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Article 75
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Securities brokers conducting brokerage trading of securities shall comply with the following provisions:
1.When accepting an account opening for processing, a securities broker shall first enter into a brokerage contract with the principal, recognize this Corporation's articles of incorporation, operating rules, public announcements, and circular letters, the regulations of the Taiwan Securities Association, and the Rules Governing Brokerage Contracts of Securities Brokers as integral parts of the contract, and specify the date of account opening and the following matters:
(1) For a principal that is a natural person: name, gender, age, occupation, address, telephone number, and National Identity Card number; if there is an agent, the agent's name and National Identity Card number.
(2) For a principal that is a juristic person: the juristic person's name, address, government uniform invoice number, phone number, representative, and authorized person.
2. For a principal that is a person of no legal capacity or limited legal capacity, his/her statutory agent shall sign/seal the brokerage contract and indicate the kinship relationship. All business vouchers for brokerage trading of securities, subscription of securities, and settlement matters shall be signed/sealed by the statutory agent.
3. For a principal that is a juristic person, such juristic person and its representative shall sign/seal the brokerage contract, and a power of attorney shall be provided. All business vouchers for brokerage trading of securities and settlement matters shall be signed/sealed by the authorized person.
4. A director, supervisor, or employee of a securities firm may not open an account, engage in the brokerage trading 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 the principal or his/her/its statutory agent or authorized person signs the brokerage contract, a seal specimen card or signature card of the principal or the principal's statutory agent or authorized person shall be kept, and that same seal or signature shall be used for any orders placed in person for brokerage trading or subscription of securities and for the procedures for carrying out settlement. That same seal or signature shall also be used when the above matters are performed by an agent engaged by the principal or its statutory agent to do so on its behalf.
6. When a principal or his/her/its statutory agent authorizes an agent to engage in brokerage trading, 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 (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, information relevant to the brokerage trade shall be given to the principal and a confirmation record shall be kept on file. 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 (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the brokerage trade to the principal and the custodian institution to be the agent for trade settlement, and shall keep a confirmation record on file.
8. A securities broker may not use computer-set groups in handling securities trading orders. The order ticket and trading order record shall record information pursuant to Articles 4 and 12 of the Regulations Governing Information to be Published in Order Tickets, Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving Orders to Buy or Sell Securities of the Competent Authority, and be prepared in accordance with the following provisions:
(1) Trading through non-electronic media:
i. For trading orders placed in person: the principal or its agent or authorized person that places trading orders for securities in person shall fill out an order ticket and affix their signature/seal thereto.
ii. For trading orders placed via telephone, in writing, or by telegraph: if the principal, or its agent or authorized person places a trading order via telephone, in writing, or by telegraph, the associated person handling the order at the securities broker that accepts the order shall fill out the order ticket by hand or electronic means, print a trading order record, and proceed pursuant to subparagraphs 5, 6, and 7; if trading orders are placed in writing or via telegraph, the letter or telegram shall be attached to the back of the order ticket or trading order record.
Where the securities broker fills out the order ticket by electronic means, if delegation of responsibility for the execution of the trading order can be implemented and the employee handling that trading order confirmed, order tickets need not be printed out individually, provided that they shall be stored using a non-revisable, non-erasable electronic medium. In addition, trading order records shall be printed out in chronological order and, after close of market, signed/sealed by the employee handling the trading order.
(2) Trading through electronic media:
Means that a principal uses voice mail, the Internet, dedicated line, closed private network, or other electronic means approved by this Corporation to place a trading order, which the securities broker shall handle in accordance with the following provisions:
i. Where a trading order is placed through an electronic medium, the securities broker need not prepare or fill out an order ticket on the client's behalf. However, it shall print trading order records in chronological order, and after close of market, have them signed/sealed by the person that handles the order and the department supervisor.
ii. If a trading order is placed via the Internet, the internet protocol (IP) address and electronic signature thereof shall be recorded. If a trading order is placed via voice mail, through coordination with the telecommunications institution the caller-end number display function shall be enabled, the number of the incoming call recorded, and a trading order record immediately printed out, but the matters that shall be recorded as specified by the Competent Authority need not be printed out.
Where the storage operations of the trading order record for a trade conducted through an electronic medium meet the following requirements, the trading order record need not be printed out:
i. A non-revisable, non-erasable electronic storage medium is used, and preparation of trading order records is completed on the day the trade is executed.
ii. Comprehensive indexing and and management procedures are set up.
iii. Management responsibility is assigned to designated personnel, and electronic data files can be converted into print format at any time.
9. The transmission of the order for purchase/sale of securities, order confirmation, execution report, and other electronic documents between a securities broker and the principal who uses an electronic trading 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 ticket referred to in subparagraph 8 shall be numbered in the order it is received. Its format and particulars to be recorded shall be as prescribed by the Competent Authority. When there is any dispute in connection with a trade, the order ticket shall be kept until the dispute is resolved. When there is no dispute, order tickets shall be kept in accordance with the following provisions:
(1) For unexecuted trades: destroy after one week; however, if an order ticket is filled out by hand, it shall be stamped "Unexecuted".
(2) For executed trades: if there is no dispute, keep for five years together with other business vouchers.
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Article 76
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Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
1. Persons without legal capacity or with limited legal capacity, who do not have the agency or authorization of their legal guardian.
2. Personnel or employees of the Competent Authority in charge of securities matters and of this Corporation.
3. Persons declared bankrupt and rights have not been reinstated.
4. Interdicted persons who are not represented by their statutory agents.
5. Juristic persons opening accounts that cannot supply proof that there is authorization to open the account.
6. Securities dealers which have not been approved by the Competent Authority.
7. A principal who has engaged a director, supervisor, or employee of a securities firm to open an account with such securities firm as an agent or representative of the principal.
8. More than one discretionary investment account has been opened at the same business premises of the same securities broker by the same principal with respect to the same authorized discretionary trader; provided, this restriction shall not apply to a principal that is a government fund such as a civil servant pension fund, labor pension fund, labor insurance fund, or postal remittance and savings fund and that, when authorizing the same authorized discretionary trader for discretionary investment, may open, at the same business premises of the same securities broker, different discretionary investment accounts for different brokerage contracts.
9. An offshore foreign institutional investor has opened more than one investment trading account at the same business premises of the same securities broker; provided, this restriction shall not apply if it is one that is permitted under the Directions for Registration Processing for Offshore Overseas Chinese and Foreign Investors to Make Investments in ROC Securities or Engage in Domestic Futures Trading to open more than one investment trading account at the same securities broker (including branches).
Internal personnel of securities firms opening accounts for brokered securities trading shall comply with the Rules Governing Internal Personnel of Securities Firms Opening Accounts at Their Securities Firms for Brokered Securities Trading prescribed by this Corporation.
Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
1. Any person that has breached a contract relating to securities trading, where this Corporation or the Over-the-Counter Securities Exchange have notified all securities brokers of this fact, where the case has not been closed and less than five years have elapsed.
2. Any person that has violated the Securities and Exchange Act or been suspected of forging (altering) listed or OTC securities documents and has been under public prosecution, or has been adjudicated criminally guilty by a final and unappealable court judgment within the last five years.
3. Any person that has breached a futures contract where the case has not been closed and less than five years have elapsed, or that has violated future trading laws or regulations and has been adjudicated criminally guilty by a final and unappealable judgment of a judicial authority within the past five years.
Upon conclusion of a case of breach of a brokerage contract by a principal, the securities broker shall promptly report such conclusion to this Corporation; this Corporation will in turn inform all other securities brokers.
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