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Article 4
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A securities firm conducting financial derivatives business shall formulate a management strategy and operational guidelines as follows, and shall submit them, and any subsequent amendments thereto, to the board of directors for approval:
- The management strategy for conducting financial derivatives business.
- The operational guidelines shall include the following particulars:
- Business principles and policies.
- Operating procedures.
- Internal control system.
- Methods of periodic evaluation.
- Methods of accounting treatment.
- Internal audit system.
- Risk management measures.
- Measures for protecting customer rights and interests.
In response to changes in products and market conditions, the board of directors shall review the management strategy and operational guidelines referred to in the preceding paragraph, and shall evaluate whether performance is consistent with established operational strategy and whether the risk assumed is within the securities firm's permitted scope of tolerance; such review shall be made at least once every year.
When a foreign securities firm establishes a branch unit in the ROC to engage in financial derivatives business, the duties to be performed by the board of directors under the preceding paragraph may be performed by persons authorized by the securities firm's head office.
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