In view of the fact that the "Scope of Material Contingencies to be Reported by Banks and Eligibilities" issued by the Financial Supervisory Commission (FSC) dated 6 March 2007 has not been amended for more than 10 years, in response to the changes across time and space as well as in financial markets, the FSC promulgated the "Regulations Governing the Scope, Reporting Procedures and other Compliance Matters of Material Contingencies to be Reported by Financial Institutions" (Regulations) on 22 March 2017, which came into force on that date and abolished the aforesaid old reporting regulations. The main points are as follows:
1. Reporting subjects:
The Regulations amended the scope of reporting subjects and provided that the financial institutions as set forth in the Regulations shall mean financial holding companies, domestic banks, branches of foreign banks or PRC banks in Taiwan, credit cooperatives, bills finance companies, credit card business institutions, electronic stored value card issuers, electronic payment institutions, Chunghwa Post Co., Ltd., Financial Information Service Co., Ltd., Joint Credit Information Center, and China Credit Cooperatives Association Southern District Joint Information Processing Center, and such financial institutions shall comply with the Regulations to report.
2. Matters required to be reported:
In addition to the material contingencies that should be reported, the Regulations added the following two matters to be reported:
(1) Item (9): The amount of a bounced check reaches NT$100,000,000 or more; and
(2) Item (10): A financial holding company or the head office of a domestic bank is informed of the results of the financial examination, carried out by the local competent authorities on overseas subsidiaries or overseas branches, which include a credit rating downgrade or contents indicating potential punishment such as "do not rule out the possibility that further measures will be taken" or "will retain the right to impose administrative penalties".
3. Reporting procedures:
The Regulations stipulated the following reporting procedures when material contingencies occur in a financial institution:
(1) When material contingencies occur in a financial institution, it shall promptly report to the Banking Bureau of FSC by telephone and via the internet reporting system.
(2) Except for the material contingency as set forth in Item (10) above, the financial institution shall promptly report to the Central Bank of the Republic of China (Taiwan) by telephone and in writing (such written report shall be transmitted by fax).
(3) Except for the material contingency as set forth in Item (10) above, the financial holding company, domestic bank, branch of foreign bank or PRC bank in Taiwan, credit cooperative, and Chunghwa Post Co., Ltd. shall promptly report to the Central Deposit Insurance Corporation by telephone and in writing (such written report shall be transmitted by fax).
(4) The financial institution shall, within seven (7) business days from the day following the material contingencies reporting day, report detailed information or the subsequent handling processes in writing.
4. Consequences of violation
The financial institution shall incorporate the relevant content under the Regulations into its internal control and audit system and implement it accordingly. The offender may be punished by the FSC depending on the degree of violation.