I INTRODUCTION

Taiwan is an island nation with a population of 23.57 million. According to The Global Competitiveness Report 2019, issued by the World Economic Forum, among 141 economies, Taiwan ranks 12th for global competitiveness and first equal for macroeconomic stability.2 Furthermore, with average financial assets of €97,850, Taiwan ranks fourth in net wealth globally, only behind the United States, Switzerland and Singapore.3

The competent authority of the Taiwanese banking sector is the Financial Supervisory Commission (FSC), which is an independent regulatory authority governing the financial services industry in Taiwan. The FSC determines financial policy and drafts regulations and rules with regard to the financial industry, conducts financial examinations and supervises financial institutions.

Based on the latest information published by the Banking Bureau of the FSC, by the end of September 2019, other than the Central Bank of the Republic of China (Taiwan) (CBC), which regulates monetary and credit policies, there were 36 domestic banks and 29 local branches of foreign banks (including banks from China) in Taiwan. The Bank of Taiwan, CTBC Bank Co, Ltd, Mega International Commercial Bank, Taiwan Cooperative Bank and the First Commercial Bank are the top five domestic banks measured by equities and assets.4

Considering aligning with the standards set by the Basel Committee on Banking Supervision, the FSC announced a draft of the amendment to the Regulations Governing the Capital Adequacy and Capital Category of Banks in 2019.5 Furthermore, after estimating the size, interconnectedness, substitutability and complexity of each bank, the FSC has also announced that CTBC Bank, Cathay United Bank, Taipei Fubon Bank, Mega International Commercial Bank and Taiwan Cooperative Bank are categorised as domestic systemically important banks and are, therefore, subject to higher capital standards.6

The most significant recent development in the Taiwan banking sector is that the FSC granted approvals to LINE, Chunghwa Telecom and Rakuten Bank to set up internet-only banks. Competition in the Taiwanese banking sector is expected to be intense in the upcoming years after these new players shake up the market.

II THE REGULATORY REGIME APPLICABLE TO BANKS

i General introduction of the related laws and regulations

The primary laws and regulations governing the Taiwanese banking sector include the following:

  1. the Banking Act of Taiwan, which provides rules on conducting banking business, including the setting-up and dissolution of banks; general business scope of various types of banks; compliance requirements; business restrictions; etc. The Banking Act not only regulates domestic commercial banks, but also special business purpose banks (such as industrial banks, agricultural banks and the export–import bank), investment and trust companies and Taiwanese branches of foreign banks;
  2. the Financial Holding Company Act of Taiwan (FHCA), which governs the establishment, business and supervision of financial holding companies. A licensed financial holding company is the parent company of financial institutions that may include banks, insurance companies, securities firms or other companies engaging in financial business. Except for standard company operations regulated by the Company Act of Taiwan, a financial holding company is obligated to comply with the FHCA;7
  3. the Central Bank of the Republic of China (Taiwan) Act, which sets out general rules as well as the powers and functions of the CBC. The CBC regulates monetary and credit policies, manages official foreign exchange reserves and issues currency;
  4. the Offshore Banking Act, which governs the establishment and operation of Taiwanese banks' offshore banking units;8
  5. the Deposit Insurance Act, which delegates Taiwan's deposit insurance system operation to the Central Deposit Insurance Corporation of Taiwan (CDIC). The CDIC handles deposit insurance-related matters and deals with distressed banks in accordance with the FSC's orders;
  6. the Financial Consumer Protection Act, which governs the protection of the interests of consumers dealing with financial institutions; and
  7. the Money Laundering Control Act, the Counter-Terrorism Financing Act and related regulations.9

In addition to these, Taiwanese banks and financial institutions have to comply with the Personal Data Protection Act; also, to avoid inappropriate tax avoidance, Taiwanese banks and financial institutions are required to comply with the Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions, which requires all Taiwanese banks and financial institutions to implement the Common Reporting Standard.

