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Title:

Corporate Governance Best-Practice Principles for Securities Firms  CH

Amended Date: 2023.02.08 (Articles 3-2, 3-3, 3-4, 10-1, 18, 24, 27, 28-4, 37, 37-2, 37-3, 40, 51, 62, 63 amended,English version coming soon)
Current English version amended on 2021.05.04 
Categories: Corporate Governance
   Chapter III       Enhancing the Function of Board of Director
      Section 2    Independent Directors
Article 24    A securities firm that has appointed two or more independent directors in accordance with the articles of incorporation shall keep the number of its independent directors not less than one-fifth of number of seats at the board of directors.
    Independent directors shall have expertise and required knowledge, and are subject to restrictions on shareholding. In addition to abiding by the applicable laws and regulations, they are also advised not to act as a director (including independent director) or supervisor of more than five companies concurrently. They shall maintain their independence when performing duties, and shall not have any direct or indirect interest in the company.
    No independent directors of a securities firm may hold the position for more than three consecutive terms.
    During their incumbency, no independent directors or non-independent directors may switch roles with each other.
    Professional qualifications, restrictions on shareholding and outside employment, determination of independence, method of nomination and other regulations for compliance with regard to independent director shall be governed by the Securities and Exchange Act, the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and the regulations of Taiwan Stock Exchange or Taipei Exchange.
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Article 25    A securities firm shall, in accordance with the regulations of the Securities and Exchange Act, have the following matters resolved at the board of directors. Adverse opinion or qualified opinion, if any, expressed by independent director shall be stated in the board of directors' meeting minutes:
  1. Establishment of or modification to the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
  2. Establishment of and modification to the procedures of major financial and business activities such as acquisition or disposal of assets, performance of transactions of derivatives, lending of funds to third parties, granting of endorsements and provision of guarantees in accordance with Article 36-1 of the Securities and Exchange Act.
  3. Matters involving interests pertaining to directors or supervisors themselves.
  4. Major transactions of assets or derivatives.
  5. Major lending of funds, endorsement or provision of guarantee.
  6. Offering, issuance or private placement of securities of the nature of equity.
  7. Appointment,dismissal or remuneration of certified public accountant.
  8. Appointment and dismissal of chief financial, accounting, risk management, compliance and internal audit officers.
  9. Standards for performance evaluations and emoluments for managers and salespersons.
  10. Structure and system of directors' emoluments.
  11. Other major issues specified by the competent authority.
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Article 26    A securities firm shall stipulate expressly the scope of duties of the independent directors and empower them with manpower and material support related to the exercise of their power. The company or other board members shall not restrict, obstruct, reject, or evade the performance of duties by the independent directors.
    A securities firm shall, in accordance with the applicable laws and regulations, stipulate expressly the emoluments of the directors in its articles of incorporation or pursuant to a resolution of the shareholders' meeting. Different but reasonable emoluments from that of other directors may be set forth for the independent directors.
    Where a securities firm separately sets aside a special reserve as stated in its articles of incorporation, as resolved at a shareholders' meeting or as ordered by the competent authority, the special reserve shall be set aside only after a legal reserve has been set aside and before remunerations of directors and supervisors and employee compensations are to be allocated. Its articles of incorporation shall also state how earnings shall be appropriated when the special reserve is reversed towards unappropriated earnings.