Taiwan Launches Expanded Credit-Information Sharing Between Banks and Securities Firms

Taiwan’s expanded credit-information sharing framework for banks and securities firms takes effect on October 31, giving lenders a broader view of customers’ borrowing across the two industries. The change moves beyond information about missed payments and defaults to cover credit limits and outstanding loans, with the aim of helping institutions assess whether a borrower is carrying more debt than an individual lender can readily see.

The system connects the Joint Credit Information Center, which handles credit reporting for financial institutions, with the Taiwan Stock Exchange’s securities-sector information network. A bank can request relevant securities-credit information through its usual channel, while a securities firm uses the exchange’s system to obtain qualifying bank-credit information. The two industries are not being given unrestricted access to one another’s customer files.

The Taiwan Stock Exchange set the October 31 start date in an October 15 regulatory notice, following instructions issued by Taiwan’s Financial Supervisory Commission (FSC) on October 6. The revised rules build on a cross-industry mechanism introduced in March 2020, when information exchanges were largely confined to negative credit records. The latest amendments broaden what an institution can learn about a person’s existing exposure before deciding whether to extend more credit.

Credit checks now extend beyond defaults and late payments

Under the earlier arrangement, a securities lender could use the shared mechanism to establish whether a prospective borrower had adverse credit information at a bank. That warning could be useful, but it offered a limited view of the customer’s debt burden. A borrower might be meeting every repayment deadline while also carrying substantial loans at several institutions. The expanded framework is designed to address that gap without treating all outstanding borrowing as evidence of financial trouble.

The additional bank-side information includes the number of financial institutions with which a customer has credit relationships, total approved credit limits and loan balances organized by purpose. The exchange’s notice identifies categories such as real-estate purchases, purchases of movable property, business investment and working capital. It also refers to overdue amounts and negative-credit records. These figures give a securities lender more context for assessing how much additional borrowing a customer could reasonably support.

Information flowing in the other direction covers lending activity at securities firms. The revised scope includes margin financing and short selling, loans connected with securities business, securities lending and loans without a specified use restriction. A bank assessing a customer’s finances can therefore take account of credit associated with securities activity that might not be evident from its ordinary banking records. The rules specify the categories of information that can be shared rather than authorizing an open-ended examination of a customer’s trading history.

There are boundaries to the bank data covered by the exchange mechanism. The amended rules encompass loans, overdrafts, discounted bills, guarantees and acceptances, but expressly exclude credit cards and non-recourse factoring of receivables. The distinction matters because the reform is an expansion of a defined credit-reporting arrangement, not a comprehensive merger of every financial account or every source of consumer debt in Taiwan.

Regulators have linked the initiative to concerns about individuals borrowing through multiple channels to finance investment activity. A borrower could, for example, have a mortgage or personal loan alongside securities financing. Those loans are not inherently improper, but a lender that sees only part of the picture may underestimate the borrower’s overall repayment obligations or exposure to a decline in asset values. Broader data can improve that assessment; it cannot by itself establish whether a particular customer’s leverage is excessive.

Large securities credit lines trigger mandatory inquiries

The FSC has established a specific threshold for securities firms. When an individual customer’s credit limit reaches NT$300 million, or 1% of the securities firm’s net worth, whichever amount is higher, the firm must use the cross-industry mechanism to request the customer’s credit information from financial institutions. The comparison is important: NT$300 million is not a universal cutoff if 1% of a firm’s net worth produces a larger figure.

The requirement applies to qualifying credit activity at securities firms, rather than every ordinary brokerage account or every stock purchase. It is aimed at situations where the scale of credit warrants a wider check of the customer’s financial commitments. Securities firms must also establish internal procedures and controls for carrying out the inquiries, according to the exchange’s notice.

For banks, the new checks are relevant when they originate personal loans intended for investment or wealth management. At an October 29 briefing, FSC officials said banks would need to examine applicable securities-sector borrowing information in such cases. The focus is on the stated purpose of a new loan, not on an automatic review of every existing deposit account or a blanket assumption that anyone investing in shares has borrowed to do so.

Customer permission remains a prerequisite. The amended framework requires a written or electronic consent document before an institution obtains cross-sector information, along with a clear explanation of what is being requested and how the data will be used. The consent process sits alongside the threshold and business-purpose restrictions: meeting a mandatory-inquiry threshold does not remove the requirement to obtain consent.

Access to the additional figures also does not mean that the resulting credit decision is predetermined. The rules preserve the bank’s or securities firm’s responsibility to assess an application independently. Shared records are an input into underwriting and regulatory compliance, not a lawful substitute for evaluating the customer’s circumstances or the merits of the proposed borrowing.

Consent rules, data safeguards and the rollout timetable

The updated regulations limit cross-industry information requests to defined credit-extension purposes. Institutions must retain the customer’s consent documentation and records showing the purpose of an inquiry for five years. A person who disputes the accuracy of shared information can seek clarification through the institution and the relevant reporting channel, with the institution required to help resolve questions about omissions or errors.

Security obligations extend to the way information is displayed and handled. The rules require identifying watermarks on screens or printed records, controls over storage and disposal, and confidentiality protections. They also prohibit use of the information for unrelated purposes and restrict disclosure or transfer outside the authorized framework. Those safeguards are part of the rules governing access, although the practical effectiveness of the system will depend on how individual institutions implement them.

Implementation is being phased. The exchange says the expanded arrangement becomes effective on October 31, but securities firms have until March 31, 2027, to complete necessary system development or adjustments. Firms unable to finish their technology changes by that deadline must use manual procedures or suitable alternative measures rather than treating incomplete systems as a reason to disregard the requirement.

The exchange is also changing the cost of cross-industry checks for securities firms. Inquiries made between October 31 and November 30, 2026, are free. From December 1, the charge falls to NT$15 per inquiry from NT$20, with fees collected on a semiannual schedule. Lowering the per-request charge removes some of the cost associated with broader use, although the notice does not estimate how many new checks firms will actually make.

For lenders, the immediate change is access to a more complete account of eligible borrowing when the conditions for an inquiry are met. For customers, it means relevant debt held through banks and securities firms may increasingly be considered together when new credit is assessed, subject to consent and the information limits in the rules. The next concrete compliance milestone is the March 31, 2027, deadline for securities firms to complete their supporting systems.