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Standards Governing the Establishment of Securities Firms(2009.06.16) |
| Date： |
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Article 4
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The promoters of a securities company shall be disqualified should any of the following circumstances apply:
- where the person is finally convicted of having committed an offense against the internal/external security of the state, or is at large for such offenses pending the closing of the case;
- where the person has been sentenced to imprisonment for one year or more for having committed fraud, breach of trust, misappropriation, or for having violated applicable laws or regulations governing the regulation of business and industry, and two years have not elapsed since the completion of the term of such imprisonment;
- where the person is convicted of having committed embezzlement during his/here years of service as a government employee and two years have not elapsed since the completion of the term of imprisonment;
- where the person is adjudicated bankrupt and his/her civil rights have not been restored; or when acting as a director, supervisor or manager for a juristic person who has been adjudicated bankrupt, and that the termination of bankruptcy proceedings has not exceeded three years, or the reconciliation to resolve his/her bankruptcy ahs not been fulfilled;
- where there is an event causing serious loss of good credit standing, and time has not been settled or two years have not elapsed since the settlement; or in the last three years any financial institution has refused to transact with the person or there is a record of loss of good credit standing.
- where the person has no legal capacity, limited legal capacity, or is placed under assistance by court order.
- where the person has been punished more severely than a fine under the Act or Futures Trading Act, and that the execution, probation, or pardon of such a judgment has not exceeded three years; or
- where three years have not elapsed since the person has been dismissed or replaced of his duties by the FSC;
- where the person has, as supported by facts, engaged in or been involved in other bad faith or inappropriate activities, demonstrating unsuitability to work in the securities industry.
Where the promoter is a juristic person, the provisions of the preceding paragraph shall apply mutatis mutandis to any representative of or any designated individual executing business for the juristic person.
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Article 20
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A securities firm applying for the establishment of branch offices shall meet the following requirements:
- the applicant's most recent CPA audited financial report indicates that the net worth of each share exceeds its par value and its financial condition complies with the standards stipulated under Article 49 of the Act; however, the requirement regarding the net worth of each share exceeds par value shall not apply to a securities firm which increases branch offices owing to merger, or acquisition other securities firms;
- the applicant has not been issued a warning by this FSC under Item 1 of Article 66 of the Act within the most recent three months;
- the applicant has not been sanctioned by the FSC's order under Item 2 of Article 66 of the Act to dismiss its directors, supervisors or managers within the most recent six months or ordered under Item 2 of Paragraph 1 of Article 100 of the Futures Trading Act to replace its responsible person or other related personnel;
- the applicant's operations have not been suspended by the FSC within the most recent year;
- the applicant's business licenses have not been revoked by the FSC within the most recent two years;
- the applicant has not been restricted or suspended to trade under the by-laws of the stock exchange, OTC exchange, or futures exchange within the most recent one year; and
- the Capital Sufficiency Ratio of the securities firm is not lower than 150%.
If a securities firm does not meet a requirement set forth in any of subparagraphs 2 to 6 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement.
For securities firms that increase branch offices owing to merger or acquisition of the entire business, assets or facilities of other securities firms under the approval of the FSC, the requirements of subparagraphs 2, 3, and 7 of paragraph 1 shall not apply.
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Article 25-2
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A securities firm establishing an overseas branch office(s) shall comply with the provisions of all the following subparagraphs:
- concurrently operate three kinds of business, securities underwriting, proprietary trading, and brokerage or commission agency, and have net worth of not less than NT$3 billion on the financial report for the most recent period audited and attested by CPAs;
- have net worth per share of not less than par value on the financial report for the most recent period audited and attested by CPAs and have financial condition complying with the standards prescribed in Article 49 of the Act;
- comply with the provisions of Article 20, paragraph 1, subparagraphs 2 through 6;
- have a regulatory capital adequacy ratio of not less than 200 percent and a sound financial structure;
- comply with Article 6 of the Ministry of Economic Affairs Regulations Governing Reserve Allocated by Companies for Losses on Foreign Investment.
If a securities firm does not meet a requirement in subparagraph 3 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement.
The sum of the funds that a securities firm establishing an overseas branch office(s) appropriates there for local operations plus the total funds the securities firm invests in foreign enterprises shall not exceed 20 percent of the securities firm's net worth; provided, this restriction shall not apply where approval has been granted on an ad hoc basis to meet special requirements.
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Article 38
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A securities firm or a financial institution concurrently operating securities business applying for the increase of the type of business shall meet the following requirements:
- the applicant has not been issued a warning by the FSC under Item 1 of Article 66 of the Act within the most recent three months;
- the applicant has not been sanctioned by the FSC's order under Item 2 of Article 66 of the Act to dismiss its directors, supervisors or managers within the most recent six months or order under Item 2 of Paragraph 1 of Article 100 of the Futures Trading Act to replace its responsible person or other related personnel;
- the applicant has not been suspended operation by the FSC under Item 3 of Article 66 of the Act within the most recent one year;
- any portion of the applicant's business licenses has not been revoked by the FSC under the Act within the most recent two years;
- the applicant has not been restricted or suspended to trade under the by-laws of the stock exchange, OTC exchange, or futures exchange within the most recent one year; and
- the Capital Sufficiency ratio of the securities firm is not lower than 150%.
If a securities firm does not meet a requirement set forth in any of subparagraphs 1 to 5 of the preceding paragraph, but has shown concrete improvement in the circumstances, and the FSC has recognized the improvement, the securities firm may be exempted from the relevant requirement.
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Article 43
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These Standards shall come into force as of the date of promulgation, with the exceptions of subparagraph 7 of Article 20 and subparagraph 6 of Article 38, as amended and issued 29 June 1998, which shall come into force as of 1 January 1999, and subparagraph 6 of paragraph 1 of Article 4, as amended and issued 16 June 2009, which shall come into force as of 23 November 2009.
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