The scope of spot foreign exchange transactions that a DSF may carry out with its customers is limited to the following:
1.The DSF is handling a business with the same customer under any subparagraph other than Subparagraph 2 of Paragraph 1, Article 4 herein that has been approved by the Bank;
2.The same securities firm acts as an recommending securities firm for an emerging stock company and has foreign exchange settlement needs in order to subscribe the stocks of foreign issuers as required by the competent authority; and
3.The same securities firm acts as the lead underwriter, paying agent or registrar agent for NTD denominated securities issued by a foreign issuer in Taiwan under the approval of the competent authority and has related foreign exchange settlement needs.
When carrying out spot foreign exchange transactions under Subparagraph 1 and 2 of the preceding paragraph, a DSF shall also observe the following rules:
1.The amount of spot foreign exchange transaction shall not exceed the transaction amount and fees of the related securities business;
2.The spot foreign exchange transaction shall be carried out only after the customer concluding the transaction of related securities business and shall be completed prior to the settlement date of the related securities business transaction;
3.The transaction is not on a leveraged, margined or financed basis; and
4.When the business involves repo trade of foreign currency securities with customers, only spot foreign exchange transaction between foreign currencies may be carried out.

Only securities firms that are concurrently a securities underwriter, a securities dealer, and a securities broker provided under Article 16 of the “Securities and Exchange Act” may apply to engage in spot foreign exchange transaction business.
A securities firm that intends to engage in spot foreign exchange transaction business shall apply to the Bank for approval by submitting the following documents:
1.Documents provided under Article 7 herein;
2.Description of operations, including business hours and cutoff time for accounting dates and ways to reconcile the “Daily Foreign Exchange Position Report” submitted to the Bank’s Department of Foreign Exchange pursuant to Paragraph 1 of Article 52 herein;
3.Documents evidencing that the securities firm has been approved by the Bank to engage in any business under the subparagraphs other than Subparagraph 2 of Paragraph 1, Article 4 herein and having a solid record of conducting such business;
4.The net worth shown in the latest CPA audited or certified financial statement meets the criteria prescribed by the FSC for a securities firm that applies for the setup of an OSU in Taiwan to engage in all of the businesses provided in the subparagraphs of Paragraph 1, Article 22-4 of the Offshore Banking Act;
5.Documents evidencing compliance and sound operation: Free of sanction due to serious violation of rules during the preceding three years before application, or the securities enterprise with sanctioned violation has effected specific improvement and has satisfied the competent authority or the Bank; and
6.Documents evidencing that its operations and auditing personnel meet the following qualification requirements:
(1)An operations personnel must have at least three months of working experience in relevant foreign exchange business, or have completed at least 12 hours of foreign exchange regulations related courses (including regulations on foreign exchange business and reporting of foreign exchange receipts, disbursements or transactions by securities enterprises and foreign exchange risk management) given by domestic financial training institutions and received certificates therefor and also have at least 20 business days of practical training in relevant foreign exchange business at an authorized bank.
(2)A controlling personnel must have at least six months of working experience in relevant foreign exchange business, or have attended courses provided in the preceding item and also have at least 40 business days of practical training in relevant foreign exchange business at an authorized bank.
A securities firm that has been approved by the Bank to engage in spot transactions between foreign currencies may apply to the Bank for approval to expand the business to spot foreign exchange transactions involving NTD by submitting the following documents:
1.A resolution of the board of directors resolving to apply for the business;
2.A statement of regulatory compliance; and
3.Documents provided in Subparagraphs 2 and 5 of the preceding paragraph.
Changes to the description of operations mentioned in Subparagraph 2 of Paragraph 2 herein shall be reported to and agreed by the Bank in advance.
The head office of a DSF that applies for its branches to engage in spot foreign exchange transaction business shall observe the following rules:
1.The head office of a DSF shall apply the business after it has been approved by the Bank to engage in the business and has a solid record of conducting such business; and
2.The head office shall apply to the Bank for approval by submitting a photocopy of the branch’s license and documents evidencing the qualifications of its operations and controlling personnel as provided in Subparagraph 6 of Paragraph 2 hereof.

A DSF shall set its total position limit for transactions between NTD and foreign currency which shall be submitted along with the resolution of the board of directors to the Bank’s Department of Foreign Exchange for approval.
The position of NTD exchange rate options shall not exceed one-fifth of the afore-mentioned total position limit.

A DSF that intends to participate in the interbank foreign exchange market involving NTD shall first make sure that it is free of the situations in Subparagraphs 2 ~ 5, Paragraph 1 of Article 9 herein and apply to the Bank for approval by submitting the following documents:
1.A statement of regulatory compliance;
2.Document evidencing that the DSF has been approved to engage in business under Subparagraph 2, Paragraph 1 of Article 4 herein and a solid record of conducting such business;
3.Document evidencing that the DSF is free of any sanction imposed by the FSC pursuant to Subparagraphs 2 ~ 4, Article 66 of the “Securities and Exchange Act” in the preceding one year; and
4.Document evidencing that the DSF has not been suspended or restricted from trading by TWSE, TPEx or Taiwan Futures Exchange pursuant to their operating rules or bylaws in the preceding one year.

