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Regulations Governing Insiders of Securities Firms Opening Accounts at Their Securities Firms for Securities Brokerage Trading  CH

Amended Date: 2015.07.09 
Categories: Market Supervision > Regulation of Securities Firms
Article 1     These Regulations are specially adopted to govern the opening of accounts for securities brokerage trading by insiders at securities firms.
Article 2     "Insiders" of securities firms as used in these Regulations, refers to the following:
  1. Directors, supervisors, and employees of securities firms, provided that for juristic-person directors or supervisors, only the juristic person itself or its representative may be designated as a director or supervisor; where the securities firm is concurrently operated by a financial institution, "employees" refers to those persons employed in the securities department.
  2. Spouses and minor children of the personnel referred to in the preceding subparagraph.
    The insiders referred to in paragraph 1 shall be limited to opening accounts for securities brokerage trading at their own securities firms.
    When an insider of a securities firm conducts any securities brokerage trading at the insider's own securities firm, the securities firm shall, following the execution of a trade, review whether such trade involves undisclosed information or a conflict of interest with the securities firm or other investors requiring recusal, and shall prescribe its review procedures in its internal control system.
    In the case of those operating dealing or underwriting business but not brokerage business, the personnel under paragraph 1, subparagraph 1 may open accounts only at other securities firms designated by the securities firm by which they are employed, and shall be subject to these Regulations.
    An insider of a securities firm may not open an account for securities brokerage trading under the name of any other person.
    No personnel in charge of brokerage trading business may process through accounts opened in their individual name, or accounts opened on behalf of others in accordance with Article 75, paragraph 1, subparagraph 4 of the Operating Rules of the TWSE, any trading orders except electronic trading orders.
    An insider of a securities firm may mandate a securities investment trust enterprise or securities investment consulting enterprise to open an account at a securities firm and conduct discretionary trading, subject to the provisions of these Regulations.
Article 3     A securities firm shall differentiate the accounts opened by insiders and other principals, and information on accounts opened shall be compiled and submitted to the Taiwan Stock Exchange Corporation each month. If the brokerage personnel handling a trade learns that a trading order was placed by an insider under another person's name, the personnel shall refuse to accept the trading order and shall notify the manager in charge of brokerage trading.
    When any insider of a securities firm loses his or her insider qualification or status, the insider's account shall be cancelled or converted to an account of an ordinary principal.
Article 4     An insider of a securities firm with knowledge that the underwriting division is selling stock obtained through firm commitment underwriting or with knowledge of the trading division's intent to trade a particular type of stock may not request trades in the same type of stock prior to the sale or the trade by the respective division.
Article 5     Account opening due diligence and risk control operations for margin trading by insiders at their own securities firms shall be prescribed in the internal control system of the securities firm.
    When quotas are allocated for margin purchases and shorts sales of any given securities by insiders at securities firms who are engaging in margin trading in their own securities firm, the insiders may only settle their margin purchase or short sale transaction for the given securities and may not place any further order for a margin purchase or short sale for the given securities.
Article 6     Internal auditing at a securities firm shall include a weekly audit of the brokerage trades entered by insiders in their securities firm and the subject of the trades, in order to avoid affecting the rights and interests of other investors and the securities firm.
Article 7     Internal auditing at a securities firm shall include a monthly audit of the evidentiary documents relating to brokerage trades by insiders in their securities firm.
    Securities firms shall place evidentiary documents relating to trades by insiders in their securities firm in custody separately from those of other principals in order to make them available for auditing by the competent authorities.
Article 8     Matters not provided for in these Regulations shall be governed by other relevant laws and regulations.
Article 9     These Regulations shall take force upon approval by the competent authority.