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Article NO. Content

Title:

Rules Governing the Proprietary Trading of Foreign Bonds by Securities Firms  CH

Amended Date: 2018.11.12 
Article 5     A securities firm shall submit formal documentation to the Taipei Exchange (TPEx) and apply for approval before conducting proprietary trading of foreign bonds. In addition, an applicant shall meet the following requirements:
  1. The applicant must be a qualified securities-dealer.
  2. It must meet one of the following conditions:
    1. Its regulatory capital adequacy ratio may not have been below 150 percent in the last 6 months.
    2. In the case of a futures commission merchant concurrently operating securities business, its adjusted net capital ratio may not have been below 40 percent in any of the last 6 months.
    3. In the case of a bank head office or a bill dealer concurrently operating securities business, its capital adequacy ratio may not have been below 8 percent in the last 6 months.
    4. In the case of Chunghwa Post Co., Ltd., its net worth after final accounting for the preceding year is not less than NT$20 billion.
  3. The applicant must be free of any of the following:
    1. Penalty imposed under Article 66, subparagraph 1 of the Securities and Exchange Act or Article 100, paragraph 1, subparagraph 1 of the Futures Trading Act in the last 3 months.
    2. Penalty imposed under Article 66, subaragraph 2 of the Securities and Exchange Act or Article 100, paragraph 1, subparagraph 2 of the Futures Trading Act in the last 6 months.
    3. Penalty involving suspension of business activities imposed by the competent authority in the last year.
    4. Penalty involving partial revocation of business permission imposed by the competent authority in the last 2 years.
    5. Penalty imposed under the operating rules or bylaws of the Taipei Exchange, Taiwan Stock Exchange Corporation, or Taiwan Futures Exchange Corporation, involving the suspension or restriction of trading activities.
    Failure to meet subparagraph 3 of the previous paragraph may be disregarded if the securities firm has made specific corrections to the satisfaction of the competent authority.
    A securities firm may proceed to conduct proprietary trading of foreign bonds if the TPEx does not express any objection to its applications within 5 days from the day following the date the application documents are delivered to the TPEx.
     The term "adjusted net capital ratio" in paragraph 1, subparagraph 2 herein means the monthly simple arithmetic mean of the adjusted net capital of the futures commission merchant as a percent of the total margins required for uncovered positions of futures traders.
     For an offshore banking branch to apply to conduct proprietary trading of foreign bonds, its head office shall meet the requirements of paragraph 1, subparagraph 3.