金融科技創新實驗管理辦法

These Regulations are adopted pursuant to Paragraph 1, Article 18 of the Financial Technology Development and Innovative Experimentation Act (referred to as the "Act" hereunder).

1An applicant that applies for approval to undertake experimentation involving innovative financial technologies (referred to as "innovative experimentation" hereunder) shall submit the following documents in triplicate and electronic files thereof to the competent authority:

2Application documents specified under Article 4 of the Act; and

3An undertaking stating that persons provided in Paragraph 1, Article 5 of the Act are free of any of the circumstances under the subparagraphs of the same paragraph.

4Where the application documents mentioned in the preceding paragraph are incomplete, the applicant shall make up the missing documents within the time period as notified by the competent authority.

1An applicant that applies for an extension of the experimentation period in accordance with Article 9 of the Act shall submit an application and state the following matters:

2The current status of innovative experimentation and expected benefits already achieved;

3Reason(s) for the extension;

4Length of extension requested and expected benefits;

5Disputes arising during the experimentation period and how they were handled;

6If applicable, status of remedial actions taken when the competent authority requested the applicant to make improvement within a given time period pursuant to Paragraph 2, Article 14 of the Act; and

7Other matters required by the competent authority.

8Where the competent authority finds the application documents mentioned in the preceding paragraph having unreasonable planning, matters detrimental to the financial market or damaging the interests of innovative experimentation participants (referred to as the "participants" hereunder), or situations that constitute failure to make effective improvement pursuant to Paragraph 2, Article 14 of the Act, the application for extension should be rejected.

1The "important elements" mentioned in the proviso of Paragraph 1, Article 10 of the Act means the financial businesses that requires the permission, approval or concession of the competent authority; utilization of technological innovation or business model innovation; or benchmarks for measuring the expected benefits of the innovative experimentation.

2Application documents under Paragraph 3, Article 10 of the Act shall state the following matters:

3The feasibility of making changes to facilitate the achievement of experimentation objectives;

4The reasonableness of objective evaluation on impacts the proposed changes will have on the interests of participants;

5The appropriateness of planning with regard to when, whom and how to notify the impact the proposed changes will have on the interests of participants, handling measures, obtaining the consent of participants, and methods for protecting the interests of participants who do not agree to the proposed changes;

6Disputes arising during the experimentation period and how they are handled; and

7Other matters deemed possible by the competent authority to have impact on the secure implementation of the innovative experimentation plan or deemed necessary for consideration by the competent authority for the protection of the public interest.

1The term "scale of innovative experimentation" mentioned in the Act refers to the number of participants and the monetary amount involved in the innovative experimentation.

2The term "monetary amount involved in the innovative experimentation" mentioned in the preceding paragraph refers to the limit of financial products or services provided by the applicant to any single participant set by the applicant itself based on the business nature of the innovative experimentation and the protection measures and appropriate compensation planned after evaluating its own financial position and risk capacity, which also complies with the following provisions:

3The aggregate amount of funds, transactions or risk exposures associated with the contracts entered into by the applicant with all participants during the experimentation period and during the contracts' effective period of financial products or services provision, shall not exceed NT$100 million or foreign currency equivalent thereof .

4With the exception of qualified institutional investors, the amounts of funds, transactions or risk exposures associated with the financial products or services provided through an innovative experimentation to any single participant are subject to the following limits:

5The amount of consumer credit or loan shall be limited to NT$500,000.

6The premium or service fees of an insurance product shall be limited to NT$100,000 or equivalent foreign currency thereof, or the insured amount shall be limited to NT$1,000,000 or equivalent foreign currency thereof.

1The term "whether the experimentation is innovative" under Subparagraph 2, Article 7 of the Act means the business nature of an innovative experimentation under application is not identical or similar to that of any innovative experimentation already approved by the competent authority and the innovative experimentation meets one of the conditions below:

2The innovative experimentation uses technology or business model that has not been made public, implemented or patented by a domestic financial service entity.

3The innovative experimentation applies existing or patented know-how to the financial business but using significantly different technology or business model.

