• Font Size:
  • S
  • M
  • L
友善列印
WORD

Article Content

Title:

Regulations Governing the Preparation of Financial Reports by Financial Holding Companies  CH

Amended Date: 2019.06.19 (Articles 24 amended,English version coming soon)
Current English version amended on 2006.01.24 
Article 1     These Regulations are prescribed in accordance with Article 14, paragraph 2 of the Securities and Exchange Act ("the Act").
Info
Article 2     A financial holding company shall establish its accounting system based on the nature of its accounting matters, actual status of business, and development and management needs.
    The content of the accounting system referred to in the preceding paragraph shall provide for the following individual items, based on the nature of the business operations:
  1. A general description
  2. A chart of account books
  3. Account titles, accounting documents, account books, and description and use of accounting statements
  4. Standards and procedures for handling general accounting matters.
  5. Internal accounting controls.
  6. Handling of management accounting matters.
  7. Handling of computerized accounting matters.
  8. Other items required by the Financial Supervisory Commission (FSC) of the Executive Yuan.
Article 3     The financial reports of a financial holding company shall be prepared in accordance with these Regulations and relevant laws and regulations. Matters not provided therein shall be handled in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and generally accepted accounting principles.
    Where an item of for which disclosure is required under these Regulations appears in more than one place in the financial report, the company need only record the information in one place, with annotations in other places giving a page reference.
Info
Article 4     "Financial report" means financial statements, a chart of major accounts, and other disclosures and explanations helpful to users in making decisions.
    Financial statements shall include a balance sheet, income statement, statement of changes in shareholders' equity, a cash flow statement, and notes or supporting schedules thereto.
    A financial holding company, unless newly established or where applicable regulations provide otherwise, shall prepare the principal financial statements and their notes referred to in the preceding paragraph by comparing two consecutive periods, and the financial holding company's responsible person, a managerial officer, and the in-charge accountant shall sign or seal each page of such statements.
Article 5     The content of a financial report shall fairly present the financial position, operating results, and cash flows of the financial holding company without misleading an interested party in making judgments and decisions.
    If a financial report violates these Regulations or any other applicable requirement and the FSC discovers the problem upon audit and notifies the violator to make adjustment, the financial holding company shall make an adjustment to correct the situation. If the adjusted amount attains the standard set by the FSC, a corrected financial report shall be publicly announced. When making public announcement, the issuer shall indicate the reasons, items, and amount of adjustment as notified by the FSC.
Article 6     To make an accounting change, a financial holding company shall do as follows:
  1. A change in accounting principle:
    1. If there is a legitimate reason for a change in accounting principles, then at the end of the year preceding the one in which the new accounting principles are to be implemented, the attesting CPA shall be requested to provide an item-by-item analysis and review opinion on the rationality of the theoretical basis and the reasons for using both the original accounting principles and the newly adopted principles, the reasons for changing to the new accounting principles, concrete evidence for the superiority of the new accounting principles, and the estimated cumulative effect of a change in accounting principles. These shall be submitted as a proposal for passage by the board of directors, after which they shall be submitted to the FSC for approval. Following FSC approval, the issuer shall make a public announcement of the estimated cumulative effect of the change to the new accounting principles and the attesting CPA's review opinion.
    2. If the cumulative effect of a change in accounting principles cannot be calculated due to practical difficulties as described in paragraph 12 of Statement of Financial Accounting Standards No. 8, the attesting CPA shall be requested to provide an item-by-item analysis and review opinion on the rationality of the theoretical basis and the reasons for using both the original accounting principles and the newly adopted accounting principles, the reasons for changing to the new accounting principles, concrete evidence for the superiority of the new accounting principles, and the reason that the cumulative effect of a change in accounting principles cannot be calculated, and after additionally providing an opinion on the impact on the auditing opinion for the year of the change to the new accounting principles, the matter shall be handled according to the above procedure.
    3. Unless it is not possible to calculate the cumulative effect of a change in accounting principles as referred to in the preceding item, within two months after the beginning of the year in which the new accounting principles go into effect, the actual cumulative effect of a change in accounting principles shall be calculated, reported to the board of directors, then reported to the FSC for recordation. If the difference between the actual cumulative effect of a change in accounting principles and the original estimated cumulative effect of a change in accounting principles is NT$10 million or more, and if the amount is also one percent or more of net operating revenues for the previous year or more than five percent of total paid-in capital, an analysis of the reason for the difference shall be given and the attesting CPA shall also be requested to provide an opinion on its rationality. The analysis and the attesting CPA's opinion shall be publicly announced and reported to the FSC.
