TAIPEI, Sept 13 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
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
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)