1The term "effectively increase the efficiency of financial services, reduce operational and use costs or enhance the interests of financial consumers and enterprises" under Subparagraph 3, Article 7 of the Act means that the following conditions shall be met:

2The participation of participants in the experimentation is necessary;

3The expected benefits are practicable;

4The benchmarks for measuring the expected benefits are reasonable; and

5The specifics of "effectively increase the efficiency of financial services, reduce operational and use costs or enhance the interests of financial consumers and enterprises" are concrete and reasonable.

1The term "potential risks have been assessed and relevant response measures prepared" under Subparagraph 4, Article 7 of the Act means the following:

2Perform a complete assessment of the biggest risk that may be brought by the innovative experimentation to the financial market, participants and applicant.

3Set up an independent and effective risk management mechanism, including risk patterns generated by the experimentation, risk monitoring and control mechanism (including frequency) and response mechanism.

4Establish procedures for submitting periodic reports and reports in case of a risk event to the competent authority in accordance with the supervision and administration provisions under Article 20 and Article 21 herein.

The term "participant protection measures have been established and appropriate compensation prepared" under Subparagraph 5, Article 7 of the Act means conforming with the provisions on protection measures under Chapter IV herein.

1The term "other matters that should be evaluated" under Subparagraph 6, Article 7 of the Act should include the following:

2The reasonableness of granting the applicant's innovative experimentation the exemption from applicable regulations, orders or administrative rules pursuant to Article 25 of the Act.

3The appropriateness of exit mechanism regarding the rights and obligations between the applicant and the participants and other matters after the innovative experimentation ends.

4The completeness of mechanisms for anti-money laundering and combating financing of terrorism (AML/CFT).

5Partners and their cooperation relationships when it is necessary for the applicant to cooperate with other financial institutions in the innovative experimentation.

6The concreteness of the innovative experimentation plan without explicit difficulties for implementation.

7The professional proficiency possessed by the applicant to implement the innovative experimentation plan.

1The exit mechanism of an innovative experimentation plan shall include the following matters :

2Events that may trigger the exit mechanism;

3Time to initiate the exit mechanism;

4Manner and time of notifying the participants;

5Persons who will handle the exit mechanism and procedure or process therefor.

6The mechanism for negotiating with participants;

7Settlement of funds involved in the innovative experimentation, its return operation and processing of other rights and obligations associated with the participants;

8The termination or referral mechanism for services or products provided by the innovative experimentation;

9Risks that may occur after the exit; and

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1The competent authority should reject the application of the innovative experimentation when the review meeting it calls decides any of the following situations :

2The application documents are incomplete, and the applicant fails to make up the missing documents as required by the competent authority; or the application documents contain false representation.

3The application does not meet the review criteria set out in this chapter.

1The applicant should allocate a reasonable number of staff and resources based on the scope, duration and scale of the innovative experimentation, and establish and carry out participant protection measures and prepare an appropriate compensation mechanism. The compensation mechanism includes declaring trust or obtaining banker's guarantee.

2The "declaring trust" mentioned in the preceding paragraph refers to signing a trust agreement with the bank where a dedicated deposit account is opened as a trust account.

3The "obtaining banker's guarantee" mentioned in Paragraph 1 hereof refers to signing a guarantee agreement on the performance of appropriate compensation, by which the bank undertakes the performance obligation of the applicant to participants.

4The effective period of the trust or banker's guarantee should cover at least the entire innovative experimentation period plus another six (6) months, and before the innovative experimentation starts, the trust agreement shall be signed with sufficient amount of compensation deposited into the trust account or a banker's guarantee shall be obtained.

5Where the protection measures or compensation mechanism mentioned in Paragraph 1 hereof are deemed inadequate by the competent authority in the review, the competent authority may require the applicant to add more protection measures or raise the compensation.

1An applicant shall establish the following management mechanisms based on the professional level of participants and possible risks associated with the innovative experimentation:

2Assessing the suitability of participants.

3Informing and disclosing the important contents of innovative experimentation and all associated risks.

4Advertising and soliciting activities and methods.

5Handling dispute and compensation.

6Protecting funds received and funds for payment obligations.

7Protecting personal information .

8Maintaining information security.

1An innovative experimentation must have independent accounting.

