Chapter IV Establishment of Branch Offices and Representative Offices
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Section I Domestic Branch Offices
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| Article 19 | A securities firm established under these Standards may apply for the establishment of a branch office or a simple branch office upon the completion of 1 year of operation. Such restriction does not apply, however, to the establishment of a branch office or a simple branch office as a result of merger or transfer. |
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| Article 20 | A securities firm applying for the establishment of a branch office or a simple branch office shall meet all of the following requirements:
1. The applicant's most recent CPA audited and attested financial report indicates that the net worth per share exceeds its par value and its financial condition complies with the standards under Article 49 of the Act. However, the requirement of net worth per share exceeding par value shall not apply to a securities firm that establishes additional branch offices or simple branch offices owing to merger, or acquisition of other securities firms.
2. The applicant has not been sanctioned by the FSC with a warning under Article 66, subparagraph 1 of the Act within the most recent 3 months.
3. The applicant has not been sanctioned by the FSC with an order under Article 66, subparagraph 2 of the Act to dismiss any of its directors, supervisors, or managerial officers or with replacement of its responsible person or other related personnel under Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act within the most recent half year.
4. The applicant has not been sanctioned by the FSC with suspension of operations within the most recent year.
5. The applicant has not been sanctioned by the FSC with voidance of permission for any part of its business within the most recent 2 years.
6. The applicant has not been sanctioned with suspension or restriction of trading by the TWSE, TPEx, or TAIFEX pursuant to its rules or bylaws within the most recent 1 year.
7. The regulatory capital adequacy ratio of the securities firm is not lower than 150 percent.
If a securities firm does not meet a requirement set forth in any of subparagraphs 2 to 6 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement.
For securities firms that establish additional branch offices or simple branch offices owing to merger or acquisition of the entire business, assets, or facilities of other securities firms under the approval of the FSC, the requirements of subparagraphs 2, 3, and 7 of paragraph 1 shall not apply. |
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| Article 20-1 | A securities firm applying for conversion of a branch office into a simple branch office shall meet the requirements of subparagraphs 6 and 7 of paragraph 1 of the preceding article.
If a securities firm does not meet the requirement set forth in subparagraph 6 of paragraph 1 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement. |
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| Article 21 | For each branch office or simple branch office that a securities firm establishes, the minimum paid-in capital of the firm shall increase by NT$30 million. However, for conversion of a securities firm branch office into a simple branch office, no increase in minimum paid-in capital is required. |
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| Article 22 | The standards of the business site and facilities required under Article 6 shall apply mutatis mutandis to branch offices or simple branch offices of securities firms.
Prior to filing an application with the FSC for permission for a branch office of a securities firm to operate brokerage business on the centralized exchange market, consent for computer linkage shall be obtained from the stock exchange centralized exchange market and the securities central depository enterprise.
Prior to filing an application with the FSC for permission for a branch office of a securities firm to operate brokerage business on the over-the-counter market, consent for computer linkage for its securities trading information shall be obtained from the TPEx. |
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| Article 23 | To establish a branch office, a securities firm shall submit all of the following documentation in an application to the FSC:
1. The application for establishment of a branch office (Annex 8).
2. Articles of incorporation or document equivalent to articles of incorporation.
3. Business plan: specify the principles of business operation of the branch office; internal organization and division of labor; personnel recruitment; overview of the site and facilities; and financial forecasts for the next 3 years.
4. Meeting minutes of the board of directors (or board of governors).
5. Internal control system required under Article 11 (including that of the branch office).
6. Documentation affirming the availability of the computer linkage as required under Article 22, paragraph 2 or 3.
7. Other documents as required by the FSC. |
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| Article 23-1 | To establish a simple branch office, a securities firm shall submit all of the following documentation in an application to the FSC for permission:
1. The application for establishment of a simple branch office (Annex 8-1).
2. Articles of incorporation or document equivalent to articles of incorporation.
3. Business plan: specify the principles of business operation of the simple branch office; internal organization and division of labor; personnel recruitment; overview of the site and facilities; and financial forecast for the next 3 years.
