After the commencement of business relating to custody and investment of funds on behalf of customers, if either of the following circumstances applies, a securities firm shall on its own initiative stop the operations of such business:
- If its credit rating falls below the eligibility condition under the application requirement.
- If its regulatory capital adequacy ratio falls below 150% for two consecutive months.
If a securities firm under either of the circumstances of the preceding paragraph does not stop the operations of the business contemplated herein, the TWSE shall notify the securities firm to promptly stop those operations.
A securities firm shall, on the next business day following its stop of business operations contemplated herein, transfer all customer funds held in custody in the cash management account to the account for book-entry transfer of securities and funds opened by each relevant customer for engaging in securities trading on the exchange or over-the-counter market, and shall within the next five business days close out all transactions in subject instruments already made through the cash management account and transfer the resultant proceeds to the account for book-entry transfer of securities and funds opened by each relevant customer for engaging in securities trading on the exchange or over-the-counter market.
If the securities firm stops the business operations contemplated herein, it shall promptly send a notice by mail to the TWSE to that effect and shall submit a regulatory filing to the TSEC on a daily basis reporting the progress and status of action taken under the preceding paragraph.
To apply to resume business operations relating to custody and investment of funds on behalf of customers, a securities firm shall submit an application to the TWSE when it has met the required eligibility conditions for both credit rating and, for three consecutive months, the regulatory capital adequacy ratio, and it may resume such business operations only when the application has been reviewed by the TWSE and then forwarded to and approved by the competent authority.
Article 5, paragraph 2 shall apply mutatis mutandis to a securities firm submitting a regulatory filing for the commencement of business for which it has received approval under the preceding paragraph.