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Article 4
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A securities firm filing for registration to issue or to reopen (that is, to issue an additional amount of) ETNs shall meet the qualifying requirements listed below:
- It must be an integrated securities firm that concurrently engages in securities brokerage, underwriting, and dealership business.
- Its CPA audited and attested financial report for the most recent period shows net worth not less than NTD10 billion and not less than paid-in capital, and its financial condition meets the requirements of Articles 13, 14, 16, 18, 18-1, and 19 of the Regulations Governing Securities Firms.
- It must have reported a regulatory capital adequacy ratio of not lower than 250 percent for each of the preceding 6 months.
- It has not been subject to any disciplinary warning from the competent authority during the preceding 3 months.
- It has not been subject to any sanction imposed by the competent authority during the preceding 6 months ordering dismissal or replacement of any of its directors, supervisors, or managerial officers.
- It has not been subject to any sanction imposed by the competent authority during the preceding year requiring a suspension of business.
- It has not been subject to any sanction imposed by the competent authority during the preceding 2 years voiding its permission for any part of its business.
- It has not been subject to any sanction during the preceding year whereby the Taiwan Stock Exchange Corporation (TWSE), the Taipei Exchange (TPEx), or the Taiwan Futures Exchange Corporation (TAIFEX), acting pursuant to its rules, has suspended or restricted the securities firm's trading privileges.
Any securities firm in non-conformance with any of the conditions of subparagraphs 4 to 8 of the preceding paragraph but that has made concrete improvement and has satisfied the competent authority thereof may be exempted from the restrictions of those subparagraphs.
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Article 5
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A securities firm issuing ETNs shall allocate on a monthly basis a performance bond that accounts for a certain percentage of the total outstanding balance of the ETNs.
The total amount of ETNs issued by the securities firm may not exceed 50 percent of its net worth as shown on its most recent CPA audited and attested financial report. However, the same does not apply to a reopening of ETNs for which the securities firm has allocated a supplementary amount of performance bond.
The securities firm shall allocate a supplementary amount of performance bond if during the term of the ETNs its net worth fails to meet the requirement of paragraph 1, subparagraph 2 of the preceding article or its regulatory capital adequacy ratio fails to meet the requirement of paragraph 1, subparagraph 3 of the preceding article.
The performance bonds referred to in the preceding 3 paragraphs shall be deposited with the TPEx. The rules governing the allocation ratio, deposit, custody, payment, and refund of such performance bonds, and any amendments thereto, shall be drafted by the TPEx in conjunction with the TWSE and submitted to the competent authority for ratification.
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