| Title： |
Regulations Governing Securities Firms(2008.05.12) |
| Date： |
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Article 19
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A securities firm trading securities for its own account, unless it is concurrently operated by a financial institution and subject to other relevant acts or regulations, shall do so in accordance with the following rules:
1. The firm shall not hold more than 10% of the total issued shares of any domestic company. The total amount of the cost of the securities issued by any domestic company held by such securities firm shall not be more than 20% of its capital net worth.
2. The firm shall not hold more than 5% of the total issued shares of any foreign company. The total amount of the cost of the securities issued by any foreign company held by such securities firm shall not be more than 10% of its capital net worth..
If the aggregate of the securities acquired by a securities firm through underwriting and those traded for its own account by such firm exceeds the limit referred to in the preceding Paragraph, the portion in excess shall be sold within 1 year after its acquisition in accordance with Article 75 of the Act.
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Article 19-1
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The Commission shall prescribe the total amount limits, and methods for calculation thereof, on the positions held in foreign securities and the expenditures on derivative financial product hedging transactions of a securities firm trading foreign securities for its own account.
When a securities firm engages in the business of trading foreign securities for its own account as referred to in the preceding paragraph, if such trading is neither an investment of proprietary funds nor done to meet hedging needs, it shall obtain approval from the Central Bank, and any trading of foreign bonds for its own account shall be done in compliance with the provisions of the GreTai.
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Article 19-2
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Exchange settlement matters for securities firms trading securities denominated in a foreign currency for their own accounts and engaging in derivative financial product hedging transactions shall be handled in accordance with the Regulations Governing the Reporting of Foreign Exchange Receipts and Disbursements or Transactions.
A securities firm may conduct hedge trading only in the capacity of a customer, through a designated bank approved by the Central Bank to conduct derivative foreign exchange product business, or through an overseas financial institution.
A securities firm tradingsecurities denominated in a foreign currency for its own account shall open a segregated foreign exchange account in the selected foreign currency at a designated foreign exchange bank, from which it shall conduct all deposits and remittances in connection with payment and receipt of settlement money and fees.
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Article 25
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When a securities underwriter is mandated to handle matters relating to the offering, issuing, listing, or trading on the over-the-counter market of securities, the assessment report, conclusion opinion and relevant information provided by it shall not have any of the following conditions:
1. Containing false statement or concealment which would mislead others;
2. Containing material omission or obvious errors which would affect investment judgment;
3. Failing to prepare work sheets or failing to keep work sheets according to regulation; adopted so that objective and reasonable evidence is not obtained;
4. The issuer violates Articles 7 and 8 of the Guidelines for Handling Offering and Issuance of Securities by Issuers or Article 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Securities Issuers, and its application shall be returned; however, if the underwriter can prove that he has exercised as much care as possible, this is not applicable;
5. The underwriter fails to conduct necessary assistance and assessment on major items that require assessment, thus causing major difference between assessment conclusions and facts;
6. After the assessment report or conclusion opinion is submitted, and before the prospectus is printed and published, if the company has a condition that will materially affect shareholders' interests or the price of securities under Subparagraph 2 of Paragraph 2 of Article 36 of the Securities and Exchange Act and the underwriter does not immediately carry out supplementation and updating; or
7. Violating other securities laws and regulations and other relevant laws and regulations.
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