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Amended Article

Title:

Taiwan Stock Exchange Corporation Review and Assessment Standards for Internal Control and Internal Audits of Applications by Securities Firms for Conducting Specific Business Operations  CH

Amended Date: 2007.01.18 
Categories: Market Supervision > Regulation of Securities Firms
Article 4     After the securities firm applying for specific business operations in accordance with Article 2, Paragraph 1 submits the application to the TWSE, the TWSE shall review and assess according to the standards set out in the preceding article whether the securities firm's internal control and internal audit records are good and whether its internal control system is sound and effective.
    If a securities firm fails to obtain approval for conducting special business due to its failure to satisfy the condition in Subparagraph 1 of the previous article and reapplies after making improvement, such that less than one year has passed since the decision disallowing its initial application, the TWSE determine that the securities firm meets the standard in Subparagraph 1 of the previous article if said firm:
  1. appoints, pursuant to the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets, a certified public accountant to conduct a special audit of its internal control system at least addressing the deficiencies that caused the initial application to be unapproved and produce an unqualified opinion and a audit report stating that the internal control system for the application of special business operations is sound and effective; or
  2. produces a statement that the deficiencies that caused the initial application to be disallowed have been mitigated and documents and related information proving the process of mitigation, and the TWSE finds upon verification that the deficiencies have been shown to be mitigated.
    If a securities firm fails to obtain approval for conducting special business operations due to its failure to satisfy the condition in Subparagraph 2 of the previous article and reapplies after making improvement, such that less than one year has passed since the routine audit upon which its initial application was unapproved, the TWSE may request the securities firm to provide the scores in the last audit of the internal auditing procedures of all its branches. If all the branches score 75 points or above, the TWSE may elect to audit the internal audit procedures of either the head office or any branch of the securities firm and use the score thus obtained as the determining score in Subparagraph 2 of the previous article.
    In regard to the same specific business operation of the same securities firm, the TWSE may conduct only one audit of the internal audit procedures of the head office or branch pursuant to the preceding paragraph.