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Regulations Governing Securities Firms  CH

Amended Date: 2020.10.29 (Articles 14-6, 21, 32-1, 35-2, 68-1 amended,English version coming soon)
Current English version amended on 2020.02.03 

Title: Regulations Governing Securities Firms(2015.11.12)
Article 19-7     A securities firm that will engage with a professional institutional investor in a derivative financial product trade involving a linked underlying set out in Article 19-6, subparagraphs 1 to 3 shall submit an application to the TPEx with the relevant documentation. The TPEx will forward the application to the FSC, and such a trade may take place only subsequent to the FSC's first issuance of an approval to a securities firm for such a trade. An application must be submitted to the Central Bank for any trade of a derivative financial product set out in Article 19-6, subparagraph 4.
    The term "professional institutional investor" as used in Article 19-6, and the preceding paragraph means the professional institutional investors as defined in Article 3 of the Regulations Governing Offshore Structured Products.
Article 24     A securities firm that underwrites securities shall make a public announcement of the underwriting and shall publish such announcement in local daily newspapers. Matters to be published shall include the method for deciding the offering price and a description of the basis of pricing, conclusions of the assessment report of the securities firm, the place where the prospectus is available and the method to obtain such prospectus.
     A securities firm that underwrites straight corporate bonds shall not be subject to the restrictions of the preceding subparagraph regarding the publishing of such announcement in local daily newspapers, if the sales target is limited to professional institutional investors as specified in the Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds, and the underwriting announcement has been published on the website of the securities dealers association.
    If the offering price referred to in paragraph 1 is decided through negotiations between the securities underwriter and the issuer or holder of the securities, in addition to the matters referred to paragraph 1, the public announcement shall include financial information based on which the offering price is decided and the audited opinion of the certified public accountants on the financial information. In calculation of the profitability of each share, the financial information based on which the offering price is decided shall fully reflect the dilution effect caused by the increase of issued shares. The calculation basis of information obtained from different sources of different time periods shall be consistent.
Article 31     A securities firm trading securities for its own account shall adopt a trading policy and related procedures. Except as otherwise provided by the FSC, the operational procedures for trade analysis, decision-making, execution, change, and review shall be included in its internal control system.
    The materials referred to in the preceding paragraph shall be recorded in chronological order and kept in files. They shall be preserved for a period of not less than 5 years.
Article 33     When a securities firm enters into a brokerage agreement with its customer, it shall explain the contents of the contract and the relevant procedures for trading securities.
Article 36-2     When an underwriting department of a securities firm underwrites securities, during the period from the time the securities firm enters into an advisory contract with a public issuer until the termination of the advisory relationship, or from the time the securities firm enters into an underwriting contract with a TWSE listed or TPEx listed company until the deadline for payment, its consulting services department shall not recommend any trading of that security or any derivative financial product thereof; a discretionary investment department may not purchase securities for a customer without first explicitly informing the customer of any related conflicts of interest and control measures and then obtaining the customer's consent on an instance-by-instance basis, and specifically stating the quantity of the securities that may be purchased.
    When an underwriting department of a securities firm obtains securities through a firm commitment underwriting, the provisions of the preceding paragraph shall apply mutatis mutandis to the handling of those securities by the consulting services department and discretionary investment department of the securities firm until such time as all the procedures of the firm commitment underwriting have been completed in accordance with regulations.
Article 40     A securities firm accepting orders to trade securities shall not place the securities deposited by the customers under its custody. It shall handle the securities pursuant to the regulations of the centralized securities depository.
Article 41     A securities firm accepting orders to trade securities shall collect or deliver the funds or securities within the time limit for settlement.