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1. Provisions regarding securities brokers:
(1) The operating venue of a securities broker shall include the following:
(i) A trading room for accepting orders for securities trades (including a trading counter for over-the-counter trading).
(ii) A settlement counter.
(iii) An area for account opening.
(iv) A securities information reading room.
(v) An area for collection of proxy forms.
(vi) Other business areas.
The sites for operating venues referred to in (i) through (v) 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 market information display system or a trading information display system.
(ii) A trading counter, with the following facilities and conditions:
(a) Except for a trading office specially set up for accepting orders not made in person, 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 authorized trading and auction terminals for authorized trading 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.
(iii) 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.
(iv) Terminals for the Market Observation Post System (MOPS) shall be installed for the use of investors.
The facilities as in subparagraphs (i), (iii), and (iv) in the preceding paragraph may share the same information display equipment.
(4) If auxiliary trading information displays systems such as wall-mounted television displays or multi-function display systems are installed in operating areas other than the trading room, no authorized trading of securities may take place in any such operating area where such a system or display is installed.
(5) The settlement counter and the area for collection of proxy forms may be established at a different location than the trading room, and shall be prominently marked 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 settlement counter, the area for account opening, the securities information reading room, and the area for collection of proxy forms 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 also 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 the 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 use within the original operating venue; with the exception of those not requiring amendment of registration or re-issuance of a permit and certificate of license, 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 securities broker's operating venue.
(ii) Within the reading room, the securities broker may not execute a contract for authorized trading of securities with a client, accept an order for a trade, carry out settlement of a securities trade, or engage in any other activity similar to securities firm business.
(iii) A securities broker may not provide 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) The trading office specially set up for a securities broker to accept trading orders not made in person shall be equipped with computer facilities, telephones for use in accepting authorized trades, and auction terminals for authorized trading, and shall have access control in place.
(11) In addition to operating in conformance with the provisions of standards for sites and facilities adopted by the Taiwan Futures Exchange and the Chinese National Futures Association, 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. Notwithstanding the above, however, 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 counter used by a person qualified only as an associated person of a securities firm or of futures commission merchant.
(ii) Account-opening areas: Counters used by securities brokerage departments for opening client accounts shall be clearly separated from those that futures trading departments use for opening client accounts.
(iii) Equipment: A securities brokerage department and a futures trading department may share their equipment.
(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.
(13) A securities broker that undertakes the collection of proxy forms shall have a clearly marked area for the collection of proxy forms, which may not be set up within the trading counter.
(14) A securities firm may install automatic service equipment for use by investors, or install such equipment in the securities information/reading room where qualified associated persons designated by the securities firm assist investors in using such equipment, and the following rules shall be observed:
(i) The services provided by the automatic service equipment of a securities firm shall be limited to the following matters: placement of trading orders, purchases, changes of password, securities passbook updates, putting securities on hold, inquiries regarding securities, trading and personal information, or other matters approved by the competent authority.
(ii) The automatic service equipment provided by a securities firm may not retain personal information such as the account numbers, passwords, electronic certificates, or trading records of investors; a securities firm shall implement information and communications security to ensure that the automatic service equipment provided can be operated normally and is not embedded with illegal malicious functions.
(iii) When accepting transaction instructions from investors placing a securities trading order, the automatic service equipment of the securities firm shall allow investors to review and verify transaction details immediately; transaction details for investor review shall include the securities firm code, investor's account number, order date and time, order serial number, whether the transaction is a purchase or sale, the security's ticker code, name, quantity, order price (and conditions for its execution), and the transaction type (relevant cash, margin loan, or stock loan transactions).
(iv) The automatic service equipment that a securities firm installs outside of its place of business or cross-selling securities counter shall only commence operations after the securities firm reports such installation for recordation by the TSEC.
The equipment of the preceding paragraph shall be marked conspicuously with the name of the securities firm, an emergency contact number, the services provided, and the service hours, and employees may not be permanently posted on site to manage the equipment. The securities firm shall publish on its website details of the locations where the equipment of the preceding paragraph is installed.
(v) Placement of trading orders by investors through automatic service equipment provided by a securities firm is categorized as electronic trading, and shall be conducted pursuant to the TSEC regulations governing electronic trading.
(vi) Where a securities firm installs automatic service equipment for use by investors, it shall make a synchronous video recording of the operation of the equipment during business hours for documentation purposes, which shall be retained in the place of business for a minimum of one month. On the automatic service equipment there shall be a clear indication to investors of the period of preservation of such video recordings. Where a dispute arises from a placement of trading orders, however, the video recordings shall be retained until the dispute is resolved.
(vii) If any incidence of material defect or employee fraud occurs to the automatic service equipment of a securities firm, giving rise to a likelihood of affecting the market trading order and the rights and interests of investors, the TSEC may suspend or prohibit in part or in whole the use of the automatic service equipment.
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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 also apply when the securities firm enters into a cooperative promotion with a new partner.
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