17 April, 2018
On December 25, 2017, the FSC promulgated the “Regulations on Application for Investment in Venture Capital and Management Consulting Business by Commercial Banks” (the “Regulations”), which provides that venture capital business and management consulting business conducting establishment or public offering of venture capital business are “the other financial related business designated by the competent authorities” referred to in Article 74 Paragraph 4 of the Banking Act that the commercial banks may invest.
The Regulations provides that the total investment amount in the venture capital business and management consulting business conducting establishment or public offering of venture capital business by the commercial bank shall not exceed 3% of commercial bank’s net worth as of the date of the investment.
The Regulations further provides that the shareholding of the commercial bank and its subsidiaries in the business invested through the venture capital business and management consulting business conducting establishment or public offering of venture capital business shall not exceed 15% of the voting shares of such business, excpt that the above restriction shall not apply if only the venture business subsidiary of the commercial bank participates in such investment and the amount of the investment does not exceed certain threshold.
In addition, the Regulations prohibits the person-in-charge or employees of the commercial bank from holding the managerial position in the business that it investes through the venture capital business.
For further information, please contact:
Hector Chin, Tsar & Tsai Law Firm
law@tsartsai.com.tw
