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1     To protect the rights and interests of futures traders, these Guidelines shall be complied with when an introducing broker is appointed by a futures commission merchant (FCM) to handle pre-account opening procedures on the FCM's behalf outside of the place of business. Matters not provided for herein shall be governed by futures laws and regulations and the internal control systems of the FCM and the introducing broker.
2     When an FCM appoints an introducing broker to conduct pre-account opening procedures on its behalf outside of the place of business, the FCM and the introducing broker shall enter into an agreement setting out the rights and obligations of the parties. The contract shall stipulate at least the following matters:
  1. The methods and procedures by which the FCM-appointed introducing broker will conduct pre-account opening procedures on behalf of the FCM.
  2. The mechanism that the introducing broker provides to enable principals to confirm the identity of futures associated persons.
  3. The provision that when a futures introducing broker assigns personnel to conduct the business contemplated herein, the operations may be jointly conducted by a staff member responsible for futures account opening and a futures associated person responsible for brokerage trading business; or may be conducted by a staff member responsible for futures account opening who is outside of the place of business, with a futures associated person responsible for brokerage trading business participating from inside the place of business through simultaneous video conference; or may be conducted by having the principal issue a written statement agreeing that the introducing broker may use electronic means to explain the contract content, futures trading procedures, and risk disclosures, and having the staff member responsible for futures account opening handle the operations related to identity verification outside of the place of business.
  4. The method by which the introducing broker will make telephone calls to the principal to confirm the account opening.
  5. If the introducing broker is liable for damages for injury incurred to a futures trader or any third person through any willful or negligent act or omission by the introducing broker in performing pre-account opening procedures on the FCM's behalf outside of the place of business, the appointing FCM shall bear the same liability as if the injury were caused by its own willful or negligent act or omission.
    The appointing FCM may not enter into any agreement with the introducing broker in advance to waive the liability referred to in subparagraph 5 of the preceding paragraph.
3     When an FCM appoints an introducing broker to conduct pre-account opening procedures on the FCM's behalf outside of the place of business, the FCM and the introducing broker shall additionally include clauses to the following effect in the brokerage agreement that they enter into with the futures trader:
  1. It shall be made known to the future trader that the FCM has appointed the introducing broker to conduct the pre-account opening procedures on the FCM's behalf outside of the place of business and that it is the introducing broker that is assigning personnel to do so in accordance with these Guidelines.
  2. If the introducing broker is liable for damages for any injury incurred through any willful or negligent act or omission by the introducing broker in conducting pre-account opening procedures on the FCM's behalf outside of the place of business, the appointing FCM shall bear the same liability as if the injury were caused by its own willful or negligent act or omission.
  3. Any other matters specified in the agreement entered into between the introducing broker and the appointing FCM under the preceding point, that involve the rights or interests of futures traders.
4     An FCM appointing an introducing broker to conduct pre-account opening procedures outside of the place of business refers the introducing broker, as necessary for business purposes, at the request of a principal, assigning personnel to conduct solely pre-account opening procedures at a location designated by the principal. The aforesaid pre-account opening procedures refers to providing an account opening application form for the principal to fill out, verifying identity, taking receipt of application documents, or interviewing the principal, but does not include the review of the account opening application or the credit check. The introducing broker and the FCM shall comply with the following provisions:
  1. An introducing broker may assign personnel to conduct the business operations contemplated herein at the location of a principal, subject to the requirement that the principal has submitted an application, and the introducing broker shall retain the relevant application records. The application submitted by the principal shall contain information including the date of application, the principal's name, date of birth, ID number, household registration address, correspondence address (or, if a juristic person, the principal's name, address, business administration number), time of account opening, the principal's location (for a juristic-person principal, the location may only be its registered address), and contact telephone number.
  2. An introducing broker shall set up a website or telephone hotline for a principal to verify the identity of the futures associated persons. An associated person conducting the aforementioned pre-account opening procedures shall wear his/her work permit prepared and issued by the National Futures Association, and an employee ID, and may not refuse to answer a principal’s inquiries about the associated person's identity.
