Guidelines for Anti-Money Laundering Noticeable Items for Securities Investment
Trust Business and Security Investment Consulting Business
(Amended on November 14, 2007)
1. This Guidelines are stipulated in accordance with Article 6 of Anti-Money Laundering
Act, Article 22-1 of Regulations Governing Securities Investment Trust Enterprises,
Article 6 of Regulations Governing Offshore Funds and Article 22-1 of Regulations
Governing the Conduct of Discretionary Investment Business by Securities Investment
Trust Enterprises and Securities Investment Consulting Enterprises for the purpose of
preventing money laundering.
2. Things to know about money-laundering prevention process:
1) Things to know about subscribing Securities Investment Trust Funds, Offshore
Funds (collectively the “fund”) or processing discretionary investment business:
a) Customers are to have the following documents submitted for review and
approval while the employees of the company are having the subscription of
fund or processing discretionary investment business for the first time:
A. Customers of natural person who are locals, should have their I.D. Card
presented. Except for those under the age of 14 without national I.D. Card,
Household Registration shall be the substitute. The national I.D. Card
should be required to be in place. Foreigners should have their passport
presented. If customers are a minor or an individual who has been
declared by law to be prohibited from owning property, the I.D. Card or
passport of the representative by law should be provided in place.
B. Customers of legal person or institute, the authorizee should provide
customer’s Power of Attorney, authorizee’s identity document,
representative’s identity document, customer’s registration certificate,
archive or relevant supporting document. Proof of tax returns may not be
the only evidence presented for the purpose of account-opening.
C. Identity documents examined should keep photocopy for record. The
customer’s Power of Attorney should keep original document for record.
b) The employees of the company who are having the aforementioned (a)
businesses processed should have dual identity documents examined and
kept copies except for the original Power of Attorney on file for record if
customers have remitted cash in person over the counter to apply for
acquisition or order, and request customers to provide the following
documents for cross reference:
A. Except that customers of natural person who are locals should have their
I.D. Card （For those under the age of 14 without I.D. Card, Household
Registration shall be the substitute.）produced, other identity document
should also be presented such as health insurance card, passport, driver’s
license, student I.D., household registration, or household book while
foreigners are to have their passport produced and other identity
document presented including legal residence card or others. If customers
are a minor or an individual who has been deprived from owning property,
the original I.D. Card or passport of the representative by law is demanded
including other identity document.
B. Customers of legal person or institute, the authorizee is to provide
customer’s Power of Attorney, authorizee’s identity document,
representative’s identity document, customer’s registration certificate,
archive or relevant supporting document including the minutes of Board
meeting, Articles of Association, and financial statements for acquisition
and order. Tax return may not be the one and only evidence presented for
having an account opened.
C. The secondary identity certificate other than the aforementioned I.D. Card,
passport, and document of registration certificate must be sufficient for
identification. If the log of institute, school, and group help identify the
identity of customer, it can be classified as the secondary identity
document. If customers refuse to produce the said document, the
application or order should be declined or it will not be processed until and
after the confirmation of customer’s identity.
c) The employees of the company that are having the identity document of
customer or authorizee examined should be aware of the use of fake name,
assumed identity, forged business entity or forged legal person group by the
costumer or the authorizee for acquisition or order; or, the presentation of
forged and modified identity document; or, the submission of questionable and
ambiguous document and data and without other supporting data provided or
the provided supporting data cannot be verified; or, the delay of customer in
producing necessary identity certificate without proper cause; or,
nonconformity identified upon the acceptance of acquisition or order, or, the
inadequacy of customer in offering reasonable explanations for other
nonconformity found, the acquisition or order should be declined.
d) For the fund subscriptions through consignment and authorization, the
employees of the company should examine the consignment or authorization
document that is required by law, the identity of customer and customer’s
representative; investigate and verify the authentication and identity document
of the consignment and authorization; the identity data of customer and
customer’s representative should be filed for record; also, confirm the
aforementioned information with customer by phone, in writing, or through
other means. If the data verification is found difficult and thus cannot be
completed, the fund subscriptions should be declined.