    4. If the condition in item 2 applies to the issuer, then in the year in which the new accounting principles go into effect, the issuer shall disclose the effect of the change in accounting principles on the profits/losses in the notes to its first quarter, semi-annual, third quarter, and yearly financial reports.
    5. With the exception of the application of new accounting principles to newly purchased assets, which need not be handled in accordance with the provisions of the preceding items, when any other change in accounting principles is adopted without having first been duly reported for approval, the financial reports for the year in which the change to the new principles was implemented shall be restated, and the new accounting principles applied only in the year after a supplementary report has been filed and approved.

  2. With respect to the subjects of accounting estimates, any change to the useful life of a depreciable or depletable asset, or to the period of economic benefit of an intangible asset, shall be handled in accordance with the provisions of items 1, 4, and 5 of the preceding subparagraph.
Info
Article 7     The term "subsidiary" as used herein means a subsidiary according to Article 4, subparagraph 4, of the Financial Holding Company Act or Statements of Financial Accounting Standards Nos. 5 and 7.
Article 8     A financial holding company created by means of business transfer or share exchange under the Financial Holding Company Act shall prepare its financial reports subject to the provisions of these Regulations, starting from the business transfer record date or the share exchange record date.
    When preparing a financial report for the year of transfer or exchange and the next year, the financial holding company shall make footnote disclosure in the financial report of supplementary information to its pro forma comparative financial statements.
    The supplementary information to pro forma comparative financial statements referred to in the preceding paragraph shall include a balance sheet and an income statement. The income statement shall at least include net income, income prior to posting of extraordinary gains and losses, net profit (loss), and earnings per share.
    When such pro forma information is provided, figures shall be computed on the assumption that the transfer or exchange in question has taken place.
Article 9     The financial reports of a financial holding company shall be prepared on a consolidated basis.
    When preparing a consolidated financial report, a financial holding company shall incorporate all bank, insurance, and securities subsidiaries therein, and shall further comply with Statement of Financial Accounting Standards No. 7.
    Upon special approval by the FSC, A subsidiary meeting the definition set out in Article 4, subparagraph 4 of the Financial Holding Company Act maybe excluded from consolidated financial statements if it is proven that the holding company does not have effective control and has prepared a concrete adjustment plan. This fact shall be disclosed in a footnote.
Article 10     When a financial holding company prepares its annual and semi-annual financial reports, same-period financial statements of the financial holding company and its subsidiaries shall undergo a CPA audit; when the holding company prepares its first-quarter and third-quarter financial reports, same-period financial statements shall undergo a CPA review.
Article 11     When a financial holding company prepares its consolidated financial statements, similar asset, liability, shareholders' equity, income, and expense and loss accounts of the financial holding company and its subsidiaries shall be aggregated, and necessary netting shall be carried out.
    In the consolidated financial reports of a financial holding company, the content of account entries is subject to these Regulations and the applicable regulations governing preparation of financial reports.
Article 12     The classification of asset accounts in the consolidated balance sheet, content of account entries, and matters to be noted are as follows:
  1. Cash and cash equivalents: Means cash on hand, notes held for exchange, petty cash revolving funds, and funds on deposit at other financial institutions. Items earmarked for a designated purpose or subject to use restrictions may not be entered under this account.
  2. Central Bank deposits and interbank loans: Means Central Bank deposits and reserves, interbank loans, and interbank overdrafts.
  3. Financial assets at fair value through profit or loss: Means financial assets held for trading; financial assets, except those designated as hedged items in hedge accounting relationships, which at the time of initial recognition were designated as assets to be measured at fair value, with changes in fair value recognized in earnings. If financial assets at fair value through profit or loss are to be used for repo transactions or are otherwise subject to any restriction or limitation, such shall be noted.