4. Meeting minutes of the board of directors (or board of governors).
5. Internal control system required under Article 11 (including the simple branch office).
6. Other documents as required by the FSC.
For conversion of a branch office into a simple branch office, the provisions of subparagraph 2 and subparagraphs 4 to 6 of the preceding paragraph shall apply, and the securities firm shall submit the following documentation in an application to the FSC for permission:
1. The application for conversion into a simple branch office (Annex 8-2).
2. Conversion business plan: specify the reasons for conversion (including an analysis of the operating condition of the existing branch office(s)), handling of the rights and interests of existing customers or alternative service methods, etc., and the principles of business operation of the simple branch office; internal organization and division of labor; personnel recruitment; overview of the site and facilities; and financial forecasts for the next 3 years.
3. Employee placement plan. |
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| Article 24 | Within 6 months after the permission has been granted for establishment of a branch office, the securities firm shall complete the incorporation registration of the branch office and submit all of the following documentation to the FSC to apply for issuance of the business license of the branch office:
1. The application for establishment of the branch office (Annex 9).
2. Photocopy of the branch office incorporation registration certificate.
3. List of managerial officers and associated persons with certification of their qualifications.
4. Documentation certifying compliance with Article 6.
5. Documentation certifying the deposit of the operation bond.
6. Contract affirming the availability to utilize the computer linkage facilities under Article 22, paragraph 2 or 3.
7. Other documents as required by the FSC.
The permit for the establishment of a branch office shall be voided if the applicant fails to apply for the license within the period prescribed in the preceding paragraph. The period prescribed in the preceding paragraph may be extended, however, if the securities firm applies to the FSC, with good cause, prior to the expiration of the period. Such an extension shall not exceed 6 months and may be granted only once. |
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| Article 24-1 | Within 6 months after the permission has been granted for establishment of a simple branch office or conversion of a branch office into a simple branch office, the securities firm shall complete the incorporation registration of the simple branch office and submit all of the following documentation to the FSC to apply for issuance of the business license of the simple branch office:
1. The application for establishment of the simple branch office (Annex 9-1).
2. Photocopy of the simple branch office incorporation or amendment registration certificate.
3. List of managerial officers and associated persons with certification of their qualifications.
4. Documentation certifying compliance with Article 6.
5. Documentation certifying the deposit of the operation bond.
6. Other documents as required by the FSC.
The permit for a simple branch office shall be voided if the applicant fails to apply for the license within the period prescribed in the preceding paragraph. The period prescribed in the preceding paragraph may be extended, however, if the securities firm applies to the FSC, with good cause, prior to the expiration of the period. Such an extension shall not exceed 6 months and may be granted only once. |
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| Article 24-2 | In each fiscal year, the total number of simplified branch offices that a securities firm applies to establish, counted in combination with branch offices to be converted to simplified branch offices, shall not exceed three. |
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| Article 24-3 | The business items that a simple branch office of a securities firm may handle are limited to the following:
1. Wealth management business.
2. Business solicitation and account opening preparatory operations for securities brokerage business.
3. Other business as approved by the FSC.
A securities firm simple branch office conducting wealth management business shall do so in accordance with the provisions regarding branch offices in the Directions for the Conduct of Wealth Management Business by Securities Firms. |
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| Article 25 | The provisions of Article 19 through 24 shall apply mutatis mutandis to a financial institutions that concurrently operates securities business and applies for concurrent operation of securities business by a branch office. The provisions of Articles 20, Article 23, subparagraphs 1, 2, 4 to 7, and Article 24, paragraph 1, subparagraphs 1 to 3 and 5 to 7 and paragraph 2 of these Standards shall apply mutatis mutandis to a financial institution that only applies to conduct proprietary trade in government bonds at its branch office. The financial institution shall assign a full time associated person to deal with such business. |
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Section I-1 Overseas Branch Offices and Representative Offices
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| Article 25-1 | A securities firm established under these Standards may apply to establish an overseas branch office(s) upon the completion of 3 years of operation.
