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FX / Interest Rate Risk Management

FX / Interest Rate Risk Management. Jonathan J. Chen. Guide Line - FX. Law ： SFC 【 公開發行公司從事衍生性商品交易辦法 】. Strategy ： Dynamic hedge. Contract Amount ： Not exceeds accounting assets and debts. Loss Limit ： No limit for Hedging

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FX / Interest Rate Risk Management

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  1. FX / Interest Rate Risk Management Jonathan J. Chen

  2. Guide Line - FX Law： SFC 【公開發行公司從事衍生性商品交易辦法】 Strategy：Dynamic hedge Contract Amount：Not exceeds accounting assets and debts Loss Limit：No limit for Hedging 5% for Trading

  3. Authorization - FX Agreement：CFO & Chief Accountant(CA) (authorized by the board) Confirmation：Finance Director (approved by CFO & CA ) Dealer：Approved dealer(s) (by CFO & CA )

  4. Control & Auditing- FX Internal Control ： 1、Counter-party filtering 2、Legal Dept. reviews the Agreements Internal Auditing： 1、Back office confirms each transaction by phone after the deal done 2、Auditing Dept. checks records constantly

  5. Interest Rate Controls Target：Lower funding cost Strategy： Precaution and Competition Internal Control： 1、Counter-party filtering 2、Credit line availability 3、Structure of pure-credit and mortgage loan 4、Structure of % of fixed and floating rate

  6. Interest Rate Control Table Unit: NTD 100M Fixed Rate Floating Rate Total Local Currency 77 (31%) 169 (69%) 246 (99.7%) Foreign Currency 0 (0%) 0.8 (0.3%) 0.8 (0.3%) Avg. cost 3.50%2.10%2.70%

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