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Title Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises or Persons Providing Virtual Asset Services CH
Date 2024.11.26 ( Amended )

Article Content

Article 60-2     These Regulations are adopted pursuant to Article 7, paragraph 3, Article 8, paragraph 4 (the fore part), Article 10, paragraph 3, Article 12, paragraph 3, and Article 13, paragraph 3 of the Money Laundering Control Act, applied mutatis mutandis under Article 5, paragraph 2 of that Act, and to Article 7, paragraph 5 of the Counter-Terrorism Financing Act.
Article 2     A stock trade of less than one trading unit shall be an odd-lot trade. The trading method for odd-lot trades shall be separately prescribed by the TPEx.
Article 3     A VASP shall comply with the following provisions when undertaking customer due diligence (CDD) measures:
  1. The VASP shall not accept anonymous accounts or accounts in fictitious names for establishing or maintaining business relationships.
  2. The VASP shall undertake CDD measures when:
    1. Establishing a business relationship with any customer.
    2. Carrying out an occasional transaction equal to or above NTD$30,000 or the equivalent, or multiple occasional transactions that are obviously related with a sum total equal to or above NTD$30,000 or the equivalent.
    3. There is a suspicion of money laundering or terrorist financing.
    4. The VASP has doubts about the veracity or adequacy of previously obtained customer identification data.
  3. CDD measures shall be taken as follows:
    1. Identifying the customer and verifying the customer's identity using reliable, independent source documents, data or information.
    2. Verifying that any person purporting to act on behalf of the customer is so authorized, and identifying and verifying the identity of that person using the methods specified in the preceding item.
    3. Identifying the beneficial owner of a customer and taking reasonable measures to verify the identity of the beneficial owner, including using data or information from a reliable source.
    4. Understanding and, as appropriate, obtaining information on the purpose and intended nature of the business relationship when undertaking CDD measures.
  4. When the customer specified in the preceding subparagraph is a natural person, the VASP shall obtain at least the following information on the customer to identify and verify the customer's identity:
    1. Name.
    2. Official identity document number.
    3. Date of birth.
    4. Nationality.
    5. Household registration or residence address.
  5. When the customer specified in subparagraph 3 is a juristic person, an organization, or a trustee of a trust, the VASP shall understand the business nature of the customer or trust (including a legal arrangement similar to a trust) and obtain at least the following information to identify the customer or the trust and verify its identity:
    1. Name, legal form, and proof of existence of the customer or trust.
    2. The articles of incorporation/association or similar power documents that regulate and bind the juristic person or trust, except in any of the following circumstances:
      1. Those listed under subparagraph 7, item C hereof without the situations specified in the proviso of subparagraph 3 of Article 6 herein.
      2. A customer that is an organization that is verified as not having articles of incorporation/association or similar power document.
    3. Names of the relevant persons having a senior management position in the customer.
    4. The address of the registered office of the customer and the address of its principal place of business.
  6. When the customer is a juristic person, the VASP shall understand whether the customer is able to issue bearer shares and apply appropriate measures for customers who have issued bearer shares to ensure the information on their beneficial owners is kept up to date.
  7. When the customer specified in item C of subparagraph 3 is a juristic person, an organization, or a trustee of a trust, the VASP shall understand the ownership and control structure of the customer or the trust, and obtain the following information to identify the beneficial owners of the customer and take reasonable measures to verify the identity of such persons:
    1. When the customer is a juristic person or organization:
      1. The identity of the natural person(s) who ultimately has a controlling interest in the juristic person. A controlling interest means holding directly and/or indirectly 25 percent or more of the juristic person's shares or capital; the VASP may ask the customer to provide its list of shareholders or other documents to assist in the identification of persons holding a controlling interest.
      2. To the extent that no natural person with controlling interest is identified under the preceding sub-item or that there is doubt as to whether the person(s) with the controlling interest are the beneficial owner(s), the identity of the natural person(s) (if any) exercising control of the customer through other means.
      3. Where no natural person is identified under sub-item a or b above, the VASP shall identify the natural person who holds the position of senior managing official.
    2. For a customer that is a trustee of a trust: the identity of the settlor(s), the trustee(s), the trust supervisor, the beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust, or the identity of person(s) in equivalent or similar positions.
    3. Unless otherwise provided for in the proviso of subparagraph 3 of Article 6 or where the customer has issued bearer shares, the VASP is not subject to the requirements of identifying and verifying the identity of beneficial owner(s) of a customer set out under item C of subparagraph 3 hereof if the customer or the person having a controlling interest in the customer is:
      1. an ROC government agency;
      2. an enterprise owned by the ROC government;
      3. a foreign government agency;
      4. an ROC public company or its subsidiary;
      5. a company listed on a stock exchange outside the ROC that is subject to regulatory disclosure requirements of its principal shareholders, or a subsidiary of such a company;
      6. a financial institution supervised by the ROC government or an investment vehicle managed by such an institution;
      7. a financial institution established outside the ROC that is subject to and supervised for compliance with AML/CFT requirements consistent with standards set by the Financial Action Task Force (FATF), or an investment vehicle managed by such an institution;
      8. a fund administered by an ROC government agency;
      9. an employee stock ownership trust or an employee savings trust.
