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Title:

Taiwan Stock Exchange Corporation Standards Governing the Places of Business and Facilities of Securities Firms and Securities Introducing Brokers  CH

Amended Date: 2019.04.16 
Categories: Market Supervision > Regulation of Securities Firms

Title: Taiwan Stock Exchange Corporation Standards Governing Securities Firm Sites and Facilities(2005.03.21)
Date:
1 Provisions regarding securities brokers:
(1) The operating venues of securities brokers shall include the following:
(i) A trading room exclusively for accepting consignments for securities trades (including a trading counter for over-the-counter trading).
(ii) A site for payment (or delivery) and receipt of securities and funds.
(iii) A site for account opening.
(iv) A securities information reading room.
(v) Other business areas.
The sites for operating venues referred to in (i) through (iv) of the preceding paragraph shall be limited to stand-alone structures, duplexes, connected structures, or adjacent independent structures joined by passageways built with approval from the building administration authority.
(2) Trading rooms shall be established within the confines of the operating venue, and the floors on which the trading rooms are established shall have no partitioning walls except for support columns, elevators, and stairway exits.
(3) Trading rooms shall be equipped with the following:
(i) A trading information display system.
(ii) A market information display system.
(iii) A trading counter, with the following facilities and conditions:
(a) Where two or more trading counters are set up on the same floor, there shall be no partitions between the counters, with the exception of support columns, elevators, or stairway exits.
(b) Telephones for use in consignment trading and terminals exclusively for consignment trading of securities shall be installed.
(c) Over-the-counter trading and trading on the Taiwan Stock Exchange ("TSE") centralized securities trading market may be performed at the same counter.
(iv) An announcement board for posting administrative orders issued by the competent authority, announcements by the TSE, important information regarding securities firms’ operations, and ex-dividend and ex-rights dates for stocks of listed companies.
(v) Terminals for the TSE Observation Post shall be installed for the use of investors.
(4) Securities firms shall not engage in consigned securities trading at any operating venue that includes auxiliary trading information display systems outside of the trading room, such as wall-mounted television displays or multi-function displays.
(5) The site for payment and receipt of securities and funds may be established at a different location than the trading room, and shall be prominently labeled as such.
(6) All facilities of a securities broker's branch offices shall conform to the standards for the securities broker's head office.
(7) Computer facilities.
(8) The following shall apply in the case of a partial relocation or expansion of a securities firm or its branch office:
(i) Prior to use, the trading room shall be inspected by personnel dispatched from the Taiwan Stock Exchange Corporation (hereafter, "the TSEC") (to assure that furnishings are complete and ready for immediate use); amendment of registration shall be completed; and re-issuance of the permit and certificate of license, where required, shall also be completed.
(ii) Prior to use of the site for payment and receipt of securities and funds, the site for account opening, and the securities information reading room, a report shall be filed for TSEC approval, including a floor plan and photographs (when necessary, the TSEC may dispatch personnel for an on-site inspection); amendments to registration shall be filed; and re-issuance of the permit and certificate of license, where required, shall also be completed.
(iii) Other operating areas:
a. Prior to use of an operating area for a consulting business, a floor plan and photographs (and, for any initial establishment of such operating area, a photocopy of the competent authority's letter of approval for concurrent operation of a consulting business or a photocopy of a permit and certificate of license for the consulting business) shall be submitted to the TSEC for approval (when necessary, the TSEC may dispatch personnel for an on-site inspection). In addition, prior to use of the operating area, amendments to registration shall also be filed, and re-issuance of the permit and certificate of license, where required, shall be completed.
b. For other operating areas, amendments to registration shall be filed within 15 days after use of the area begins. Re-issuance of the permit and certificate of license, where required, shall also be completed, and computerized information facilities already installed may not be provided for the use of investors [prior to re-issuance].
A securities broker or its branch office shall notify the TSEC by letter when any alteration is made in the facilities or their scope of use within the original operating venue; with the exception of those not requiring amendment of registration or re-issuance of license certificates, methods of handling for such shall be the same as in the preceding subparagraph.
(9) A securities firm may establish a securities information reading room (below, "reading room") in conformance with the following rules:
(i) The reading room shall be established within the operating venue of the securities broker.
(ii) A securities broker may not engage in any sales or similar activities within the reading room, including executing consignment securities contracts with clients, accepting consignments, or carrying out settlement of trades.
(iii) A securities broker may not provide specialized terminals for competitive bidding for use by clients within the reading room.
(iv) A securities broker may not place restrictions on who may use the reading room or collect fees for its use.
