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Relevant Laws

Title：Regulations Governing Responsible Persons and Associated Persons of Securities Firms (2022.10.28)
Article 2     The term "responsible person" as used in these Regulations shall be defined in accordance with Article 8 of the Company Act.
    The term "associated persons" as used in these Regulations means persons who engage in the following businesses for a securities firm:
  1. Securities investment analysis, internal auditing, self-auditing, legal compliance, or in-charge accountant.
  2. Liaison or execution of securities underwriting and trading.
  3. Proprietary securities trading, clearing and settlement, or agency for shareholder services.
  4. Account opening, credit searches, solicitation, recommendation, brokerage order taking, filing, clearing, settlement, or receipt, payment, and safekeeping of cash and stocks, in connection with securities trading.
  5. Margin purchases or short sales in securities trading.
  6. Derivatives trading.
  7. Risk management.
  8. Conducting other approved business.
    Responsible persons and associated persons of the overseas branch of a securities firm shall abide by the local laws and regulations governing securities in the country where they conduct business. With the exception of Article 12, Article 13, and Article 18, paragraph 1, these Regulations shall not apply.
Article 3     Associated persons of securities firms are classified into the following two categories in accordance with the complexity and degree of responsibility of their duties:
  1. Senior agent: A person who supervises a department or who is a responsible person of a securities firm's branch unit, or is engaged in investment analysis or internal auditing, as described in Article 8, paragraph 1.
  2. Agent: A person who engages in underwriting, proprietary trading, or brokerage trading of securities, or who is an internal auditor or an in-charge accountant, as described in the subparagraphs of paragraph 2 of the preceding article.
    Only a person who is trained and certified by the internal auditor training program of an institution accredited by the Financial Supervisory Commission (FSC) may engage in internal auditing as provided in subparagraph 2 of the preceding paragraph.
Article 4     Associated persons of a securities firm may not concurrently hold any position at another securities firm either domestically or in a foreign country. This, however, does not apply to legal compliance, internal auditors, risk management personnel, or in-charge accountant of the securities firm concurrently holding a position of the same nature at a securities affiliate enterprise in a foreign country.
    An affiliate enterprise as referred to in the preceding paragraph shall be governed by the Affiliated Enterprises chapter of the Company Act.
    The following associated persons of a securities firm may not engage in business beyond the scope for which they are registered, nor may their business be concurrently performed by associated persons, unless so prescribed in other laws or regulations:
  1. Associated persons engaged in proprietary trading of securities.
  2. Internal auditors.
  3. Risk management personnel.
    Persons engaged in the business of brokerage trading of securities, and persons charged with consulting in connection with asset allocation or financial planning or services in connection with the sale of financial products, may not concurrently handle services that involve account opening for securities trading, clearing and settlement, receipt, payment, and safekeeping of cash and stocks, margin purchases or short sales, underwriting, serving as in-charge accountant, or agency for shareholder services.
    In the case of a futures commission merchant that concurrently operates securities business, if any of its associated persons possesses the qualifications for both securities and futures business, then those an associated person, when engaging in the business of account opening, brokerage trading, proprietary trading, clearing and settlement, legal compliance, internal auditing, self-audit, risk management, and in-charge accountant within the scope for which the person is registered, may concurrently handle securities business and futures business of the same nature.
    In the case of a futures commission merchant that concurrently operates securities business, a managerial officer of the department that handles brokerage trading, proprietary trading, or clearing and settlement business, who furthermore meets the qualifications set out in Articles 8 and 10 herein, may concurrently serve as a managerial officer of the futures department that handles business of the same nature.
    Except as otherwise provided by law or regulation, the provisions of paragraph 3 and the preceding paragraph shall apply mutatis mutandis to financial institutions other than futures commission merchants that concurrently operate securities business.
    An agent of a securities firm shall neither execute nor concurrently engage in the business of a senior agent.
    A securities firm shall establish internal audit and control mechanisms for any concurrent holding of positions and concurrent handling of services by its associated persons, to ensure the effective execution of the associated person's principal duties and concurrently held duties or concurrently handled services, and for maintaining the normal business operations of the securities firm. The concurrent holding of positions and concurrent handling of services may not involve any conflict of interest or any violation of applicable securities regulations or internal control system provisions, and the rights and interests of customers and shareholders shall be protected.
Article 5     A senior agent of a securities firm shall have one of the following qualifications:
  1. Graduation from a college or university or above, and having been an agent of a securities institution for 3 years or more.
  2. Qualification as a securities investment analyst as prescribed in the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises.
  3. Having passed the securities firm senior agent exam held by the Securities and Futures Institute (hereinafter "SFI") at the request of the Taiwan Securities Association (hereinafter the "Securities Association").
