|
5
|
A securities firm applying to conduct the business under point 2, subparagraph 1 shall meet the following conditions and qualifications, and shall obtain approval from the FSC:
1. Regulatory capital adequacy ratio: its regulatory capital adequacy ratio reported for the half-year prior to the application date exceeds 150 percent.
2. Financial position meets any of the following conditions:
A. Its CPA audited or reviewed financial report for the most recent period shows no accumulated deficit, and its financial position meets the provisions of Articles 13, 14, 16, 18, 18-1 and 19 of the Regulations Governing Securities Firms.
B. A controlling company that directly or indirectly holds 100 percent of the shares of the securities firm provides an unconditional and irrevocable guaranty securing the obligations of the securities firm.
3. Legal compliance
A. Has not, within the past three months, been sanctioned under Article 66, subparagraph 1 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 1 of the Futures Trading Act.
B. Has not, within the past six months, been sanctioned under Article 66, subparagraph 2 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act.
C. Has not, within the past one year, had a sanction imposed by the FSC to suspend its business.
D. Has not, within the past two years, had a sanction imposed by the FSC to void any part of its business permit.
E. Has not, within the past one year, had a sanction of suspended or restricted trading imposed on it by the Taiwan Stock Exchange Corporation (TWSE), Taipei Exchange (TPEx), or Taiwan Futures Exchange (TAIFEX), under the operating rules or bylaws thereof.
4. Has established a legal compliance unit and a person in charge thereof pursuant to the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets (hereinafter "Regulations Governing Internal Control").
After a securities firm has been approved by the FSC to conduct the aforementioned business, if its regulatory capital adequacy ratio is non-compliant with the requirement of the preceding paragraph for two consecutive months, the securities firm shall suspend the aforementioned business. It may resume such business only after the regulatory capital adequacy ratio has met the requirement for three consecutive months and approval has been filed for and granted by the FSC.
A securities firm that fails to meet the compliance requirements in subparagraph (3) of paragraph 1 may be exempted from restriction under that subparagraph if has already corrected the infraction and provide specific documentary proof thereof.
An ROC branch of a foreign securities firm applying to conduct business under paragraph 1 shall comply with paragraph 1, subparagraphs 3 and 4, and the regulatory capital adequacy ratio, financial position, and the long-term credit rating of its head office shall comply respectively with subparagraphs 1 and 2 of paragraph 1, and Attachment 2.
|
Info
|
|
6
|
A securities firm applying to conduct the business under point 2, subparagraph 2 shall meet the below-listed conditions and qualifications, and obtain the approval of the FSC:
1. Regulatory capital adequacy ratio: The regulatory capital adequacy ratio reported for the half-year prior to the application date exceeds 150 percent.
2. The financial condition meets one of the following conditions:
A. The CPA-audited and attested financial report for the most recent period states net worth of not less than NT$10 billion and not lower than the paid-in capital.
B. The CPA-audited and attested financial report for the most recent period states total assets of not less than NT$20 billion, net worth of not less than NT$6 billion and not less than paid-in capital, and a profit in each of the past three years.
C. A holding company that directly or indirectly holds 100 percent of the shares of the securities firm, or a financial holding company that has a controlling interest in the securities firm, meets the conditions in one of the two preceding subparagraphs, and issues an unconditional and irrevocable guaranty securing the liabilities of the securities firm.
3. Legal Compliance
A. Has not, within the past three months, been sanctioned under Article 66, subparagraph 1 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 1 of the Futures Trading Act.
B. Has not, within the past six months, been sanctioned under Article 66, subparagraph 2 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act.
C. Has not, within the past one year, had a sanction imposed by the FSC to suspend its business.
D. Has not, within the past two years, had a sanction imposed by the FSC to void any part of its business permit.
E. Has not, within the past one year, had a sanction of suspended or restricted trading imposed on it by the TWSE, TPEx, or TAIFEX, under the operating rules or corporate thereof.
F. Has not, within the past 6 months, been given an official reprimand or ordered to take corrective action under Article 44 of the Trust Enterprise Act.
G. Has not, within the past 2 years, been sanctioned under Article 44, subparagraph 1, 2, or 3 of the Trust Enterprise Act.
4. Has established a legal compliance unit and a person in charge thereof pursuant to the Regulations Governing Internal Control.
After a securities firm has been approved by the FSC to conduct the business under the preceding paragraph, if its regulatory capital adequacy ratio or net worth for two consecutive months fail to meet the requirements of the preceding paragraph, it shall suspend conducting the business under the preceding paragraph, and may resume it only after its regulatory capital adequacy ratio or net worth have met the requirements for three consecutive months, and it has reported to and received approval from the FSC.
A securities firm failing to meet a condition in subparagraph 3 of paragraph 1 may be exempted from restriction under that subparagraph if has already corrected the infraction and provides specific documentary proof thereof.
An ROC branch of a foreign securities firm applying to conduct business under paragraph 1 shall comply with paragraph 1, subparagraphs 3 and 4, and the regulatory capital adequacy ratio, financial condition, and long-term credit rating of its head office shall comply respectively with subparagraphs 1, and 2 of paragraph 1, and Attachment 3.
