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Relevant Laws

Title：Regulations Governing the Acquisition and Disposal of Assets by Public Companies (2022.01.28)
Article 20     A public company engaging in derivatives trading shall adopt the following risk management measures:
  1. Risk management shall address credit, market, liquidity, cash flow, operational, and legal risks.
  2. Personnel engaged in derivatives trading may not serve concurrently in other operations such as confirmation and settlement.
  3. Risk measurement, monitoring, and control personnel shall be assigned to a different department that the personnel in the preceding subparagraph and shall report to the board of directors or senior management personnel with no responsibility for trading or position decision-making.
  4. Derivatives trading positions held shall be evaluated at least once per week; however, positions for hedge trades required by business shall be evaluated at least twice per month. Evaluation reports shall be submitted to senior management personnel authorized by the board of directors.
  5. Other important risk management measures.
Article 21     Where a public company engaging in derivatives trading, its board of directors shall faithfully supervise and manage such trading in accordance with the following principles:
  1. Designate senior management personnel to pay continuous attention to monitoring and controlling derivatives trading risk.
  2. Periodically evaluate whether derivatives trading performance is consistent with established operational strategy and whether the risk undertaken is within the company's permitted scope of tolerance.
    Senior management personnel authorized by the board of directors shall manage derivatives trading in accordance with the following principles:
  1. Periodically evaluate the risk management measures currently employed are appropriate and are faithfully conducted in accordance with these Regulations and the procedures for engaging in derivatives trading formulated by the company.
  2. When irregular circumstances are found in the course of supervising trading and profit-loss circumstances, appropriate measures shall be adopted and a report immediately made to the board of directors; where a company has independent directors, an independent director shall be present at the meeting and express an opinion.
    A company shall report to the soonest meeting of the board of directors after it authorizes the relevant personnel to handle derivates trading in accordance with its Procedures for Engaging in Derivatives Trading.