  4. Bill and bond reverse repurchase investments: Means the dollar amount actually paid to the counterparty when engaging in bill and bond reverse repurchase transactions
  5. Available-for-sale financial assets: Means any non-derivative financial asset that meets one of the following conditions:
    1. Is designated as available-for-sale.
    2. Is not a financial asset designated at fair value through profit or loss, a financial asset held to maturity, a financial asset measured at cost, a bond portfolio with no active market, a loan, or a receivable.
  6. Receivables: Means various types of receivables, regardless whether originated by the entity, including accounts receivable, notes receivable, interest receivable, acceptances receivable, securities margin loans receivable, refinancing collateral receivable, insurance premiums receivable, claims and benefits recoverable from reinsurers, unaccrued amounts payable on reinsurance, accrued amounts payable on reinsurance, and other receivables.
  7. Loans: Means documentary credits, discounts on notes, loans, life insurance loans, insurance premium loans, and loans reclassified as non-accrual loans.
  8. Held-to-maturity financial assets: Means non-derivative financial assets with fixed or determinable payments and fixed maturity that the company has the positive intention and ability to hold to maturity.
  9. Equity investments using the equity method: Means a long-term equity investment using the equity method. If it is encumbered by a pledge or is otherwise subject to any restriction or limitation, this fact shall be reported in a footnote.
  10. Real estate investments: Means investments made by any subsidiary (in the course of its conduct of a registered line of business and in accordance with applicable laws and/or regulations) in real estate not intended for its own use.
  11. Fixed assets: Means tangible assets for use in conduct of business, and not intended for sale. If a fixed asset is provided as a guarantee, or has a mortgage or lien against it, that fact shall be noted.
  12. Goodwill and intangible assets: Means assets which are nonphysical but have economic value, including goodwill, franchises, patents, concessions, trademarks, computer software costs, deferred pension costs, specialized expertise, leaseholds, and other intangible assets.
  13. Other financial assets: Financial assets not recorded individually on the balance sheet shall be classified as "other financial assets," and include derivative financial assets for hedging, financial assets measured at cost, equity investments held for disposal, bond portfolios with no active market, non-accrual loans other than those reclassified from loans, insurance product assets held in segregated custody accounts, and other miscellaneous financial assets. When the amount of "other financial assets" exceeds 5 percent of the total amount of assets, the account for each such "other asset" shall be recorded separately.
  14. Other assets: Means assets not falling within the above categories, including foreclosed collateral, funds held by ceding companies, and other miscellaneous assets. When "other assets" account for more than 5 percent of the total amount of assets, the account for each such "other asset" shall be recorded separately.
Article 13     The classification of liability accounts on the consolidated balance sheet, the content of account entries, and matters to be noted are as follows:
  1. Central Bank deposits and deposits from other banks: Means Central Bank deposits, deposits from other banks, overdrafts on other banks, and loans from other banks.
  2. Deposits: Means checks, demand deposits, time deposits, savings deposits, and money orders.
  3. Commercial paper payable: Means short-term bills issued through financial institutions to acquire funds from the money market. For commercial paper payable, the guarantor or accepting institution and interest rate shall be indicated. If collateral is provided, the name and carrying amount of the collateral shall be indicated.
  4. Financial liabilities at fair value through profit or loss: Means financial liabilities held for trading; financial liabilities, except those designated as hedged items under hedge accounting, which at the time of initial recognition were designated as assets to be measured at fair value and changes in fair value is recognized in earnings.
  5. Bill and bond repurchase liabilities: Means the dollar amount actually obtained from the trading counterpart when engaging in bill and bond repurchase transactions
  6. Payables: Means various payable amounts, including accounts payable, notes payable, interest payable, acceptances, short sale proceeds collected as collateral, refinancing borrowings, commissions payable, insurance claims and benefits payable, reinsurance claims and benefits payable, accrued amounts payable on reinsurance, unaccrued amounts payable on reinsurance, and other payables.
  7. Borrowings from the Central Bank and other banks: Means financing obtained from the Central Bank using discounted notes or secured claims, or financing obtained from other banks using negotiable instruments or other means.
  8. Bonds payable: Means previously issued financial bonds and corporate bonds.
  9. Other borrowings: Means borrowed amounts that cannot be classified under any of the categories set out above. Indicate the nature of the borrowing, whether there is any guarantee, and the interest rate range. If collateral is provided, indicate the name and carrying amount of the collateral.
  10. Preferred stock liabilities: Means preferred stock with characteristics of financial liabilities as defined under Statement of Financial Accounting Standards No. 36.