A securities firm that has been approved to conduct wealth management business by means of trusts and that furthermore meets certain conditions, after reporting for review by the TWSE and forwarding to and approval by the FSC, may be exempted from the restrictions set out in Point 24, paragraph 2 hereof with respect to the utilization of trust assets of high-asset customers in offshore structured products as set out in Article 6-2 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities, and with respect to the credit rating of foreign bonds in which it entrusts investment by high-asset customers or by high net worth corporate investors as defined in Article 3, paragraph 3 of the Regulations Governing Offshore Structured Products.
The provisions of Article 3-1 and Articles 6-1 to 6-4 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities shall apply mutatis mutandis to the following matters under the preceding paragraph: the definitions of "a securities firm that…meets certain conditions" and "high-asset customers," the conditions for and review of, and eligible purchasers of, the offshore structured products, the content on which the securities firm shall agree with or obtain written confirmation from the domestic agent with respect to the entrusted investment, the reporting requirements, the establishment of a product suitability system, and the product review panel system.
A securities firm meeting the conditions set forth in paragraph 5 may, by means of trusts, provide to high-asset customers and to professional investors meeting the requirements of Article 3, paragraph 3, subparagraphs 1 to 4 of the Regulations Governing Offshore Structured Products, structured bonds issued pursuant to Article 5, paragraph 1, subparagraph 6 of the Regulations Governing Banks Conducting Financial Products and Services for High-Asset Customers.
|
Info
|
|
11
|
The personnel handling wealth management business in a securities firm shall meet the following qualifications and conditions:
1. The persons in charge shall meet the qualifications and conditions under Article 5 of the Regulations Governing Responsible Persons and Associated Persons of Securities Firms (hereinafter, "Regulations Governing Personnel"), and the associated persons shall meet the qualifications and conditions of Article 6 of the Regulations Governing Personnel.
2. Meets other qualifications and conditions and training criteria set by the Taiwan Securities Association (the "Securities Association"), and reported to and approved by the FSC.
When a securities firm conducts wealth management business by means of trusts, the supervising personnel (including the person in charge of the internal audit department), managerial personnel, and associated persons shall meet the provisions of the Regulations Governing the Required Qualifications for Responsible Persons and Required Trust Expertise or Experience for Operating and Managerial Personnel of Trust Enterprises (hereinafter, the "Regulations Governing Expertise or Experience") with the exceptions of Articles 3 to 9 and Article 12 thereof.
The internal auditing of a securities firm conducting wealth management business shall meet the following qualifications and conditions:
1. Internal audit personnel for the business under Point 2, subparagraph 1 shall meet the qualifications and conditions under paragraph 1.
2. Internal audit personnel for the business under Point 2, subparagraph 2 shall meet the qualifications and conditions of Article 16, paragraph 1 of the Regulations Governing Expertise or Experience.
For a securities firm conducting wealth management business by means of trusts, its officers with authority to approve business operations or transactions shall comply with Article 24 of the Regulations Governing the Implementation of Internal Control and Audit Systems by Financial Holding Companies and Banking Enterprises, or attend training sessions for internal auditors organized by institutions approved by the FSC, and obtain the required qualifications.
|
Info
|
|
28
|
Upon obtaining any notification delivered by an issuer of financial instruments or any other material in connection with rights and interests of a customer, the securities firm shall immediately forward them to the trust settlors and beneficiaries, and shall regularly compile account statements and deliver the same to each trust settlor and beneficiary for inspection.
Delivery of the account statements referred to in the preceding paragraph shall be carried out in accordance with the following:
1. If a securities firm uses trust assets to engage in transactions involving onshore structured products, the provisions of Article 14, paragraph 2 of the Regulations Governing Offshore Structured Products shall apply mutatis mutandis.
2. If a securities firm acts as a fund distributor and uses trust assets to engage in transactions involving funds, it shall comply with the Securities Investment Trust and Consulting Association of the Republic of China's Rules of Conduct for Members and Their Distribution Channels Regarding Channel Remuneration Payment and Sales.
3. If a securities firm uses trust assets to engage in transactions involving domestic or foreign securities or short-term bills other than those covered under the preceding subparagraph, account statements shall be delivered at least once every three months.
4. If a securities firm uses trust assets to engage in transactions involving instruments other than those covered under subparagraphs 1 to 3, account statements shall be delivered at least once per year.
|
Info
|
|
30
|
To conduct business set out in Point 2, subparagraph 1 herein, a securities firm shall submit the application, together with the following documents, to the TWSE, which shall review them and forward a report to the FSC. Approval to conduct the business is deemed to be granted if the FSC does not raise any objection within 15 days:
1. Minutes of the directors meeting that approved the plan to conduct wealth management business.
2. Business plan: to include, among other items, the management policy and working procedures set out in Point 8 of these Directions.
3. Documentary proof that the securities firm meets the qualification requirements for operating this line of business (proof that it has not been sanctioned by the FSC authority is not needed).