e) For discretionary investment, try to understand customer’s financial status in
accordance with the data provided in customer’s profile; moreover, demand
customer to provide supporting document or to perform investigation on site. If
the discretionary investment is discrepant from the customer’s social status or
income, or, if the source of fund cannot be identified, special attentions should
be paid for the suspicious activities of money laundering.
f) If one single fund subscription is for an amount over NT$1,000,000 (or an
equivalent amount in foreign currency) and it is paid with cash or a doubt over
suspicious activities of money laundering is warranted, the identity of customer
should be identified and with the said documents in (a) presented; moreover,
the information of investor’s name, birthday, address, phone number,
transaction account number, trade amount, and identity document should be
documented. For the acquisition completed by inventor’s representative, the
representative’s name, birthday, phone number, and identity document
documented and with the confirmed records and transaction evidence
reserved for record.
g) If there is an unusual large subscription amount that is discrepant from
customer’s status or income, special attentions should be paid for the
suspicious activities of money laundering.
h) If the fund applicant or beneficiary is found to be on the terrorist list or group
identified by foreign government to Financial Supervisory Commission,
Executive Yuan (referred to as “FSC” hereinafter) or it is suspected or has
reasonable reason to suspect of the trading amount associated with
terrorism activities, terrorist organizations or financings the transaction should
be classified as suspicious money laundering and report to Ministry of
Justice’s Investigation Bureau with FSC also informed immediately.
i) If the customer is in connection with special serious incidents reported on
television, newspaper, magazine or internet, the customer’s fund subscription
or discretionary investment should be noted whether the transaction is
suspicious of money laundering.
j) Things to know about other filings for fund subscriptions and processing
discretionary investment applications should be processed subject to internal
2) Things to know about fund transaction:
a) When a customer subscribes to a single fund for more than NTD$1,000,000
(or an equivalent amount in foreign currency) and pays with cash, or the
customer has engaged in suspicious activities, the company should verify the
customer’s identity and reserve the records of verification and transaction.[The
method of verification is same to which stated in 2-(1)-(e)]
b) The company should pay careful attention for the customer who makes cash
transaction using any of the following:
A. When a customer subscribes to or redeems a certain fund in the same
business day for more than NTD$1,000,000 (or an equivalent amount in
foreign currency) that is discrepant from investor’s income and condition.
B. When a customer subscribes to or redeems a single fund or different
funds in the same institute for more than NTD$1,000,000 respectively (or
an equivalent amount in foreign currency) that is discrepant from
investor’s income and condition.
C. When a customer makes subscription and redemption for equivalent
amount and in equivalent time.
D. When a customer subscribes funds with money remitted from certain
areas (uncooperative nations) and redeems within 5 business days after
subscription, or the customer requests to transfer proceeds directly from
Taiwan, and the transactions are discrepant from investor’s income and
condition. The company shall download and update the nations or
economy bodies mentioned in this clause from the website of “Financial
Action Task Force on Money Laundering (FATF)” (www.fatf-gafi.org) If the
company updates the list of uncooperative nations or terrorist group, it is
not required to report to SFC.
E. When the transactions are made by a customer on behalf of his client or
by different third parties on behalves of the customer.
F. Other conspicuous irregular transactions.
c) Be aware of and examine customer’s transaction report periodically and with a
business model established for each customer to investigate nonconformity or
specious money laundering.
3) Things to know about signing discretionary investment agreement:
a) Re-confirm the identity of customer [to be verified the same way as the
method stated in II 1] (5)] and with customer’s application form and profile filed
b) If any of the following items occurs after the discretionary investment
agreement is signed, the discretionary depository institute should be informed
of any suspicious cash transactions which might be related to money
laundering in the investment accounts.
A. The said customer is not identified.
B. Customer denies there is any discretionary investment agreement signed.
C. The mailed report or document is returned by postal office for “the identity
of receiver is unknown.”
D. Customer’s account is proven to be abused by others with the support of
sufficient evidence or fact.
E. The content of application form is forged or false.
F. If customer terminates the discretionary contract immediately after signing
it with no proper cause.
