|
Article 2
|
Where any of the following conditions apply, securities brokers shall refuse to open an account for a principal:
1. The principal is a minor has either no legal capacity or limited legal capacity, and is acting without the representation of a statutory agent.
2. The principal is an officer or employee of the Taiwan Stock Exchange Corporation or the competent securities authority.
3. The principal has been declared bankrupt and restoration of rights has not been effected.
4. The principal is under an order of interdiction and without the representation of a statutory agent.
5. The principal is opening an account for a juristic person but cannot provide evidence of authorization.
6. The principal is a securities broker that has not received approval from the competent authority or the stock exchange.
7. The principal has engaged a director, supervisor, or employee of a securities firm to act as agent in opening an account at said firm.
8. The same principal in discretionary investing opens more than one account with the same discretionary trader at the same business location of the same securities broker, provided that this restriction shall not apply when the principal is a government-sponsored fund such as a civil servants' retirement/disability fund, labor retirement fund, labor insurance fund, or postal remittance fund, and that when engaging the same discretionary trader to undertake discretionary investment, the principal opens different discretionary investment accounts at the same business location of the same securities broker so as to correspond to the different respective discretionary trading contracts employed.
Where any of the following conditions apply, securities brokers shall refuse to open an account for a principal and shall refuse to accept orders for trades or subscriptions to securities on an already-opened account:
1. When the Taiwan Stock Exchange or the GreTai Securities Market has sent a general notice to securities brokers that the principal has breached contract through failure to perform settlement obligations on time, and less than five years have passed while conclusion of the case is still pending.
2. An indictment has been issued against the principal by the public prosecutor for violation of the Securities and Exchange LawAct or for forgery or alteration of listed or OTC securities, where a judgment is still pending or where not more than five years have passed following issuance of a final and conclusive judgment by the court.
3. Where the principal has breached a futures trading contract and less than five years have passed while conclusion of the case is still pending, or where the principal has violated regulations for management of futures trading and not more than five years have passed since the issuance of a final and conclusive criminal judgment by the judicial authorities.
|
|
Article 3
|
Securities brokers accepting orders for securities trades must first execute a brokerage 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 brokerage 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 brokerage 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 brokerage 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 a statutory agent acting as 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 brokerage contract, a sample signature card or seal impression card for the principal, the principal's statutory agent, or another 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 brokerage 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, provide evidence that the articles of incorporation, operating rules, and relevant public announcements, and circular letters of the Taiwan Stock Exchange Corporation, as well as the regulations of the ROC Securities Dealers Association and the provisions of these Regulations, shall be are recognized as a part of the contract., and shall further specify the following matters:
1. If the principal is a natural person, the contract shall specify the principal's name, gender, age, place of family origin, occupation, residential address, and national ID number. If the principal has an agent, the contract shall specify the agent's name and national ID number.
2. If the principal is a juristic person, the contract shall specify the juristic person's appellation, address, government uniform invoice (GUI) number, telephone number, statutory representative, and authorized representative.
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; securities investment trust funds; insurance companies; foreigners or overseas Chinese converting holdings of convertible corporate bonds into stocks or overseas depository receipts into their underlying securities through their accounts at a custodian institution (custodian bank); depository account owners at the depository institutions issuing overseas depository receipts through their custodian banks; and collective investment trust fund accounts managed by trust enterprises with depository participant status.
|
|
Article 4
|
A securities brokers shall comply with the following provisions in brokerage trading of securities:
A broker must receive an order placed by a principal or principal's agent by means of letter, telegraph, telephone, the Internet, dedicated line, closed dedicated network, other or electronic trading method approved by this Corporation, or placed in person, before the broker may fill out and print the trading order form prescribed under Article 87 of the Securities and Exchange LawAct in order to execute a trade. The term "electronic trading" means trading by use of telephone voice menu system, the Internet, dedicated line, closed dedicated network, or other electronic trading method approved by this Corporation.
When a principal or principal's agent places a securities tradeing order by letter, telegraph or telephone, the securities broker's officer managing the trade shall fill out the trading order form in either written or electronic form, print the trading order, and stamp it. When the principal places a tradeing order by an electronic trading method such as voice, the Internet, dedicated line, or closed dedicated network, the securities firm may be exempt from the requirement to produce and fill out the trading order form; however, it shall print a record of requests for trades trading orders in the chronological order received, and for requests for trades made trading orders placed by an electronic trading method such as voice, the Internet, dedicated line, or closed dedicated network, or where trading order forms were filled out in electronic form and not printed out one by one, the officer processing the trade and the department manager, or the employee receiving the trading order, shall add their signatures to the record of requests for trades trading orders. The record of requests for tradestrading orders shall include the principal's name and account number, the time of the order, the type, number, and face value of the securities, the order's price limit, the period of validity, the name or code number of the trader, and the method of request how the order was placed. RequestOrders made in person shall be signed and stamped by the principal or the principal's agent.
