A securities firm that retains customers' settlement funds in the Settlement Account with customers' consent shall conform to the following conditions and qualification requirements except where, in the event of non-compliance with Subparagraph 2, it has made specific improvement and obtained the approval of the competent authority:
Prior to retaining customers' settlement funds, the securities firm shall submit the following documents with the commencement date stated to the TWSE, with a copy to the TPEx. The TWSE is deemed to agree to the retention if it does not indicate any disagreement within 10 business days:
- The net value specified in the latest financial reports duly audited or approved by the CPA may not be lower than the paid-in capital.
- Legal compliance:
- Not having been subject to the disposition in Article 66, Subparagraph 1 of the Securities and Exchange Act or in Article 100, Paragraph 1, Subparagraph 1 of the Futures Exchange Act in the last three months.
- Not having been subject to the disposition in Article 66, Subparagraph 2 of the Securities and Exchange Act or in Article 100, Paragraph 1, Subparagraph 2 of the Futures Exchange Act in the last six months.
- Not having been subject to the disposition of the competent authority in the form of business termination in the past year.
- Not having been subject to the disposition of the competent authority in the form of revocation or nullification of the business permit in the last two years.
- Has established a legal compliance unit and supervisor in accordance with the internal control system establishment guidelines of various service enterprises in the securities and futures markets.
- The regulatory capital adequacy ratio reported in the half-year period prior to application has been over 150%.
Any addition of or change in the information in Subparagraph 4 of the preceding paragraph after the securities firm begins to retain customers' settlement funds shall immediately be reported to the TWSE in writing, with a copy provided to the TPEx.
- Minutes of the directors' meeting where it is resolved that the securities firm may retain customers' settlement funds.
- A written description of the internal control system through which the proposal for the securities firm to retain customers' settlement funds is raised to and approved by the board of directors.
- Contract for the opening of a special account for the securities firm to retain customers' settlement funds.
- Ledger account contract executed between the securities firm and each bank.
- Latest CPA-audited or -approved financial reports.
- Documents relevant to legal compliance.
- Regulatory capital adequacy ratio reported in the last half-year period.
- Affidavit that the bank receiving and paying the retained settlement funds of customers satisfies all qualification requirements set forth in the preceding article.