  4. Being registered as a securities firm senior agent in accordance with these Regulations, or having obtained a certificate of qualification as a securities firm senior agent issued by the FSC.
  5. Currently serving as an agent of a securities institution, and having served 1 year or more as an agent before the June 18, 1991 amendment to these Regulations came into force, and further, after that amendment came into force, having served as an agent, cumulatively, for 5 years.
Article 6     An agent of a securities firm shall have one of the following qualifications:
  1. Qualification as a securities investment analyst as prescribed in the Regulations Governing Responsible Persons and Associated Persons of Securities Investment Consulting Enterprises.
  2. Having passed the securities firm agent exam held by the SFI at the request of the Securities Association.
  3. Being registered as a securities firm agent in accordance with these Regulations, or having obtained a certificate of qualification as a securities firm agent issued by the FSC.
Article 7     Any person who has obtained a certificate of qualification as a securities firm associated person issued by the FSC and requires re-issuance or replacement of the certificate shall file an application with the SFI.
    The preceding paragraph shall come into force from January 1, 1999.
Article 8     In a securities firm, qualification as a senior agent shall be required for the supervisory personnel of departments engaged in underwriting, proprietary trading, brokerage trading, clearing and settlement, internal auditing, shareholder services, and financial affairs. a branch unit of a securities firm, qualification as a senior agent shall be required for its responsible persons and the supervisory personnel of the brokerage trading and clearing and settlement departments. a securities firm concurrently operated by a financial institution, however, separate provisions of the FSC may be followed with respect to the supervisory personnel of internal auditing departments and financial affairs departments.
    In a foreign securities firm's branch unit within the ROC, with the exception of its responsible persons and the supervisory personnel of its financial affairs and shareholder services departments, qualification as a senior agent shall be required for the supervisory personnel of departments engaged in underwriting, proprietary trading, brokerage trading, clearing and settlement, and internal auditing.
Article 10     The supervisory personnel of the departments set forth in Article 8, paragraph 1, and the assistant general managers, deputy assistant general managers, and managers of those departments, or those who oversee those departments, and the responsible persons of securities firms' branch units, shall possess one of the following qualifications:
  1. Graduation from a local or foreign junior college recognized by the Ministry of Education, or an equivalent or higher degree, with 3 years or more of business work experience and a good performance record in a securities, futures, finance, or insurance institution.
  2. Four years or more of work experience and a good performance record at a securities institution.
  3. Six years or more of work experience, with a good performance record, in a professional field such as information, technology, law, e-commerce, or digital economy.
  4. Other academic or work qualifications demonstrating possession of professional knowledge of securities and operations and management experience that would enable sound and effective management of securities firm business.
    The chief internal auditor of an exchange-listed or OTC-listed securities firm or a securities subsidiary of a financial holding company, in addition to possessing one of the qualifications in the preceding paragraph, shall have an occupational rank equal to an assistant general manager or a position with equivalent duties, and may assume their position only after the candidate is reported to the FSC for review and found to be qualified.
    For a branch unit of a foreign securities firm within the ROC, the supervisory personnel of departments that engage in underwriting, proprietary trading, brokerage trading, clearing and settlement, and internal auditing shall possess the qualifications of the paragraph 1.
    The provisions of paragraph 1 shall apply mutatis mutandis to positions equivalent to assistant general manager, deputy assistant general manager, or manager under other laws or under the articles of incorporation of the securities firm.
Article 14     In the event of leave, suspension of work duties, or other cause of absence of a responsible person or associated person of a securities firm, the securities firm shall appoint a person with equivalent qualifications to act as a deputy.
    With regard to deputies referred to in the preceding paragraph, the securities firm shall record the reason, period, name of the acting deputy, and his or her duties in a special-purpose book for reference.
Article 15     Associated persons of a securities firm shall participate in pre-service and in-service training offered by an institution appointed by the FSC. A securities firm also may apply to conduct its own in-service training in accordance with the in-service training operation directions prescribed by the Securities Association.
    An associated person of a securities firm who is assuming the job for the first time, or who has resumed the job after an absence of 3 years, shall participate in pre-service training within 6 months after reporting for work. Currently employed personnel shall participate in in-service training once every 3 years.
    The FSC may specify the content and periods for the training described in the preceding paragraph according to actual needs.
Article 16     The FSC or the training institution shall issue a training certificate to associated persons who participate in and pass the pre-service or in-service training, and shall submit the training performance evaluation to the employer institution for reference regarding the evaluation, promotion, and assignment of work. The FSC or training institution may reward those who are outstanding in performance.
