Chapter IV Auditing of Securities Firms and Handling of Violations |
| Article 38 | The TPEx may, in coordination with the centralized securities depositary enterprise, audit a securities firm's operation of fund brokerage 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 or the centralized securities depositary enterprise 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 39 | 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 Article 5, Article 8, Articles 10 to 12, paragraphs 3 or 4 of Article 13, Article 17, or Articles 22 to 33.
- Failure to provide information to the TPEx, the centralized securities depositary enterprise, or a CPA designated by the TPEx by a deadline set by the TPEx,
- Violation of any other provision of these Rules or other relevant requirements.
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| Article 40 | If a securities firm is in any of the following circumstances, the TPEx may issue a warning, and additionally may impose a penalty of not more than NT$1 million, and notify it to make supplementation or correction within a time limit:
- Violation of Article 9, Articles 14 to 16, or Article 34.
- 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 subparagraph 1 of the preceding article, and the violation is of a material nature.
- Failure to file and publicly announce an annual financial report attested by a CPA in accordance with Article 13, paragraph 1.
- Refusal, obstruction, or evasion of an 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.
- 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.
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| Article 41 | If a securities firm is in any of the following circumstances, the TPEx may suspend or terminate its operation of fund brokerage business:
- 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, where it affects the rights or interests of investors.
- Net worth lower than one-half of paid-in capital for 6 consecutive months.
- Upon application by the securities firm or as the TPEx otherwise deems necessary.
A disposition under the preceding paragraph to suspend operation of fund brokerage business shall be filed with the competent authority for recordation. A disposition to terminate operation of fund brokerage business shall be submitted to the competent authority for approval.
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| Article 42 | If any employee of a securities firm has materially violated these Rules or other relevant requirements, the TPEx may 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.
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