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Amendments

Title:

Taiwan Stock Exchange Corporation Regulations Governing Brokerage Contracts of Securities Brokers  CH

Amended Date: 2019.07.11 
Categories: Basic Laws and Regulations
Market Supervision > Regulation of Securities Firms

Title: Taiwan Stock Exchange Corporation Regulations Governing Brokerage Contracts of Securities Brokers(2009.10.22)
Date:
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 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; 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 serial number and establishment of a withholding entity, a legally valid power of attorney and a copy of the authorized person's National Identity Card.
3. If the principal is a non-juristic person organization, an account shall be opened in the name of the organization's responsible person, with the organization's name listed as part of the account holder's name; the responsible person shall append a photocopy of the registration certificate for the organization issued by the competent authority (or its establishment approval, filing for recordation, or other registration document), a photocopy of the notice from the tax authority of the establishment of a tax withholding entity and the assignment of a uniform serial number (if the organization is exempt from income tax withholding, it must also submit one copy of the "income tax withholding exemption certificate"), and a photocopy of the responsible person's national ID. When the account is opened, a central securities depository book-entry account shall also be opened, and the organization's securities deposited in it; only sale orders may be placed through the account, however, and not purchase orders, and when accepting a sale order, the securities broker shall first collect the full quantity of securities necessary before making a sale quote.
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 principal or the principal's statutory agent shall issue a power of attorney when engaging an agent to handle on its behalf any procedures relating to brokerage trading, subscription to securities, or settlement, and a signature specimen card or seal impression card of the agent may be kept on record for handling such matters.
The brokerage contract shall provide evidence that the articles of incorporation, operating rules, 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, 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, uniform serial 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 central securities depository account and a deposit account at the principal's designated financial institution.
The requirement in the preceding paragraph concerning the opening of a deposit account shall not be applicable to those specified in the following subparagraphs:
1. Offshore overseas Chinese or foreign nationals; securities investment trust funds; insurance enterprise; overseas Chinese or foreign nationals converting holdings of convertible corporate bonds into stocks or overseas depository receipts into the underlying securities, having opened a deposit account at the custodian institution (or custodian bank), may receive or deliver the price by account transfer (remittance).
2. A trust enterprise with depository participant status may receive or deliver the price by account transfer (remittance) through the collective investment trust fund account managed by the trust enterprise.
3. A depository institution of overseas depository receipts, when accepting orders for redemption and sale of shares held, may receive the price by account transfer (remittance) through the deposit account at its custodian bank.
4. A securities investment consulting enterprise (SICE) or a securities investment trust enterprise (SITE) that has been engaged by a principal to conduct discretionary trading of securities may receive or deliver the price by account transfer (remittance) through a deposit account opened with the custodian institution.
5. A domestic bank or insurance company, if it has obtained a rating of twA- or above from Taiwan Ratings Corporation, or a rating, from a credit rating institution approved or recognized by the competent authority, that is equivalent to twA- or above from Taiwan Rating Corporation, may receive or deliver the price by account transfer (remittance) during the valid period of the above-mentioned rating.