G. If customer increases investment in large amount or with intensive
frequency during throughout the discretionary agreement period, but the
fund is discrepant from the customer’s income and condition.
H. Customer decreases investment fund without proper causes throughout
the discretionary investment agreement period.
I. Customer unusually increases or decreases investment fund intensively
throughout the agreement period.
c) Keep a close and frequent contact with customers throughout the
discretionary investment agreement period; also, be aware of and controls
customer’s financial status and with at least one interview arranged annually
to update or supplement customer’s profile for reference in investigating
suspicious money-laundering activities.
3. Internal control procedure of anti-money laundering:
1) Company should reserve the complete and correct transaction record of
subscription and redemption in terms of the fund of a certain amount or engaged
in suspicious money laundering activities. Or, company should reserve the
complete transaction proofs, customer ID confirmation and filing record for
discretionary investment. Company should comply with the “Guidelines for
Anti-Money Laundering” and its related regulations.
2) The reservation method and period of transaction records:
a) For the discretionary investment business or one single cash transaction for
over NT$1,000,000 (or an equivalent amount in foreign currency), company
should reserve the transaction records, confirmation, and filing report that are
sufficient to understand the transaction for at least five years.
b) For the transaction engaged in suspicious money-laundering activities,
company should reserve the transaction records, confirmation, and filing
report that are sufficient to understand the transaction for at least five years.
c) For customer who has redeems his entire fund or terminates discretionary
business agreement, company should reserve the customer’s related
information for at least five years, such as ID proof, account information, and
d) For the cases under investigation by law, all the expired confirmation and
transaction records should be reserved till the case closed.
e) Company should pay special attention to the transaction with no obvious
economic purpose, legitimate complicate transaction for large amount, and all
the abnormal transaction. Company should examine the background and
purpose of the above-mentioned transaction and file all the findings for at least
3) The confirmation of customer’s identity should be processed subject to the
a) At the time of establishing a business relationship with customers or when
there is insufficient information for the confirmation of customer’s identity, it
should be identified and documented subject to the document or other identity
paper issued by government.
b) The identity of customers should be confirmed forcefully for the order account,
proxy transaction, and individual or group that represents a high risk to the
goodwill of securities investment trust and consulting business.
c) For the identity of customers that are not conducting business with the
company face-to-face, it is to be confirmed effectively to reduce risk.
d) Provided that it is not in violation against relevant regulations, if customer’s
source of fund is known for fact or is assumed to be from corruption or
embezzlement, the acquisition or order will not be processed.
4) The internal filing procedure and the procedure of filing to designated institute:
a) The Headquarters should have the Vice President (and/or higher level
officers ) and/or equivalent officers designated to help coordinate and
supervise the execution of money-laundering control; the designated
personnel must have been trained with money-laundering control courses.
The designated personnel should attend the said training courses within six
months since the day reporting to duty. A responsible supervisor will be
assigned to the position under the designated personnel in the Headquarters
and it is a position to be assumed by senior personnel. Branch office should
have senior supervisor appointed to be the designated supervisor for
money-laundering supervision and control.
b) The employees of the company should have the fund subscription from
customers rejected upon the occurrence of the followings and with the
designated supervisor advised:
A. Customers who have been informed and requested having identity
document presented for the process of cash transaction refuse to have the
said document submitted accordingly.
B. Coerce or intend to coerce the employees of the company not to have the
confirmed records, transaction evidences, or reports filed for record.
C. Try to persuade the employees of the company avoiding the data that are
required for the process of transaction.
D. Seek for the possibility of avoiding report filing.
E. Try to clarify the source of fund or deny the violation of money-laundering.
F. Insist to have transactions completed immediately without giving proper
causes for doing so.
G. Intend to offer profit to the employees of the company for the return of
services from securities financial institute.
c) Filing procedures:
A. For one single cash transaction for more than NTD$1,000,000 (or an
equivalent amount in foreign currency), the company in-charge person
should fill in attachment A and file to the Ministry of Justice’s Investigation
Bureau through the Headquarters within five business days upon the
occurrence of the transaction.
