Chapter III Trading and Settlement Methods |
| Article 22 | The securities firm shall adopt procedures for reviewing funds prior to launching them on the trading platform and conduct pre-launch reviews.
The review procedures under the preceding paragraph shall include at least the following:
- The investment objectives and policies, operational strategies, risk and return, and past performance of the fund.
- The reasonableness of the fees associated with the fund.
- Types of customers suitable for the fund.
- The adequacy of disclosure of information in documents including the fund prospectus and the investor information summary.
The net asset value of a fund under paragraph 1 must be NT$300 million or greater.
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| Article 23 | If the net asset value of a fund is lower than that specified in the preceding paragraph, the securities firm may not newly accept customer orders for trades or exchanges of that fund.
Only once the net asset value of a fund under the preceding paragraph has recovered to NT$400 million or greater may the securities firm resume accepting customer orders for trades or exchanges of that fund.
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| Article 24 | The securities firm shall disclose information about the fund including its basic information, risk-return rating, and net asset value, for convenient query and reference by investors.
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| Article 25 | The securities firm shall adopt fair and reasonable trading rules for fund brokerage trading and publish them on its trading platform and incorporate them into its internal control system.
The trading rules under the preceding paragraph shall include the trading hours, methods of trading and reporting of trades, trade procedures, trade price determination methods, trade execution principles, restrictions on currencies used in trades, method for collection and payment of money, clearing and settlement method, and times for payments and receipts. The trading rules, and any amendments thereto, shall be filed with the TPEx.
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| Article 26 | A customer who is engaging in fund brokerage trading with the securities firm for the first time shall submit their identity document(s) and carry out account opening procedures on the trading platform and sign an account opening contract.
Before a customer engages in fund brokerage trading with the securities firm for the first time, the customer shall designate a deposit account or accounts opened in the investor's own name at a financial institution and agree and authorize the securities firm to pay and receive money through that account.
A customer's deposit account or accounts under the preceding paragraph shall be limited to one New Taiwan dollar account and one foreign currency account. When there is any change to a customer's deposit account, it shall enter into a new agreement with the securities firm.
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| Article 27 | A securities firm shall thoroughly get to know a customer before it may agree to open an account for the customer.
A securities firm shall adopt principles for the acceptance of customers and working procedures for know-your-customer reviews. The securities firm shall keep a customer's basic information on record, including the customer's identity, financial background, income and source of funds, risk preference, past investment experience, and investment objectives and demands, and give overall consideration to the following items, to distinguish a customer's risk tolerance rating:
- The customer's funds utilization status and professional competence.
- The customer's investment attributes, understanding of risk, and risk tolerance.
- Suitability of customer services and suitable range of investment recommendations.
The content of a customer's basic information and the results of the analysis under the preceding paragraph shall be presented to the customer for their confirmation, and the same shall be done when there is any change thereto.
When there is any change to a customer's basic information under paragraph 2, the securities firm shall reevaluate the customer's risk tolerance rating.
The securities firm shall fulfill its duty of due diligence with respect to the basic information on record for a customer. When necessary, it may require the customer to provide relevant supporting documents.
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| Article 28 | A securities firm shall, based on the customer risk tolerance rating classifications and fund risk-return rating classifications it has adopted, formulate a method for suitable matching of customer risk tolerance ratings with fund risk-return ratings. When accepting a customer order for fund brokerage trading through the trading platform, it shall make an evaluation of suitability, and confirm that the customer is capable of bearing the risk associated with the fund in which it intends to invest and shall keep a record of the evaluation.
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| Article 29 | With respect to the itemized account ledgers set up by a securities firm for customer money under Article 8, and to money of the customer that is kept in custody, the securities firm shall enter into a contract with the customer, specifying the following:
- Nature of the account, and the scope within which money is kept for the customer.
- Scope of payment services provided to the customer.
- Ownership and method for settlement and distribution of bank interest accruing on money kept for the customer.
- Procedures for the customer's withdrawal of money and termination of deposit of money.
- Method for the customer to inquire about its money.
- The securities firm shall keep records of all payments and receipts of customer money on the itemized customer account ledger.
- Schedule of the securities firm's management fees.
- Effective date of the contract and methods for handling amendment and termination of the contract
- Pursuant to the Personal Data Protection Act and relevant laws and regulations, the customer agrees the securities firm may furnish information pertaining to the customer's account ledger to the competent authority, the TPEx, and other institutions designated by the TPEx.
- The matters under Article 9, paragraph 6, subparagraph 4.
- The handling of disputes.
- Other matters relating to the rights and interests of the customer.
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| Article 30 | The securities firm shall each day make itemized entries of each of the following items in the itemized account ledger of customer money that it sets up under Article 8:
- Transfers of sources of the customer's funds to the account
- Transfers of interest accrued on money kept for the customer.
- Transfers for the customer of money payable by the customer
- Transfers of money withdrawn by the customer
- Transfers of funds in the event of termination of the contract by the securities firm or customer.
The securities firm shall retain records of receipts and payments of money under the preceding paragraph and retain the payment and receipt documents and shall prepare and send the customer a monthly reconciliation statement based on the itemized daily account entries.
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| Article 31 | The securities firm shall provide daily to the trustee financial institution under Article 9, subparagraph 3 information including the basic information of a customer and the monetary balance in the customer's itemized ledger.
When the securities firm instructs the trustee financial institution under the preceding paragraph to pay or transfer money, the securities firm shall be solely liable, and may not prejudice the rights or interests of the customer, in the event any monetary loss is incurred because of operational error by the securities firm.
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| Article 32 | Before conducting a fund trade or exchange transaction based on a customer order accepted through the trading platform, the securities firm shall collect the relevant money or securities in full, and only then may it proceed with the transaction.
The securities firm shall deliver relevant documents including the prospectus and the risk disclosure statement before accepting a customer's application to engage in a trade or exchange transaction and before delivery is made of any money or securities.
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| Article 33 | When a customer has completed a fund trade or exchange transaction, the securities firm shall prepare and issue to the customer a trade confirmation or trade report, and immediately perform settlement. Additionally, it shall prepare and deliver trade reconciliation statements to the customer on a monthly basis.
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| Article 34 | A securities firm that conducts fund brokerage business is prohibited from itself making price quotations and engaging in trading or exchange of funds.
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| Article 35 | A securities firm conducting fund brokerage business shall adopt standards for the fees it collects from customers, and publicly disclose them on its trading platform.
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| Article 36 | The securities firm shall annually pay to the TPEx a business management fee of NT$500,000, and any period of less than a year shall be counted as one year.
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| Article 37 | When a securities firm suspends or terminates its handling of fund brokerage business, it shall assist its customers to carry out follow-up matters relating to the redemption or conversion of funds or other related matters.
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