Chapter XI Penalities For Violations |
| 135 | Where any securities firm violates Article 13, Article 16, paragraph 2 of Article 21, Article 23, paragraph 1 or 6 of Article 25, paragraph 3 of Article 28-1, paragraph 1 of Article 29, Article 33, Article 40, Article 68, subparagraph 1, 2, 3, 6, 8, or 11 of Article 75, paragraph 1 of Article 75-1, paragraph 1 of Article 75-2, Article 75-7, Article 76, Article 77-9, Article 79-1, paragraph 2, or 3 of Article 80, Article 80-1, paragraph 4 of Article 82, paragraph 3 of Article 85, Article 87, paragraph 2 of Article 93 or Article 95 hereof, the TWSE may notify it to make correction or improvement within a prescribed time frame, or, in addition thereto, impose a breach penalty of not more than NT$100,000.
Where any securities firm violates these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, announcements, and circular letters of the TWSE, unless otherwise provided, the TWSE may notify it to make correction or improvement within a prescribed time frame, or, in addition thereto, impose a breach penalty of not more than NT$100,000.
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| 136 | Where any securities firm violates paragraph 4 of Article 25, Article 26, paragraph 2 or paragraph 3 of Article 58, subparagraph 5 of paragraph 1 and paragraph 3 of Article 75, paragraph 2 of Article 75-1, paragraph 2 of Article 75-2, Article 77-4, paragraph 5 of Article 80, Article 81, paragraph 1, 2, or 3 of Article 82, Article 82-1, paragraph 2 of Article 83, paragraph 1, 2, 3, 5, or 6 of Article 91, paragraph 2 of Article 91-1, paragraph 2 of Article 92, paragraph 2 or 3 of Article 94, or Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, the TWSE may warn them orimpose a breach penalty of not more than NT$300,000, and notify it to make correction or improvement within a prescribed time limit.
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| 137 | If any securities firm violates Article 75-5, paragraph 2 herein or the provision regarding reporting deadline in Point 3(4) of the Taiwan Stock Exchange Corporation Operational Guidelines for Omnibus Trading Accounts, the TWSE may impose a fine of NT$30,000 if the delay is 1 hour or less, or an additional fine of NT$10,000 for each additional hour's delay.
Where any securities firm fails to key-in within the prescribed time period the clearing data in respect of margin purchases or short sales in accordance with Article 103, the TWSE shall impose a fine of NT$30,000 if the delay is 1 hour or less, or an additional fine of NT$10,000 for each additional hour's delay.
Where any securities firm violates Article 104, paragraph 5, subparagraphs 1 or 2, the TWSE shall impose a delay fine in accordance with the following criteria, provided that this rule shall not apply where the securities firm can provide evidence proving the delayed delivery of securities or proceeds is not attributable to any intent or negligence of the securities firm:
- Where the delay is 1 hour or less, a fine of NT$30,000 is imposed if the volume of shortfall in securities is 5,000 lots or less, or if the settlement price in the delayed payment is NT$50 million or less; a fine of NT$40,000 is imposed if the volume of shortfall is over 5000 lots, or the settlement price is over NT$50 million.
- Where the delay is over 1 hour, an additional fine of NT$10,000 is imposed for each additional hour's delay.
Securities firms shall pay fines referred to in the preceding three paragraphs to the Finance Division of the TWSE within 2 days after receiving notification of the TWSE.
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| 138 | Where any securities firm commits any of the following acts, the TWSE may impose a penalty in an amount not more than NT$2 million:
- 1.violation of paragraph 5 of Article 25, paragraph 2 of Article 28, paragraph 2 of Article 28-1, Article 30, Article 37, Article 75, subparagraph 9, Article 77, paragraph 1 of Article 80 or Article 86.
- 2.failure to make correction or improvement within the time limit designated in accordance with Article 136.
- 3.failure to pay the fine within the time limit specified in paragraph 3 of Article 137.
- 4.having been warned twice in accordance with Article 136 within the most recent half year.
Where a securities firm violates any provisions of other TWSE bylaws, rules, or the market usage contract, the TWSE may impose a penalty in an amount of NT$1 million or less, depending upon the seriousness of the matter.
Where a securities firm violates the provision of any subparagraph of paragraph 1 and paragraph 2 for the second time within the most recent half year, the TWSE may impose a penalty in an amount of NT$4 million.
Where any securities firm commits the offense specified in subparagraph 2 of paragraph 1, the TWSE shall send a second notice setting forth a time limit for its correction or improvement.
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| 139 | Where a securities firm commits any of the following acts, the TWSE may suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises for a period of not more than 3 months:
- failure to make correction within the time limit designated by the TWSE for its violation of Article 24.
