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Title: Audit Content and Disposition Standards for Securities Subscription Operations of Securities Firms
Date: 2000.10.27 ( Announced )
Date: 2000.10.27 ( Amended )

Article Content

 
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┌───────┬───────┬───────┬──────┐
│Audit Items   │Audit Basis   │Disposition   │Provisions  │
│              │              │Standards     │with respect│
│              │              │              │to the      │
│              │              │              │procedure   │
├───────┼───────┼───────┼──────┤
│1.            │Article 57 of │(i)           │Shall take  │
│              │the Taiwan    │Suspend the   │effect after│
│(i) Whether or│Securities    │businesss     │having been │
│not a broker  │Association   │supervisor    │submitted to│
│accepting     │Rules         │from executing│and approved│
│securities    │Governing Un  │his or her    │by the      │
│subscription  │derwriting and│duties for a  │competent   │
│orders from a │Resale of     │period of     │authority.  │
│customer has  │Securities by │three months. │Subsequent  │
│opened a      │Securities    │              │amendments  │
│special       │Firms         │(ii) Suspend  │thereto     │
│securities    │              │the business  │shall be    │
│account with  │              │supervisor    │effected in │
│the           │              │from executing│the same    │
│subscriber's  │              │his or her    │manner.     │
│bank.         │              │duties for a  │            │
│              │              │period of     │            │
│(ii) Whether  │              │three months. │            │
│or not funds  │              │              │            │
│in said       │              │              │            │
│account have  │              │              │            │
│been used for │              │              │            │
│other         │              │              │            │
│purposes.     │              │              │            │
├───────┼───────┼───────┼──────┤
│2.            │Article 2,    │(i)           │            │
│(i) Whether or│paragraph 2 of│Suspend the   │            │
│not           │The Procedures│businesss     │            │
│the securities│Related to the│supervisor    │            │
│firm has      │Allocation of │from executing│            │
│assigned      │Securities by │his or her    │            │
│registered    │Public Su     │duties for a  │            │
│qualified     │bscription by │period of one │            │
│associated    │Securities    │month; and    │            │
│person to     │Firms.        │suspend the   │            │
│accept        │              │unregi        │            │
│subscription  │              │gistered      │            │
│orders from   │              │personnel     │            │
│customers who │              │handling the  │            │
│have opened an│              │subscr        │            │
│account.      │              │cription from │            │
│              │              │executing his │            │
│(ii) Whether  │              │or her duties.│            │
│or not        │              │              │            │
│subscription  │              │(ii) Suspend  │            │
│orders are    │              │the business  │            │
│serially      │              │supervisor    │            │
│numbered.     │              │from executing│            │
│              │              │his or her    │            │
│(iii) Whether │              │duties for a  │            │
│or not records│              │period of one │            │
│of online     │              │month; and    │            │
│subscription  │              │suspend the   │            │
│orders are    │              │personnel     │            │
│printed out in│              │handling the  │            │
│sequential    │              │subscription  │            │
│order. Whether│              │from executing│            │
│or not such   │              │his or her    │            │
│records are   │              │duties for a  │            │
│kept in the   │              │period of     │            │
│same manner   │              │three months. │            │
│and for the   │              │              │            │
│same period as│              │(iii) Suspend │            │
│subscription  │              │the business  │            │
│orders placed │              │supervisor    │            │
│by other      │              │from executing│            │
│methods.      │              │his or her    │            │
│              │              │duties for a  │            │
│              │              │period of one │            │
│              │              │month; and    │            │
│              │              │suspend the   │            │
│              │              │personnel     │            │
│              │              │handling the  │            │
│              │              │subscription  │            │
│              │              │from executing│            │
│              │              │his or her    │            │
│              │              │duties for a  │            │
│              │              │period of     │            │
│              │              │three months. │            │
├───────┼───────┼───────┼──────┤
│3. Whether or │Article 58 of │(i)           │            │
│not the       │the Taiwan    │Suspend the   │            │
│securities    │Securities    │businesss     │            │
│firm accepting│Association   │supervisor    │            │
│subscription  │Rules         │from executing│            │
│orders from a │Governing Un  │his or her    │            │
│subscriber has│derwriting and│duties for a  │            │
│verified and  │Resale of     │period of one │            │
│cancelled     │Securities by │month; and    │            │
│accepted      │Securities    │suspend the   │            │
