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Article 12
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A securities firm that operates only the business of proprietary trading of security tokens shall, within 3 months after the end of each fiscal year, file with the TPEx and publicly announce its annual financial report audited and attested by CPAs. The auditing and attestation of the aforesaid financial report shall be performed by practicing CPAs of a joint accounting firm approved by the FSC in accordance with the Regulations Governing Approval of Certified Public Accountants to Audit and Attest to the Financial Reports of Public Companies.
A securities firm that operates only the business of proprietary trading of security tokens shall, by the 7th day of each month, file with the TPEx in the prescribed format its monthly accounting summary and income statement for the preceding month.
The periods for which a securities firm keeps its accounting reports, account books, and accounting documents shall comply with the Business Entity Accounting Act, and additionally shall comply with the Required Periods for Preservation of Accounting Statements and Vouchers by Securities Firms Trading on the TPEx adopted by the Taipei Exchange.
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Article 15
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In the case of a securities firm that operates only the business of proprietary trading of security tokens, its capital may not be loaned to others nor used for other purposes. The utilization of its capital shall be limited to the following:
- NTD dollar bank deposits.
- Purchase of government bonds or financial bonds.
- Purchase of treasury bills, negotiable certificates of deposit, or commercial paper.
- Other uses approved by the TPEx.
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Article 16
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A securities firm that operates only the business of proprietary trading of security tokens may not make any equity investment in other securities, futures, financial or other enterprises.
A securities firm may invest in security tokens issued on its trading platform, and shall comply with the following requirements:
- Except when it buys back, under Article 36, paragraph 1 of these Rules, security tokens issued itself, the total cost of its holdings in the security tokens of any single issuer may not exceed the limit set out in Article 19 of the Regulations Governing Securities Firms.
- It shall adopt a trading policy and related procedures, which shall cover operational procedures for trade analysis, decision-making, execution, change, and review, and incorporate them into its internal control system.
A securities firm may not invest in security tokens that were not issued on its trading platform.
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Article 18
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A securities firm operating the business of proprietary trading of security tokens shall conduct business in accordance with the principles of honesty and good faith.
A securities firm operating the business of proprietary trading of security tokens may not engage in any of the following conduct:
- Failing to duly fulfill its duty of due diligence when issuing security tokens for an issuer.
- Agreeing to or providing any specific interest or sharing of losses, or providing any judgment regarding whether a certain security token will rise or fall in price, or providing any investment recommendation, or providing investment consulting service, to induce investors to trade.
- Misappropriating security tokens or funds owned by a customer or temporarily kept under the custody of the securities firm in the course of business.
- Any agreement between the securities firm or any insider thereof and the issuer or relevant personnel thereof for purposes of improper profit.
- Any serving, by the securities firm or any insider thereof, in a position such as a director, supervisor, or managerial officer of an issuer that issues security tokens on the securities firm's trading platform; however, this rule does not apply in the case of security tokens issued by the securities firm itself on its trading platform.
- Concealing or omitting important financial or business information of an issuer that issues security tokens on its trading platform.
- Arranging for the issuance of security tokens for an issuer through any channel other than the securities firm's trading platform.
- Keeping custody of security tokens that are not issued or not traded through price negotiation on its trading platform.
- Concealing or making a false entry regarding information on any changes in security tokens.
- Any other matter injurious to the rights and interests of investors or in violation of any relevant law or regulation.
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Article 22
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When the securities firm applies to the TPEx to establish or relocate its place of business, and within 3 months after the end of each fiscal year, it shall have an evaluation report issued by a CPA on the information systems and security control operations in accordance with the Principles for Information System and Security Control Operation Evaluation Reports Issued by Certified Public Accountants, as published by the TPEx.
The content of the evaluation report under the preceding paragraph shall at least include the qualifications of the evaluator, scope of the evaluation, deficiencies found in the evaluation, severity of deficiencies, types of deficiencies, description of associated risks, specific recommendations for corrections, and the results of related exercises. Furthermore, the securities firm shall have its internal audit unit carry out follow-up review of the correction of the deficiencies. The aforementioned report and related documents including those regarding correction of the deficiencies shall be kept for at least 2 years.
