• Font Size:
  • S
  • M
  • L

Relevant Laws

Title:Operating Rules of the Taiwan Stock Exchange Corporation (2020.05.05)
Article 30     Securities firms shall not supply false or inaccurate information in any of their reports to the TWSE.
Article 75     Securities brokers conducting brokerage trading of securities shall comply with the following provisions:
  1. When accepting an account opening for processing, a securities broker shall first enter into a brokerage contract with the principal, recognizing these Operating Rules, the TWSE Regulations Governing Brokerage Contracts of Securities Brokers (hereinafter, the "Regulations Governing Brokerage Contracts"), public announcements, circular letters, and the regulations of the Taiwan Securities Association as integral parts of the contract, and specify the date of account opening and the following matters:
    1. For a principal that is a natural person: name, gender, age, occupation, address, telephone number, and National Identity Card number; if there is an agent, the agent's name and National Identity Card number.
    2. For a principal that is a juristic person: the juristic person's name, address, government uniform invoice number, phone number, representative, and authorized person.
  2. For a principal that is a person of no legal capacity or limited legal capacity, or who has been declared by a court to be placed under assistance, his/her statutory agent, guardian, or assistant shall sign/seal the brokerage contract and indicate the kinship relationship. All business vouchers for brokerage trading of securities, subscription of securities, and settlement matters shall be signed/sealed by the statutory agent, guardian, or assistant.
  3. For a principal that is a juristic person, such juristic person and its representative shall sign/seal the brokerage contract, and a power of attorney shall be provided. All business vouchers for brokerage trading of securities and settlement matters shall be signed/sealed by the authorized person.
  4. A director, supervisor, or employee of a securities firm may not open an account, engage in the brokerage trading of securities, purchase securities, or handle settlement-related matters on behalf of any other person, unless he/she is the statutory agent or guardian of the principal.
  5. When the principal or his/her/its statutory agent or authorized person signs the brokerage contract, a seal specimen card or signature card of the principal or the principal's statutory agent or authorized person shall be kept, and that same seal or signature shall be used for any orders placed in person for brokerage trading or subscription of securities and for the procedures for carrying out settlement, provided when the principal cancels an authorization, he/she/it may do so by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent; where the Taiwan agent and custodial institution of an offshore overseas Chinese or foreign national are the same person, the agent account-opening and settlement seal of the custodian institution may be taken as the specimen seal.
  6. When a principal or his/her/its statutory agent authorizes an agent to engage in brokerage trading, purchase securities or process settlement-related matters, a power of attorney shall be issued, and the seal specimen or signature card of such agent shall be kept for handling, provided when the principal cancels his/her/its authorization, he/she/it may do so according to the proviso in the preceding subparagraph .
  7. Where settlement of the principal's payment and securities is to be made by the book entry method, and where a letter of consent is signed, signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, information relevant to the brokerage trade shall be given to the principal and a confirmation record shall be kept on file. Where, pursuant to law or regulation, the principal may effect receipt or payment of the purchase price by account transfer (or remittance), signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the brokerage trade to the principal and the custodian institution to be the agent for trade settlement, and shall keep a confirmation record on file.
  8. A securities broker may not use computer-set groups in handling securities trading orders. The order ticket and trading order record shall record information pursuant to Articles 4 and 12 of the Regulations Governing Information to be Published in Order Tickets, Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving Orders to Buy or Sell Securities of the Competent Authority, and be prepared in accordance with the following provisions:
    1. Trading through non-electronic media:
      1. For trading orders placed in person: the principal or its agent or authorized person that places trading orders for securities in person shall fill out an order ticket and affix their signature/seal thereto.
      2. For trading orders placed via telephone, in writing, by telegraph, or by another method approved by the TWSE: if the principal, or its agent or authorized person places an order for trading of securities by one of the above methods, the associated person handling the order at the securities broker that accepts the order shall fill out the order ticket by hand or electronic means; with the exception of orders placed by telephone, the letter, telegram, or relevant documents shall be attached to the back of the order ticket.
      3. Where the securities broker fills out the order ticket by electronic means, if delegation of responsibility for the execution of the trading order can be implemented and the employee handling that trading order confirmed, order tickets need not be printed out individually, provided that they shall be stored using a non-revisable, non-erasable electronic medium.
