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A securities firm applying to conduct the business under point 2, paragraph 1, subparagraph 2 shall meet the below-listed conditions and qualifications, and obtain the approval of the FSC:
- Regulatory capital adequacy ratio: The regulatory capital adequacy ratio reported for the half-year prior to the application date exceeds 150 percent.
- The financial condition meets one of the following conditions:
- The CPA-audited and attested financial report for the most recent period states net worth of not less than NT$10 billion and not lower than the paid-in capital.
- The CPA-audited and attested financial report for the most recent period states total assets of not less than NT$20 billion, net worth of not less than NT$6 billion and not less than paid-in capital, and a profit in each of the past three years.
- A holding company that directly or indirectly holds 100 percent of the shares of the securities firm, or a financial holding company that has a controlling interest in the securities firm, meets the conditions in one of the two preceding subparagraphs, and issues an unconditional and irrevocable guaranty securing the liabilities of the securities firm.
- Legal Compliance
- Has not, within the past three months, been sanctioned under Article 66, subparagraph 1 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 1 of the Futures Trading Act.
- Has not, within the past six months, been sanctioned under Article 66, subparagraph 2 of the Securities and Exchange Act or under Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act.
- Has not, within the past one year, had a sanction imposed by the FSC to suspend its business.
- Has not, within the past two years, had a sanction imposed by the FSC to void any part of its business permit.
- Has not, within the past one year, had a sanction of suspended or restricted trading imposed on it by the TWSE, TPEx, or TAIFEX, under the operating rules or corporate thereof.
- Has not, within the past 6 months, been given an official reprimand or ordered to take corrective action under Article 44 of the Trust Enterprise Act.
- Has not, within the past 2 years, been sanctioned under Article 44, subparagraph 1, 2, or 3 of the Trust Enterprise Act.
- Has established a legal compliance unit and a person in charge thereof pursuant to the Regulations Governing Internal Control.
After a securities firm has been approved by the FSC to conduct the business under the preceding paragraph, if its regulatory capital adequacy ratio or net worth for two consecutive months fail to meet the requirements of the preceding paragraph, it shall suspend conducting the business under the preceding paragraph, and may resume it only after its regulatory capital adequacy ratio or net worth have met the requirements for three consecutive months, and it has reported to and received approval from the FSC.
A securities firm failing to meet a condition in subparagraph 3 of paragraph 1 may be exempted from restriction under that subparagraph if has already corrected the infraction and provides specific documentary proof thereof.
An ROC branch of a foreign securities firm applying to conduct business under paragraph 1 shall comply with paragraph 1, subparagraphs 3 and 4, and the regulatory capital adequacy ratio, financial condition, and long-term credit rating of its head office shall comply respectively with subparagraphs 1, and 2 of paragraph 1, and Attachment 3.
A securities firm that has been approved to conduct wealth management business by means of trusts and that furthermore meets certain conditions, after reporting for review by the TWSE and forwarding to and approval by the FSC, may be exempted from the restrictions set out in Point 24, paragraph 2 hereof with respect to the utilization of trust assets of high-asset customers in offshore structured products as set out in Article 6-2 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities, and with respect to the credit rating of foreign bonds in which it entrusts investment by high-asset customers or by high net worth corporate investors as defined in Article 3, paragraph 3 of the Regulations Governing Offshore Structured Products.
The provisions of Article 3-1 and Articles 6-1 to 6-4 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities shall apply mutatis mutandis to the following matters under the preceding paragraph: the definitions of "a securities firm that…meets certain conditions" and "high-asset customers," the conditions for and review of the offshore structured products, the content on which the securities firm shall agree with or obtain written confirmation from the domestic agent with respect to the entrusted investment, the reporting requirements, the establishment of a product suitability system, and the product review panel system.
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