  11. Operating and liability reserves: Means various reserves set aside by insurers, and other operating and liability reserves.
  12. Other financial liabilities: Financial liabilities not recorded individually on the balance sheet shall be classified as "other financial liabilities," and include derivative financial liabilities for hedging, financial liabilities measured at cost, and other miscellaneous financial assets. When the amount of "other financial liabilities" exceeds 5 percent of the total amount of liabilities, the account for each such "other liability" shall be recorded separately.
  13. Other liabilities: Means liabilities not listed under the above subparagraphs, such as collections for others and other miscellaneous liabilities. When the amount of "other liabilities" exceeds 5 percent of the total amount of liabilities, the account for each such "other liability" shall be recorded separately.
Article 14     The classification of shareholders' equity accounts on the consolidated balance sheet, content of account entries, and matters to be noted are as follows:
  1. Parent company shareholders' equity: Means financial holding company consolidated shareholders' equity net of minority interest. Within the "Parent company shareholders' equity" account, the amounts and principal components of capital stock, additional paid-in capital, retained earnings (or accumulated deficit), and other shareholders' equity items shall be recorded separately.
  2. Minority interest shall be recorded separately from parent company shareholders' equity. There is no need to distinguish between capital stock, additional paid-in capital, and retained earnings (or accumulated deficit).
  3. Where it is permitted under Article 47, paragraph 4, of the Financial Holding Company Act and other applicable provisions to distribute cash dividends from additional paid-in capital derived from undistributed earnings of the financial institution before conversion, and it is also permitted to reallocate it as capital in the year of the conversion without being subject to the limitations imposed by Article 8 of the Securities and Exchange Act Enforcement Rules in relation to capitalization percentage, footnote disclosure shall be made in the financial report specifying the nature and dollar amount of such distribution or capitalization.
Info
Article 15     The account structure in a consolidated income statement, content of account entries, and matters to be noted are as follows:
  1. Revenues and expenses shall be classified according to their nature, and net interest income, net non-interest income, credit provisions, provisions to insurance policy reserves, and operating expenses shall be separately disclosed.
  2. Net interest income: Means the difference of interest income minus interest expenses.
    1. Interest income: Means interest income generated by loans, deposits, conduct of margin purchase and short sale business, and holdings of bills, bonds, bill and bond reverse repurchase investments, reinsurance deposits paid out, and financial assets not designated at fair value through profit or loss.
    2. Interest expenses: Means interest expenses generated by deposits accepted or other debts contracted, conduct of margin purchase or short sale business, bill and bond repurchase liabilities, reinsurance deposits received, and financial liabilities.
  3. Net non-interest income:
    1. Net income on service charges and commissions: Means the net amount of service charge and commission revenues minus service charge expenses and commission payouts, including service charges and commissions received for execution of trading orders, conduct of short sale business, or the provision of guarantees, certification, underwriting, brokering, and ceding of reinsurance; service charge expenses and commission payouts include brokerage and dealer handling fee expenses, refinancing service charges, underwriting service charges, commissions paid out in connection with the writing of insurance contracts, and reinsurance commissions paid out upon assumption of reinsurance.
    2. Net insurance business income: Means the net amount of insurance business income minus insurance business expenses.
      1. Insurance business income: Includes premium income, claims and benefits recovered from reinsurers, and income from insurance product assets held in segregated custody accounts.
      2. Insurance business expenses: Includes reinsurance expenses, underwriting expenses, insurance claims and benefits, contributions to the appropriate stabilization fund, and expenses connected with insurance product assets held in segregated custody accounts.
    3. Gains (losses) on financial assets and liabilities designated at fair value through profit or loss: Means gains (losses), dividends, and end-of-period fair market valuation gains (losses) on: (a) assets and liabilities held for trading or for borrowing and lending transactions; and (b) financial assets and liabilities designated at fair value.
    4. Realized gains (losses) on available-for-sale financial assets: Means gains (losses) and dividends arising from the trading, borrowing, or lending of available-for-sale financial assets.
    5. Realized gains (losses) on held-to-maturity financial assets: Means gains (losses) arising from the trading, borrowing, or lending of held-to-maturity financial assets.
