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Article 1     These Organizational Rules are promulgated pursuant to Article 38 and Article 55 of the Futures Trading Act, Article 26 of the Rules Governing Futures Clearing Houses, and Article 36 of the Articles of Incorporation of the Taiwan Futures Exchange Corporation (hereinafter, "this Corporation").
Article 2     The Disciplinary Committee (hereinafter, the "Committee") is charged with the following duties:
  1. Overseeing futures commission merchants and clearing members in the observance of laws and regulations and fulfillment of the spirit of self-regulation.
  2. Making recommendations regarding the following matters:
    1. Handling by this Corporation of suspected violations of relevant market rules of this Corporation by futures commission merchants, clearing members, and responsible persons or employees thereof.
    2. Handling by this Corporation of suspected violations of the Futures Trading Act and relevant laws and regulations by futures commission merchants, clearing members, and responsible persons or employees thereof.
    3. Handling by this Corporation of reports of unlawful market activity.
    4. Other matters relating to discipline of futures commission merchants and clearing members.
Article 3     The Committee shall comprise nine members, nominated by the following procedures and appointed following ratification by the Board of Directors of this Corporation:
  1. Three representatives of futures commission merchants having clearing member status that trade on this Corporation's Exchange and three alternates shall be nominated after their election by and from among a pool of representatives to which every futures commission merchant having clearing member status shall appoint one of its personnel.
  2. Three experts/scholars representing the public interest and three of the personnel of this Corporation, to be proposed by the president and nominated by the chairman of the Board of Directors.
    The representatives and alternates nominated after election pursuant to subparagraph 1 of the preceding paragraph shall not be replaced by other appointees.
Article 3-1     The company to which a futures commission merchant representative belongs shall not have undergone any of the following events within the past one year:
  1. Been the subject of a disposition imposed by the Competent Authority pursuant to Article 66, subparagraphs 1 to 4 of the Securities and Exchange Act or Article 100, paragraph 1, subparagraphs 1 to 4 of the Futures Trading Act.
  2. Had its trading rights terminated or restricted by the Taiwan Stock Exchange Corporation or the Gretai Securities Market pursuant to their rules.
  3. Had its trading rights suspended or terminated or its market usage contract terminated by this Corporation pursuant to its rules.
  4. Had its clearing and settlement operations suspended or terminated by this Corporation pursuant to its rules, or have in any way been unable to sustain compliance with clearing membership standards.
    A futures commission merchant representative shall not have received any disposition from the competent authority pursuant to the Securities and Exchange Act or the Futures Trading Act and shall be free of any event specified in any subparagraph of paragraph 1 of Article 28 of the Futures Trading Act, and shall further possess one of the following qualifications:
  1. Have at least five years of work experience in administrative regulatory work in the futures, securities, or finance field(s) and have held a position at the recommended-appointment rank or higher or an equivalent position;
  2. Have at least five years of work experience in futures, securities, or financial institution(s), and have held the position of manager or higher.
  3. Have at least three years of work experience in futures, securities, or financial institution(s), and have held the position of vice president (assistant general manager) or higher.
  4. Have at least two years of work experience in futures, securities, or financial institution(s), and have held the position of president (general manager) or higher.
  5. Have at least two years of work experience in a futures institution(s), and have held the position of futures institution manager or higher or an equivalent position.
  6. Have graduated from a domestic or foreign institution at the junior college or higher level or have an equivalent degree, and, as supported by factual evidence, possess professional know-how related to futures and be capable of soundly and effectively operating futures business.
Article 3-2     The experts/scholars representing the public interest appointed by this Corporation refers to impartial citizens with expertise in any of the fields of accounting and auditing, finance, business administration, law, securities, or futures. Such persons shall possess one of the following qualifications:
  1. Be a scholar in a domestic educational institution at the level of junior college or higher, and hold the position of associate professor or higher.
  2. Have at least three years of work experience in futures, securities, or financial institution(s), and have held the position of vice president (assistant general manager) or higher.