ii Operating a bank in Taiwan

According to the Banking Act, an approval and licence from the FSC are required for setting up and operating a bank in Taiwan.10 The minimum capital requirement for a commercial bank is NT$10 billion.11

The establishment, cancellation or relocation of any branch office, representative office, subsidiary or joint venture by a bank also require the FSC's approval.12 If the branch office, representative office, subsidiary or joint venture concerned is in another jurisdiction, the FSC will consult with the CBC before granting its approval.13 In addition, separate approval from the CBC is required for a bank to conduct foreign exchange-related business or to set up and operate an offshore banking unit.14

iii Overseas banks in Taiwan

An overseas bank is not allowed to conduct business within the territory of Taiwan before obtaining the FSC's approval to set up and operate a branch office in Taiwan.15

Moreover, an overseas bank may set up a representative office in Taiwan after obtaining the approval of the FSC. The permissible activities of the representative office of an overseas bank are limited to the collection of commercial and market information and business liaison.16

Furthermore, an FSC ruling issued on 10 September 2019 forbids domestic banks or branches of overseas banks acting as unlicensed overseas banks' agents to provide financial services in Taiwan. Such behaviour would be treated as an evasion of the Banking Act, which would be penalised.17 It is generally understood that the FSC's policy is to forbid an overseas bank with no Taiwanese branch office to conduct business in Taiwan unless the relevant transaction is carried out on an offshore transaction basis. While there is no crystal rule for such offshore transaction, it is generally understood that an overseas bank with no Taiwanese branch office shall avoid: (1) signing or receiving transactions or account opening documents in Taiwan; (2) using services of any local agent, intermediary or personnel in respect of such transactions; (3) meeting with any Taiwanese customers in Taiwan for specific transactions; and (4) initiating any public marketing or promotion activities in Taiwan.

iii PRUDENTIAL REGULATION

i Relationship with the prudential regulator

As the competent authority of Taiwan's banking sector, the FSC issues regulations relating to financial services generally. There are two main bureaus subordinated to the FSC, which are in charge of supervising different areas of the banking sector. The Banking Bureau plans and implements the supervision and regulation of the banking market, the bills market, financial holding companies and banking enterprises; and the Examination Bureau is responsible for financial inspection and audit of financial institutions regulated by the FSC.18

The Examination Bureau may, at any time, appoint its staff, professionals (e.g., attorneys or accountants), authorised organisations or officials of the FSC to examine the business, financial and other affairs of a bank and request a bank to submit its financial reports, property inventories or other relevant documents for examination.19 In local practice, the Examination Bureau conducts financial examinations once every two years. Additionally, when the CBC thinks it necessary, it may also conduct the examination of a bank and request a bank to submit its financial reports, property inventories or other relevant documents for examination.

Each of the Taiwanese banks is required to prepare and submit its reports to the FSC and the CBC, respectively, for recordation. Such reports include an annual report, business report, financial statements and resolutions as to the distribution of profits or the form of losses, and other materials designated by the FSC. The submission shall be filed within 15 days of such reports being approved by the banks' annual shareholders' meeting or by the banks' board of directors (if there is no shareholders' meeting), as applicable.20 Taiwanese banks are also required to submit their internal audit reports, resolutions of board meetings and the relevant committees, and business-related information to the FSC or the CBC, or both, periodically, pursuant to various banking regulations.

All Taiwanese financial institutions, including banks, that are duly approved to accept deposits should participate in the CDC's deposit insurance programme. If an insured financial institution is ordered to suspend its operations by the FSC, the CDIC will compensate each depositor up to NT$3 million. The types of deposits covered generally include deposits in current accounts (checking deposits), demand deposits, time deposits, deposits required by law to be deposited in certain financial institutions and any other deposits as approved by the FSC.

ii Management of banks

The corporate governance requirements for Taiwanese banks are generally similar to those applicable to other regular Taiwanese corporations under the Company Act. Banks are required to convene shareholders' meetings annually, conduct daily operations under the leadership of the board of directors and be supervised by the supervisors or the audit committee and remuneration committee composed of independent directors. Because all Taiwanese banks are public companies or are deemed public companies, they are also required to comply with the Securities and Exchange Act of Taiwan and the related regulations issued by the FSC in respect of the corporate governance of, and public disclosure by, a public company.

