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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(2009.12.09)
Article 4 A broker must receive an order placed by a principal or principal's agent by means of letter, telegraph, telephone, electronic trading, 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 Act 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.
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 places a trading order by telephone when such errors are not attributable to 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 sign or seal it.
(2) When a principal or principal's agent places a securities trading order by letter, telegraph, or telephone, the securities broker's personnel handling the trade shall fill out the order ticket in either written or electronic form. Where order tickets are written, they shall be signed or sealed; 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.
(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 securities broker receives a trading order in non-electronic form and fills out the order ticket in electronic form, or when it receives a trading order in electronic form, it shall print out records of such trading orders in chronological sequence, which shall be signed or sealed after market close by the securities broker personnel handling the trades, provided that when procedures for the storage of trading order records satisfy the following provisions, such records need not be printed out or signed or sealed:
(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 signed or sealed 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 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. This restriction shall not apply, however, under the following circumstances:
1. When an order confirmation or transaction confirmation is delivered by telephone, facsimile, text messaging, or webpage program.
2. When the conditions for exemption under the TWSE Operation Directions for Implementation of Direct Market Access by Securities Brokers are applicable.