| Title： |
Operating Rules of the Taiwan Stock Exchange Corporation(2003.10.01) |
| Date： |
|
|
Article 77
|
Upon accepting any account opening consignment from overseas Chinese or foreign nationals for securities trading, a securities broker shall obey relevant laws and regulations and process the matter in accordance with the following:
1.Where approval was obtained from the Investment Commission of the Ministry of Economic Affairs, Science-Based Industrial Park Administration, or the Export Processing Zone Administration, a photocopy of the document of approval of sale and tax return power of attorney in the form specified by the tax collection authority (submission of the latter is not compulsory during the period when gains from stock exchange are exempt from taxation), along with the copy of the securities trading consignment contra
ct, and cover letter shall be submitted to this Corporation for issuance of an approval letter to open the account. Only upon the receipt of the approval letter may sales consignments be accepted, and the type of securities trading and trading volume undertaken shall be in conformance with the approved investment plan.
2.Where the listed securities and the resulting rights for subscription of capitalization increase or stock divided are obtained due to gift, succession, pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235; Article 240; or Article 267 of the Company Law or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Law, or prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Ov
erseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, a copy of the passport and the following documents shall be submitted to a securities firm for account opening. Furthermore, the trading shall be limited to the sale of the aforesaid listed securities.
(1) Where the listed securities and the said entitlements are obtained through gift, transfer procedure shall be completed and the paper of tax-payment or tax-exemption for gift issued per Article 41 of the Estate and Gift Taxes Law shall be submitted.
(2) Where the listed securities and the said entitlements are obtained through succession, transfer procedure shall be completed and the paper of tax-payment or tax-exemption for legacy issued per Article 41 of the Estate and Gift Taxes Law shall be submitted.
(3) Where the listed securities and the said entitlements are obtained pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235; Article 240; or Article 267 of the Company Law or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Law, a certificate of employment valid at the time of subscription, issuance of bonus shares, or taking assignment of shares and documents evidencing the subscription , issuance of bonus shares, or assignment of shares shall be sub
mitted.
(4) Where the listed securities are obtained prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, document proving the source of the listed securities or other relevant documents shall be submitted.
3. Securities obtained in compliance with the preceding item may be sold by mutatis mutandis application of Article 82-1.
Foreign banks with branch offices in the Republic of China may use the name of the branch office to open the account in accordance with Article 75.Such account shall only accept sales consignments, and purchase consignments shall not be accepted.
|
|
Article 77-1
|
Securities brokers accepting account opening applications from the domestic agent of a depositary institution for a foreign depositary receipt shall ensure that the account name clearly states its relation with and the rights and obligations of the securities of such listed company, and shall further supply the following documents:
1.Copy of the approval to issue foreign depositary receipts issued by the Competent Authority.
2.Copy of the power of attorney executed by a depositary institution appointing a domestic agent.
3.Photocopies of the National Identity Card, Alien Resident Certificate, or company registration (or amendment registration) certification of the domestic agent/representative of the depositary institution. Provided, if such documentation for the same domestic agent/representative has already been submitted to and placed on file by the broker, it need not be resubmitted.
The trading account referred to in the preceding Paragraph shall be only used to execute sales consignments unless the issuance plan of such depositary receipt, the depositary contract, and the custodian contract specifies that the depositary institution may purchase and then re-issue securities from the centralized exchange market, and such depositary institution files an application, containing copies of the above purchase and issuance documents (including abstract translations), with this Corporation;
upon the filing of such application, the securities broker may accept purchase consignments of the securities indicated on the depositary receipt.
Domestic agents applying for account opening on behalf of overseas Chinese or foreign nationals investing in foreign depositary receipts and desiring to redeem such depositary receipt into the underlying securities shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to redemption of the foreign depositary receipts, it need not be done anew.
|
|
Article 77-3
|
Where an overseas Chinese or foreigner who has made investment in foreign convertible corporate bonds and has requested exchange, conversion, or subscription of securities issued by a domestic issuing company through such foreign convertible corporate bonds appoints his local agent to open an account on his behalf, he shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to exchange, conversion, or subscriptio
n for the foreign convertible corporate bonds, it need not be done anew.
|
|
Article 77-4
|
To invest in domestic securities, onshore overseas Chinese and foreign nationals shall submit the relevant documents to a securities broker to carry out registration with this Corporation and obtain an identification number and submit the below-listed documents to the securities broker for purposes of opening an account for securities trading.