  8. The VASP shall perform CDD measures by itself. However, if it is otherwise permitted by law or regulation to rely on third parties to perform the identification and verification of the identities of customers, agents, and beneficial owners or the purpose and nature of the business relationship, such a VASP relying on a third party shall still bear the ultimate responsibility for CDD measures and comply with the following provisions:
    1. The VASP shall be able to immediately obtain the necessary CDD information.
    2. The VASP shall take adequate steps to satisfy itself that copies of identification data and other relevant documentation relating to the CDD requirements will be made available from the third party upon request by the VASP without delay.
    3. The VASP shall ensure that the third party it relies on is regulated, supervised or monitored, and has appropriate measures in place for compliance with CDD and record-keeping requirements.
    4. The VASP shall make sure that the jurisdiction where the third party it relies on is located has AML/CFT regulations in place consistent with the standards set out by the FATF.
  9. The VASP shall not establish a business relationship with a customer or conduct occasional transactions with a value equal to or above than NTD$30,000 or the equivalent before completing the CDD measures.
  10. If the VASP is unable to complete the required CDD process on a customer, it shall consider filing a suspicious transaction report on money laundering or terrorist financing (STR) in relation to the customer.
  11. If the VASP forms a suspicion of money laundering or terrorist financing and reasonably believes that performing the CDD process will tip-off the customer, it is permitted not to pursue that process and file an STR instead.
Article 4
Article 65
Article 6     The VASP shall determine the extent of application of CDD and ongoing due diligence measures under Article 3, subparagraph 3 and the preceding article based on a risk-based approach (RBA):
  1. For higher risk circumstances, the VASP shall perform enhanced CDD or ongoing due diligence measures, including adopting at least the following additional enhanced measures:
    1. Obtaining the approval of senior management of the VASP before establishing or entering a new business relationship.
    2. Taking reasonable measures to understand the sources of wealth and the source of funds of the customer. The aforementioned source of funds refers to the substantial source from which the funds generate.
    3. Conducting enhanced ongoing monitoring of the business relationship.
  2. For customers from high ML/TF risk countries or regions, the VASP shall conduct enhanced CDD measures commensurate with the risks identified.
  3. For lower risk circumstances, the VASP may apply simplified CDD measures, which shall be commensurate with the lower risk factors. However, simplified CDD measures are not allowed in any of the following circumstances:
    1. The customers are from or in countries or regions known to have inadequate AML/CFT regimes, including but not limited to those which are designated by international organizations on AML/CFT as countries or regions with serious deficiencies in their AML/CFT regime, and other countries or regions that do not or insufficiently comply with the recommendations of international organizations on AML/CFT.
    2. There is a suspicion of ML/TF in relation to the customer or the transaction.
Article 7     (deleted)
    A securities dealer while trading shall make sure not to damage the formation of fair prices and the soundness of the operation.
Article 8     Except in the case of government bond and international bond trading or where otherwise provided by law, regulation, or these Rules, a securities dealer shall not place quotes for sale of securities that it does not own.
Article 70-2     When conducting CDD measures, the VASP shall put in place risk management systems to determine whether a customer or its beneficial owner is a person who is or has been entrusted with a prominent function by a domestic government, a foreign government, or an international organization ("politically exposed person"; "PEP"):
  1. For a customer or a beneficial owner thereof determined to be a current PEP of a foreign government, the VASP shall directly deem the customer to be a high-risk customer and adopt enhanced CDD measures under the items of subparagraph 1 of Article 6.
  2. For a customer or the beneficial owner thereof determined to be a current PEP of the domestic government or an international organization, the VASP shall assess the PEP's risks when establishing a business relationship with the PEP and conduct annual review thereafter. In cases of a higher risk business relationship with such customers, the VASP shall adopt enhanced CDD measures under the items of subparagraph 1 of Article 6.
  3. For a PEP who is no longer entrusted with a prominent public function by the domestic government, a foreign government, or an international organization, the VASP shall assess the influence that the individual could still exercise by considering relevant risk factors and determine whether to apply the provisions of the two preceding subparagraphs based on the RBA.
  4. The three preceding subparagraphs shall also apply to family members and close associates of PEPs.
    The scope of PEPs, their family members, and close associates mentioned in the preceding paragraph will be determined by the standards provided in the latter part of paragraph 4 of Article 8 of the Money Laundering Control Act.
