Article NO. Content

Title:

Directions for the Conduct of Wealth Management Business by Securities Firms 

Amended Date: 2020.09.10 (Articles 6 amended,English version coming soon)
Current English version amended on 2015.01.21 
13     Working procedures adopted by a securities firm for "Know Your Customer" evaluating rules shall be tailored to the characteristics of each different by type of business, and shall at least include the following:
  1. Customer acceptance and account opening:
    1. Procedures for opening customer accounts and the minimum dollar amount and conditions required to enter into the business relationship, and the circumstances in which the securities firm may refuse to do business or to accept a customer. Stricter due diligence and approval procedures shall be in place for higher risk individuals of specific backgrounds or professions, and family members thereof.
    2. Procedures for building basic information on the customer, including customer identity and basic background information, customer credit information, wealth management needs and goals, and other information relating to the customer's credit standing, profession engaged in and source of assets (describe in detail the economic activities that produced the wealth), and verification of the information provided by the customer.
    3. In a situation where a customer authorizes another person to sign and open an account on his or her behalf, additional evaluation shall be conducted on such authorized representative and the beneficiary shall be identified.
  2. Evaluation of customer's investment capacity: Evaluation of a customer's investment capacity and acceptance of a customer's mandate shall, in addition to taking into consideration the information referred to in the preceding subparagraph, take the following information into overall consideration as well as the approval procedures for large transactions of over a certain dollar amount:
    1. The customer's fund utilization status and professional competence.
    2. The customer's investment attributes, understanding of risk, and risk tolerance.
    3. Suitability of customer services, suitable range of investment recommendations, or suitable transaction amounts.
  3. Updating of customer evaluation materials:
    1. The securities firm shall update customer information in a timely manner, and closely monitor any change in a customer's financial position.
    2. The evaluation of a customer's investment ability and the acceptance of transactions shall be reviewed and revised in light of any changes in a customer's information and other relevant supporting materials.
  4. Verification of the customer information and customer investment capacity evaluation: The securities firm shall designate personnel other than those involved in handling wealth management business, or other independent control personnel, to perform regular audits of the customer files for accuracy, consistency, and completeness.