Also, to ensure the sound business operation of Taiwanese banks, they are required to establish proper internal audit and internal control systems. The overall operation strategies, risk management policies and guidelines, operation plans, risk management procedure and execution guidelines are also required to be set up.21

There is no mandatory restriction on the bonus and remuneration paid by a bank to its directors, officers or employees. However, bonuses and remuneration are required to be reviewed and approved by the remuneration committee. Taiwanese banks are also required to set up a sales personnel remuneration system and have it approved by the board of directors.22 Also, according to the Guiding Principles for the Practice of Banks in Corporate Governance promulgated by the FSC, a bank shall take the following into consideration, inter alia, when reviewing the performance of its directors, officers and employees and determining payment of bonuses and remuneration:

  1. the risks associated with their performance (that may be realised in the future);
  2. the criteria and arrangement for determination and payment of bonus and remuneration should not have an effect of encouraging the bank's directors, officers and employees to proceed with risky transactions;
  3. a significant portion of the bonus and remuneration should be deferred or paid in the form of the bank's equity; and
  4. the amount payable under any golden parachute arrangement should be based on the performance that has been delivered by the relevant directors, officers or employees.23

iii Regulatory capital and liquidity

Capital adequacy requirement

The principal legislation regarding the capital adequacy of a bank are the Regulations Governing the Capital Adequacy and Capital Category of Banks, which implemented many of the Basel III framework in 2013. The current capital adequacy requirements are generally in line with the standards under the Basel III framework, which are set out as below:

  1. common equity Tier 1 ratio: 7 per cent;
  2. Tier 1 capital ratio: 8.5 per cent; and
  3. total capital adequacy ratio: 10.5 per cent.24

The ratios are generally defined as follows:

  1. common equity Tier 1 ratio: net common equity Tier 1 divided by total risk-weighted assets;
  2. Tier 1 capital ratio: net Tier 1 capital divided by total risk-weighted assets; and
  3. total capital adequacy ratio: aggregate amount of net Tier 1 capital and net Tier 2 capital divided by total risk-weighted assets.25

A bank shall periodically report relevant capital adequacy-related ratios to the FSC, and the FSC may, at any time, request a bank to do so. The FSC may assess a bank's capital based on the report made by the bank.26

A bank is also required to self-assess its capital adequacy and establish a strategy to maintain its capital adequacy.27 The FSC may, based on a bank's self-assessment, request the bank to improve its risk management. If the bank fails to do so, the FSC may require it to adjust its regulatory capital and risk-weighted assets or submit a capital restructuring plan within a certain period.28

Consolidated (group) supervision

The FSC has the authority to impose prudential standards on a consolidated basis for a banking group. The quarterly average balance of the total net asset amount (i.e., the amount of assets minus the amount of liability for each transaction) of the subsidiary bank, combined with the number of the foreign financial institution's branches within Taiwan, shall not exceed 50 per cent of the local subsidiary bank's net worth of the preceding fiscal year. However, a foreign financial institution meeting certain requirements (e.g., the common equity Tier 1 ratio is above 9.5 per cent; Tier 1 capital ratio is above 11 per cent; and total capital adequacy ratio is above 13 per cent) is allowed to set a different ratio.29

Reporting obligations are also imposed on banking groups: the balance sheet, income statement and statement of cash flow of a foreign bank's Taiwan branch; the consolidated balance sheet, income statement and statement of cash flow of such branch and its offshore banking units; and the head office's annual report must be submitted to the FSC for its records within four months of the end of the fiscal year, and must be publicly announced in a local newspaper or in another manner designated by the FSC.30