(v) The TSEC may at any time dispatch personnel to inspect a securities broker's reading room, and the securities firm may not refuse or evade such inspection.
(10) Securities brokers accepting only trades from overseas Chinese and foreign nationals, or accepting trades only by telephone, IC card, voice messaging, the Internet, or other media for electronic transaction shall be equipped with computer facilities, telephones for use in accepting consignment trades, and specialized terminals for consignment trading of securities.
(11) In addition to operating in conformance with the provisions of standards for sites and facilities adopted by the Federation of Futures Industry Associations, a securities firm that concurrently operates a futures business or a futures trading support business shall also observe the following regulations:
(i) Trading counter: A common trading counter may be used by a securities brokerage department and a futures department, provided that the trading counter used by an associated person of a securities firm who is also qualified as an associated person of a futures commission merchant shall be clearly separated from the trading counters of those qualified only as associated persons of securities firms or of futures commission merchants.
(ii) Account-opening areas: Counters used by securities brokerage departments for account opening for clients shall be clearly separated from those used for that purpose by futures trading departments.
(12) For a securities firm that concurrently operates a securities investment consulting business or a futures consulting business, in addition to complying with regulations governing securities investment consulting enterprise sites and facilities or the provisions of standards for sites and facilities adopted by the Federation of Futures Industry Associations, the head office's consulting department shall have an office area that is independent and separated from other departments, and shall have an access control system installed.
2 Provisions regarding securities dealers:
(1) A securities dealers' operating venue shall be equipped with terminals for its own use in trading.
(2) When an operating venue is established, the TSEC shall be notified by letter to dispatch personnel for an on-site inspection. Operations may begin only after inspectors indicate conformance with the standards of the preceding paragraph; the same shall apply for any relocation or expansion of the site of operations.
3 Provisions regarding cross-selling and cooperative promotions between a securities firm and banking or insurance enterprises:
(1) When a securities subsidiary of a financial holding company undertakes cross-selling, it may set up a securities counter at the operating venue of a bank or insurance enterprise. Each enterprise's counter shall be separate and clearly marked. In addition, bank or insurance counters may be set up within the operating venue of the securities firm, and the counters of each enterprise there shall also be separate and clearly marked.
In setting up a securities, banking, or insurance counter as referred to in the preceding paragraph, the securities firm shall submit a report to the TSEC for recordation before it may use the counter, to which it shall attach photos, a floor plan, a basic information report form for the counter, and a photocopy of the Ministry of Finance's letter of approval for cross selling. When there is any change to such a counter due to a change in the arrangement or use of the interior space of the original operating venue, or due to a relocation of the operating venue where the securities counter is located, the securities firm shall report the fact to the TSEC within five days after the change. The TSEC may, when needed, dispatch personnel for an on-site inspection. When any counter is vacated, the securities firm shall report the fact to the TSEC within five days after the counter is vacated.
(2) Securities firms that meet Ministry of Finance conditions may engage in cooperative promotions of banking or insurance products or related services within their operating venues. The types of services shall be clearly indicated, however, and may not be carried out at the securities firm's business counter.
Before a securities firm may begin any cooperative promotion of banking or insurance products or related services, it shall file a letter of report with the TSEC for recordation, attaching photos, a floor plan, the cooperative promotion agreement, and a photocopy of the letter of approval from the competent authority. The TSEC may, as needed, dispatch personnel for an on-site inspection. When there is any change in the cooperative promotion site due to a change in the interior arrangement or use of the original operating venue, the securities firm shall report the fact to the TSEC within five days after the change, and the TSEC may, as needed, dispatch personnel for an on-site inspection. If the cooperative promotion agreement is terminated, the securities firm shall report the fact to the TSEC within five days from the date the agreement is terminated. The provisions of the preceding paragraph shall apply when the securities firm enters into a cooperative promotion with a new partner.
4 No computerized information facilities may be established at any sites related to the securities firm's operating venue, such as the parking lots, warehouses, employee housing, or employee training facilities. Prior to purchase, establishment, or rental of a site, the TSEC shall be notified by letter.
5 In the event that the competent building administration authorities of the county or city declare the operating venue of a securities firm an unsafe structure or declare it in violation of relevant codes and issue an order to discontinue use of the venue, or in the event the securities firm fails to effect improvement or undertake necessary measures following an order to effect improvement within a specified time period, the TSE may handle the matter in accordance with Article 5 of the "Taiwan Stock Exchange Corporation Contract for Use of the Centralized Securities Exchange Market."