TAIPEI, Sept 13 (Reuters) - Taiwan’s financial regulator said on Tuesday it has punished seven domestic banks and tightened their foreign currency derivatives options business amid malpractices related to opening client accounts in their offshore banking units. The Financial Supervisory Commission (FSC) will tighten business of such products on put options by Taipei Fubon Commercial Bank, CTBC Bank, Cathay United Bank, Yuanta Commercial Bank, Jih Sun Bank, Ta Chong Bank and Bank Sinopac, it said in a statement. A put option is an option contract giving the owner the right to sell a specified amount of an underlying security at a specified price within a specified time. The first three banks were fined T$6 million ($190,000), while Yuanta and Jih Sun were fined T$4 million, it said, without specifying the penalties for the other two. The move highlighted the government’s latest effort to tighten such products. Some local banks suffered losses from customer defaults earlier this year on a popular derivative product, as investors were hit by an unexpected slide in China’s currency. Taiwan’s central bank said last week it will require local banks to submit applications before opening foreign currency derivative product accounts for retail customers and institutional investors. Among the malpractices, these banks did not check carefully clients’ financial information when they opened offshore accounts, the statement said. Reporting by Faith Hung; Editing by Nick Macfie
Taiwan’s Financial Supervisory Commission (FSC) has issued fines for and tightened rules on foreign currency derivatives options businesses for three banks following malpractice in offshore client accounts, including failing to fully check clients’ financial information before opening accounts. Taipei Fubon Commercial Bank, Yuanta Commercial Bank, Ta Chong Bank, Bank Sinopac, CTVC Bank, Cathay United Bank and Jih Sun Bank were fined and the FSC is cracking down on these products as banks have suffered defaults in the past due to currency fluctuations.