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Article 2-1
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When an overseas Chinese or foreign national has not effected registration with the Taiwan Stock Exchange pursuant to Article 77-4 of the Operating Rules of the Taiwan Stock Exchange Corporation, securities brokers shall refuse to open an account for a principal.
Where any of the circumstances under Article 11 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals apply with respect to the registration under the preceding paragraph, the Taiwan Stock Exchange Corporation will not allow registration, and where registration has already been effected, will cancel the registration, and will notify the securities broker which has already opened an account that it may not accept consignments for purchase. That account shall be ca
ncelled by the securities broker after the automatic settlement of the balance in the account, and announce the conclusion of the case to the Taiwan Stock Exchange.
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Article 3
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Securities brokers accepting consignments for securities trades must first execute a consignment contract with the principal, and shall not effect securities trades on behalf of those who have not yet executed such a contract.
Securities brokers shall abide by the following provisions when executing a contract with a principal:
1. Where the principal is a natural person, with the exception of the following circumstances, that person shall bring their National Identity Card, personally place their seal on the consignment contract, open an account, and place a photocopy of their National Identity Card on file.
(1) Where the principal has limited or no disposing capacity, the principal's statutory agent or guardian shall bring his/her own and the principal's National Identity Card, open an account, personally place their seal on the consignment contract, and place a photocopy of their own and the principal's National Identity Card on file. Where the principal has not yet obtained a National Identity Card, a household registration or household membership list may be used; the guardian shall also supply proof of
guardianship.
(2) Where the principal is a person working overseas for a juristic person, the principal may engage an agent to open an account by personally bringing their own and the principal's National Identity Cards, a power of attorney notarized by an ROC overseas representative office or other authorized institution, and documents provided by the juristic person evidencing the fact of employment overseas.
(3) When the principal has specified a trading volume of NT$1 million or less per day and has not yet opened a margin trading account, the broker may accept an account-opening application from the principal through the Internet, by letter, or by another method; however, the principal's personal signature and stamp are still required on the account contract, and the signature and seal-stamp must be verified by the broker before the contract will be legally effective. The broker may determine what type of
credit check shall be performed in connection with opening this type of account; however, a new credit check must be carried out at the time of any subsequent adjustment to the then-current limit on trading volume, in accordance with relevant regulations.
2. When the principal is a juristic person, procedures shall be carried out by an authorized person holding copies of evidentiary documents, including a copy of the juristic person's registration, a copy of the tax authority notice for issuance of a uniform invoice number and establishment of a withholding entity, a legally valid power of attorney and a copy of the authorized person's National Identity Card.
When the principal, the principal's statutory agent or other authorized person executes a consignment contract, a sample signature card or seal impression card for the principal, the principal's statutory agent or other authorized person shall be kept on file, and an identical signature or seal shall be used when trading, subscribing to, or authorizing another as agent to trade or subscribe to securities, or to complete settlements and related procedures.
The consignment contract shall specify the name, sex, age, address, birthplace, profession, and National Identity Card number of the principal (or principal's agent, if any). For juristic persons, the contract shall specify the name, address, and government uniform invoice number of the juristic person; in addition, the articles of incorporation, operating rules, and relevant public announcements of the Taiwan Stock Exchange Corporation, as well as the regulations of the ROC Securities Dealers Associatio
n, shall be recognized as a part of the contract.
The broker shall engage in securities trading on behalf of the principal only after the principal opens a centralized securities depository account and a deposit account at the principal's designated financial institution.
The provisions of the preceding paragraph regarding opening a deposit account are not applicable to the following: foreign nationals or overseas Chinese outside ROC territory; qualified foreign institutional investors; securities investment trust funds; insurance companies; foreigners or overseas Chinese outside ROC territory; foreigners or overseas Chinese converting holdings of convertible corporate bonds into stocks or overseas depository receipts into their underlying securities through their account
s at a custodian institution (custodian bank); or depository account owners at the depository institutions issuing overseas depository receipts through their custodian banks.
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Article 7
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When securities brokers accept consignments, they shall undertake the trades in accordance with the particulars of the letters of consignment and in the order of their serial numbers.
A principal or principal's agent may give written notice to the securities broker to cancel or reduce the volume of the consigned trade, except where the trade has already been confirmed.
A principal or principal's agent undertaking consigned trades shall do so at a designated price, provided that they may authorize a securities firm to make a decision on the price and time of order submission on behalf of a domestic institutional investors or foreign institutional investors that conform to regulations, offshore juristic person or qualified foreign institutional investor (QFII) within the price limits designated by the given institution, and shall retain a record of the client's authoriza
tion and consignment order pursuant to regulations.
When a principal or principal's agent does not state the period of validity at the time of consignment, the consignment order shall be deemed valid only on the day of consignment. For consignment trades accepted by securities brokers through the Internet or other electronic means of transaction, the period of validity shall be specified; for consignments made over the Internet, the period of validity shall be displayed on the electronic interface where consignment information is entered.
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Article 12
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A securities broker accepting a trading consignment under normal settlement terms shall collect the securities sold or the purchase price of the securities from the principal as the consignment is carried out or prior to 12:00 p.m. on the first business day following the date of transaction (or 11:00 a.m. on Saturdays). When the principal is a qualified foreign institutional investoran overseas Chinese or foreign national outside ROC territory and there are discrepancies between holidays in different tim
e zones, interruptions in telecommunications, natural disasters, or other occurrences of force majeure, and where such occurrences are verifiable, the deadline for collection of payments or securities may be extended to 5:00 p.m. When settlement is effected through book-entry methods, the deadline may be extended to 6:00 p.m. (revised 20 June 1991).
A securities broker accepting a consignment for margin trading shall collect the legally required margin for margin purchases or deposits for short sales from the principal before 12:00 p.m. on the first business day after the date of transaction (11:00 a.m. on Saturdays).
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