- having been imposed the penalty in accordance with Article 138 for three times or more within the most recent half year.
- failure to pay the penalty in accordance with Article 138.
- failure to make correction or improvement within the time limit prescribed in accordance with paragraph 3 of Article 138.
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| 140 | Where any securities firm violates paragraph 1 or paragraph 3 of Article 28, paragraph 2 of Article 85, or Article 113, the TWSE may suspend trading by it for a period of not less than 3 months but not more than 6 months.
Where any securities firm has been halted from trading two times in any one year for violation of the provisions of Article 113, or has failed to meet the deadline for payment prescribed in accordance with Article 114, the TWSE may terminate its market usage contract.
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| 141 | Where a securities firm commits any of the following acts, the TWSE may restrict or suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises or terminate the market usage contract:
- violation of Article 30 by making false statements or reports to the TWSE that result in damages to the TWSE or others.
- violation of Article 83, paragraph 1 by producing false records and vouchers.
- violation of Article 89 by offsetting outside the Exchange or transacting outside the Exchange or transacting securities that are not listed by the TWSE without the approval of the Competent Authority.
- violation of Article 75, subparagraph 5 or having any event set forth in Article 90, paragraph 1 or Article 94, paragraph 2 that seriously damages the rights and interests of the principal, which has been verified by the TWSE.
- violation of Article 83, paragraph 5 of, Article 96, or Article 97.
- a disposition under Article 142, paragraph 1, subparagraph 4, where corrections have not been made after 3 months.
- any events set forth in Article 3 of the Regulations Governing Special Inspection of and Guidance to Securities Firms as prescribed by the TWSE, and has not been able to improve after being subject to guidance for several times.
- failure to present relevant account books or certificates within a specified time limit, after being subject to a disposition under Article 142, paragraph 1, subparagraph 1.
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| 142 | Where a securities firm commits any of the following acts, the TWSE may temporarily halt trading, in whole or in part, of its dealing or brokerage business or its business premises and report to the Competent Authority:
- violation of Article 25, paragraph 2 by evading or refusing the inspection or the inquires of personnel sent by the TWSE.
- violation of the settlement obligation specified in Article 113, paragraph 1.
- its net worth is less than one-half of its paid-in capital referred to in Article 28-1, paragraph 2 for 6 consecutive months.
- regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after 3 months.
- violation of the provisions of these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
The TWSE may resume its trading status if the cause of the circumstance under subparagraph 1, 3, 4, or 5 of the preceding paragraph ceases to exist.
Where trading by any securities firm halted by the TWSE in accordance with paragraph 1, subparagraph 2, the number of days for which its trading is halted may be used to offset against the number of days for which its trading shall be suspended pursuant to Article 140, paragraph 1.
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| 143 | Where it is discovered by the TWSE that any securities firm is suspected to have violated Article 5, paragraph 2, Article 27, Article 78, Article 85, paragraph 1, or other relevant provisions of the Securities and Exchange Act, the matter shall be reported to the Competent Authority for its disposition.
Where any securities firm or securities underwriter is suspected to have violated the provisions of Article 5, paragraph 2, the matter shall be dealt with by the TWSE in accordance with relevant regulations and shall be reported to the Competent Authority for its recordation.
The TWSE shall, pursuant to the resolutions adopted by the Special Management Committee formed in accordance with the Regulations for Management of Clearing and Settlement Fund under Joint Responsibility System, reduce the trading volume of securities by a securities firm for its own account or on the account of its principals, or restrict or halt its trading, and shall report the matter to the Competent Authority.
The TWSE may, on the grounds of a disposition by the GreTai Securities Market to halt or suspend trading by a securities firm, render an appropriate disposition with respect to the same securities firm, and submit it for recordation by the Competent Authority and post-approval by the TWSE's board of directors.
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| 144 | Where any employee of a securities firm violates these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE, the TWSE may, depending upon the severity of the violation, notify the securities firm to give warning to its employee, or to halt him from executing business activities for 1 to 6 months.
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| 145 | Any disposition pursuant to Article 136 or 138 of this Chapter shall be submitted to the competent authority for review and recordation.
Any disposition restricting or suspending trading pursuant to Article 139, Article 140, or Article 141 of this Chapter shall be submitted to the Board of the Directors of the TWSE for resolution and then submitted to the Competent Authority for review and recordation.
Any disposition of termination of the market usage contract pursuant to Article 141 of this Chapter shall be submitted to the Board of the Directors of the TWSE for resolution and then submitted to the Competent Authority for approval.
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| 145-1 | Any disposition taken pursuant to this Chapter shall be effective upon delivering the notice to the securities firms concerned.
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