B. Reporting suspicious money-laundering
(i) The clerk of the company who is aware of any nonconforming
transaction or has a doubt over suspicious activities of money
laundering should have it reported to the designated supervisor
(ii) The said designated supervisor should determine to have the said
findings of the clerk filed for report or not upon receiving an advice. If a
decision is made to have the said nonconforming transaction or
money-laundering reported, the responsible clerk should be instructed
to have a report file (Attachment 2).
(iii) The responsible clerk is to have the report forwarded to the
responsible personnel in the Headquarters after having it reviewed by
the designated supervisor. The responsible personnel in the
Headquarters are to have the report filed with the Ministry of Justice’s
Investigation Bureau for record.
(iv) The process of having a report filed with the Ministry of Justice’s
Investigation Bureau is to be completed within ten business days upon
the awareness of suspicious money laundering.
(v) If the designated supervisor has concluded the nonconforming
transaction or suspicious money-laundering activities are deemed as ,
a verbal report should be made to the responsible personnel in the
Headquarters first and with the Ministry of Justice’s Investigation
Bureau informed through fax or other means and then with a written
report filed afterwards.
a) The employees of the company are obliged to have the aforementioned data
and information kept in confidence without revealing to any third party.
b) The data and document filed should be kept in confidence and an
unauthorized information reveal should be processed subject to relevant
6) Evaluate the adequacy of internal control measures in preventing
a) The Headquarters of the company should have the Money-Laundering Control
Act reviewed periodically and with records documented.
b) For the widespread branch offices, the responsible personnel should be
summoned to have a regional money-laundering control review meeting held
7) Audit performed by internal auditor to prevent money-laundering:
a) Company should have money-laundering noticeable items been contained in
internal control system, which should be reported to industrial association to
review according to related regulations. Meanwhile, auditing office should
execute periodical audits.
b) Auditors that have identified any nonconformity committed by the employees
of the company who are responsible for money-laundering control process
should have an audit report prepared and submitted to the responsible
personnel and President for approval; moreover, a corrective action should be
proposed for the reference of employee’s on-job training.
c) The responsible department in the Headquarters should have the auditors
who have major nonconformity identified but failed to have it disclosed
8) Securities investment trust business or securities investment consulting business
should apply relevant money-laundering control act to the additional business of
9) The company shall ensure that its overseas branches and subsidiaries, to the
extent that the law of the host country permits, comply with AML/CFT measures
that are as conscientious as this Guidelines are. Where the requirements in the
host country differ from those in the home country, the company shall require that
the overseas branch or subsidiary apply the higher of the two standards. However,
when the identity of higher standard is in doubt, the home country’s definition
should be adopted. Where the law of the host country conflicts with home
country’s law such that the overseas branch or subsidiary is unable to observe the
same standard with the head office, the company shall report the relevant facts to
the competent authority for record.
4. Arrange or join money-laundering control training courses periodically:
1) Pre-job training:
Arrange new recruits to attend money-laundering control training courses for at
least three hours in order to help them understand relevant regulations and
2) On-the-job training:
a) Regulations propaganda:
Introduce the update of Money-Laundering Control Act after its enforcement,
the Money-Laundering Control Act and relevant regulations, and the
responsive control measures of the company to employees promptly.
b) General education:
A. Provide or arrange training courses and seminars periodically to
employees for reinforcing their judgment, substantiating money-laundering
control function, and avoiding violations committed by employees.
B. Introduce case study periodically to help employees understand the
features of money-laundering and suspicious money-laundering in order to
help identify money-laundering transactions.
5. Rewards to the personnel responsible for the success of money-laundering control:
The employees of the company who are responsible for the success of
money-laundering control will be rewarded as follows: 1) Reporting suspicious
money-laundering cases to help prosecution and investigation office prevent or fight
crimes; 2) Attend national and international money-laundering control seminars
successfully or collect valuable data of international study on securities financial
institute money-laundering control activities.
6. The Act is in effect upon the approval of the Board of Directors and it is to be filed with
FSC for record; the Act is to be reviewed annually and the amendment of the Act is to
be processed the same way.