The FSC also has the authority to limit the range of activities the consolidated banking group may conduct and the overseas locations in which activities can be conducted. A bank's investment in any financial business or non-financial business must obtain prior approval from the FSC.31

Minimum capital requirement

The minimum paid-in capital for establishing a commercial bank in Taiwan is NT$10 billion; the promoters of the bank shall subscribe to up to 80 per cent of the total paid-in capital of the bank and the remaining shares shall be publicly offered; the capital contribution shall be made in cash.32

Subject to certain exceptions, a branch of a foreign bank in Taiwan shall allocate the minimum operating capital of NT$250 million if the Taiwan branch plans to conduct retail deposit business.33

Liquidity coverage ratio

To enhance the short-term liquidity recovery ability of banks, the FSC and the CBC implemented the liquidity coverage ratio (LCR) framework in 2015. The LCR is calculated by dividing a bank's high-quality liquid assets by its total net cash flows over a 30-day period.34 Since 1 January 2019, banks incorporated under the laws of Taiwan have been required to maintain an LCR of at least 100 per cent.35 The LCR requirement is not applicable to a branch office of a foreign bank in Taiwan.36 However, a foreign bank applying to establish a branch office in Taiwan must specify the liquidity risk management framework adopted by the head office and the liquidity risk management measures applicable to the Taiwan branch.37

iv Recovery and resolution

The FSC may place a bank in receivership if any of the following occur:

  1. there is a concern that a bank might be unable to pay its debts when due or there might be a detriment to the depositors' interests due to obvious deterioration in the bank's business or financial condition;38
  2. a bank's capital is graded as being seriously inadequate and 90 days have lapsed since the bank was listed as having seriously inadequate capital. However, if a bank is ordered by the FSC to undertake capital restructuring or a merger within a prescribed period and fails to comply, the 90 days should be calculated from the day subsequent to the prescribed period;39 or
  3. the losses of a bank exceed one-third of the bank's capital and the bank fails to make up such deficit within three months.40

If the FSC places a bank in receivership, the bank's operations and management power and the powers to administer and dispose of the bank's properties shall be exercised by the receiver appointed by the FSC.41 The duties and powers of the bank's shareholders' meeting, board of directors, directors, supervisors or audit committee should be suspended.42

The receiver may formulate a concrete plan for taking the following actions towards a bank under receivership, which should be subject to the FSC's approval:

  1. mandating other banks, financial institutions or the CDIC to operate all or part of the business;
  2. increasing capital, reducing capital or increasing capital after reducing capital;
  3. selling all or part of the business, assets or liabilities;
  4. arranging a merger with another bank or financial institution; and
  5. other important actions as determined by the FSC.43

In local practice, if a bank is placed under receivership and has been included in the coverage of the Financial Restructuring Fund set up by Taiwan's Executive Yuan (the cabinet of the Taiwan government), the rights of the shareholders of the bank should be forfeited except for entitlement to distribution of remaining assets (if any).44 Seven banks were placed under receivership between 2006 and 2008, but none have been since.45 For the seven banks in crisis, the FSC divided their assets into 'bad banks' (non-performing assets) and 'good banks' (the other assets) and sold them separately. The bad banks were sold to asset management companies; the businesses of the good banks were sold to and assumed by banks on the condition that the FSC agreed to pay a certain amount of compensation to these banks. The depositors, employees and non-deposit creditors suffered little hurt, but the shareholders generally received nothing back after the disposal.