    6. Calculation and presentation of gains (losses) on equity investments recognized using the equity method shall be carried out in accordance with Statement of Financial Accounting Standards No. 5.
    7. Gains (losses) on real estate investments: Means the netted figure for real estate investment gains and real estate investment losses.
    8. Foreign exchange gains (losses): Means actual exchange or valuation gains (losses) on foreign-currency-denominated assets and liabilities due to exchange rate fluctuations. In order to avoid risks arising from net investments in overseas business units, these shall be accounted for in accordance with Statement of Financial Accounting Standards No. 34.
    9. Asset impairment losses, and gains on reversal of impairment, shall be calculated and presented in accordance with the applicable Statements of Financial Accounting Standards.
    10. Other net non-interest income (losses): Means non-interest income or losses other than those falling under the accounts listed above. Other net non-interest losses (e.g. amounts set aside as reserve against losses on other business, and losses on the sale of non-performing loans) shall be recorded separately in the income statement if their combined dollar amount is equal to or greater than 5 percent of net non-interest income.
  4. Net income: Means the total figure for net interest income plus net non-interest income.
  5. Credit provisions: Means bad debt provisions set aside against loan assets.
  6. Provisions to insurance policy reserves: Means expenses incurred in provisioning to and withdrawing amounts from premium reserve, special reserve, and loss reserve.
  7. Operating expenses: Means expenditures required to carry out business operations. As necessary, these shall be recorded individually, classified principally as personnel expenses, depreciation and amortization expenses, and other business and administrative expenses.
  8. Income (losses) from continuing operations: Means the net amounts in the preceding four subparagraphs. These shall be recorded separately as pre-tax income (losses), income tax expenses (benefits), and consolidated after-tax income (losses).
  9. Income (losses) from discontinued operations: Income or loss arising in the current period from disposal or planned disposal of a significant business segment, including operating income (losses) before discontinuation of operations and gains (losses) on disposal in the current period. Gains (losses) on disposal shall be measured on the date on which the decision for the disposal is made. Should there be a loss on a disposal, it shall be recognized promptly; should there be a gain, it shall not be recognized until realization.
  10. Extraordinary gains and losses: Means income statement items unusual in nature and infrequent in occurrence. These shall be recorded individually and shall not be amortized over more than one year.
  11. Cumulative effects of changes in accounting principles: Shall be recorded individually, after extraordinary gains and losses.
  12. Consolidated total income (losses): Means consolidated earnings (or deficit) for the current accounting period, being the sum of the items set out in the preceding four subparagraphs.
  13. Consolidated total income (losses) shall be allocated among the parent company shareholders and minority interest.
  14. Earnings per share shall be recorded separately for consolidated income (losses) from continuing operations, income (losses) from discontinued operations, extraordinary gains (losses), cumulative effects of changes in accounting principles, and consolidated total income (losses).
Article 16     A consolidated statement of changes in shareholders' equity is a report that presents the change in each of the components of shareholders' equity of the parent company and its subsidiaries. It shall record the balance at the beginning of the period for capital stock, capital reserve, retained earnings (or accumulated deficit), other components of shareholders' equity, and minority interest. It shall also record any balances that have changed during the current period, and the amount thereof, as well as the ending balance for each component.
    The figure obtained by subtracting minority interest from ending consolidated shareholders' equity shall equal the ending balance for parent company shareholders' equity.
Info
Article 17     A statement of cash flows summarizes the inflows and outflows of cash and cash equivalents arising from the operating, investing, and financing activities of a financial holding company and its subsidiaries during a given period; it shall be prepared in accordance with the applicable Statements of Financial Accounting Standards.
Article 18     In order that a consolidated financial report may clearly and thoroughly reflect the financial position, operating results, and cash flows of a financial holding company and its subsidiaries, it shall be accompanied by notes setting forth the following matters on a consolidated basis:
  1. An outline history of the company, and a description of its business scope, including a description of the investment/shareholding relationship between the entities covered by the consolidated financial statements and each of the subsidiaries.
  2. Important changes in the organization and significant changes to the management system.
  3. A declaration affirming that the consolidated financial statements were prepared in conformance with these Regulations and other applicable acts and regulations (the titles of such act or regulations shall be expressly recorded) and generally accepted accounting principles.