  3. Have at least two years of work experience in futures, securities, or financial institution(s), and have held the position of president (general manager) or higher.
  4. Be a certified public accountant or lawyer who has practiced in a domestic joint firm for at least five years.
  5. Be a professional with special expertise, supported by factual evidence, in matters such as futures, securities, or finance market trends.
Article 4     Committee members serve terms of one year. However, this restriction shall not apply if a change in the term has been approved by the Board of Directors and reported to the competent authority for recordation.
    Committee members may be reappointed twice to consecutive terms. The number of reappointed representatives shall not exceed one-half of the number of Committee members referred to in each subparagraph of paragraph 1 of Article 3; provided, this restriction shall not apply to the representative of this Corporation.
    When there is a vacancy in the Committee, the vacant Committee member seat shall be succeeded to by an originally elected alternate. If there are no originally elected alternates or insufficient alternates, then a successor shall be separately elected. The method of election shall be as set forth in Article 3. The filling of a vacant Committee member seat shall not contravene the provisions of the preceding paragraph; the term of the succeeding member shall be the remainder of the predecessor's term.
    Upon conclusion of a Committee member's term, he or she shall continue to perform his or her duties until the succeeding Committee member has taken up duty.
Article 5     The Committee shall have one convenor, to be elected by and from among the Committee members.
    The convenor shall serve a term of the same length as the Committee members, and shall not serve a consecutive term.
Article 6     The first Committee meeting of each term shall be held within 15 days from the election, after the Chairman of the Board of Directors has convened the Committee members to elect a convenor by and from among them. However, in case the election of members was conducted prior to the expiration of the term of office of the members of the preceding term, the first meeting of the newly elected members shall be convened within 15 days after expiration of the term of office of the members of the preceding term.
    The Committee shall meet once each month, and shall be convened by the convenor; provided, the convenor may convene the Committee as necessary at any time. If two or more Committee members jointly execute a written request to convene the Committee, the convenor shall do so.
    When the convenor or a Committee member is unable to exercise his/her duties for some reason, he/she may designate one of the Committee members to do so on his/her behalf; such designation shall be made in writing.
Article 7     The managing department will compile proposal materials and prepare an agenda. After it has been approved by the convenor, it shall be delivered to all Committee members two days prior to the meeting.
    When the Committee meets to review cases, this Corporation's managing department that submitted the proposal shall dispatch personnel to attend and give reports.
    Committee operating rules shall be separately prescribed.
Article 8     A Committee member who has a direct or indirect interest in any matter in connection with a Committee recommendation, where sufficient to affect his or her independence, shall recuse him/herself and shall not join in the voting.
Article 9     Resolutions of the Committee shall be adopted by a majority of the members present at a meeting attended by at least half of the members.
Article 10     Resolutions adopted by the Committee shall be recorded in the minutes of the meeting and affixed with the signature or seal of the chairman of the meeting, and shall be distributed to all Committee members and the Board of Directors [of this Corporation] within 15 days of the close of the meeting.
    The minutes of the meeting shall record the date (year, month, day) and place of the meeting, the name of the chairman, and the names of the members present, and shall give a summary of the essential points of the proceedings and state the results.
Article 11     Committee members shall maintain an impartial and objective viewpoint and a disinterested and independent spirit in the exercise of their duties. Except in making inquiries conducted in accordance with laws and regulations, they shall not externally disclose any information learned in the course of exercising their duties.
    The position of Committee member is an unpaid position, except for the distribution of traveling expenses for meetings attended.
Article 12     This Corporation shall immediately report to the Board of Directors for discharge from duty any Committee member to whom any of the following events applies during such member's term:
  1. Inability to maintain qualification in conformity with Article 3-1 or violation of Article 8 or Article 11.
  2. Demanding, agreeing to accept, or accepting a bribe or other improper benefit in connection with actions relating to the duties of the Committee.
  3. Other event factually sufficient to deem the member incompetent.
Article 13     These Organizational Rules shall be implemented after passage by the Board of Directors [of this Corporation] and ratification by the Competent Authority; the same shall apply to any amendments hereto.