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When a securities firm adopts working procedures for business promotion and risk management of customer accounts, such procedures shall include at least:
- The securities firm shall adopt standard operating procedures for conducting the promotion of wealth management business, to ensure that the workflow and related documents are compliant with the applicable legal requirements, and shall cover such matters as product explanations, risk disclosure, and fee itemizations and standards (including products sold on consignment).
- When selling products, the securities firm shall provide a risk disclosure statement to the customer, and shall ask the customer to provide written confirmation that he or she understands the product risks.
- The securities firm shall prepare and provide to the customer a handbook on customer rights and interests, and shall include information on how the customer can express comments and lodge complaints, the mechanism whereby the securities firm responds to and handles customer comments, and other information related to the safeguarding of customer rights and interests.
- If a securities firm conducting wealth management business recommends or sells to a customer any product issued by another institution, it shall be liable for any dispute arising in connection with any promotion of false products or failure to properly disclose associated risk. This liability shall be fully disclosed to customers in the handbook on customer rights and interests referred to in subparagraph (3).
- The securities firm shall establish transaction control mechanisms to avoid providing to customers products or services exceeding their credit limits, financial capacity, or suitable investment scope, and to avoid unauthorized business activities or improper consulting activities by wealth managers.
- For important documents and reports that the securities firm provides to the customer, it shall establish an appropriate control mechanism and indicate the number of years information is to be kept on file, to ensure the suitability and accuracy of the content. Where there is an information change or data error of material significance, the securities firm shall promptly notify the customer and handle the matter appropriately.
- The securities firm shall adopt appropriate working rules, and closely monitor, evaluate, and report to the customer any changes in a customer's asset allocation and investment portfolio.
- The securities firm shall establish a system for reporting to the customer regularly and from time to time. Apart from the report items set out in subparagraphs (6) and (7), which are mandatory, the content, scope, manner, and frequency of other related reports shall be set by mutual agreement between the two parties.
- When selling a financial product, the securities firm shall give comprehensive consideration to the term and risk level of the financial product, and to the customer's age, experience in the trading of financial products, and degree of risk tolerance.
- When conducting wealth management business, the securities firm shall keep records of the content of its important communications with the customer with respect to matters such as its introduction of the financial products and risk disclosures and shall keep the records on file for inspection.
For securities firms conducting wealth management business, guidelines with respect to the conduct of financial product sales, sales advertising and business promotional activities shall be drawn up by the Securities Association and reported to the FSC for review and approval.
Where a securities firm conducts wealth management business by means of trusts, its advertising, soliciting, and business promotional activities for the trust business shall be governed by the Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises (hereinafter,"Regulations Governing the Conclusion of Contract by Trust Enterprises".
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