│orders if any │Firms and     │personnel     │            │
│of the        │Article 2,    │handling the  │            │
│following     │paragraph 3 of│subscr        │            │
│applies       │the Taiwan    │cription from │            │
│barring the   │Securities    │executing his │            │
│subscriber    │Association   │or her duties │            │
│from placing  │Operating     │for a period  │            │
│orders:       │Rules of      │of three      │            │
│              │Public Subsc  │months.       │            │
│(i) Has not   │iption.       │              │            │
│opened a      │              │(ii) Suspend  │            │
│trading       │              │the business  │            │
│account,      │              │supervisor    │            │
│electronic    │              │from executing│            │
│transfer      │              │his or her    │            │
│custodial     │              │duties for a  │            │
│account, or   │              │period of one │            │
│central       │              │month; and    │            │
│depository    │              │suspend the   │            │
│account with  │              │personnel     │            │
│the securities│              │handling the  │            │
│firm with whom│              │subscription  │            │
│it has placed │              │from executing│            │
│subscription  │              │his or her    │            │
│orders.       │              │duties for a  │            │
│              │              │period of     │            │
│(ii) Has not  │              │three months. │            │
│signed a      │              │              │            │
│consignment   │              │(iii) Suspend │            │
│contract with │              │the business  │            │
│the bank      │              │supervisor    │            │
│designated by │              │from executing│            │
│the securities│              │his or her    │            │
│firm regarding│              │duties for a  │            │
│debiting of   │              │period of one │            │
│funds for     │              │month; and    │            │
│public        │              │suspend the   │            │
│subscription. │              │personnel     │            │
│              │              │handling the  │            │
│(iii) The     │              │subscription  │            │
│balance in the│              │from executing│            │
│subscriber's  │              │his or her    │            │
│bank account  │              │duties for a  │            │
│and account   │              │period of     │            │
│for payment by│              │three months. │            │
│wire transfer │              │              │            │
│is less than  │              │(iv)          │            │
│the sum of the│              │(1) Warning to│            │
│subscription  │              │    the       │            │
│processing    │              │    personnel │            │
│fees and      │              │    handling  │            │
│subscription  │              │    the subscr│            │
│payment.      │              │    cription  │            │
│              │              │    where info│            │
│(iv) Has not  │              │    nformation│            │
│filled in     │              │    submitted │            │
│fully or      │              │    is incompl│            │
│truthfully the│              │    mplete.   │            │
│required items│              │(2) Suspend   │            │
│in a          │              │    the       │            │
│subscription  │              │    business s│            │
│order (those  │              │    supervisor│            │
│placing orders│              │    from      │            │
│by telephone  │              │    executing │            │
│or on the     │              │    his or her│            │
│Internet need │              │    duties for│            │
│neither sign  │              │    a period  │            │
│nor seal the  │              │    of one    │            │
│order forms). │              │    month, and│            │
│              │              │    suspend   │            │
│(v) Has       │              │    the       │            │
│accepted      │              │    personnel │            │
│orders which a│              │    handling  │            │
│subscriber    │              │    the subscr│            │
│places in or  │              │    cription  │            │
│assuming the  │              │    from      │            │
│name of       │              │    executing │            │
│another       │              │    his or her│            │
│person.       │              │    duties for│            │
│              │              │    a period  │            │
│              │              │    of three  │            │
│              │              │    months, if│            │
│              │              │    false info│            │
│              │              │    nformation│            │
│              │              │    is submitt│            │
│              │              │    mitted.   │            │
│              │              │              │            │
│              │              │(v)Depending  │            │
│              │              │   on the     │            │
│              │              │   severity of│            │
│              │              │   the vio    │            │
│              │              │   violation, │            │
│              │              │   suspend the│            │
│              │              │   subscr     │            │
│              │              │   cription   │            │
│              │              │   business of│            │
│              │              │   the sec    │            │
│              │              │   securities │            │
│              │              │   firm for a │            │
