萬國法律事務所

Structured notes have accounted for a considerable amount of profit for Taiwanese banks. In July 2009, for example, Taiwanese banks made almost NT$ 300 billion from transactions in structured notes. The Financial Supervisory Commission of Taiwan’s Executive Yuan therefore plans to impose specific regulations on such financial products, and especially on dual- currency deposits, which account for approximately 80% of the structured notes sold by Taiwanese banks.

The major provisions of the regulations are as follow:

First, clients must be explicitly informed that structured notes are not regular deposits; instead, they are complicated financial products that may result in capital losses.

Second, structured notes shall not be marketed and sold in the name of deposits.

Third, structured notes that are linked to exchange rates must guarantee at least 80% of the principal.

Fourth, where the financial products are highly complicated and carry significant risk, the application and purchase process must be recorded.

Fifth, clients must sign some form of an acknowledgment when making his/her first purchase of structured notes.