| Article 4 |
Futures brokers shall not enter into a brokerage contract with any of the following persons:
1. a person under the age of 20;
2. a person who has been adjudicated bankrupt and whose rights have not been reinstated;
3. a person who is under guardianship or assistance, where the interdiction has not been voided;
4. a person engaged by a juristic person to open an account who is unable to produce certification of authorization by such juristic person to do so;
5. an overseas Chinese or foreign national, or a mainland area investor, that mandates it to open an account but fails to produce documentary proof of registration issued by the TWSE or TAIFEX;
6. an offshore overseas Chinese or foreign national, or a mainland area investor, opening an account that fails to produce the photocopy of its contract with a domestic agent or the declaration from its domestic agent, or where the content of the contract or declaration does not comply with applicable provisions of the TAIFEX Operating Rules, or the content of the contract fails to specify any of the following particulars:
(1) that receipt and payment of margins and margin calls will be done in a foreign currency as publicly announced by the TAIFEXs;
(2) that a designated agent will apply to open a segregated foreign exchange deposit account for futures trading;
(3) the use of the funds remitted in;
(4) the use and scope of any conversion of funds in the segregated foreign exchange deposit futures trading account into New Taiwan dollars;
(5) provisions for control/management of the use and any conversion into a foreign currency as publicly announced by the TAIFEX of cumulative realized surplus denominated in New Taiwan Dollars;
(6) the method for handling margin calls;
(7) matters in connection with the handling of clearing and settlement and information reporting for futures trading;
(8) method of providing order records;
(9) reporting to the competent authority for foreign exchange business the status of foreign exchange settlement of funds, foreign exchange deposit balance, and summary information on the equity in the customer margin account, with a copy to the TAIFEX for registration.
(10) where the agent is a futures commission merchant, the contract shall stipulate that the agent may not serve as an agent for securities trading, open New Taiwan Dollar deposit accounts, or perform physical delivery. When there is a likelihood that the transaction of such offshore overseas Chinese or foreign national, or mainland area investor, involves physical delivery, the agent shall immediately notify the offshore overseas Chinese or foreign national, or mainland area investor, to close the positions, or to replace the agent with the custodian bank; if the agent is not promptly replaced and is instructed to execute physical delivery, the contract shall stipulate that the agent shall, within three business days following the acquisition of deliverables at settlement, complete the disposition of same, and deposit the funds received from the disposition into the customer margin account under the futures commission merchant that accepts futures trading orders from the offshore overseas Chinese or foreign national, or mainland area investor.
7. staff and employees of the competent authority, the Futures Exchange, futures clearing houses, futures industry associations, or the Federation of Futures Industry Associations;
8. a custodian institution for discretionary futures trading that has opened more than one futures trading account at the same business premises of the same futures broker for the same principal with respect to the same mandatory; provided, however, that this restriction shall not apply to a principal that is a government fund–such as the Civil Servant Pension Fund, Labor Pension Fund, Labor Insurance Fund, or Postal Remittance and Savings Fund—and has opened separate futures trading accounts in fulfillment of separate mandate contracts for discretionary futures trading;
9. A person who has defaulted on a futures trading contract or a securities trading contract with a securities broker where the case is not yet closed and five years have not elapsed since such default; or
10. a person who has violated a futures trading act or regulation or securities trading act or regulation and been convicted by a final and unappealable judgment of a judicial authority, or who has previously been notified by the competent authority to suspend securities or futures trading, where less than five years has elapsed since the expiry of the period of suspension.
The responsible person, an associated person, or any other employee (or the spouse of any of the preceding) at a futures broker or a futures commission merchant shall observe the relevant regulations when engaging in futures trading. |
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