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FSC deregulates overseas collateral restrictions for non-resident foreigners
Taiwan News, Staff Writer
2014-07-25 02:55 PM

In order to enhance the competitive strength of domestic banks and after approval from the Central Bank, the Financial Supervisory Commission (FCS) will amend regulations pertaining to financial institution acceptance of foreign currency and foreign securities collateral when processing New Taiwan Dollar denominated credit extensions. The amendment will focus on further deregulation to include overseas Chinese and foreign nationals among individuals eligible to collateralize foreign currency and foreign securities for New Taiwan Dollar denominated credit extensions.

In 2006, Taiwan began allowing non-resident foreign national application for New Taiwan Dollar denominated credit extension. Now, restrictions will be further lifted to allow foreign nationals to collateralize foreign assets in applications to financial institution for the extension of credit. This deregulation measure facilitates the borrowing of New Taiwan Dollars by foreign institutions to invest in Taiwan’s stock market and is advantageous for bank expansion of New Taiwan Dollar credit business.

The FSC offers this reminder, when overseas Chinese and foreign nationals apply for New Taiwan Dollar credit extension from financial institutions, details such as whether collateral should be provided, credit extension purpose, funding mechanism, and loan-to-value ratio should still be processed in accordance with the relevant regulations of “Elements of Banker Association of the Republic of China member bank processing of New Taiwan Dollar credit extension business for non-resident foreign nationals in Taiwan.”

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