IV CONDUCT OF BUSINESS

i Suitability of products for different types of customers and disclosure of information

Pursuant to the Financial Consumer Protection Act46 and various regulations promulgated by the FSC, Taiwanese banks are generally required to carefully evaluate the suitability of financial products for different types of customers. A bank should not introduce products to customers if the products do not meet their risk-tolerance level. Taiwanese banks are also required to disclose detailed product information and risks to customers47 by providing a prospectus, a summary of major terms and conditions and risk disclosure statement, and such information should be in Chinese unless the customers are professional investors. Any misleading information in the advertisement or marketing materials to such customers or obviously unfair provisions in the transaction documents may result in an administrative fine and other sanction imposed by the FSC or will affect the validity of the relevant transactions.48 The Financial Consumer Protection Act and related regulations provide further protection to bank customers who are not professional investors or high-net-worth individuals, including more requirements on due sale process and information disclosure, alternative dispute resolution and punitive damages.49

ii Abuse of dominant bargaining position

The Banking Act prohibits Taiwanese banks from requesting a guarantor for housing loans and other consumer loans if such loans are fully secured. If a guarantor is required for a credit extension, the bank should first pursue the borrower and then pursue the guarantor or guarantors for the remaining portion (on a pro rata basis if there is more than one guarantor).50

In addition, the Fair Trade Commission of Taiwan has promulgated guiding principles51 for banks' conduct of business, which include various requirements and restrictions on the advertising, disclosure of fee calculation and other material information, the scope of the obligations of a guarantor or security provider, permitted events of default or acceleration events in the transaction documents. A failure to comply with such principles may be considered as a violation of the Fair Trade Law and penalised by the Fair Trade Commission, and could affect the validity of the relevant transactions.52

iii Protection of confidentiality and personal data

The Banking Act requires Taiwanese banks to keep the information regarding their customers and the relevant transactions in strict confidence unless otherwise required by laws or the FSC or the customers are in default.53 Also, when collecting, processing and using personal data, Taiwanese banks need to follow the requirements of the Personal Data Protection Act.

V FUNDING

All types of funding methods, including equity and debt financing, interbank lending and central bank funding (principally by way of qualified bills rediscount and accommodation loans with or without collateral), are generally available to Taiwanese banks.

To meet the criteria for qualified Tier I capital, Taiwanese banks may raise funds by issuing common shares (including capitalising profits by distributing stock dividends), perpetual preferred shares and perpetual subordinated bonds.

VI CONTROL OF BANKS AND TRANSFERS OF BANKING BUSINESS

i Control regime

Share acquisition

According to Article 25 of the Banking Act, any entity (together with its related parties and affiliates) holding more than 5 per cent shares of a Taiwanese bank must report to the FSC. Also, prior approval of the FSC would be required for acquisition of more than a 10, 25 and 50 per cent share of a Taiwanese bank.

The application documents for the approval of acquiring more than 50 per cent shares should include, inter alia, the following information:

  1. how the target bank could benefit from the financial ability and business operation of the purchaser;
  2. whether there is any reason the bank's responsible persons are unsuitable for the role, such as if they have no capacity or limited capacity, have been found guilty of certain crimes or have been declared bankrupt but have not had rights and privileges reinstated. The FSC will scrutinise the responsible persons' capacity, credibility and morality;
  3. the purchaser's funding source for the acquisition;
  4. the purchaser's business strategy for the target bank;
  5. an analysis and assessment of the impact on the financial condition and business operation of the target bank within three fiscal years of the acquisition;
  6. the purchaser's audited financial statements for the previous three years; and
  7. a description of the purchaser's business plan and management team for the operation of the target bank, and the arrangement for protection of the target bank's employees' benefits.54

Merger, share swap and business transfer

In addition to the notification and regulatory approval requirement for the acquisition of bank shares under the Banking Act described above, the merger, share swap, spin-off or business transfer by a bank are also governed by the FHCA (if a party to the transaction is a financial holding company), the Financial Institutions Merger Act and the Business Mergers and Acquisitions Act. Such types of transactions generally require approval by the target bank's shareholders' meeting and the approval of the FSC. The application documents required for such types of transactions are substantially similar to those for acquisition of more than 50 per cent of the shares of a bank.

