Chapter V Auditing of Securities Firms and Handling of Violation |
| Article 54 | The TPEx may, in coordination with the centralized securities depositary enterprise, audit a securities firm's handling of security token business, and the securities firm may not refuse to provide information or fail to cooperate with the investigation or audit.
When any deficiency is discovered, the TPEx may request the securities firm in writing to submit a corrective plan or an internal audit report.
When the TPEx deems necessary, it may require the securities firm to engage a CPA(s) designated by the TPEx to conduct a targeted examination within an audit scope designated by the TPEx, and to submit the results of the examination to the TPEx. The audit fees shall furthermore be borne by the securities firm.
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| Article 55 | If a securities firm is in any of the following circumstances, the TPEx may notify it to make supplementation or correction within a time limit, and in addition may impose a penalty of not more than NT$100,000:
- Violation of Articles 5 to 11, paragraph 3 of Article 12, Article 14, paragraph 2 of Article 16, Article 19, Article 20, Article 23, Article 24, paragraph 1 of Article 30, paragraph 1 or 2 of Article 31, Article 32, paragraph 2 or 3 of Article 35, paragraph 3 or 4 of Article 36, paragraph 2 of Article 37, paragraph 1 or 2 of Article 39, paragraphs 4 to 6 of Article 41, Articles 42 to 44, or Articles 46 to 53.
- Failure to confirm or control the limit on the amount purchased and balance held by a professional investor who is a natural person in accordance with paragraph 3 of Article 31 or Article 45.
- Failure to submit, by the 7th day of each month, the monthly accounting summary and income statement for the preceding month in accordance with paragraph 2 of Article 12, or failure to file by the required deadline a summary of the data relevant to the security tokens that it has issued for an issuer or on its own in accordance with Article 13, or failure to provide information to the TPEx, a CPA designated by the TPEx, or the centralized securities depositary enterprise by a required deadline.
- Violation of any other provision of these Rules or other relevant requirements.
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| Article 56 | If a securities firm is in any of the following circumstances, the TPEx may issue a warning, or impose a penalty of not more than NT$300,000, and notify it to make supplementation or correction within a time limit:
- Violation of paragraph 1 of Article 12, Article 15, paragraph 1 or 3 of Article 16, Article 18, Article 22, Article 33, Article 34, or Article 40.
- Failure to make supplementation or correction or to pay a penalty within a time limit set pursuant to the preceding Article.
- Commission of a violation set forth in the preceding article, and the violation is of a material nature.
- Refusal, obstruction, or evasion of an inspection or examination by the TPEx or by a CPA designated by the TPEx.
- Misrepresentation, concealment, material omission, or obvious error in any relevant material presented by the securities firm.
- Occurrence of a serious information security incident on the trading platform.
- Material breach of a contract signed with the TPEx.
- Violation of laws or regulations of the competent authority where the violation is of a material nature.
Dispositions made pursuant to the preceding paragraph shall be filed with the competent authority for recordation.
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| Article 57 | If a securities firm is in any of the following circumstances, the TPEx may impose a penalty of not more than NT$600,000 on it, and notify it to make supplementation or correction within a time limit; if the securities firm fails to make the supplementation or correction within the time limit, the TPEx may continuously impose the penalty for each time until supplementation or correction is made:
- Failure to make supplementation or correction or to pay a penalty within a time limit set pursuant to the preceding article.
- Two or more instances of warning or penalty imposed under the preceding article within the past half year.
- Violation under the preceding two articles, where the violation is of a material nature such that it adversely affects market trading order or the rights or interests of investors.
If there is another violation of paragraph 1 by a securities firm within the past half year, the TPEx may impose a penalty of NT$1 million.
Dispositions made pursuant to this article shall be filed with the competent authority for recordation.
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| Article 58 | If a securities firm is in any of the following circumstances, the TPEx may suspend or terminate its operation of the business of proprietary trading of security tokens:
- Failure to make supplementation or correction or to pay a penalty within a time limit set pursuant to the preceding Article.
- Misrepresentation or concealment in any information presented, sufficient to cause damage to the TPEx or others.
- Making of untrue records of trading or payment/receipt.
- Occurrence of a serious information security incident on the trading platform, where it affects the rights or interests of investors.
- Net worth lower than one-half of paid-in capital for 6 consecutive months.
- Violation of Article 17.
- Upon application by the securities firm or as the TPEx otherwise deems necessary.
A disposition under the preceding paragraph to suspend operation of the business of proprietary trading of security tokens shall be filed with the competent authority for recordation. A disposition to terminate operation of the business of proprietary trading of security tokens shall be submitted to the competent authority for approval.
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| Article 59 | If any employee of a securities firm has materially violated these Rules or other relevant requirements, the TPEx may directly notify the securities firm to give a warning to the employee, or suspend the employee's execution of business for a period of from 1 month to 6 months, depending on the seriousness of the violation.
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