    The provisions of paragraph 1 do not apply when a beneficial owner of any of those specified in Article 3, subparagraph 7, item C, sub-items a to c and h is a PEP.
Article 10     The VASP shall keep records and evidence of all business relations and transactions with its customers in hard copy or electronic form and in accordance with the following provisions:
  1. The VASP shall maintain all necessary records on domestic and international transactions for at least 5 years or a longer period as otherwise required by law.
  2. The VASP shall keep all the following information for at least five years, or a longer period as otherwise required by law, after the business relationship is ended or after the occasional transaction is concluded:
    1. All records obtained through CDD measures, such as copies or records of passports, identity cards, driving licenses or other similar official identification documents.
    2. Contract document files.
    3. Business correspondence, including information obtained from inquiries regarding the background and purpose of complex, unusual large transactions and any analysis undertaken.
  3. The transaction records maintained shall be sufficient to reconstruct individual transactions so as to provide evidence for determination of illegal activity.
  4. The VASP shall ensure that transaction records and CDD and related information will be available swiftly to the competent authorities when such requests are made with appropriate authority.
Article 11     The VASP shall report cash transactions with an amount equal to or above NTD$500,000 (including its equivalent in foreign currencies and currencies issued by Mainland China, Hong Kong, or Macao) to the Investigation Bureau, Ministry of Justice within 5 business days after the transaction.
    The data reported to the Investigation Bureau, Ministry of Justice under the preceding paragraph and related records and evidence shall be kept in accordance with the preceding article.
Article 12     A securities dealer may engage in when-issued trading of central government bonds in the following manners:
  1. Trading by price negotiation at its place of business. This is not applicable to securities firms.
  2. By using the TPEx's computerized bond price quotation system.
    When-issued trading of central book-entry bonds among dealers shall be handled in accordance with subparagraph 2 of the preceding paragraph.
    For the purposes of paragraph 1, when-issued trading of central government bonds refers to outright purchase/sale of the underlying government bonds from the business day next following the public announcement by the Ministry of Finance of the quarterly plan for bond issuance or of follow-on issuance until 1 business day prior to the date of issuance; provided, if TPEx Electronic Bond Trading System bond trading is suspended under applicable regulations on the business day prior to the originally scheduled date of issue of the government bonds because of a natural disaster or force majeure, the when-issued trading period will be extended to the date of issue of the bonds.
    Rules governing when-issued trading of central government bonds under subparagraph 1 of paragraph 1 shall be separately promulgated by the TPEx.
Article 13     If a securities dealer is engaged by an issuer to provide quotes for corporate bonds or financial bonds, then during the period for which it is engaged, it shall continuously provide trading quotes on each business day through the TPEx-designated quotation system, provided that the securities dealer is exempt from making sell quotes if it does not hold such bonds.
Article 14     As soon as a trade is confirmed, a securities firm trading securities over the counter shall promptly enter the trade information, at the time and in the form prescribed by the TPEx, into the information system of the TPEx and display the same at its business premises.
    If a trade referred to in the preceding paragraph is conducted between securities firms, the selling securities firm shall promptly enter the trade information as soon as the trade is executed; the buying securities firm shall promptly enter the dealing slip number for confirmation as soon as the trade is executed.
     When a securities firm conducts trading of local government bonds, corporate bonds and financial bonds at its place of business, then within 60 minutes from the confirmation of an outright purchase or sale transaction, it shall enter the information on the trade, in the format prescribed by the TPEx, into the TPEx information system.
Article 74     When the TPEx discovers that the securities trading of a securities dealer may affect the normal market condition, it may report to the competent authority to limit the trading volume of part of or all the securities traded by it.
    A securities dealer shall, at the times and in the format prescribed by the TPEx, report on a daily basis the volume of its holdings of book-entry central government bonds through the TPEx information system.
Article 16     The VASP shall conduct ML/TF risk identification and assessments before launching new products or services or conducting new types of business. It shall also establish corresponding risk management measures to mitigate identified risks.
Article 17     With respect to the VASP's implementation of AML/CFT, the FSC may, at any time, appoint a designee or entrust an appropriate institution to conduct an audit using the risk-based approach, using audit methods including on-site audit and off-site audit. When necessary, it may designate or require the VASP to engage professional and technical personnel to conduct an audit of the VASP's implementation of AML/CFT and submit a report to the FSC. The expenses shall be borne by the audited entity.
    When the FSC conducts an audit under the preceding paragraph, it may order the VASP to provide AML/CFT-related books, documents, electronic data files, or other relevant materials. The aforementioned materials, whether stored in hard copy, electronic files, email, or any other form, shall be provided, and the VASP shall not circumvent, reject, or obstruct the audit for any reason.
Article 79-1     These Regulations shall enter into force from 30 November 2024, except for Article 7, which shall enter into force from a date to be separately specified by the FSC.
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