1. Overseas Chinese and foreign natural persons: passport and overseas Chinese identity certificate (or alien resident certificate).
2. Foreign institutional investor: Ministry of Economic Affairs Recognition Certificate, Ministry of Economic Affairs Company License, Business License, and National Identity Card (or Alien Resident Certificate or passport) of the responsible person.
Offshore overseas Chinese and foreign nationals shall carry out registration with this Corporation through their designated domestic agent/representative and obtain an identification number and submit the below-listed documents to the securities broker for purposes of opening an account for securities trading (provided, if such documents, for the same domestic agent/representative and having identical content, have already been submitted to and placed on file by the broker, they need not be resubmitted).
1.The power of attorney/agency letter issued by the applicant, authorizing a local agent or representative to handle on his behalf the procedures pertaining to the opening of an account for trading domestic listed securities, applying for exchange, conversion, or subscription of shares through domestic corporate bonds, exercise of the right associated with the purchased listed securities, applying for foreign exchange, payment of taxes, and other procedures.
2.Copy of the National Identity Card, Alien Resident Certificate or company registration (or amendment registration) certification of the local agent or representative.
3.Copy of agreement with custodian bank designating such bank as the agent for securities certificate custody, confirmation of trades, trading settlement, and filing of registration statements.
Where an overseas subsidiary of a listed (or OTC) company carries out registration with this Corporation on the grounds of disposing employee stock option certificates of its overseas foreign national employees, the provisions of paragraph 2 concerning offshore overseas Chinese and foreign nationals shall apply mutatis mutandis, and it shall submit the documents in all the subparagraphs below. In addition, it shall authorize its local agent to open an account with the securities broker, and shall annex
the documents listed below, in addition to all the documents in the subparagraphs of paragraph 2. Trading by said account will be confined to the sale of the certificates of payment of shares or the shares obtained through the exercise of such employee stock options; trading of other securities shall not be engaged in.
1. Original affidavit stating that the overseas subsidiary has actuallybeen authorized by the overseas employees
2. Photocopy of the Securities and Futures Commission approval letter approving the issue of employee stock option certificates by the listed (or OTC) company.
3. Photocopy of the minutes of the listed (or OTC) company's board of directors' meeting that approved the given issue of employee stock option certificates.
If any of the circumstances in Article 11 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals is present with respect to a registration under paragraph 1, 2, or 3 by an overseas Chinese or foreign national, this Corporation shall not carry out registration; where registration has already been made, the registration shall be cancelled, and the securities broker that has opened an account shall be notified that it may not perform consigned purchase. After the bal
ance of the account has been liquidated by the account holder, the securities broker shall cancel the account and notify this Corporation of the circumstances of the closure of the case.
The registration operations in this article shall also be handled in compliance with the Directions for Registration of Securities Investment by Overseas Chinese and Foreign Nationals reported by this Corporation to and approved by the Competent Authority.
|
|
Article 77-5
|
Overseas Chinese and foreign nationals investing in share certificates issued overseas by a domestic public company, when entrusting their local agent to open an account with a securities broker on their behalf in accordance with Paragraph 2 of Article 37 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, shall carry out registration and account opening in accordance with paragraph 4 of Article 77, provided, if approval has been obtained and an account opened
prior to the sale of the overseas share certificates, it need not be done anew.
|
|
Article 79
|
Trading consignments to a securities broker shall be limited to trading consignments at a designated price. Provided, a securities broker may accept authorization from domestic institutional investors and foreign institutional investors as set out in paragraph 4, to decide on its behalf the price and time of placement of an order within the range of the price limits specified by said institution, and the broker shall retain the customer consignment authorization record in accordance with regulations.
Where the consignment referred to in the preceding Paragraph is made without specifying the term of validity, such consignment shall be effective only on the date of consignment. Where a securities broker accepts the consignment through internet or other electronic means, the effective date shall be agreed, and the consignee through internet shall show such effective date on the order screen of the web page.
Consignment to trade at a designated price shall mean that the principal consigns a securities broker to trade at a designated price. The execution price may be equal to or lower than the designated price in the case of purchases, and may be equal to or higher than the designated price in the case of sales.
