The parties to this Contract, the Taiwan Stock Exchange Corporation (below, “Party A”) and the securities broker or securities dealer (below, “Party B”), in accordance with Article 129 of the Securities and Exchange Law, mutually agree to abide by the terms and condition of this Contract as follows:
When this Contract is executed and takes effect, Party B shall enjoy the right to use the centralized securities exchange market established by Party A; Party B shall abide by Party A’s rules, regulations, and announcements, and pay the trading charge and other fees within prescribed time limits pursuant to regulations. Following execution of this Contract, Party B shall remain obligated to abide by Party A’s rules and regulations notwithstanding any subsequent revisions by Party A, provided that prior to any revisions in the Operating Rules of the Taiwan Stock Exchange Corporation affecting the interests of securities firms, Party A shall first invite the opinion of the ROC Securities Dealers Association in accordance with the provisions of Article 138, Paragraph 2 of the Securities and Exchange Law.
The rate of the trading charge referred to in the preceding paragraph and any adjustments thereto shall be determined pursuant to Article 132, Paragraph 3 of the Securities and Exchange Law.
Party B shall deposit a settlement and clearing fund with Party A pursuant to the standards established by the competent authority.
Party B’s sales personnel shall be registered pursuant to the rules and regulations of Party A. Party B shall bear full responsibility for the conduct of said personnel in performance of their duties prior to any amendment or cancellation of their registration.
Party B shall be responsible to Party A for performance of all settlement and clearing obligations and all related responsibilities in trading on the centralized securities exchange market.
Upon occurrence of any of the following conditions with respect to Party B, Party B shall accept the decision of Party A made pursuant to Articles 133 and 134 of the Securities and Exchange Law and shall pay a fine for breach of contract, suspend or limit its trading, or terminate this contract:
- Violation of laws or regulations, or violation of administrative dispositions based on laws or regulations.
- Violation of Party A’s articles of incorporation, operating rules, criteria governing consignment contracts, or other rules and regulations.
- Trading practices counter to the principle good faith and sufficient to cause injury to the interests of others.
- Violation of the provisions of this contract.
When Party B receives a disposition from the competent authority to suspend operations or when its operating permit is revoked, or when Party A requires Party B to suspend or limit trading activity or to terminate this contract pursuant to the provisions of the preceding paragraph, Party B shall remain bound by the obligation to effect settlement and clearing for any trades already undertaken through the centralized securities exchange market. When Party B is incapable of or unable to wind up and settle a transaction, Party A shall designate other securities firms to wind up and settle on Party B’s behalf pursuant to Article 153 of the Securities and Exchange Law.
When Party B is designated by Party A to wind up and settle on behalf of other securities firms, which under Articles 4 and 6 are incapable of or unable to wind up and settle or which fail to carry out settlement obligations, Party B shall bear responsibility for winding up and effecting settlement, provided that for resulting differences in securities prices or fees arising out of settlement, Party A shall first compensate Party B from the settlement and clearing fund, and where that fund is insufficient, Party A shall make payment out of the compensation reserve, and thereafter seek compensation for monies allocated from those funds from the securities firm which defaulted on its settlement obligations.
Any delivery, payment, or compensation referred to in the preceding paragraph shall be limited to fees and price differences arising directly out of transaction with the trading counterpart securities firm in Party A’s centralized securities exchange market.
When Party B is in default on its settlement and clearance obligations, Party A, in addition to drawing on the settlement and clearing fund deposited by Party B, may also draw upon available assets in which Party B has claim against Party A in order to offset debt and statutory interest arising out of its settlement payments on behalf of Party B. When those assets are insufficient to offset Party B’s debts, Party B agrees that Party A may also make application through the competent authority to draw upon the business guarantee bond deposited at Party B’s bank. Where a shortfall remains, Party B remains obligated to make compensation; where a surplus exists, the surplus shall be returned to Party B after termination of this contract.
Party A may temporarily retain or place a lien upon assets collected from Party B or upon settlement funds or securities owed to Party B as against debts arising out of settlement obligations which Party B owes Party A; said assets may remain so disposed until the discharge of Party B’s debt.
Where any change is made in Party B’s directors, supervisors, managers or sales personnel, Party B shall notify Party A within five days from the date of the change.
Party A may dispatch personnel to examine Party B’s account books and related vouchers, documents, and statistical forms or make inquiries of Party B. Party B may not refuse such examinations or inquiries. Furthermore, Party B agrees that Party A may inquire with the Joint Credit Information Center about information concerning Party B’s credit with financial institutions.
Party A may, when necessary, notify Party B to provide specific or general information regarding company finance or operations; Party A may also, when necessary, publicly disclose such information.
Party A and Party B agree to submit any disputes that arise out of this Contract to arbitration, and to apply the provisions of Chapter 6 of the Securities and Exchange Law regarding arbitration.
This Contract shall be made in two originals and four copies; Party A and Party B shall each hold one original and two copies.
This Contract shall become effective upon submission of one copy held by Party A to the competent authority.
Upon termination of this contract, Party B shall return the contract to Party A for annulment.
Party A: The Taiwan Stock Exchange Corporation
Address: 9F, No. 85, Yen-ping South Rd., Taipei