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Article 31-2
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A securities firm trading foreign securities for its own account or engaging in foreign derivative financial product transactions shall adopt handling procedures, which shall be implemented after approval by the board of directors, as shall any amendments thereto.<br/>The handling procedures under the preceding paragraph shall include all the following items:<br/>1. Trading principles and policies: shall include types of underlyings traded, trading or hedging strategies, setting of position limits.<br/>2. Trading procedures: shall include hierarchy of responsibility, trading process, division of powers and duties of relevant departments, procedures for preservation of trading records.<br/>3. Risk management measures: shall include risk management scope, risk management procedures, methods and frequency of position evaluation, production and review of position evaluation reports, irregularity reports and procedures for follow-up surveillance.<br/>4. Audit procedures: shall include internal audit and self-inspection, frequency and scope of audits, audit reports and procedures for correction and follow-up of deficiencies.
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