  3. The time and place for the visit by the introducing broker personnel to conduct pre-account opening procedures at a location designated by the principal should advisably be a time and place that facilitate explanation of the contract content, futures trading procedures, risk disclosure, and the verification and confirmation of the principal’s identity and basic personal information. The introducing broker and FCM shall, within 3 weeks after the day of conducting the pre-account opening procedures, complete the review of the account opening application and the credit check.
  4. When an introducing broker assigns personnel to conduct the business operations contemplated herein, the operations may be conducted jointly on-site by a staff member responsible for futures account opening and a futures associated person responsible for brokerage trading business; or may be conducted by a staff member responsible for futures account opening who is outside of the place of business, with a futures associated person responsible for brokerage trading business participating from inside the place of business through simultaneous video conference; or may be conducted by having the principal issue a written statement agreeing that the introducing broker may use electronic means to explain the contract content, futures trading procedures, and risk disclosures, and having the staff member responsible for futures account opening conduct the operations related to identity verification outside of the place of business. The staff member responsible for account opening shall verify and confirm the principal's identity and basic information. Unless electronic means are used to explain the contract content, futures trading procedures, and risk disclosures, that staff member shall furthermore provide the principal with a brokerage contract marked with the words "account opening procedures conducted outside of the place of business," and a risk disclosure statement, and the associated person responsible for brokerage trading business shall be responsible for carrying out the aforesaid explanations before having the principal sign or seal the contract and risk disclosure statement.
  5. When an introducing broker assigns a staff member responsible for account opening to conduct pre-account opening procedures for its head and branch offices at different business locations ("outside cross-location pre-account opening procedures"), the introducing broker shall comply with the following requirements:
    1. The assignment for the conduct of outside cross-location pre-account opening procedures shall first be approved by the managerial officers, or eligible officers appointed thereby, of both the business location requiring such operations ("requiring business location") and the business location to make the assignment ("assigning business location") before the assigning business location may assign a staff member responsible for account opening to conduct such operations.
    2. When conducting outside cross-location pre-account opening procedures, the staff member responsible for account opening must affix his or her signature or seal to the account opening documentation and indicate thereon the business location to which he or she belongs.
    3. The assignment records, approvals, means of delivery or signature for receipt, and other relevant operating procedures shall be retained or documented electronically or in writing for future reference.
    4. The assigning business location must place the written account opening documentation in a confidential, sealed envelope and deliver the same to the managerial officer of the requiring business location or the staff member responsible for account opening, who shall then personally remove the seal. The delivery process shall be documented so that the flow of the documentation can be tracked.
5     An introducing broker conducting pre-account opening procedures pursuant to these Guidelines shall adopt the following control measures:
  1. The application records related to the pre-account opening procedures conducted at the request of the principal under the preceding point shall be deemed part of the account opening agreement and retained for a period prescribed in the TAIFEX Table of Mandatory Preservation Periods for Accounts, Statements, Vouchers, and Certificates of Futures Commission Merchants and Clearing Members.
  2. A futures trading account opened by a person responsible for futures account opening outside of the place of business, and a futures associated person responsible for brokerage trading business pursuant to the preceding point shall be confirmed with the principle by telephone by a third party other than the person responsible for the futures account opening. Without confirmation, the account opening information and the account number shall not be input into the computer system. Recordings of the aforementioned telephone confirmation shall be retained for at least two years.
  3. For a futures trading account opened by a person responsible for futures account opening outside of the place of business, with a futures associated person responsible for brokerage trading business participating in the place of business through simultaneous video conference, pursuant to the preceding point, the audio-visual recordings of the video conference shall be retained and deemed part of the account opening agreement, to be retained for a period prescribed in the TAIFEX Table of Mandatory Preservation Periods for Accounts, Statements, Vouchers, and Certificates of Futures Commission Merchants and Clearing Members.
  4. The records related to the conduct of outside cross-location pre-account opening procedures under the preceding point shall be retained for at least 2 years.
6     The FCM and introducing broker shall each individually adopt operational procedures in compliance with these Guidelines and include them in its internal control system and internal audit operations and faithfully implement them. The internal audit personnel of the introducing broker shall conduct itemized audits of account opening operations, and keep records of them.