Chang Hwa Bank|Corporate Social Responsibility-Compliance

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Compliance

The Bank has established a sound compliance system and framework and launches a compliance effectiveness reporting and monitoring mechanism, thereby maintaining an effective and appropriate internal control system. In addition, we improve the effectiveness of compliance risk management to reduce the Bank's compliance risk through promotion, education and training.

Compliance Organizational Structure

Responsibilities

Set up a dedicated unit for compliance affiliated with the President, responsible for the planning, management, and execution of the compliance system, while establishing procedures, plans, and mechanisms for identification, assessment, control, measurement, monitoring, and independent reporting of compliance risks.
Through horizontal communication and liaison meetings for compliance as the second line of defense, we discuss and improve important compliance issues regularly, and we have established an independent notification mechanism for compliance risks to keep abreast of bank-wide compliance risks.

Whistleblowing Mechanism

The Bank has established the whistleblowing system. The compliance unit accepts whistleblower cases and discloses relevant reporting channels on the official website.

Assessment Mechanism

Examine whether the Bank's compliance resources (that is, the human resource allocation, organizational structure, as well as education and training of the compliance unit) are adequate timely in order to put the compliance function into force.
The compliance unit conducts relevant compliance risk management by assessing major operating activities, products and services, credit or business projects, and material customer complaints that may violate the laws.
Conduct the Bank's implementation status of compliance.

Actions

Risk Management

The Bank has completed the self-assessment of compliance for the first and second half of 2025, and reported on the implementation status to the Audit Committee and the Board of Directors.
The Bank completed the on-site audit of compliance and the AML business in accordance with the 2025 compliance onsite audit project.

Education and Training

The Bank regularly provides compliance awareness training to all employees, covering the Bank's compliance framework and the implementation of compliance self-assessment, compliance deficiency cases, major deficiencies identified by the regulatory authority in examinations of domestic banks, regulatory sanction cases involving domestic banks, and important regulatory requirements. In 2025, the numbers of employees who completed the compliance training programs in the first and second halves of the year were 6,840 and 6,908, respectively, achieving a completion rate of 100% for both sessions.
In 2025, there were 8 classes in compliance, AML, know-your-customer (KYC) policy, and employee code of conduct training for new recruits, with a total of 551 participants.

Implementation

No major penalties were imposed by the competent authorities in 2025.
Note : The scope of major sanctions is defined according to Article 2 of the "Regulations Governing Public Disclosure by the Financial Supervisory Commission of Material Enforcement Actions for Violations of Financial Legislation," including fines of NT$3 million or more for single violations.