Chapter VI The Increase of the Type of Business |
| Article 38 | A securities firm or a financial institution concurrently operating securities business applying for the increase of the type of business shall meet all of the following requirements:
- The applicant has not been issued a warning by the FSC under Article 66, subparagraph 1 of the Act within the most recent 3 months.
- The applicant has not been sanctioned by the FSC's order under Article 66, subparagraph 2 of the Act to dismiss its directors, supervisors or managers within the most recent 6 months or order under Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act to replace its responsible person or other related personnel.
- The applicant has not been suspended operation by the FSC under Article 66, subparagraph 3 of the Act within the most recent 1 year.
- Any portion of the applicant's business licenses has not been revoked by the FSC under the Act within the most recent 2 years.
- The applicant has not been restricted or suspended to trade under the by-laws of the TWSE, TPEx, or TAIFEX within the most recent 1 year.
- The Capital Sufficiency 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 1 to 5 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 39 | In filing an application for the permit to increase the type of business by a securities firm or a financial institution concurrently operating securities business, all of the following documentation shall be submitted to the FSC:
- Articles of incorporation or equivalent documentation.
- A business plan which specifies: the principles of the operation for the increased type business; the division of internal organization; the employment of personnel; the description of facilities; and its financial projection for the next 3 years.
- The meeting minutes of the Board of directors.
- The system of internal control required under Article 11 (including that for the increased business type).
- The documentation affirming the availability to the computer linkage as required under Article 8.
- Other documents that the FSC may so require.
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| Article 40 | The amendment registration for the increase of the type of business of a securities company or a financial institution concurrently operating securities business shall be completed within 6 months from the date of the permit issued by the FSC and all of the following documentation shall be submitted to the FSC to apply for a securities business operation license:
- A photocopy of the company license with the increased type of business.
- The list of managers and associated persons with certification of their qualifications.
- The documentation certifying the compliance with Article 6.
- The documentation certifying the deposit of business bond.
- The contract affirming the availability to utilize the computer linkage facilities under Article 8.
- Other documents that the FSC may so require.
The permit for the increase of the type of business shall be revoked if the applicant fails to apply for the license within the duration prescribed in the preceding paragraph. The duration prescribed in the preceding paragraph may be extended, however, should the applicant apply to the FSC, with just cause, prior to the expiration of the duration. Such an extension shall not be more than 6 months and may be applied only once.
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| Article 40-1 | In the event that a securities firm or a financial institution concurrently operating securities business only applies to increase the business of proprietary trading in government bonds, its application for the permit under Article 39 may exempt the documentation required under subparagraph 2; its application for the securities business operation license under Article 40 may exempt the documentation required under subparagraph 3.
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| Article 41 | The provisions of Article 3, 6, 8, 11, 14 and 15 shall be applied mutatis mutandis to the application for the increase of the type of business by a securities firm or a financial institution concurrently operating securities business. The provisions of Article 3, 11, 14 and 15 shall be applied mutatis mutandis to the application to increase the business of proprietary trading in government bonds and the said securities firm or financial institution shall assign at least one full time associated person to deal with such business.
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| Article 41-1 | Articles 38 to 40 are applicable to securities firms or financial institutions concurrently operating securities business applying for increasing the types of business operations; provided, if this does not involve issuance of a new operations license, the mutatis mutandis application of Article 40 is exempted.
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