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Article 2
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Under these Rules, reporting of the following unlawful activities is encouraged:
- Issuance
When any of the following circumstances applies to the responsible person or a related personnel of a TWSE listed company:
- Violation of Article 20, Paragraph 1, and Article 32, of the Securities and Exchange Act (the "Act") in that there are misrepresentations, frauds, or any other acts which are sufficient to mislead other persons during the public offering, issuing or private placement of securities.
- Violation of Article 20, Paragraph 2 of the Act in that the financial reports and financial an business documents filed or publicly disclosed according to law contain misrepresentations or nondisclosures.
- Violation of Article 171, Paragraph 1, Subparagraph 2 of the Act by causing the company to conduct transactions to its disadvantage and not in the normal course of operation, thus causing substantial damage to the company.
- Violation of Article 171, Paragraph 1, Subparagraph 3 of the Act by acting contrary to duties or misappropriating company assets, thus causing damage up to NT$5 million or more to the company.
- Violation of Article 174, Paragraph 1, Subparagraph 8 of the Act by loaning company funds to another person, using company assets to provide security or a guarantee for another person, or endorsing a negotiable instrument in violation of an act or regulation, or the articles of incorporation, or beyond the scope authorized by the board of directors, causing substantial damage to the company.
- Misappropriation of funds or defalcation of assets in violation of a law or regulation or the company's articles of incorporation or internal control procedures, where the violation is likely to materially affect the company's operation and shareholders' rights and interests.
- Trading
- Violation of Article 96 of the Act by engaging in the operation of business similar to that of a centralized securities exchange market or providing business premises or facilities for such proposes.
- Any of the following occurs on a centralized securities exchange market:
- Violation of Article 20, Paragraph 1 of the Act in that there are misrepresentations, frauds, or any other acts which are sufficient to mislead other persons during the trading of securities.
- Violation of Article 155, Paragraph 1 of the Act by failing to perform settlement, placing corresponding orders, speculating, consummating corresponding transactions, spreading rumors or false information, or manipulating the trading prices of securities.
- Short-swing trading in violation of Article 157 of the Act.
- Insider trading in violation of Article 157-1 of the Act.
- Frauds committed by a person posing as a representative of the competent authority or TWSE in violation of Article 210 (forging private documents) and Article 339 (fraudulence) of the Criminal Code or other criminal laws.
- Violation of other criminal laws where the facts of the offense involve a centralized securities exchange market.
- Securities service enterprises
- Any of the following acts by a securities firm or its responsible person or employee:
- Violation of a law or regulation governing securities trading or an administrative disposition under a law or regulation.
- Violation of any provision of the Operating Rules, the Rules Governing Brokerage Contracts Of Securities Brokers of the Taiwan Stock Exchange Corporation (TWSE), or other TWSE rules or bylaws.
- Breach of any of the contract for use of the central securities exchange market, contract for computer connection, or contract for supply and use of trading information entered into with the TWSE.
- Trading activities in breach of the principle of good faith, where sufficient to cause damage to others.
- Operation of securities business without permission, in violation of Articles 18 and 44 of the Act.
- A circumstance where a responsible person or employee of a securities investment trust and consulting enterprise engages in the same type of securities trading, accepts property, or misuses fund assets or discretionary investment accounts for himself/herself or others, using information he/she becomes aware of in the performance of duties, in violation of securities investment trust and consulting laws and regulations or other criminal laws where the rights and interests of fund investors or discretionary investment customers are affected
- Breach by an information service provider of a contract for supply and use of trading information.
- Unauthorized performance of securities investment consulting services in violation of Articles 6 and 107 of the Securities Investment Trust and Consulting Act, with the fact of crime committed involving the centralized securities exchange market.
Violations of the short-swing trading provisions in Article 157 of the Act as referred to in item 2, subparagraph 2 of the preceding paragraph shall be limited to those by an insider holding shares through a nominee.
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