When the principal makes a trading request places a trading order over the Internet, the record of requests orders referred to in the preceding paragraph shall also include the principal's Internet address (IP) and digital signature. When the request is made order is placed by phone, the broker shall make use of the telecommunications provider's caller ID service to record the caller's telephone number. When the immediate record of requestorders is printed, the items listed above may be omitted. An agent must first obtain a power of attorney from the principal before trading on his behalf or signing trading documents. The securities broker shall not be liable for errors that occur when the principal or his agent makes places a trading requestorder by telephone when such errors are not attributable to the fault of the broker.
A securities broker is prohibited from using computer-assigned group codes to handle securities trading orders, and is required to prepare order tickets and trading records in one of following ways, depending on how the trading order is placed:
1. Non-electronic trading methods
(1) Where a securities trading order is placed in person, it shall be done by either principal or by an agent or authorized person of the principal, who shall fill out a letter of authorization and stamp it.
(2) When a principal or principal's agent places a trading order by letter, telegraph, or telephone, the securities broker's associated person handling the trade shall fill out the order ticket in either written or electronic form, print out a record of the trading order, and stamp it. Where order tickets are filled out using an electronic trading method, the securities broker need not print out every single order ticket if it is able to implement delegation of responsibility for the handling of trading orders, and to identify which account executives are responsible for which orders.
2. Electronic trading methods
(1) Where a principal places an order using an electronic trading method, the securities broker need not prepare an order ticket and fill it out on the principal's behalf, but it shall print out records of such trading orders in chronological sequence.
(2) The record of a trading order shall include the principal's name or account number, time of the order, type of securities, number or par value of shares, limit price, expiration time, name or code of the associated person handling the trade, and manner in which the order is placed.
(3) When the principal places a trading order over the Internet, the record of the trading order shall also include the principal's Internet Protocol (IP) address and digital signature. When a trading order is placed by phone, the broker shall make use of the telecommunications provider's caller ID service to record the caller's telephone number. When a trading order record is printed on the spot, the items listed above need not be printed.
(4) Where procedures for the storage of records of trading orders placed by an electronic trading method satisfy the following provisions, such records need not be printed out:
(i) Electronic storage media are used, and preparation of the records is completed on the day of the trade's execution.
(ii) The records are fully indexed, and management procedures are in place.
(iii) A specific person(s) is responsible for records management, and it is possible at any time to convert the electronically stored data to hardcopy format.
Where order tickets placed by an electronic trading method or filled out electronically are not printed out immediately, they shall be stored on electronic media that cannot be edited or erased, and a record of each trading order shall be stamped after market close by a responsible staff member and a department supervisor or the associated person who handled the trade.
With the exception of orders placed by voice, for orders between securities brokers and principals using electronic trading methods, electronic signatures issued by a certification authority shall be used to differentiate and verify documents transmitted during placement of orders, order confirmation, and transaction confirmation. However, this restriction shall not apply for orders placed between a principal and securities broker electronically over a dedicated line if the connection access points are all located outside the Republic of China and the connection method complies with the local laws and regulations of the country(ies) in which they are located.With the exception of orders placed by telephone voice menu system, electronic signatures issued by a certification authority shall be used to identify and confirm order tickets, order confirmations, execution reports, and other such electronic documents transmitted between securities brokers and principals that place orders by an electronic trading method. However, this requirement does not apply if all the network access points between a securities broker and principals that place orders by Direct Market Access are located outside the Republic of China and the network connections comply with the local laws and regulations of the country(ies) in which they are located.
Where records of trading orders placed by electronic trading methods such as voice, the Internet, dedicated line, or closed dedicated network are saved in accordance with the following provisions, the broker may be exempt from the requirement to print out a record of requests for trades:
1. Use of a digital data storage medium that allows neither modification nor deletion, with complete records produced on the date of transaction.
2. Establishment of a comprehensive directory and procedures for management.
3. Personnel solely responsible for management of the storage medium, and the capability to convert electronic data files to printed format at any time.
Trading order forms which are filled out electronically and not printed one by one shall be stored in an electronic form that cannot be altered or deleted.
|