The Financial Supervisory Commission (FSC) issued a press release on 16 August 2018 stating the plans to amend the "Standards Governing the Establishment of Commercial Banks" and "Regulations Governing Investments in Other Enterprises by Commercial Banks" for internet-only bank establishment. The key points are as follows:

1. Capital and financial requirement:

(1)NTD10 billion, same as required for setting up a conventional commercial bank.

(2)The founders are required to subscribe for all the shares to be issued at the time of incorporation of the internet-only bank.

(3)Internet-only banks are required to be further registered as public companies within one year after establishment.

2. Requirements for founders:

(1)The shares held by the founders and shareholders of an internet-only bank that are financial institutions (including financial holding companies, banks, insurance companies and securities firms) should account for more than 40% of the paid-in capital. At least one of an internet-only bank's founders should be a bank or a financial holding company and the minimum shareholding held by the bank or financial holding company should reach 25%.

(2)The founder of an internet-only bank could be a foreign financial institution.

(3)In case the founder of an internet-only bank is not a financial institution, if such founder specializes in fintech, e-commerce or telecommunications, and can submit a successful business operational plan, such founder may subscribe for over 10% of the issued shares.

(4)It is required that more than half of the board members of an internet-only bank should specialize in banking and either fintech, e-commerce or telecommunications. Moreover, at least one member of the board shall specialize in fintech, e-commerce or telecommunications.

(5)As stated above, the minimum shareholding held by a bank or financial holding company of an internet-only bank should reach 25%. To avoid unnecessary restrictions on the business operations of a commercial bank holding shares in such internet-only bank, the FSC plans to amend the law that commercial banks holding a certain percentage of an internet-only bank be exempted from the restriction on requiring such commercial bank cease operating the same type of business.

3. Business premises: Other than a head office and customer service centers to provide face-to-face customer service, internet-only banks are prohibited from establishing physical branches.

4. Content of business plan: Based on the characteristics of the operations of internet-only banks, the business plan of such bank should contain, among other things, client identification mechanisms, information systems, security controls and backup operations, business continuity plan, liquidity management mechanisms and market exit plan.

According to media coverage, the FSC plans to receive applications for internet-only bank establishment beginning in November 2018, and will accept applications for three months since such announcement date.