    2. Trading through electronic media:
    3. Means that a principal uses voice mail, the Internet, dedicated line, closed private network, or other electronic means approved by the TWSE to place a trading order, which the securities broker shall handle in accordance with the following provisions:
      1. Where a trading order is placed through an electronic medium, the securities broker need not prepare or fill out an order ticket on the client's behalf.
      2. If a trading order is placed via the Internet, the internet protocol (IP) address and electronic signature thereof shall be recorded. If a trading order is placed via voice mail, through coordination with the telecommunications institution the caller-end number display function shall be enabled, and the number of the incoming call recorded.
    4. When a securities broker accepts a trading order through non-electronic media, and uses electronic media to fill out the order ticket, or accepts a trading order through electronic media, it shall print trading order records in chronological order, and after close of market, have them signed/sealed by the brokerage personnel handling the order. However, if the storage operations of the trading order record meet the following requirements, the trading order record need not be printed out and signed:
      1. A non-revisable, non-erasable electronic storage medium is used, and preparation of trading order records is completed on the day the trade is executed.
      2. Comprehensive indexing and management procedures are set up.
      3. Management responsibility is assigned to designated personnel, and electronic data files can be converted into print format at any time.
  9. The brokerage trading of securities, order confirmation, and execution report between a securities broker and a principal shall be conducted in accordance with the following provisions:
    1. Trading through non-electronic media:
    2. The execution report may be given by electronic mail, telephone, facsimile, text message, voice message, or the Internet.
    3. Trading through electronic media:
    4. The transmission of the brokerage order for purchase/sale of securities, order confirmation, execution report, and other electronic documents between a securities broker and the principal who uses an electronic trading method other than voice mail shall carry the electronic signature issued by the institution providing vouchers for identification and confirmation; however, this restriction shall not apply in the following circumstances:
      1. Order confirmation and execution report are conducted by telephone, facsimile, text message, voice menu system, or the Internet.
      2. The conditions for exemption are met under the Operational Guidelines for the Implementation of Direct Market Access by Futures Brokers.
  10. The order ticket referred to in subparagraph 8 shall be numbered in the order it is received. Its format and particulars to be recorded shall be as prescribed by the Competent Authority. When there is any dispute in connection with a trade, the order ticket shall be kept until the dispute is resolved. When there is no dispute, order tickets shall be kept in accordance with the following provisions:
    1. For unexecuted trades: destroy after one week; however, if an order ticket is filled out by hand, it shall be stamped "Unexecuted".
    2. For executed trades: if there is no dispute, keep for 5 years together with other business vouchers.
  11. If, after an order from a principal to trade within 30 minutes prior to the commencement of market trading hours or within a certain period of time prior to the close of market trading hours as accepted by a securities broker is reported to the TWSE, there occurs a massive revocation or amendment to the report, the TWSE may request the securities broker to collect in advance from its principal, upon accepting the trading order, the funds or securities, margin for margin purchases, or margin for short sales.
Article 83     A securities broker shall keep complete and true records and vouchers when receiving or delivering securities or payments in connection with brokerage trading.
    The vouchers referred to in the preceding paragraph shall include receipts for funds and securities collected in advance, vouchers on securities delivered, and trade reports. The format thereof and the particulars to be entered therein shall conform to the regulations prescribed by the Competent Authority. Where a financial institution concurrently engages in the business of a securities broker and has opened specific accounts for depositing funds which can be verified, it need not use trade reports.
    A securities broker shall handle the receipt of securities or funds from its principals or delivery of securities or funds to its principals referred to in paragraph 1 of this Article by book-entry through the central securities depository accounts opened by its principals or through the deposit accounts opened by its principals with financial institutions designated by the securities broker, except under any of the following circumstances:
  1. Where a securities investment trust fund, venture capital enterprises invested by the National Development Fund of the Executive Yuan, insurance enterprise, offshore overseas Chinese or foreign national, or an overseas Chinese or foreign national or mainland area investor who has converted overseas corporate bonds held by him into stock or has converted overseas depositary receipts held by him into the underlying securities, has a deposit account opened by the custodian institution on behalf thereof, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account.
  2. Fund collection or payment operations of centralized segregated trust asset accounts under the management of a trust enterprise that has the status of a central depository participant may be carried out by means of transfer (remittance).