Acquisition finance

The FSC reviews the funding source and financial ability of the purchaser. The purpose of such review is to ensure that the purchaser is able to close the transaction and, when necessary, inject additional capital into the target bank in the future. Therefore, while the regulator's policy does not prohibit a purchaser from funding a deal by loan, the regulator may have concerns if the purchaser could not present a reasonable plan regarding repayment of the loan or would not have the proper financial ability to support additional capital needs of the target bank in the future.

Also, according to Article 197-1 of the Company Act, if a director (including the corporate shareholder that appoints the director) of a Taiwanese bank pledges more than 50 per cent of the shares held by the director at the time the director is elected, the director would not be able to exercise the voting power of the excessive portion of shares.

ii Transfers of banking business

A Taiwanese bank may transfer all or part of its business to another licensed bank in the following ways:

  1. merger;
  2. transfer of whole business or major business; and
  3. spin-off of part of its business that can be operated independently from its remaining business.

Such types of transaction generally require approval by the shareholders' meeting of the parties thereto and the approval of the FSC. The consent of the customers or creditors of the selling bank may be exempted:

  1. if a notice to each of the customers or creditors of the relevant banks is provided, and a public announcement is made, stating that customers or creditors may raise an objection to the transaction within the designated period (which should not be less than 30 days);
  2. if any customer or creditor raises an objection within the designated period, the relevant banks either make a full repayment (if applicable), furnish an appropriate security, create a trust exclusively for creditors' satisfaction or otherwise demonstrate that such a transaction would not adversely affect the rights of customers and creditors; and
  3. in the event of a failure to comply with the requirements set forth in point (a) or (b), the banks would not be able to assert the validity of the transaction as a defence against the relevant customers or creditors in respect of the performance of their obligations under the relevant contracts or legal relationships.55

However, note that:

  1. in the event of a business transfer or spin-off, the transferring bank would remain jointly and severally liable for the performance of the transferred obligations for the first two years;56
  2. if there were any changes to the services or products after the transaction, additional notification requirements may be applicable and such changes would still require the consent of the relevant customers or creditors (or the dissenting customers or creditors should have a right to terminate the contracts). For instance, if a bank transfers its credit card business to another bank and the bank assuming its credit card business is unable to offer identical benefits to cardholders, a notification for such change would be required under the related regulations and the cardholders may have the right to terminate the credit card contract early; and
  3. if the contract with a customer or creditor includes provisions expressly prohibiting the bank's merger, business transfer or spin-off without the consent of customers or creditors, the merger, business transfer or spin-off would still take effect by operation of law but would simultaneously constitute a breach of contract by the bank.

VII THE YEAR IN REVIEW

Compared to the rest of Asia, innovation in the banking industry in Taiwan has been moving at a relatively slow pace. However, in recent years, the FSC has unveiled a few initiatives to encourage growth, including encouraging and expressing support in the innovation and development in the following areas:

  1. green finance;
  2. fintech and other technological innovation;
  3. mobile payment and other electronic payment methods; and
  4. internet-only banks.

However, our observation is that, for the time being, the FSC will likely adopt a gradual approach and take time to assess the impacts of the relevant innovation and development before further relaxing the regulations. In addition, the FSC and CBC consider cryptocurrencies as commercial merchandise rather than currencies. The authorities have an open mind regarding cryptocurrencies and blockchain but are relatively conservative on their development and application. However, the FSC also aims to enhance cybersecurity, protection of banks' consumers and transparency in the shareholding structure and related parties' banking transactions.57

VIII OUTLOOK AND CONCLUSIONS

Taiwan's banking regulators may review and adjust their policies from time to time based on the relevant innovation and experience in other jurisdictions, the financial regulatory environments worldwide, Taiwan's industrial policy and the international situation. It is anticipated that the trade war, the potential Chinese debt crisis, the Hong Kong protests, the uncertainty on the relationship between Taiwan and China after Taiwan's recent presidential election and the outbreak of covid-19 and its impact on the global supply chain may increase pressure on Taiwan's banking system, and make it more difficult to predict future development. As such, it is likely that Taiwan's banking regulators will focus more on the management of risks by Taiwanese banks and the stability of financial market in 2020.


