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Standard Directions for the Content and Procedures of Assessment of Legal Compliance of Securities Firms  CH

Amended Date: 2018.07.24 (Articles 3 amended,English version coming soon)
Current English version amended on 2010.12.28 
Categories: Market Supervision > Regulation of Securities Firms
1     These Directions were established per Letter No. Financial-Supervisory-Securities-Trading-2-09600095743 of 16 April, 2007 of the Financial Supervisory Commission.
2     The content and procedures of assessment of legal compliance set by securities firms must comply with the "Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets" ("Regulations") and these Directions. These Directions provide for the minimum requirements and standards for the content and procedures of assessment of legal compliance to be established by securities firms, and securities firms shall, taking into consideration factors such as the business scale, nature of the business, organizational characteristics etc., establish the content and procedures of assessment that at least meet the standards under these Directions, and make adjustments and amendments accordingly in the event of changes in laws and regulations.
3     Securities firms must, at the very least, establish the content and procedures of assessment of legal compliance according to the following content:
  1. The compliance unit shall establish the content and procedures of assessment of legal compliance ("Procedures") for the company pursuant to the Regulations for the purposes of planning, managing and implementing a compliance system, instilling in practitioners of the company an understanding of the importance of law and order, and reinforcing education and advocacy regarding securities laws and regulations, in order to familiarize all personnel of the company with the rules and regulations related to their work.
  2. The compliance supervisor shall be in charge of all compliance affairs and report to the board of directors and each supervisor or the audit committee at least every six months.
  3. The content of assessment of legal compliance must include:
    1. Establishing clear and appropriate conveyance, consultation, coordination and communication systems regarding laws and regulations.
    2. Affirming that all procedures and management regulations are updated in a timely manner pursuant to applicable laws and regulations to ensure all operational activities comply with laws and regulations.
    3. Supervising the regular self-assessment of compliance of each unit.
    4. Implementing appropriate and proper training on laws and regulations for members of each unit.
    5. Supervising the compliance of overseas branch offices with the laws and regulations of the countries they are located in.
    6. Other matters as required by the competent authority.
  4. The Procedures adopt a self-assessment method, with each unit conducting a self-assessment no less than once every year (subsidiaries of financial holding companies shall conduct a self-assessment no less than once semi-annually). Self-assessment results shall be submitted to the legal compliance unit for recordation. The supervisor of each unit shall appoint persons to specially conduct the self-assessment.
  5. Self-assessment is divided into two types as below:
    1. Regular self-assessment items: applicable to units of a company
    2. Unit self-assessment items: applicable to individual units
  6. The aforementioned self-assessment shall be conducted using a "Legal Compliance Self-Assessment Chart" (see attachments). "Legal Compliance Self-Assessment Charts" (in lieu of self-assessment working papers) and self-assessment related information shall be kept for a minimum of five years.
  7. The Procedures shall be implemented after having been approved by the General Manger. Subsequent amendments thereto shall be effected in the same manner.
4     These Directions shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.