2Personnel arrangement, information exchange and utilization, and sharing of business equipments and venues between business involved in innovative experimentation and business not involved in innovative experimentation shall be free from conflicts of interest or other situations that may damage the interests of participants.

1An applicant shall, prior to starting an innovative experimentation, consent in writing or consent explicitly in its products or service contracts or other documents that the complaint, mediation and ombudsman service procedures in the Financial Consumer Protection Act apply mutatis mutandis to Article 24 of the Act.

2The written consent, contract or other documents mentioned in the preceding paragraph shall state that the applicant will accept the decision of the Financial Ombudsman Institution in an ombudsman procedure, and the decision requires the applicant to pay each participant cash or property value under a certain amount. If the ombudsman decision exceeds the certain amount, the applicant will also accept it if the participants explicitly agree to reduce the cash or property value to a certain amount.

1The contract entered between the applicant and participants shall contain the following particulars:

2The scope, important content, duration, and potential associated risks of the innovative experimentation, disclosure of transaction information and the number of approval document issued by the competent authority;

3Where the products or services in the experimentation involves investment or utilization of funds, there shall be no guaranteed performance or income;

4Rights and obligations of the applicant and the participants, including the applicant's responsibilities towards the participants described under Article 20 to Article 22 of the Act;

5Mechanisms for participating in and withdrawing from the innovative experimentation;

6Protection and return measures for funds associated with funds received by the applicant and applicant's payment obligation, and informing the participants that funds received will not be protected by deposit insurance or Insurance Guaranty Fund;

7Complaint, dispute handling and compensation mechanism; and

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An applicant shall ensure the security of information collection, processing, use and transmission in accordance with Article 13 of the Act, prevent illegal intrusion, access, tampering, or destruction of business records or personal information, and establish a participant notification and damage compensation mechanisms to respond to third-party's intrusion in information system.

1When the innovative experimentation is terminated by the applicant, or cancelled or revoked by the competent authority or when the innovative experimentation period ends, the applicant shall handle exit related matters in accordance with the exit mechanism approved by the competent authority and the instructions of the competent authority, and notify the participants of the end of the innovative experimentation.

2An applicant shall, within three (3) business days after completing the exit mechanism mentioned in the preceding paragraph, report the implementation results to the competent authority for record.

3The report on the innovative experimentation results submitted to the competent authority in accordance with Article 16 of the Act shall include the implementation status of the exit mechanism, and if applicable, subsequent planning for the financial business involved in the innovative experimentation.

1An applicant shall submit periodic reports as requested by the competent authority. The reports shall contain at least the following items and be signed by the applicant:

2Statement:

3The innovative experimentation is carried out in consistence with the content approved by the competent authority.

4Status of regulatory compliance.

5Report content:

6The progress of the innovative experimentation plan, including the scope of the experimentation, number of participants protection measures, protection of participant's personal information, implementation of risk management mechanism and exposures, solicitation activity and content, measurement of expected outcomes and achievement status, AML/CFT assessment as of the date of report, etc.

7Implementation status of information system security control mechanism, including information operation, network security monitoring and controls, defense and responses, audit trail retention mechanisms and implementation status.

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1When an applicant has any of the following situations during the innovative experimentation period, the applicant shall submit a signed special report no later than the next business day of occurrence:

2A situation under any of the subparagraphs of Paragraph 1, Article 15 of the Act.

3Having material changes to its finance, business or personnel.

4Ending the innovative experimentation on own initiative.

5Having an information or communications incident and the outcome of the incident damages the interests of participants or affects the continuing operation of the applicant.

6There is media report that may affect the applicant's business reputation.

7There is a situation on which the competent authority requires a special report.

8Any material situation deemed by the applicant that it should be immediately reported to the competent authority.

With regard to the reports mentioned in the preceding two articles, the competent authority may ask the applicant to make an explanation or provide relevant information within a given time period, to which the applicant shall respond accordingly.

1If deemed necessary, the competent authority may send people to conduct an onsite visit, to which the applicant shall not evade, interfere or refuse.

2An applicant shall provide relevant data and explanations in coordination with the needs of the onsite visit conducted by the competent authority.

These Regulations shall come into force on April 30, 2018.