An ROC branch of a foreign securities firm intending to apply to conduct wealth management business shall file its application with the TWSE, which shall forward a report to the FSC, and shall furnish with the application a letter of consent from the board of directors of its head office, or a document signed by an entity or personnel authorized by the head office.
|
Info
|
|
31
|
For an application for a securities firm's branch unit to conduct business set out in Point 2, subparagraph 1 herein, the securities firm shall submit the application, together with following documents, to the TWSE, which shall review them and forward a report to the FSC. Approval to conduct the business is deemed to be granted if the FSC does not raise any objection within 15 days:
1. Documentary proof that the securities firm's head office has obtained the approval from the competent authority to operate this line of business.
2. Minutes of the meeting at which the board of directors passed the resolution to apply to operate this line of business.
3. Business plan: The operational procedures and internal controls (including internal audit system) for operating this line of business.
4. Other documents as required by FSC regulations.
Where the head office and a branch unit of a securities firm simultaneously apply for approval to conduct the business under the preceding paragraph, they may consolidate the identical application documents.
|
Info
|
|
32
|
With the exception of the type of business under Point 4, paragraph 1, subparagraph 4, which shall be conducted pursuant to the Regulations Governing Management and Utilization of Collective Investment Trust Funds, to conduct business set out in Point 2, subparagraph 2 herein a securities firm shall submit the application, together with following documents, to the TWSE, which shall review them and forward a report to the FSC for its approval:
1. Documentary proof that the securities firm meets the qualification requirements for conducting business set out in Point 2, subparagraph 1 herein (not required if the securities firm is simultaneously applying for approval for that business).
2. Articles of incorporation or equivalent documents.
3. Documentary proof of the regulatory capital adequacy ratio.
4. The CPA-audited and attested financial report for the most recent period.
5. Documentary proof of the long-term credit rating.
6. Documentary proof that the securities firm meets the qualification requirements for operating this line of business (proof that it has not been sanctioned by the FSC is not needed).
7. Minutes of the meeting at which the board of directors passed the resolution to apply to operate this line of business.
8. Documentary proof of the effectiveness of the internal control system and risk management culture, passed by resolution of the board of directors:
A. The securities firm has specifically corrected any material defects in internal controls.
B. The securities firm has properly handled customer complaint cases and maintains good quality in treating customers fairly.
C. The board of directors and senior management personnel effectively implement corporate governance and take measures to enhance the effectiveness of the risk management culture.
9. Business plan, with content including the following items:
A. Business planning: the trust business activities, types of trust business, and operational procedures and risk management for operating this line of business.
B. Accounting system.
C. Internal control system and internal audit system.
D. Matters concerning protecting the rights and interests of customers.
E. Business operation capability and investment of resources: staffing and equipment assessment (including information systems), plans for professional talent development and training for the next three years, salary and compensation incentives and performance evaluation system.
10. A list of personnel that operate and manage trust business, and documentary proof of their qualifications.
11. A written statement of the non-existence of the circumstances listed in Article 2 of the Regulations Governing Expertise or Experience with respect to the responsible person.
12. A template trust agreement.
13. Other documents as required by FSC regulations.
An ROC branch of a foreign securities firm intending to apply to conduct the business under the preceding paragraph shall file its application with the TWSE, which shall forward a report to the FSC, and shall furnish with the application a letter of consent from the board of directors of its head office, or a document signed by an entity or personnel authorized by the head office.
|
Info
|
|
33
|
For an application for a securities firm's branch unit to conduct business set out in Point 2, subparagraph 2 herein, the securities firm shall submit the application, together with following documents, to the TWSE, which shall review them and forward a report to the FSC for approval:
1. Documentary proof of that the securities firm's head office has obtained the approval from the competent authority to operate wealth management and trust businesses.
2. Minutes of the meeting at which the board of directors passed the resolution to apply to operate this line of business.
3. Documentary proof of the effectiveness of the internal control system and risk management culture, passed by resolution of the board of directors:
A. The securities firm has specifically corrected any material defects in internal controls.
B. The securities firm has properly handled customer complaint cases and maintains good quality in treating customers fairly.
C. The board of directors and senior management personnel effectively implement corporate governance and take measures to enhance the effectiveness of the risk management culture.
4. Business plan, with content including the following items:
A. Business planning: the trust business activities, types of trust business, and operational procedures and risk management for operating this line of business.
B. Accounting system.
C. Internal control system and internal audit system.
D. Matters concerning protecting the rights and interests of customers.
E. Business operation capability and investment of resources: staffing and equipment assessment (including information systems), plans for professional talent development and training for the next three years, salary and compensation incentives and performance evaluation system.
5. A list of personnel that operate and manage trust business, and documentary proof of their qualifications.
6. A written statement of the non-existence of the circumstances listed in Article 2 of the Regulations Governing Expertise or Experience with respect to the responsible person of the branch unit.
7. Other documents as required by FSC regulations.
Where the head office and a branch unit of a securities firm simultaneously apply for the approval to conduct the business under the preceding paragraph, they may consolidate the identical application documents.
|
Info
|