Newsletter
AMENDED RULES ON CROSS STRAIT FINANCIAL BUSINESS
On 30 May 2001, the Executive Yuan approved amendments to the Rules on Grant of Permission for Finance Related Activities between Mainland China Area and Taiwan Area.
The amendments cover two main areas: approv-als for financial institutions' offshore banking units (OBUs) to conduct cross strait financial business, and approvals for banks to set up rep-resentative offices in Mainland China.
The Ministry of Finance (MOF), acknowledging the needs of domestic banks' OBUs to match Taiwanese companies' financial requirements for their overseas operations, and to enhance their own competitiveness decided to relax restric-tions on cross strait business by OBUs. Par-ticularly, the amended rules now allow OBUs to conduct banking business with Mainland China branches of foreign banks, overseas branches of Mainland China banks, and overseas Mainland China entities and individuals. In other words, the OBUs can now engage in the same busi-nesses as the overseas branches of Taiwanese banks.
In deciding the qualifications for Taiwanese banks to establish representative offices in Mainland China, the MOF took account of the provisions of the current Regulation for Estab-lishment of Overseas Branch by Domestic Bank and the Rules Governing Permission for Estab-lishment of Branch and Subsidiary in Hong Kong and Macao by a Taiwanese Bank. In view of the nature of the cross strait relationship, it imposes more stringent requirements on banks' risk undertaking capability. The specific re-quirements include: