The Financial Supervisory Commission (FSC) said yesterday that they will not demand that local banks report the transnational fund flows of Taiwanese clients who open bank accounts with their overseas business units.
The financial watchdog clarified its position after the government said that China-bound investment will go through a stricter approval process beginning on June 30, following President Chen Shui-bian's (
The plan reportedly gave rise to concern among local banks, as the regulations could drive Taiwanese companies investing in China to turn to foreign banks for more data protection.
"In compliance with international norms and practice, the commission will support the requirements of local financial institutions to protect customers' data, unless their clients are involved in money laundering or illegal activities," the commission's spokesman Lin Chung-cheng (
The FSC only governs financial institutions like banks, investment trusts and investment consultancy firms, not their clients, Lin said. The commission will not inspect Taiwanese firms investing in China, as long as they are not involved in unlawful activities, even if the regulatory body signs a memorandum of understanding with China, he said.