  3. Where a depositary institution of overseas depositary receipts has been engaged by its principal to redeem the overseas depositary receipts and sell the stock, it may receive the proceeds thereof by way of account transfer (or remittance) through the deposit account maintained at the custodian institution.
  4. Where a principal places engages a securities investment consulting enterprise or a SITE to conduct discretionary securities trading, the principal may open and maintain a deposit account at the custodian institution, and the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account. When processing trade settlement, it is prohibited to transfer payment funds or securities between separate discretionary investment accounts of the same principal.
  5. If a domestic bank or insurance company obtains a rating of twA- or higher from the Taiwan Ratings Corporation, or its rating by a credit rating institution approved or recognized by the Competent Authority meets or exceeds the qualification requirements of the Taiwan Ratings Corporation's twA- rating, its receipt and payment of purchase prices may be effected by account transfer (or remittance) during the period for which the aforementioned rating is valid.
  6. If government agencies conduct securities trading settlement through deposit accounts of such institutions in accordance with laws and regulations, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such accounts.
  7. If a principal agrees to keep settlement money in dedicated accounts for settlement with a securities firm, an arrangement may be made with the securities firm to have the receipt and payment of the purchase prices be effected by account transfer (or remittance) through the principal's own deposit accounts.
Article 89     A securities broker and its branch offices shall not engage in the following activities:
  1. Offset purchase orders against sales orders for the same securities in whole or in part in private off-market trading.
  2. Engage in matched-order trading with another securities firm or firms outside the Exchange.
  3. Trade securities not listed by the TWSE, without the approval of the Competent Authority.
Article 90     A securities broker may not violate brokerage contract when conducting brokerage trading. In the event that a securities broker breaches the brokerage contract, the principal may report the matter to the TWSE.
    Any claim by the principal against the clearing and settlement fund deposited with the TWSE by a securities broker that arises out of breach of contract by the securities broker in brokered market trades shall have the second highest priority after that of the TWSE.
    The principal may request the TWSE for payment from the clearing and settlement fund deposited with the TWSE by its contracted securities broker only if it has obtained the consent of the securities broker or a final adjudication of execution or of an arbitral award.
Article 96     A securities dealer shall not directly or indirectly accept orders from others to trade securities on the Exchange.
Article 97     A securities dealer may subscribe stock or corporate bonds of a company. With the exception of such subscriptions, any proprietary trading of listed securities by a securities dealer shall be done on the Exchange only. Unless otherwise approved by the Competent Authority, a securities dealer shall not place orders with securities brokers to trade on its behalf.
Article 142     Where a securities firm commits any of the following acts, the TWSE may temporarily halt trading, in whole or in part, of its dealing or brokerage business or its business premises and report to the Competent Authority:
  1. violation of Article 25, paragraph 2 by evading or refusing the inspection or the inquires of personnel sent by the TWSE.
  2. violation of the settlement obligation specified in Article 113, paragraph 1.
  3. its net worth is less than one-half of its paid-in capital referred to in Article 28-1, paragraph 2 for 6 consecutive months.
  4. regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after 3 months.
  5. violation of the provisions of these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
    The TWSE may resume its trading status if the cause of the circumstance under subparagraph 1, 3, 4, or 5 of the preceding paragraph ceases to exist.
    Where trading by any securities firm halted by the TWSE in accordance with paragraph 1, subparagraph 2, the number of days for which its trading is halted may be used to offset against the number of days for which its trading shall be suspended pursuant to Article 140, paragraph 1.
Article 142     Where a securities firm commits any of the following acts, the TWSE may temporarily halt trading, in whole or in part, of its dealing or brokerage business or its business premises and report to the Competent Authority:
  1. violation of Article 25, paragraph 2 by evading or refusing the inspection or the inquires of personnel sent by the TWSE.
  2. violation of the settlement obligation specified in Article 113, paragraph 1.
  3. its net worth is less than one-half of its paid-in capital referred to in Article 28-1, paragraph 2 for 6 consecutive months.
  4. regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after 3 months.
  5. violation of the provisions of these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
    The TWSE may resume its trading status if the cause of the circumstance under subparagraph 1, 3, 4, or 5 of the preceding paragraph ceases to exist.
    Where trading by any securities firm halted by the TWSE in accordance with paragraph 1, subparagraph 2, the number of days for which its trading is halted may be used to offset against the number of days for which its trading shall be suspended pursuant to Article 140, paragraph 1.