A DSF may, in the capacity of a customer, purchase/sell foreign currency from/to selected cooperating authorized banks to cover its long or short foreign currency positions against NTD.
DSFs that have been approved by the Bank to carry out position covering in accordance with the preceding article may purchase or sell foreign currencies in the interbank foreign exchange market and be a counterparty to each other in the transactions of foreign currency position covering provided in Paragraph 1 of Article 13 herein and in raising foreign currency funds provided in Subparagraphs 1 and 3, Paragraph 1 of Article 14 herein.
A DSF may hold long or short positions within the total position limit mentioned in Paragraph 1 of Article 48 herein.
A DSF participating in the interbank foreign exchange market shall comply with the trading rules formulated by the Taipei Foreign Exchange Market Development Foundation with reference to international practices after coordinating with the Bankers Association of the Republic of China and reported to the Bank for record.

A DSF shall draw up its position limits such as "transaction positions for individual currencies" and an "overnight position for each trader". All its units shall abide by these limits, and carry out audits regularly.

DSFs shall fill out a "Foreign Exchange Position Daily Report" for all foreign exchange transactions involving NTD on a daily basis. The reported foreign exchange positions shall be consistent with those recorded on the internal books or foreign exchange transaction datafile, and reconciled and checked on a daily basis.
DSFs shall report the estimated foreign exchange positions for the day to the Bank’s Department of Foreign Exchange by telephone at the end of each business day.

When the foreign exchange business provided in Subparagraph 2, Paragraph 1 of Article 4 herein conducted by a DSF involves exchange settlement against NTD or conversion between foreign currencies, the DSF shall handle the matter in accordance with the “Regulations for Declaration” and “Directions for Domestic Securities Firm Approved to Conduct Foreign Exchange Business while Assisting Customers to Declare Foreign Exchange Receipts and Disbursements or Transactions.”

A DSF shall issue a foreign exchange purchase (sale) memo for foreign exchange receipts and disbursements or transactions involving exchange settlement against NTD from its foreign exchange business and shall issue other transaction certificates if exchange settlement against NTD is not involved, and deliver such memo/certificate to customers or process them in a manner as agreed with the customer.
The “purchase (sale) memo or other transaction certificates” mentioned in the preceding paragraph may be made in electronic form.
DSFs shall transmit relevant data mentioned in Paragraph 1 hereof and the Daily Foreign Exchange Receipts (Disbursements) Transaction Report of the previous day to the Bank’s Foreign Exchange Data Processing System before 12:00 noon on the following business day.

When DSFs engage in large NTD spot, swap or cross currency swap transactions with customers, they shall transmit relevant data to the Bank’s Foreign Exchange Data Processing System pursuant to the following regulations:
1.When a DSF engages in foreign exchange purchase or sale with a company, limited partnership or firm with the amount no less than an equivalent of US$ 1,000,000 or with an individual or association with the amount no less than an equivalent of US$500,000, the DSF shall transmit the data immediately on the contract day after verifying relevant supporting documents.
2.When a DSF engages in a NTD swap or cross currency swap transaction with a customer with the amount no less than an equivalent of US$1,000,000, the DSF shall transmit the data before 12:00 noon on the next business day following the contract day after verifying the relevant supporting documents.

The exchange rates used for foreign exchange transactions between a DSF and a customer may be solely determined by the DSF.
The NTD exchange rate for a single foreign exchange transaction with a customer for an amount of less than US$10,000 shall be posted at the DSF's business premises before 9:30 AM on each business day and disclosed on a publicly accessible website or made through other public means.

If a relocation or a name change is made by a DSF that has been approved to engage in spot foreign exchange transaction business, the securities enterprise shall report the change to the Bank for record within seven (7) days after the receipt of a new business license or permit from the competent authority. In the case of a relocation, the securities enterprise shall also submit the qualification documents of its operations and auditing personnel as provided in Subparagraph 6, Paragraph 2 of Article 47 herein.

To engage in electronic transaction business involving currency conversion with customers, the DSF shall apply to the Bank for approval by submitting a description of relevant operations related to the declaration of foreign exchange receipts and disbursements or transactions.
The term "electronic transaction" referred to in the preceding paragraph shall mean transactions carried out with customers not over the counter but through various electronic and communications equipments.
A DSF that engages in the business mentioned in Paragraph 1 hereof with customers over the Internet shall observe the following provisions:
1.The Internet system shall be capable of performing computerized verification of transaction details such as classification of foreign exchange receipts (disbursements).
2.Before offering services in foreign exchange receipts and disbursements or transactions over the Internet, a DSF shall verify the customer's identification documents or basic registration information.
3.When applying to the Bank to engage in NTD exchange settlement with values equal to or over an equivalent of NT$500,000, or large exchange settlement transactions, the DSF’s Internet system shall conform to the provisions of Article 59 herein.

The computer equipment and relevant operating environment of a securities firm must be capable of properly handling operations regulated in Articles 54 and 55 herein and the query of the aggregate settlement amount of the current year, and must pass the test of connection with the Bank’s Foreign Exchange Data Processing System before the securities firm applies to engage in the spot foreign exchange transaction business.
A securities firm shall connect with the Bank’s Foreign Exchange Data Processing System by one of the means below and comply with “Directions Concerning Financial Institutions Using the Bank’s Foreign Exchange Data Processing System”：
1. If the securities firm opts to develop its own server for server-to-server connection, it shall follow the inter agency specifications for connection operation of the Foreign Exchange Data Processing System.
2. If the securities firm opts to use the Bank’s Foreign Exchange Data Reporting System, it shall follow the user manual of the Foreign Exchange Data Reporting System software and comply with“Directions Concerning Financial Institutions Using the Bank’s Foreign Exchange Data Reporting System”.