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Article 1     These Rules are made in accordance with Article 32 of the Statute Governing Relationship with Hong Kong and Macau.
Article 2     The branch institution referred to in these Rules shall include representative office and branch office; the subsidiary shall refer to a company of which 50% or more of its issued shares or paid-in capital is held separately or jointly by a Taiwanese securities or futures institution.
Article 3     A Taiwanese securities or futures institution filing an application with the Ministry of Finance for permission to establish a branch institution or subsidiary in Hong Kong or Macau shall have the following qualifications:
  1. its director(s), supervisor(s) or manager(s) has not been subject to a discharge sanction made by the Securities and Futures Commission (SFC) of the Ministry of Finance for the most recent year;
  2. it has not been subject to a business suspension sanction issued by the SFC;
  3. the approval for its branch institution to operate business has not been revoked or invalidated by the SFC for the most recent three years;
  4. it has not been sanctioned by the stock exchange, futures exchange, futures clearance exchange or R.O.C. OTC Securities Exchange (the "OTC Exchange") for restriction or suspension of sales according to their by-laws within the most recent one year; and
  5. its financial structure meets the provisions of the laws and regulations governing securities and futures.
Article 4     A Taiwanese securities or futures institution applying for permission to establish branch institution or subsidiary in Hong Kong or Macau shall submit the following documents to the MOF for approval:
  1. Its Articles of Incorporation or equivalent documentation;
  2. business by-laws (not required for establishment of a subsidiary);
  3. investment plan;
  4. minutes of the board of directors meeting or minutes of the shareholders meeting;
  5. financial statements for the most recent quarter duly audited or reviewed by a certified public accountant; and
  6. other documents that the MOF may require.
    The investment plan referred to in the preceding Item 3 shall include the following:
  1. investment plan: including investment purposes and the expected effects, source of capital, and the utilization plan, business plan, capital recovery plan;
  2. business operation principles: including the place for establishment, source of capital, business operation, business items and business operation principles;
  3. the organization and the responsibilities of each department: including company organization chart or the organization chart of the holding company and its group, and division and responsibilities of each department;
  4. personnel planning: including personnel deployment, training and management;
  5. overview of floor area and facilities: including overview for floor arrangement and major facilities; and
  6. financial projections for the incoming three years: including operating expenses and the financial projections for the incoming three years, and charts for explanations.
    After establishment of a branch institution or subsidiary in Hong Kong or Macau, if a Taiwanese securities of futures institution has any of the following conditions , it shall be reported to the MOF for recordation:
  1. where there is a change or removal of the company name, responsible person, business place, or business items;
  2. where the subsidiary transfers its capital contribution.
Article 5     A Taiwanese securities or futures institution shall not establish a branch institution or subsidiary in Hong Kong or Macau without MOF's approval.
    A securities institution applying for permission for establishment but having entered an agreement for the usage of the centralized securities trading market with the Taiwan Stock Exchange Corporation shall have its application transmitted to the MOF for approval through the Taiwan Stock Exchange Corporation; a securities firm having merely entered into an agreement with the OTC Exchange for OTC trading shall have its application transmitted to the MOF through the OTC Exchange; a securities firm having entered into none of the above agreements shall have its application transmitted to the MOF through the Securities Dealers Association.
    A futures firm applying for permission in accordance with the provision of Paragraph 1 shall have its application transmitted to the MOF through the Futures Exchange.
Article 6     The capital contributed by a Taiwanese securities or futures institution applying for permission to establish a branch institution or subsidiary in Hong Kong or Macau shall be limited to the following:
  1. foreign exchange;
  2. net profits or other benefits received from outward investments;
  3. compensations or other benefits received from outward technical cooperation projects.
    After outward remittance of the above capital contribution, the Taiwanese securities or futures institution shall, upon incorporation registration or amendment registration of the Hong Kong or Macau branch institution or subsidiary, submit relevant documents and its annual financial statements to the competent authority for recordation.
Article 7     The subsidiary established in Hong Kong or Macau by a Taiwanese securities or futures institution shall be limited to operate securities or futures business allowed by the local laws and regulations, but it may concurrently operate relevant securities, futures or financial business if the local laws provide otherwise.
Article 8     Where a subsidiary established in Hong Kong or Macau by a subsidiary of a Taiwanese securities or futures institution makes reinvestments in local securities or futures institutions, it shall be processed in accordance with the provisions of these Rules.
Article 9     Where the application by a Taiwanese securities or futures institution to establish a branch institution or subsidiary in Hong Kong or Macau has evidence showing that it is possible to hinder the wholesome development of securities or futures industry or is unable to comply with the requirements of the government policies, the MOF may refuse to grant its approval; where approval has been granted, the MOF may invalidate its approval if it is necessary; where untrue information is entered in an application or untrue documents are provided for application, the MOF may revoke its approval.
Article 10     The amount of investment to be made by a Taiwanese securities or futures institution applying for permission to establish a branch institution or subsidiary in Hong Kong or Macau shall be processed in accordance with the provisions of the SFC.
    The MOF may depending on the local economic and financial situations and the securities and futures market conditions limit the establishment of a branch institution or subsidiary in Hong Kong or Macau by a Taiwanese securities or futures institution.
Article 11     Where a branch institution or subsidiary has been established in Hong Kong or Macau with the SFC approval before the effectiveness of these Rules, it is unnecessary to file another application for establishment, but it shall observe the provisions of these Rules.
Article 12     These Rules shall become effective on the date of implementation of this Statute, provided, however, that if there shall have the conditions specified in the proviso of Article 62 of this Statute, these Rules shall be enforced on the day when this Statute is implemented in whole or in part.
    The amendments to these Rules shall become effective on the date of promulgation.