Footnotes

1 James C C Huang is a partner and Maggie Huang is an associate partner at Lee and Li, Attorneys-at-Law.

7 Article 2 of the FHCA.

8 An offshore banking unit of a Taiwanese bank is its independent business unit in Taiwan engaging in foreign currency-related business.

9 Such as the Regulations Governing Anti-Money Laundering of Financial Institutions; the Regulations Governing Internal Audit and Internal Control System of Anti-Money Laundering and Countering Terrorism Financing of Banking Business and Other Financial Institutions Designated by the FSC; the Regulations Governing Implementation of Internal Control and Audit System for Anti-Money Laundering and Countering Terrorism Financing of Insurance Companies, etc.

10 Articles 53 and 54 of the Banking Act.

11 Article 2 of the Standards Governing the Establishment of Commercial Banks.

12 Articles 57 and 74 of the Banking Act.

13 Paragraph 3 of the Directions Concerning the Establishment of Foreign Branches by Domestic Banks.

14 Article 4 of the Banking Act and Article 3 of the Offshore Banking Act.

15 Paragraph 1, Article 117 of the Banking Act.

16 Paragraph 2, Article 4 of the Regulations Governing Foreign Bank Branches and Representative Offices.

18 Other than the Banking Bureau and the Examination Bureau, there are another two bureaus subordinated to the FSC: the Securities and Futures Bureau and the Insurance Bureau.

19 Article 45 of the Banking Act.

20 id., at Paragraph 1, Article 49.

21 Article 3 of the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries.

22 Paragraph 1, Article 11-1 of the Financial Consumer Protection Act.

23 Article 36-1 of the Guiding Principles for the Practice of Banks in Corporate Governance.

24 Article 5 of the Regulations Governing the Capital Adequacy and Capital Category of Banks.

25 id., at Article 2.

26 id., at Article 16.

27 id., at Article 18.

28 id., at Article 17.

29 Article 3 of the Eligible Assets Maintenance Requirements for a Local Subsidiary Bank of a Foreign Financial Institution.

30 Article 17 of the Regulations Governing Foreign Bank Branches and Representative Offices.

31 Articles 74, 115-1 and 123 of the Banking Act.

32 Articles 2 and 3 of the Standards Governing the Establishment of Commercial Banks.

33 Article 3 of the Regulations Governing Foreign Bank Branches and Representative Offices.

34 Article 2 of the Standards Implementing the Liquidity Coverage Ratio of Banks.

35 id., at Article 3.

36 id., at Article 6.

37 Article 19 of the Regulations Governing Foreign Bank Branches and Representative Offices.

38 Paragraph 1, Article 62 of the Banking Act.

39 id., at Paragraph 2, Article 62.

40 id., at Article 64.

41 id., at Article 62-2.

42 id., at Article 62-1.

43 id., at Article 62-3.

44 Article 4 of the Act for the Establishment and Administration of the Financial Restructuring Fund.

46 Article 9 of the Financial Consumer Protection Act.

47 id., at Article 10.

48 id., at Articles 7, 8, 11 and 12-1.

49 id. ,at Articles 10, 11-3 and 13.

50 Article 12-1 of the Banking Act.

51 Explanation regarding the Restrictions on Banking Enterprise promulgated by the Fair Trade Commission.

52 Article 25 of the Fair Trade Act.

53 Article 48 of the Banking Act.

54 Article 7 of the Regulations Governing the Administration of the Holding of Voting Shares in One Bank Exceeding Certain Percentage by the Same Person or the Same Group of Related Parties.

55 Articles 23, 27 and 35 of the Business Mergers and Acquisitions Act.

56 Article 305 of the Civil Code and Article 35 of the Business Mergers and Acquisitions Act.