The term “domestic institutional investors and foreign institutional investors” in paragraph 1 includes domestic and foreign banks, insurance companies, fund management companies, securities firms, government investment institutions, government funds, mutual funds, unit trusts, investment trusts, trust enterprises, and academic or charitable institutions.
|
|
Article 82
|
In the case of trading consignment of normal settlements, a securities broker shall collect from its principal the payment for securities bought or the securities sold at the time of acceptance of the consignment or before noon of the first business day following the date of transaction. In case its principal is an offshore overseas Chinese or foreign national and it can be substantiated that there is a difference in holiday in the two countries, interruption of telecommunication, acts of god or other ev
ents of force majeure, the deadline for settlement may be extended to 5:00 p.m. or, in the case of settlement through book-entry, to 6:00 p.m.
In the case of margin trade consignments, a securities broker shall collect from its principal the legally required margin for margin purchases or margin for short sales before noon of the first business day following the date of transaction.
Where this Corporation has taken any disciplinary measure against a specific securities in accordance with the "Regulations for Implementation of Stock Market Monitoring System" and other relevant operation rules, a securities broker shall, on the date of its acceptance of the consignment, collect in advance from its principals the funds or securities, or the margin for margin purchases, or the margin for short sales.
Where a securities broker believes that there are any defect on the rights of the securities delivered by its principal for sale or there is legal dispute or other doubtful matter, it may decline to sell such securities; provided that the above shall not be applicable where its principal has provided adequate collateral as approved by the securities broker.
|
|
Article 83
|
A securities broker shall keep complete and true records and vouchers when receiving or delivering listed securities or payments in connection with the consigned trade.
The vouchers referred to in the preceding Paragraph shall include receipts for funds and securities collected in advance, vouchers on securities delivered, and trading reports. The format thereof and the particulars to be entered therein shall conform to the regulations prescribed by the Competent Authority.
Where a financial institution concurrently engages in the business of a securities broker and has opened specific accounts for depositing funds which can be verified, it need not use trading reports.
A securities broker shall handle the receipt of listed securities or funds from its principals or delivery of listed securities or funds to its principals referred to in Paragraph 1 of this Article by book-entry through the securities central depositary accounts opened by its principals or through the accounts opened by its principals with financial institutions designated by the securities broker, except under any of the following circumstances:
1.Where a securities investment trust fund, insurance enterprise, offshore overseas Chinese or foreign national, or an overseas Chinese or foreign national who has converted foreign corporate bonds held by him into stock or has converted foreign depositary receipts held by him into the underlying securities maintains an account at the custodian institution (custodian bank), the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account.
2.Where a depositary institution of foreign depositary receipts upon being consigned by its principal to redeem the foreign depositary receipts and sell the stock, it may receive the proceeds thereof by way of account transfer (or remittance) through the account maintained at the custodian bank.
3. Where a principal places consignment for discretionary account securities trading with a securities investment consulting enterprise or a securities investment trust enterprise, the principal may open and maintain an account at the custodian institution, and the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account. When processing transaction settlement, transfer of payment or stock certificates among separate accounts for discretionary in
vestment consignment in the name of the same principal shall not be allowed.
The listed securities received by a securities broker in connection with the consigned trade shall be handled in accordance with the Measures for Custody of Listed Securities and Measures for Management of Transitionally Deposited Listed Securities as approved by the Competent Authority.
|
|
Article 136
|
Where any securities firm violates Paragraph 3 of Article 25, Article 26, Paragraph 2 or Paragraph 3 of Article 58, Subparagraph 5 of Paragraph 1 and Paragraph 3 of Article 75, Paragraph 2 of Article 75-1, Paragraph 2 of Article 75-2, Article 77-4, Paragraph 5 of Article 80, Article 81, Paragraph 1 or Paragraph 2 of Article 82, Article 82-1, Paragraph 2 of Article 83, Paragraph 1, 2, 4 or 5 of Article 91, Paragraph 2 of Article 91-1, Paragraph 2 of Article 92, Paragraph 2 of Article 108, Paragraph 3 of A
rticle 109, Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, this Corporation may warn them and notify it to make correction or improvement within a prescribed time limit.
|