When the securities firm engages the CPA to handle the procedures under paragraph 1, the contract for the engagement shall specify that the competent authority or the TPEx, when necessary, may request the CPA to provide explanations or to hand over the CPA's working papers from the evaluation report for review, and the CPA must comply with such requests.
To ensure the privacy and security of data and maintain the accuracy of data transmission, exchange, or processing, the TPEx when necessary may require the securities firm to raise its information system standards and strengthen its security control procedures.
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Article 33
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An issuer may ffer security tokens on a single trading platform only, and the cumulative amount of offerings by it may not exceed NT$30 million.
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Article 34
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Following the first time that a securities firm accepts an application for issuance of security tokens for an issuer or issues security tokens itself, after 6 months has elapsed from the day that trading of that issue of security tokens begins, and provided that there has been no material violation of any relevant provision of these Rules during that period, the securities firm may again accept an application for issuance of security tokens or issue security tokens itself. Furthermore, the cumulative amount of offerings by the securities firm on its trading platform may not exceed NT$200 million.
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Article 40
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If any of the following circumstances applies to an issuer, the securities firm shall suspend the trading of its security tokens on the trading platform:
- The issuer's application documents, information, or explanations contain any misrepresentation or any important fact is omitted.
- The issuer commits a material violation of law or regulation or these Rules.
- The issuer materially breaches its contract with the securities firm.
- The issuer fails to file an annual financial report, or the CPA attesting the filed financial report issues a disclaimer of opinion or an adverse opinion in the audit report.
- Any other circumstance under which the TPEx or the securities firm deems it necessary to suspend the trading of the issuer's security tokens on the trading platform.
Where trading of security tokens is to be suspended under the preceding paragraph, the securities firm shall promptly make a public announcement that the trading of the security tokens will be suspended beginning from the 5th business day following the announcement date.
Where trading of a security token is suspended due to occurrence of an event in any subparagraph of paragraph 1, the issuer may, upon extinction of the cause and where furthermore no cause under any other subparagraph thereof exists, submit relevant supporting documents to apply for resumption of trading. Upon examining such documents and finding them accurate, the securities firm shall promptly publicly announce that trading of the security tokens will resume from the business day next following the day the announcement is made.
If any of the following events applies to an issuer, the securities firm shall promptly make a public announcement that the trading of its security tokens on the trading platform will be terminated beginning from the 40th day following the announcement date:
- Trading of the security tokens has been suspended under paragraph 1 for over 3 months, and the cause(s) of the suspension, which need not be limited to a cause under a single subparagraph, has not been extinguished.
- The issuer's corporate registration is voided or revoked by a competent authority, or the issuer is dissolved by a competent authority.
- The issuer files with a court for bankruptcy or reorganization.
- The quantity of security tokens issued and outstanding is lower than 10 percent of the originally issued quantity,
- Any other circumstance under which the TPEx or the securities firm deems it necessary to terminate the trading of issuer's security tokens on the trading platform.
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Article 55
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If a securities firm is in any of the following circumstances, the TPEx may notify it to make supplementation or correction within a time limit, and in addition may impose a penalty of not more than NT$100,000:
- Violation of Articles 5 to 11, paragraph 3 of Article 12, Article 14, paragraph 2 of Article 16, Article 19, Article 20, Article 23, Article 24, paragraph 1 of Article 30, paragraph 1 or 2 of Article 31, Article 32, paragraph 2 or 3 of Article 35, paragraph 3 or 4 of Article 36, paragraph 2 of Article 37, paragraph 1 or 2 of Article 39, paragraphs 4 to 6 of Article 41, Articles 42 to 44, or Articles 46 to 53.
- Failure to confirm or control the limit on the amount purchased and balance held by a professional investor who is a natural person in accordance with paragraph 3 of Article 31 or Article 45.
- Failure to submit, by the 7th day of each month, the monthly accounting summary and income statement for the preceding month in accordance with paragraph 2 of Article 12, or failure to file by the required deadline a summary of the data relevant to the security tokens that it has issued for an issuer or on its own in accordance with Article 13, or failure to provide information to the TPEx, a CPA designated by the TPEx, or the centralized securities depositary enterprise by a required deadline.
- Violation of any other provision of these Rules or other relevant requirements.
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