Article 17     The FSC or training institution shall cancel the registration of an associated person who fails to participate in pre-service or in-service training, or who fails the training and furthermore fails to pass retraining within 1 year.
Article 18     Responsible persons and associated persons of a securities firm shall conduct business in accordance with the principles of honesty and good faith.
    Except where otherwise provided by law or regulation, responsible persons and associated persons of a securities firm may not engage in the following conduct:
  1. Engaging in the trading of exchange-listed or OTC-listed stocks with information learned on the job for the purpose of obtaining speculative profit.
  2. Disclosing information regarding a customer order or other secrets learned as a result of the job, other than in response to inquiries made in accordance with laws or regulations.
  3. Accepting a customer's trading order with discretionary authority over the type, quantity, price, or purchase or sale of the securities.
  4. Trading securities with a guarantee to the customer of earning profits or with a promise of sharing profits.
  5. Trading securities under an agreement with the customer to jointly assume the losses or profits of the transaction.
  6. Accepting orders from customers to buy or sell securities and concurrently buying or selling the same securities for his or her own account on the opposite side of the trade.
  7. Subscribing or trading securities in the name of the customer or by using the customer's account.
  8. Subscribing or trading securities for the customer in the names of other persons or relatives.
  9. Borrowing or lending of money or securities to or from a customer, or acting as an intermediary for the borrowing or lending of money or securities to or from a customer.
  10. Fraud, deception, or other misleading behavior when engaging in underwriting, proprietary trading, or brokerage trading of securities.
  11. Safekeeping securities, cash, chops, or deposit books of customers, or misappropriating any of those things.
  12. Trading securities for a customer that has not entered into a brokerage contract;
  13. Trading securities other than in accordance with the particulars and instructions of the order placed by the customer.
  14. Providing a customer or unspecified persons with information indicating that the price of certain securities will rise or fall in order to solicit the trading of securities;
  15. Recommending trades in specific stocks to unspecified persons, except as necessary for purposes of securities underwriting.
  16. Accepting customer settlement by means of offsetting a purchase or sale of securities with a sale or purchase of securities of the same type through the same or a different account. However, this restriction shall not apply to settlement by mutually offsetting margin purchases and short sales in margin trading, nor shall it apply to accepting customer settlement by means of mutually offsetting an equal quantity of cash purchases and spot sales of the same security that have been executed through the same account on the same business day, when done in accordance with laws and regulations.
  17. Opening an account, or subscribing, trading, or settling securities as agent on behalf of another person, provided that this restriction does not apply if the responsible person or associated person is the statutory representative of the principal.
  18. Processing the opening of an account, or the subscription, trading, or settlement of securities, for a director, supervisor, or employee of the company on behalf of another person.
  19. Processing the opening of an account for a person other than the principal for whom the account is being opened. However, this rule does not apply if the FSC has provided otherwise.
  20. Processing an application for subscription, trading, or settlement of securities from a person who is not the customer or not an agent with a power of attorney from the customer.
  21. Accepting a trading order despite being aware that the customer is using undisclosed information of a public company that will have a material impact on the stock price of the company or being aware that the customer intends to manipulate the market.
  22. Any agreement between persons engaging in securities underwriting business and an issuing company or its relevant personnel for purposes of obtaining improper profit.
  23. Soliciting, acting as an intermediary for, or promoting unapproved securities or derivative products thereof.
  24. Other conduct in violation of securities laws or regulations or conduct prohibited by the rules prescribed by the FSC.
    Persons referred to in the preceding paragraph also may not engage in any conduct prohibited by securities laws and regulations when conducting their duties.
    The provisions of the two preceding paragraphs shall apply mutatis mutandis to other employees of a securities firm.
Article 19     If a responsible person or associated person of a securities firm is alleged to have violated a securities law or regulation or there is an inquiry regarding the performance of the person's duties, then that person shall appear before the FSC to explain, or submit to it a written report, within a period set by the FSC.
Article 20     The associated person of a securities firm shall be deemed to be acting under the authorization of the securities firm when engaging in the business under any subparagraph of Article 2, paragraph 2,.
Article 21     The FSC will reward or commend a responsible person or associated person of a securities firm for any of the following:
  1. Contribution of intellect and effort toward building securities market mechanisms, with distinguished results.
  2. Research or writing that contributes creative ideas to the development of the securities market or the implementation of securities business, when the ideas have been adopted and implemented.
  3. Reporting any illegal matter that is confirmed to be true.
  4. Service in the same securities firm for 15 consecutive years or longer with devotion to the job.
  5. Zealous work on behalf of the public interest and the exercise of team spirit, as proven through concrete achievements.
  6. Other achievements deserving of commendation.