  4. A summary of significant accounting policies and measurement bases.
  5. Where for some special reason the accounting treatment changes, thus affecting the comparison of financial information between two successive periods, the reason for the change and its effect on the financial statements shall be explained.
  6. Among the amounts recorded in the consolidated financial report, the valuation basis shall be noted in the case of financial instruments and any other items for which notation of the valuation basis is necessary.
  7. If any account contained in the consolidated financial report is subject to any legal, contractual, or other type of restriction, the conditions and time frame thereof and any relevant matters shall be stated.
  8. Any addition, expansion, construction, lease, obsolescence, idleness, sale, pledge, transfer, or long-term lease of major assets.
  9. Any material commitments or contingent liabilities (including off-balance sheet items).
  10. Any change in capital structure.
  11. Borrowings (including loans needed by an insurance subsidiary to pay major claims).
  12. Any losses caused by major disasters.
  13. Acceptance of any research and development project funded by another party, and the amount thereof.
  14. Major litigation pending or concluded.
  15. Signing, completion, cancellation, or voidance of major contracts.
  16. Information related to employee pensions.
  17. Financial instruments shall be disclosed in accordance with the Statements of Financial Accounting Standards applicable to financial instruments.
  18. Information relating to transfers of financial assets and extinguishments of liabilities shall be disclosed in accordance with Statement of Accounting Standards No. 33.
  19. Information relating to capital adequacy. (Form A)
  20. The aggregate amount, or ratio, of loans extended, endorsements given, or any other transactions conducted by all subsidiaries of the financial holding company to, for, or with a single party, single group of related parties, or single group of affiliated enterprises, disclosure of which is required under Article 46 of the Financial Holding Company Act. (Form B)
  21. Material effects of changes in government acts and regulations.
  22. Information relating to any discontinued operations.
  23. Acquisition of a major part of the operations, assets, and liabilities of another financial institution, or transfer of such to another financial institution.
  24. With respect to the revenues, costs, expenses, and income (losses) generated though business dealings or transactions, joint business promotion, information sharing, and common use of business facilities or premises by or between the financial holding company and its subsidiaries, or between any two subsidiaries, state how these have been allocated, and the dollar amounts thereof.
  25. In the case of private placement of securities, disclose the type, issue date, and dollar amount.
  26. Segment financial information. (Form C)
  27. The financial holding company's financial statements and the condensed balance sheet and income statement of each subsidiary. (Form D, Form E)
  28. Material business information for each subsidiary, such as profitability, asset quality, management information, liquidity, and market risk sensitivity. (Forms F through J).
  29. Where a subsidiary holds shares in the parent company, the notes to the financial report shall state the name of each such subsidiary, and for each one shall separately disclose the number of shares held, dollar amount, reason, limits on retained earnings, statutory time limit for disposal, and planned disposal method passed by a board of directors resolution.
  30. Other necessary disclosures to prevent misunderstanding by users or to facilitate the fair presentation of the consolidated financial report.
Article 19     A consolidated financial report shall provide notes and explanations on any of the following subsequent events that occur between the consolidated balance sheet date and the date on which the financial report is issued:
  1. Any change in capital structure.
  2. Any long-term and short-term borrowings in substantial amounts (including loans needed by an insurance subsidiary to pay major claims).
  3. Any addition, expansion, construction, lease, obsolescence, idleness, sale, pledge, transfer, or long-term lease of major assets.
  4. Any material change in scope of operations and operational strategy.
  5. Any acquisition of a major part of the operations, assets, and liabilities of another financial institution, or transfer of such to another financial institution.
  6. Any material change in the method of provisioning insurance subsidiary reserves.
  7. Any major investments in other enterprises.
  8. Any losses caused by major disasters.
  9. Any deterioration of major assets or loan write-offs.
  10. Any major litigation pending or concluded.
  11. Any signing, completion, cancellation, or voidance of major contracts.
  12. Any major organizational adjustments and significant reforms of the management system.
  13. Any material effects of changes in government acts and regulations.
  14. Any other significant events or measures that could affect future financial condition, operating results, or cash flows.
Article 20     The notes to a consolidated financial report shall disclose current-period information on the following items:
  1. Information on material transactions:
    1. Accumulated buying/selling of shares in a single investee enterprise for which the aggregate dollar amount reaches either NT$300 million or 10 percent or more of paid-in capital.