Applications to establish an overseas branch office under the preceding paragraph shall be confined to locations that have a centralized securities exchange market and a dedicated competent authority, and have been publicly announced by the FSC. |
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| Article 25-2 | A securities firm establishing an overseas branch office(s) shall comply with the provisions of all the following subparagraphs:
1. Concurrently operate the three types of business of securities underwriting, proprietary trading, and brokerage or commission agency, and have net worth of not less than NT$3 billion on the financial report for the most recent period audited and attested by CPAs.
2. Have net worth per share of not less than par value on the financial report for the most recent period audited and attested by CPAs and have financial condition complying with the standards prescribed in Article 49 of the Act.
3. Comply with the provisions of Article 20, paragraph 1, subparagraphs 2 through 6.
4. Have a regulatory capital adequacy ratio of not less than 200 percent and a sound financial structure, provided that this restriction does not apply if the securities firm has been granted special approval due to special needs.
If a securities firm does not meet a requirement under subparagraph 3 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement.
The sum of the funds that a securities firm establishing an overseas branch office(s) appropriates there for local operations plus the total funds the securities firm invests in foreign and mainland enterprises shall not exceed 40 percent of the securities firm's net worth, provided that this restriction does not apply if the securities firm has been granted special approval due to special needs. |
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| Article 25-3 | The minimum paid-in capital of a securities firm shall be increased by NT$30 million for each overseas branch office it establishes. |
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| Article 26 | A securities firm applying for a permit to establish a branch office or representative office overseas or a financial institution with approval to concurrently operate securities business applying for a permit for its overseas branch office to concurrently operate securities business shall submit all of the following documentation to the FSC:
1. Application for establishment of the branch office or representative office.
2. Articles of incorporation or document equivalent to articles of incorporation.
3. Business plan: for the establishment of a branch office, the plan shall specify the principles of business operation by the overseas branch office, internal organization and division of labor, personnel recruitment, overview of the site and facilities, and its financial forecasts for the next 3 years; for the establishment of a representative office, the plan shall specify the organization of and affairs to be dealt with by its representative office.
4. Meeting minutes of the board of directors or (board of governors).
5. Internal control system required under Article 11 (including the overseas branch office or representative office).
6. For the establishment of a branch office, a feasibility assessment report must be submitted, specifying: the factors in the choice of the location for establishment; provisions of laws and regulations regarding matters such as local restrictions applying to foreign securities firms with respect to application procedures, review standards, business operations, and whether the competent authority of the home country may collect and inspect information on the financial and operational condition of the branch office; self-assessment describing the compliance of the application case with local laws and regulations, operational risk assessment and benefit analysis.
7. Other documents as required by the FSC.
If the business that would be handled, under local securities laws and regulations and customary business practices, by the overseas branch office that the securities firm is applying to establish extends beyond the business items of the head office, all of the following documents shall be submitted in addition to the documents in the preceding paragraph:
1. Business item particulars: including the products to be handled, types of transactions, and trading counterparts and markets.
2. Local laws and regulations that must be complied with when engaging in such business.
3. Internal control and risk management plan.
4. Legal opinion by a lawyer. |
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| Article 26-1 | A securities firm that has applied to establish a branch office or representative office overseas or a financial institution concurrently operating securities business that has applied for its overseas branch office to concurrently operate securities business shall, after obtaining approval for establishment from the local competent authority, submit all of the following documentation to the FSC for recordation before commencing business:
1. Photocopy of the document issued by the local competent authority to approve the establishment.
2. List of managers and associated persons or representatives.
3. Date of establishment and detailed address.
4. For establishment of a branch office, the business items the local competent authority has approved for operation shall also be submitted. |
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| Article 26-2 | A securities firm that has already established an overseas branch office or representative office shall still be required to file an application with the FSC in accordance with the provisions of this Section when establishing any additional branch office or representative office in the same country or region. |
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Section II Foreign Securities Firms |
| Article 27 | (Deleted) |
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| Article 28 | A foreign securities firm that intends to establish a branch office within the territory of the Republic of China (ROC), shall meet all of the following qualifications:
1. The applicant possesses sufficient international securities business experience and financial soundness for the business type being applied for.
