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Article 25
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A securities firm that provides structured instrument trading services to customers other than professional institutional investors and high net worth juristic person investors shall impose the following controls on its marketing procedures:
- The securities firm shall indicate, in a prominent typeface in the notice to customers and in the prospectus, the degree of product risk for the given structured instrument, based on the assessment of the product's characteristics pursuant to Article 24, subparagraph 2.
- A securities firm that provides structured instrument trading services to customers shall fulfill its duty of disclosure. For a product targeted for sale to 10 or more persons and furthermore having identical terms and conditions of transaction and a duration in excess of 6 months, the securities firm shall provide ordinary customers with a review period of not less than 7 days to review the related contracts of the structured instrument, and a review period of not less than 3 days for professional customers to do the same, unless the professional customer provides a signed statement expressly indicating that the customer has fully reviewed the product. When such a period of review is not required for a given product, the fact that there is no review period for the given product shall be clearly stated in the product's prospectus.
- A securities firm that provides structured instrument trading services to ordinary customers shall read aloud or use electronic equipment to explain to the customer the important content of the notice to customers, and shall retain an audio recording as a record or use electronic equipment to retain a trail of the relevant procedures carried out. However, in the case of a professional customer, it may instead deliver the information in writing or by means of an audiovisual medium.
- A securities firm that provides structured instrument trading services to a natural person customer shall assign dedicated personnel to explain the products. If the products provided are non-principal-protected products, the securities firm shall use audio or video recording means to retain a record of the content of the explanatory procedures carried out by the designated personnel. Once it has done so, the securities firm will subsequently be exempted from assigning dedicated personnel to give explanations regarding trading of the same type of structured instrument.
- When a securities firm undertakes a structured instrument trade with a customer that is a juristic person, then in subsequent trades with the same customer for the same type of structured instrument, the securities firm may be exempt, if the customer signs a written consent to exemption for that specific transaction, from following the requirements of subparagraph 3.
- The "same type of structured instrument" as used in the preceding two subparagraphs means that the product's structure, denominating currency, and linked underlying asset are all completely the same.
The matters to be handled pursuant to the preceding paragraph regarding the notice to customers, the required disclosures in the product prospectus, and the method for audio recording, video recording, or for retention using electronic equipment, will be formulated by the TPEx and publicly announced after submission to and approval by the competent authority.
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