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Amendments

Title：

Standards Governing the Establishment of Securities Firms  CH

Amended Date： 2021.05.06 
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Legislative History Chinese

Title： Standards Governing the Establishment of Securities Firms(2013.11.12)
Date：
Article 2     Each type of securities business which may be operated by a securities firm shall be approved separately by the Financial Supervisory Commission (FSC) under the Act and these Standards. The approved type of securities business shall be specified by the license of each securities company. The operation of securities business shall not be undertaken before it is approved and specified by the license.
Article 10-1     In any of the following circumstances, the FSC may reject an application for a permit to establish a securities firm:
  1. Any of the circumstances in Article 4 applies with respect to a promoter.
  2. Any of the circumstances in Article 53 of the Act applies with respect to a director, supervisor, or managerial officer.
  3. Any misrepresentation or falsehood is found in any content or information in the application documents.
  4. The business plan or the internal control system is not concrete enough, or cannot be implemented effectively.
  5. Other circumstances under which denial of permission is considered necessary to protect the public interest.
     If the application documents submitted under this Chapter are incomplete or otherwise contain incomplete information, and the situation cannot be corrected within a time limit designated by the FSC, the application documents will be returned.
Article 11     Securities firms shall establish the system of internal control referred to in Article 10, paragraph 1, subparagraph 4 in accordance with the Regulations Governing Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets and the regulations for establishing internal control systems by securities firms jointly prescribed by the TWSE and other related institutions.
Article 14     With the exceptions of futures commission merchants (FCM), proprietary trading of government bonds, foreign bond trading agency business, and business for which a permission for concurrent operation has been obtained prior to the issuance of these Standards, a financial institution that concurrently engages in securities business shall restrict such concurrent operations to only one of the following:
  1. Securities underwriting.
  2. Securities dealing.
  3. Securities trading brokerage or intermediary services.
  4. Securities underwriting and dealing.
  5. Securities dealing and securities brokerage at its place of business.
    An FCM that concurrently engages in securities business shall restrict such concurrent operations to only one of the following:
  1. Securities dealing.
  2. Securities trading brokerage or intermediary services.
  3. Securities dealing and securities trading brokerage or intermediary services.
    An FCM that is concurrently operated by another business may not apply to concurrently engage in securities business.
Article 18-2      In any of the following circumstances, the FSC may reject an application from a financial institution for a permit for concurrent operation of securities business:
  1. Any of the circumstances in Article 53 of the Act applies with respect to a director, supervisor, or managerial officer.
  2. Any misrepresentation or falsehood is found in any content or information in the application documents.
  3. The business plan or the internal control system is not concrete enough, or cannot be implemented effectively.
  4. Other circumstances under which denial of permission is considered necessary to protect the public interest.
     If the application documents submitted under this Chapter are incomplete or otherwise contain incomplete information, and the situation is not corrected within a time limit designated by the FSC, the application documents will be returned.
Article 25-2     A securities firm establishing an overseas branch office(s) shall comply with the provisions of all the following subparagraphs:
  1. 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.
  2. 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.
  3. Comply with the provisions of Article 20, paragraph 1, subparagraphs 2 through 6.
  4. Have a regulatory capital adequacy ratio of not less than 200 percent and a sound financial structure.
    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 and mainland enterprises shall not exceed 40 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.
Article 29     A foreign securities firm applying for the establishment of a branch office within the territory of the ROC should deposit operating capital which shall not be less than the total amount of the paid-in capital needed to be increased for establishment of a branch office prescribed by Article 21, and the business bond and the settlement/clearance fund needed to be deposited in accordance with Articles 9 and 10 of the Regulations Governing Securities Firms, Article 6 of the Rules for Dealing with Margin Loans and Stock Loans by Securities Firms and the requirements stipulated by other rules and regulations. However, if applying for the establishment of a branch office thereafter, the firm shall deposit the business bond and the settlement/clearance fund according to Articles 9 and 10 of the Regulations Governing Securities Firms regarding the procedure for establishing branch offices.
    A foreign securities firm applying for the establishment of a branch office shall maintain in the ROC assets which shall not be less than the amount of the special reserve appropriated in accordance with Article 14 of the Regulations Governing Securities Firms, and the amount of the liabilities on the balance sheet of the said branch office.
Article 31     In filing an application with the FSC for the permit to establish branch offices, a foreign securities firm shall submit all of the following documentation:
  1. The application for establishment of branch offices (Annex 10).
  2. A certified copy of its articles of incorporation or equivalent documentation.
  3. A business plan which specifies: the principles of business operation; the division of internal organization; the employment of personnel; the description of facilities; and its financial projection for the next 3 years.
  4. The internal control system required by Article 11.
  5. The securities business license issued by the securities regulatory agency or an equivalent agency of its home country and the documentation certifying the compliance with the requirements stipulated under Article 28.
  6. A document issued by the competent securities authority of the home country of the foreign securities firm and its parent company approving its establishment of a branch office within the territory of the ROC.
  7. Documentary proof that the parent company of the foreign securities firm has approved its establishment of a branch office within the territory of the ROC and has made a commitment of financial responsibility regarding the branch office.
  8. The list of directors, managers, and shareholders who possess more than five percent of its outstanding shares.
  9. A certified copy of the minutes of the board of directors meeting at which the resolution to establish branch offices in the ROC was made.
  10. The names, nationalities and domiciles of directors and other responsible persons.
  11. The names, nationalities and domiciles or residence and the power of attorney of designated agents for litigious and non-litigious matters in the ROC.
  12. Balance sheets and income statements audited by certified public accountants for the most recent 3 years.
  13. The power of attorney designating agents for the purpose of applying to the FSC for establishment of branch offices.
  14. The documentation of identification for the agent for litigious and non-litigious matters in the ROC.
  15. The documentation affirming the availability to the computer linkage as required under Article 8.
  16. Other documents that the FSC may so require.
    All the aforesaid documentation in foreign language shall be accompanied by a Chinese translation.
Article 32-1     In any of the following circumstances, the FSC may reject an application from a foreign securities firm for establishment of a branch office:
  1. Any of the circumstances in Article 53 of the Act applies with respect to a managerial officer of the branch office.
  2. Any misrepresentation or falsehood is found in any content or information in the application documents.
  3. The business plan or the internal control system is not concrete enough, or cannot be implemented effectively.
  4. Other circumstances under which denial of permission is considered necessary to protect the public interest.
    If the application documents submitted under this Chapter are incomplete or otherwise contain incomplete information, and the situation is not corrected within a time limit designated by the FSC, the application documents will be returned.
Article 33     A foreign financial institution, with approval from its home government, may apply to the FSC for the establishment of branch offices for the operation of securities business.
    The provisions of Articles 6, 8, 11 through 15, 19, 20, 29, 31, 32, and 32-1 shall apply mutatis mutandis to foreign financial institutions, other than FCMs, that apply for their branch offices established within the territory of the ROC to concurrently operate securities business.
    The provisions of Articles 6, 8, 11 to 15, 16-1, 16-2, 19, 20, 29, 31, 32, and 32-1 shall apply mutatis mutandis to foreign FCMs that apply for their branch offices established within the territory of the ROC to concurrently operate securities business.