2. The applicant has not been sanctioned by its home country's securities regulatory authorities within the most recent 2 years.
The sufficient international securities business experience referred to in subparagraph 1 of the preceding paragraph requires more than 3 years in the securities business and one of the following criteria:
1. Verification of sufficient international securities business experience through the governing institution or other organization of the firm's home country, or through any other institution recognized by the FSC.
2. Obtaining from a country other than the firm's home country a membership or trading qualification of a stock exchange.
3. Having established a place of business operation located outside of the firm's home country or business operations in overseas markets, and having overseas operating income from the same type of operations applied for.
The financial soundness referred to in paragraph 1, subparagraph 1 requires the most recent CPA audited and attested financial report to indicate that the net value of per share is not below par value. |
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| Article 29 | A foreign securities firm applying for the establishment of a branch office within the territory of the ROC shall deposit operating capital which shall not be less than the total amount of the increase in minimum paid-in capital required for establishment of a branch office under Article 21, and the business bond and the settlement/clearance fund required to be deposited in accordance with Articles 9 and 10 of the Regulations Governing Securities Firms, Article 6 of the Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, and the requirements of other rules and regulations. However, when subsequently further applying for the establishment of a branch office thereafter, the firm shall deposit the business bond and the settlement/clearance fund in accordance with the provisions, applied mutatis mutandis, of Articles 9 and 10 of the Regulations Governing Securities Firms regarding the amounts required to be deposited for establishment of securities firm branch offices.
A foreign securities firm applying for the establishment of a branch office shall maintain in the ROC assets which shall not be less than the amount of the special reserve required to be appropriated in accordance with Article 14 of the Regulations Governing Securities Firms and the amount of the liabilities on the balance sheet of the branch office. |
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| Article 30 | The provisions of Articles 6 and 8 shall apply mutatis mutandis to the establishment of branch offices within the territory of the ROC by foreign securities firms. |
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| Article 31 | In filing an application with the FSC for a permit to establish a branch office, a foreign securities firm shall submit all of the following documentation:
1. The application for establishment of the branch office (Annex 10).
2. Certified copy of its articles of incorporation or document equivalent to articles of incorporation.
3. Business plan: specifying the principles of business operation; internal organization and division of labor; personnel recruitment; overview of site and facilities; and financial forecasts for the next 3 years.
4. Internal control system required by Article 11.
5. Securities business license issued by the securities regulatory agency or an equivalent agency of its home country and documentation certifying compliance with the requirements under Article 28.
6. Document issued by the competent securities authority of the home country of the foreign securities firm and its parent company approving its establishment of a branch office within the territory of the ROC.
7. Documentary proof that the parent company of the foreign securities firm has approved its establishment of the branch office within the territory of the ROC and has made a commitment of financial responsibility regarding the branch office.
8. List of directors, managerial officers, and shareholders who hold five percent or more of its shares.
9. Certified copy of the minutes of the board of directors meeting at which the resolution to establish the branch office in the ROC was made.
10. Names, nationalities, and domiciles of directors and other responsible persons.
11. Names, nationalities and domiciles or residence and the power of attorney of designated agents for litigious and non-litigious matters in the ROC.
12. Balance sheets and income statements audited and attested by CPAs for the most recent 3 years.
13. Power of attorney designating the agent for the purpose of applying to the FSC for establishment of the branch office.