│              │              │   period of  │            │
│              │              │   one to two │            │
│              │              │   months and │            │
│              │              │   suspend the│            │
│              │              │   business s │            │
│              │              │   supervisor │            │
│              │              │   and        │            │
│              │              │   personnel  │            │
│              │              │   handling   │            │
│              │              │   the subscr │            │
│              │              │   cription   │            │
│              │              │   from       │            │
│              │              │   executing  │            │
│              │              │   his or her │            │
│              │              │   duties for │            │
│              │              │   a period of│            │
│              │              │   one to     │            │
│              │              │   three      │            │
│              │              │   months, and│            │
│              │              │   may impose │            │
│              │              │   a more     │            │
│              │              │   severe     │            │
│              │              │   penalty if │            │
│              │              │   recurrence │            │
│              │              │   of the     │            │
│              │              │   above is   │            │
│              │              │   found.     │            │
├───────┼───────┼───────┼──────┤
│4. Whether or │Article 70 of │Suspend the   │            │
│not after the │the Taiwan    │business      │            │
│public        │Securities    │supervisor    │            │
│announcement  │Association   │from executing│            │
│of the lottery│Rules         │his or her    │            │
│winners,      │Governing Un  │duties for a  │            │
│general       │derwriting and│period of     │            │
│subscription  │Resale of     │three months. │            │
│information is│Securities by │              │            │
│kept for 30   │Securities    │              │            │
│days and      │Firms.        │              │            │
│information   │              │              │            │
│regarding     │              │              │            │
│unqualified   │              │              │            │
│cases or      │              │              │            │
│lottery       │              │              │            │
│winners is    │              │              │            │
│kept for 90   │              │              │            │
│days for      │              │              │            │
│reference.    │              │              │            │
├───────┼───────┼───────┼──────┤
│5. Whether or │Article 2,    │Warning to the│            │
│not the       │item 5 of the │business      │            │
│securities    │Operating     │supervisor.   │            │
│firm has made │Rules of      │              │            │
│available on  │Public Subsc  │              │            │
│the trading   │ription and   │              │            │
│floor         │Allotment by  │              │            │
│information up│Securities    │              │            │
│to the        │Firms.        │              │            │
│previous day  │              │              │            │
│on qualified  │              │              │            │
│and           │              │              │            │
│disqualified  │              │              │            │
│subscriptions │              │              │            │
│to subscribers│              │              │            │
│for perusal   │              │              │            │
│(consultation)│              │              │            │
│or provided   │              │              │            │
│voice or      │              │              │            │
│computer      │              │              │            │
│inquiry       │              │              │            │
│service.      │              │              │            │
├───────┼───────┼───────┼──────┤
│6. A          │Article 2,    │Suspend the   │            │
│securities    │item 3 of the │subscription  │            │
│firm shall    │Operating     │business of   │            │
│verify whether│Rules of      │the securities│            │
│the           │Public Subsc  │firm until    │            │
│corresponding │ription by    │such time as  │            │
│bank is able  │Securities    │corrections   │            │
│to provide,   │Firms         │have been     │            │
│pursuant to   │              │made; suspend │            │
│the           │              │the business  │            │
│consignment   │              │supervisor    │            │
│contract      │              │from executing│            │
│executed with │              │his or her    │            │
│the customer, │              │duties for a  │            │
│records       │              │period of     │            │
│evidencing    │              │three months. │            │
│that the      │              │              │            │
│subscriber has│              │              │            │
│adequate bank │              │              │            │
│deposits on   │              │              │            │
│the day of    │              │              │            │
│subscription  │              │              │            │
│to cover      │              │              │            │
│subscription  │              │              │            │
│processing    │              │              │            │
│fees and      │              │              │            │
│subscription  │              │              │            │
│payments.     │              │              │            │
└───────┴───────┴───────┴──────┘