    2. Acquisitions or disposals of real estate, the dollar amount of which is either NT$300 million or 10 percent or more of paid-in capital.
    3. Service charge discounts on transactions with related parties in an aggregate amount of NT$5 million or more.
    4. Amounts receivable from related parties amounting to either NT$300 million or 10 percent or more of paid-in capital.
    5. Sell-off by a subsidiary of non-performing loans of NT$5 billion or more.
    6. The type of any securitization product offered or to be offered by a subsidiary that has applied for and received approval to do so in accordance with the Financial Asset Securitization Act or the Real Estate Securitization Act, and information related thereto.
    7. Any other material transactions that could affect the decisions of financial statement users.
  2. Information on enterprises invested in by the financial holding company:
    1. Where the financial holding company directly or indirectly exercises significant influence or control over a company in which it has invested, the notes shall disclose the investee enterprise's name, location, principal line(s) of business, original investment amount, shareholdings at end of period, current-period income (loss), and investment gains (losses) recognized; for any single group of parties related to the financial holding company as set out in Article 4, paragraph 1, subparagraph 8 of the Financial Holding Company Act, or any interested party of the financial holding company as set out in Article 44, paragraph 1, subparagraphs 1 and 2 of the same Act, the notes shall also disclose any participation by such party or parties in investment(s) in an investee enterprise as set out in subparagraph 1, item (1) above. (Form K)
    2. Where the financial holding company directly or indirectly exercises significant influence or control over a company in which it has invested, the notes shall also disclose information on the investee company as set out in items 2 through 7 of the preceding subparagraph, as well as information on such company regarding loans of funds to others, endorsements or guarantees made for others, end-of-period securities holdings, cumulative purchases or sales of a single security amounting to either NT$300 million or 10 percent or more of paid-in capital, and any derivatives transactions; provided, however, that if the investee company is a financial institution, insurance enterprise, or securities enterprise, and if loaning funds to others, making endorsements or guarantees for others, and/or trading in securities are among the company's principal registered lines of business, then these types of transactions need not be included among the material transactions that the company is required to disclose.
  3. Information about a subsidiary's mainland China investments, material commitments and contingent liabilities, losses caused by major disasters, and subsequent events.
Info
Article 21     A financial holding company shall fully disclose related party transactions, and additionally disclose any related party transactions by a subsidiary in an amount of NT$100 million or more.
    The meaning of "related party" under the preceding paragraph shall be determined in accordance with Statement of Financial Accounting Standards No. 6. To determine whether a trading counterparty is a related party, the substance of the relationship as well as the legal form shall be taken into consideration.
    An entity to which any of the following circumstances applies shall be deemed a related party, unless proof can be produced that it has no control or significant influence:
  1. An affiliated enterprise, within the meaning given by Chapter VI-I of the Company Act, and its directors, supervisors, and managerial officers.
