Securities brokers accepting trading consignments for securities shall process matters in accordance with the following:
1.Upon opening new accounts, a securities broker shall enter into a consignment contract with the principal specifying the date of account opening, name of the principal (if his/her agent, then the agent's), his/her sex, age, occupation, address, telephone number, and National Identity Card number. Where the principal is a juristic person, its name, address, uniform invoice number, and rights and obligations between the securities broker and the principal shall be included. In addition, the Articles of Incorporation of this Corporation, these Rules, related public announcements, rules of the securities dealers association, and the standard securities broker consignment contract shall form an integral part of all such consignment contract.
2. Where the principal is a person of no legal capacity or limited legal capacity, his/her statutory agent shall sign/seal the consignment agreement and indicate the kinship. All business vouchers required to be signed in the consignment trade of securities shall be signed/sealed by the statutory agent.
3. Where the principal is a juristic person, such juristic person and its representative shall sign/seal the consignment agreement, and a power of attorney shall be provided. All business vouchers required to be signed in the consignment trade of securities shall be signed/sealed by the authorized person.
4. Any director, supervisor, or employee of a securities firm shall not open the account, engage in the consignment trade of securities, purchase securities, or handle settlement-related matters on behalf of any other person, unless he/she is the statutory agent or guardian of the principal.
5. When a principal or his/her statutory agent or appointee signs the consignment agreement, a seal specimen or signature card of the principal or his/her statutory agent or appointee shall be kept. The consignment trade of securities, purchase of securities, or authorizing another person to conduct consignment trade or purchase securities, or handling settlement-related procedures shall be effected against the same seal specimen or signature.
6. When a principal or his/her statutory agent authorizes an agent to handle consignment trade, purchase securities or process settlement-related matters, a power of attorney shall be issued, and the seal specimen or signature card of such agent shall be kept for handling.
7. Where settlement of the principal's payment and securities is to be made by the book entry method, and where a letter of consent is signed, signature/seal of the settlement slips (consignment orders for non face-to-face consignments, trading reports, etc.) may be waived. However, before settlement, information relevant to the consignment trade shall be given to the principal and a record shall be maintained for confirmation. Where, pursuant to law or regulation, the principal may effect receipt or payment of the purchase price by account transfer (or remittance), signature/seal of the settlement slips (consignment orders for non face-to-face consignments, trading reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the consignment trade to the principal and the custodian institution to be the agent for transaction settlement, and shall maintain a record for confirmation.
8. When a principal, his/her agent, or authorized person places orders for securities trades on a face-to-face basis, he/she shall fill in and sign/seal the order. Where orders are placed by telephone, letter, or telegraph, the associated person of the securities broker taking the order shall complete the order form in writing or electronically and print a record of the order, and process it in accordance with Subparagraphs 5, 6, and 7. In case of orders made through letters or telegrams, such letters or telegrams shall be appended to the order form or the trading order record. Where the securities broker completes the order form electronically, if hierarchical delegation of responsibility for brokerage trading can be implemented and the trading personnel by whom an order was processed can be confirmed, it is not necessary to print the order forms one by one; however, trading order records shall be printed in the sequence that the orders were received, and upon closing of the market, the processing person
shall sign the records. Where orders are made by electronic transaction methods such as voice mail, the Internet, dedicated line, or closed dedicated network, the securities broker is not required to prepare and complete trading order records; provided that it shall print records of the trading orders in the sequence that they were received, and upon closing of the market, the processing person and the chief of the department shall sign such records. The trading order records shall contain the name or account number of the principal, time of order, type of securities, number of shares or par value, limit price, period of validity, name or code number of the associated person taking the order, and the order method.
Where the principal places an order through internet, the content of the order record shall bear the internet protocol (IP) and electronic signature. Where the principal places an order through voice mail, the incoming telephone number shown on the system of the telecommunications institution shall be recorded. When the order records are printed out on real-time basis, the said items may be waived.
9. The transmission of the order for purchase/sale of securities, order report, trading report, and other electronic documents between a securities broker and the principal who uses an electronic transaction method other than voice mail shall carry the electronic signature issued by the institution providing vouchers for identification and 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.
10. The order referred to in Subparagraph 8 shall be numbered in the order it is received. Its form and particulars to be recorded shall be as prescribed by the Competent Authority. Orders of closed transactions shall be kept with other business vouchers. Orders of transactions not closed shall be affixed with a seal indicating that the transactions are not closed. The undisputed orders shall be kept and destroyed after one week. The trading order records printed for transactions by electronic transaction methods such as voice mail, the Internet, dedicated line, or closed dedicated network, or printed for orders completed by a securities broker electronically, and order records in the form of computer file, if undisputed, shall be kept for at least five years. For any disputed transactions, the records shall be kept until the dispute is removed. Where order forms are completed electronically and are not printed out one by one, they shall be stored using an electronic medium that cannot be altered or deleted.
11. Where record-keeping operations for trading orders made by electronic transaction methods such as voice mail, the Internet, dedicated line, or closed dedicated network conform to the following provisions, trading order records need not be printed out.
(1) Records are kept using a non-revisable, non-erasable electronic storage medium, and are completed on the same day the trade is executed.
(2) Comprehensive indexing and management procedures are instituted.
(3) Dedicated personnel are placed in charge of administering the records, and the electronic data files can be converted to printed format at any time.