14. Documentation of identification for the agent for litigious and non-litigious matters in the ROC.
15. Documentation affirming the availability to the computer linkage as required under Article 8.
16. Other documents as required by the FSC.
If any of the aforesaid documentation is in a foreign language, it must be accompanied by a Chinese translation. |
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| Article 32 | Within 6 months from the date of the permit issued by the FSC for a foreign securities firm's application to establish a branch office, it shall complete the incorporation registration of the branch office and submit all of the following documentation to the FSC to apply for issuance of the business license of the branch office:
1. The application (Annex 11).
2. Photocopy of the branch office incorporation registration certificate.
3. List of managerial officers and associated persons with certification of their qualifications.
4. Documentation certifying compliance with Article 6.
5. Documentation certifying deposit of the business bond.
6. Contract affirming the availability to utilize the computer linkage facilities under Article 8.
7. Other documents as required by the FSC.
The permit for the establishment of a foreign securities firm's branch office shall be voided if the applicant fails to apply for the license within the period prescribed in the preceding paragraph. The period prescribed in the preceding paragraph may be extended, however, if the foreign securities firm applies to the FSC, with good cause, prior to the expiration of the period. Such an extension shall not exceed 6 months and may be granted only once. |
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| Article 32-1 | In any of the following circumstances, the FSC may deny an application from a foreign securities firm for permission for establishment of a branch office:
1. Any of the circumstances in Article 53 of the Act applies with respect to a managerial officer of the branch office.
2. Any misrepresentation or falsehood is found in any content or information in the application documents.
3. The business plan or the internal control system is not concrete enough, or cannot be implemented effectively.
4. Other circumstances under which denial of permission is considered necessary to protect the public interest.
If the application documents submitted under this Chapter are incomplete or otherwise contain incomplete information, and the situation is not corrected within a time limit designated by the FSC, the application documents will be rejected. |
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| Article 33 | A foreign financial institution, with approval from its home country government, may apply to the FSC for the establishment of a branch office for the operation of securities business.
The provisions of Articles 6, 8, 11 through 15, 19, 20, 29, 31, 32, and 32-1 shall apply mutatis mutandis to foreign financial institutions, other than FCMs, that apply for their branch offices established within the territory of the ROC to concurrently operate securities business.
The provisions of Articles 6, 8, 11 to 15, 16-1, 16-2, 19, 20, 29, 31, 32, and 32-1 shall apply mutatis mutandis to foreign FCMs that apply for their branch offices established within the territory of the ROC to concurrently operate securities business. |
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| Article 33-1 | A foreign securities firm intending to establish a representative office in the ROC shall meet both of the following qualifications:
1. The applicant possesses sufficient experience in international securities business.
2. The applicant has not been sanctioned by suspension of business or a more severe penalty by its home country's securities regulatory authorities within the most recent year.
The term "sufficient experience in international securities business" in subparagraph 1 of the preceding paragraph shall be subject, mutatis mutandis, to the provisions of Article 28, subparagraph 2. |
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| Article 33-2 | In filing an application with the FSC for approval to establish a representative office within the territory of the ROC, a foreign securities firm shall submit all of the following documentation:
1. Application for the establishment of a representative office.
2. Securities business license issued by the securities regulatory agency or equivalent agency of the home country and documents certifying compliance with the qualification requirements under Article 33-1.
3. Certified copy of its articles of incorporation or document equivalent to articles of incorporation.
4. Certified copy of the minutes of the board of directors meeting at which the resolution to establish a representative office in the ROC was made.
5. Balance sheets audited and attested by CPAs for the most recent 3 years.
6. Certified copy of the power of attorney designating the representative.
7. Resume of the authorized representative.
8. Certified copy of the power of attorney designating the agent for the purpose of applying to the FSC for establishment of the representative office.
9. Other documents as required by the FSC.
If any of the aforesaid documentation in foreign language, it must be accompanied by a Chinese translation. |
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| Article 33-3 | For a foreign securities firm that establishes a representative office within the territory of the ROC, its representative office is prohibited from operating the business under Article 15 of the Securities and Exchange Act. |
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