  2. A director, supervisor, or managerial officer of a subsidiary of the financial holding company.
  3. A person at the rank of manager or higher at the financial holding company.
  4. A company or institution listed as an affiliated enterprise in its external publications or printed materials.
Article 22     The consolidated financial statements and chart of major accounts of a financial holding company and its subsidiaries include the following items: (to be presented using the forms indicated)
  1. Consolidated Balance Sheet (Form 1)
    1. Schedule of Cash and Cash Equivalents (Form 1-1)
    2. Schedule of Financial Assets at Fair Value Through Profit or Loss (Form 1-2)
    3. Schedule of Bill and Bond Reverse Repurchase Investments (Form 1-3)
    4. Schedule of Available-for-Sale Financial Assets (Form 1-4)
    5. Schedule of Amounts Receivable (Form 1-5)
    6. Schedule of Loans (Form 1-6)
    7. Schedule of Held-to-Maturity Financial Assets (Form 1-7)
    8. Schedule of Changes in Equity Investments Using the Equity Method (Form 1-8)
    9. Schedule of Changes in Accumulated Impairment of Equity Investments Using the Equity Method (Form 1-9)
    10. Schedule of Changes in Real Estate Investments (Form 1-10)
    11. Schedule of Changes in Accumulated Depreciation of Real Estate Investments (Form 1-11)
    12. Schedule of Changes in Accumulated Impairment of Real Estate Investments (Form 1-12)
    13. Schedule of Changes in Fixed Assets (Form 1-13)
    14. Schedule of Changes in Accumulated Depreciation of Fixed Assets (Form 1-14)
    15. Schedule of Changes in Accumulated Impairment of Fixed Assets (Form 1-15)
    16. Schedule of Changes in Goodwill and Intangible Assets (Form 1-16)
    17. Schedule of Other Financial Assets (Form 1-17)
    18. Schedule of Other Assets (Form 1-18)
    19. Schedule of Deposits (Form 1-19)
    20. Schedule of Commercial Paper Payable (Form 1-20)
    21. Schedule of Financial Liabilities at Fair Value Through Profit or Loss (Form 1-21)
    22. Schedule of Bill and Bond Repurchase Liabilities (Form 1-22)
    23. Schedule of Amounts Payable (Form 1-23)
    24. Schedule of Bonds Payable (Form 1-24)
    25. Schedule of Preferred Stock Liabilities (Form 1-25)
    26. Schedule of Changes in Operating and Liability Reserves (Form 1-26)
    27. Schedule of Other Financial Liabilities (Form 1-27)
    28. Schedule of Other Liabilities (Form 1-28)
  2. Consolidated Financial Statements (Form 2)
    1. Schedule of Interest Income (Form 2-1)
    2. Schedule of Interest Expenses (Form 2-2)
    3. Schedule of Net Income on Service Charges and Commissions (Form 2-3)
    4. Schedule of Net Insurance Business Income (Form 2-4)
    5. Schedule of Financial Assets and Liabilities at Fair Value Through Profit or Loss (Form 2-5)
    6. Schedule of Realized Gains (Losses) from Sale of Available-for-Sale Financial Assets (Form 2-6)
    7. Schedule of Realized Gains (Losses) from Held-to-Maturity Financial Assets (Form 2-7)
    8. Schedule of Investment Gains (Losses) Recognized Using the Equity Method (Form 2-8)
    9. Schedule of Real Estate Investment Gains (Losses) (Form 2-9)
    10. Schedule of Foreign Exchange Gains (Losses) (Form 2-10)
    11. Schedule of Asset Impairment Losses, and Gains on Reversal of Impairment (Form 2-11)
    12. Schedule of Other Net Non-interest Income (Losses) (Form 2-12)
    13. Schedule of Credit Provisions (Form 2-13)
    14. Schedule of Provisions to Insurance Policy Reserves (Form 2-14)
    15. Schedule of Personnel Expenses (Form 2-15)
    16. Schedule of Depreciation and Amortization Expenses (Form 2-16)
    17. Schedule of Other Business and Administrative Expenses (Form 2-17)
  3. Statement of Changes in Shareholders' Equity (Form 3)
  4. Consolidated Statement of Cash Flows (Form 4)
Article 23     A financial holding company shall prepare interim financial reports in accordance with Chapter 2 herein and Statement of Financial Accounting Standards No. 23.
    When preparing a quarterly report, a financial holding company need not prepare the statement of changes in shareholders' equity or the chart of major accounts.
Article 24     A financial holding company shall prepare consolidated financial statements covering its affiliated enterprises unless the FSC has granted it approval to do otherwise.
Article 25     Consolidated financial statements covering affiliated enterprises shall be prepared and presented in accordance with the Regulations Governing Preparation of Consolidated Business Reports Covering Affiliated Enterprises, Consolidated Financial Statements Covering Affiliated Enterprises, and Reports on Affiliations, as adopted by the FSC.
Article 26     The financial report and related attachments that financial holding company is required to file under Article 36 of the Securities and Exchange Act shall be separately bound, with the upper right corner of the front cover of the financial report imprinted with the common stock code, and submitted to the FSC along with related documents. A copy shall also be sent to the Securities and Futures Institute for access by the public. For a financial holding company whose stocks are already listed on a stock exchange, a copy shall also be sent to the Taiwan Stock Exchange Corporation and the Taiwan Securities Association; for a financial holding company whose stocks are being traded over the counter, a copy shall be sent to the GreTai Securities Market and the Taiwan Securities Association.
    Copies of the documents that the financial holding company is required to file under Article 6 shall also be sent to the relevant organizations in accordance with the preceding paragraph.
Article 27     These Regulations shall enter into force on the date of promulgation.