| Title： |
GreTai Securities Market Regulations Governing Over-the-Counter Trading of Financial Derivatives by Securities Firms(2012.11.23) |
| Date： |
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Article 5
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"Financial derivatives," as used in these Regulations, means forward contracts, options contracts, or swaps, or combinations of two or more of the above, or hybrid contracts that also include fixed-income products, whose value, in conformity with regulations or common practice on domestic or foreign OTC markets, is derived from stocks, interest rates, currencies, indexes, commodities, credit, or other interests.
Except where otherwise provided in these Regulations, the financial derivatives of the preceding paragraph may not be linked to any of the following underlying products:
- Securities privately placed domestically or abroad.
- Securities issued overseas by domestic enterprises or certificates of beneficial interest issued overseas by domestic securities investment trust enterprises.
- Any Taiwan stock index compiled by a domestic or foreign institution and related financial commodities, provided that this restriction shall not apply to an index compiled by the GTSM or the Taiwan Stock Exchange Corporation, either singly or in cooperation.
- Securities of Mainland Area securities markets.
A securities firm that conducts financial derivative business that involves foreign exchange business shall apply to the Central Bank for permission for any portion of the business that involves an inward or outward remittance of funds.
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Article 29
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As used in these Regulations, "structured instrument" means a hybrid contract combining features of fixed-income and financial derivatives products.
The scope of eligible linked underlying assets of structured instruments is given in Appendix 3.
The duration of a structured instrument transaction, from the initial transaction date to the date the contract matures, shall be a maximum of 10 years.
Where the structured instruments sold by a securities firm are linked to the publicly offered certificates of beneficial interest of a securities investment trust fund, consent from the securities investment trust enterprise (SITE) shall be obtained prior to the sale. When the sales staff recommend or sell products to investors, relevant documents involving description of the fund shall comply with the Code of Conduct for Members of the Securities Investment Trust and Consulting Association of the ROC and Their Sub-distributors Governing the Advertising and Business Activities of Securities Investment Consulting Enterprises. An explanation shall be given to non-institutional investors that these products are not funds.
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Article 42
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As used in these Regulations, "equity derivatives product" refers to a financial derivatives product whose value is derived from stocks, stock indexes, or exchange-traded funds.
The subject of an equity derivatives transaction between a securities firm and its trading counterparty must be one of the stocks, stock indexes, or ETFs given in Appendix 3 of these Regulations, which provides a list of eligible linked underlying assets of structured instruments handled by securities firms.
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