| Title： |
Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers(2014.09.18) |
| Date： |
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Article 3-1
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The researchers at a securities firm, prior to the release of any research report, may not discuss the content of the report to anyone outside of the research department, except for necessary discussions with the review department during the research report review procedures conducted by the securities firm or its overseas parent company (or headquarters), or an affiliated enterprise of the overseas parent company (or headquarters).
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Article 6
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In recommending trade in securities to customers, a securities firm may issue under its own name research reports that it has prepared itself or outsourced, and shall disclose any relevant conflicts of interest of the securities firm or the personnel who wrote or reviewed the research report.
A research report referred to in the previous paragraph shall be written by a qualified securities investment analyst of a securities investment consulting enterprise or by a qualified senior associated person registered with this Corporation; provided, if a research report referred to in the preceding paragraph is obtained from a foreign securities institution, a qualified senior associated person registered with this Corporation may be substituted as a reviewer.
A research report obtained from a securities firm's overseas parent company (or headquarters) or an affiliated enterprise of the overseas parent company (or headquarters) shall not be subject to the restrictions of the preceding paragraph.
The securities firm's performance evaluation method for the researchers may not affect the independence of the researchers.
The scope of the research reports under paragraph 1 may, based on the relevance of the industry to which the securities listed on the TWSE market belong, extend to securities listed on markets other than the TWSE market, provided that if the securities firm does not operate brokerage trading business in those markets, it shall mark in distinctive typeface in such research reports “without recommendation” and may not accept orders from customers to trade in such securities that are "without recommendation."
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Article 7
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In recommending trade in securities to customers, a securities firm shall, after having the research report signed by the responsible person of the securities firm or the head of the authorized and responsible department, have the recommendations thereunder made by an associated person who handles securities brokerage trading business.
The research report may be delivered directly to the customer through a system or network under the name of the securities firm's overseas parent company (or headquarters) or of an affiliated enterprise of the overseas parent company (or headquarters), without being subject to the requirement of approval by the responsible person or the head of the authorized and responsible department under the preceding paragraph.
If the securities firm delivers the research report by the method under the preceding paragraph, it shall simultaneously deliver the report to the responsible person or the head of the authorized and responsible department and to at least one associated person who handles brokerage trading business and is responsible for making the recommendations, to handle relevant matters.
The research report may be provided to professional institutional investors that are not customers.
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Article 10
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When making recommendations by publishing or distributing publications ("research report"), a securities firm shall clearly indicate the author, publisher, and date of the information on all distributed written material, and furthermore shall include the language "This recommendation material is for reference only. Investors should carefully consider their own investment risk. Investment results are the responsibility of the individual investor." and "May not be reprinted without permission."
In the event the media requests consent from the securities firm to reprint content of the research report, if the securities firm, after taking into account its own and its customers' rights and interests, consents for the media to reprint content of the report, the reprinted content may not involve any prediction of target prices for individual stocks, future operating revenues, or earnings per share, nor may it mention support or resistance points, even without directly mentioning any recommended sale or purchase price.
If any discrepancy exists between a media reprint or reportage and the research report, or there is any failure to fully explain the principles of the analysis such as is likely to cause any misunderstanding by investors, the securities firm shall, within two business days (counting from the following business day), make clarifications on the Market Observation Post System and to the reprinting media. If any reprint of content of the report is done without the securities firm's consent, the securities firm, in addition to making clarifications on the Market Observation Post System, shall remind the reprinting media of the requirement to first obtain consent from the securities firm before doing so, provided that this restriction shall not apply if the reprint does not contain any content prohibited under the preceding paragraph and would not cause any misunderstanding by investors.
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