apply to an authorized bank that issues foreign exchange convertible bank debentures, foreign exchange exchangeable bank debentures or other foreign exchange bank debentures involving equity outside the ROC shall follow the Regulations Governing Issuance of Bank Debentures by Banks, Regulations Governing the Offering and Issuance of Overseas Securities by Issuers and other provisions of the Bank.