| Article 1 |
(Legal Basis)
These Organizational Rules are promulgated pursuant to Article 38, applied mutatis mutandis under 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 ("TAIFEX").
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| Article 2 |
(Role and Responsibilities of the Committee)
The role and responsibilities of the TAIFEX OTC Derivative Clearing ("OTC clearing") Disciplinary Committee ("the Committee") are the following:
- Overseeing OTC clearing members ("clearing members") in the observance of laws and regulations and fulfillment of the spirit of self-regulation.
- To make recommendations on the following matters:
- Handling by TAIFEX of suspected violations of relevant market rules of TAIFEX by clearing members, and responsible persons or employees thereof.
- Handling by TAIFEX of suspected violations of the Futures Trading Act and relevant laws and regulations by clearing members, and responsible persons or employees thereof.
- Handling by TAIFEX of reports of unlawful market activity.
- Other matters related to discipline of clearing members.
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| Article 3 |
(Nomination and Appointment of Committee Members)
The Committee consists of up to nine members, nominated by the following procedure and appointed with the approval of the TAIFEX board of directors.
- Up to three representatives of clearing members and several alternates shall be nominated after their election by and from among a pool of representatives to which every clearing member shall appoint one of its personnel..
- Up to three expert /scholars representing the public interest and up to three TAIFEX's personnel, to be proposed by the president and nominated by the chairman of the Board of Directors.
The representatives nominated after election pursuant to Subparagraph 1 of the preceding paragraph shall not be replaced by other appointees.
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| Article 4 |
(Qualifications for Companies Represented by Clearing Members Representatives and Clearing Member Representatives)
Companies represented by clearing members must not have been in any of the following circumstances in the past year:
- Have any sanction imposed upon itself by the competent authority pursuant to Article 61-1, Paragraph 1, Subparagraph 2 and Subparagraphs 5 to 7 of the Banking Act, Article 149, Paragraph 1, Subparagraphs 1, 2, 4, and 6 of the Insurance Act, Article 66, Subparagraphs 1 to 4 of the Securities and Exchange Act, Article 100, Paragraph 1, Subparagraphs 1 to 4 of the Futures Trading Act, or Article 61-1, Paragraph 1, Subparagraph 2 and Subparagraphs 5 to 7, applied mutatis mutandis under Article 51 of the Act Governing Bills Finance Business, of the Banking Act.
- Have its OTC clearing operations suspended or terminated by TAIFEX pursuant to its regulations; or have been unable to continue to meet the clearing membership eligibility criteria.
In addition to not having any sanction imposed upon them by the competent authority pursuant to the Securities and Exchange Act, the Futures Trading Act, the Banking Act, the Insurance Act, or the Act Governing Bills Finance Business and not being in any of the circumstances under Article 28, Paragraph 1 of the Futures Trading Act, clearing member representatives shall possess one of the following qualifications:
- Have at least five years of work experience in administrative regulatory work in the finance field, and have held a position at the recommended-appointment rank or higher or an equivalent position.
- Have at least five years of work experience in financial institution(s), and have held the position of manager or higher.
- Have at least three years of work experience in financial institution(s), and have held the position of vice president (assistant general manager) or higher.
- Have at least two years of work experience in financial institution(s), and have held the position of president (general manager) or higher.
- Have at least two years of work experience in futures institution(s), and have held the position of manager or higher in a futures institution or an equivalent position.
- 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 derivatives and be capable of soundly and effectively operating derivatives business.
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| Article 5 |
(Qualifications for Expert /Scholars Representatives)
The experts/scholars representing public interest appointed by TAIFEX refer 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:
- 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.
- Have at least three years of work experience in financial institution(s), and have held the position of vice president (assistant general manager) or higher.
- Have at least two years of work experience in financial institution(s), and have held the position of president (general manager) or higher.
- Be a certified public accountant or lawyer who has practiced in a domestic joint firm for at least five years.
- Be a professional with special expertise, as supported by factual evidence, in matters such as derivatives or finance market trends.
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| Article 6 |
(Term of Office for Committee Members)
Committee members serve terms of one year. However, exception applies where a change of term of office has been approved by the TAIFEX board of directors and filed with the competent authority.
When there is a vacancy in the Committee due to resignation, dismissal, termination of employment or any other event that disqualifies a member, the vacant seat shall be filled by an alternate for the seat. In the absence of an alternate for the seat or a sufficient number of alternates, a different successor may be elected. The election is to be conducted as provided under Article 3. A successor filling a vacant seat is to serve a term that is the remaining term of his/her predecessor.
Committee members shall continue to perform their duties past the end of their terms of office until the new members to succeed them take office.
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| Article 7 |
(Committee Meeting Convenor)
The Committee is to have one convenor, who is 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.
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| Article 8 |
(Frequency of Committee Meetings)
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.
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| Article 9 |
(Agenda and Proposals)
The managing department will compile proposal materials and prepare an agenda. It shall be delivered to all Committee members two days prior to the meeting.
When the Committee meets to review cases, TAIFEX managing department that submitted the proposal shall dispatch personnel to attend and give reports.
Committee operating rules shall be separately prescribed.
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| Article 10 |
(Handling of Conflict of Interest)
Regarding items on an agenda in which a committee member or a clearing member represented by a committee member has a conflict of interest, the committee member shall explain key information on the conflict of interest, and must not participate in the vote or act as a voting proxy for any other member.
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| Article 11 |
(Committee Votes and Resolutions)
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.
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| Article 12 |
(Submission of Committee Meeting Minutes to the Board of Directors)
The Committee's resolutions shall be recorded in the meeting minutes and affixed with the chairman's signature or seal. Meeting minutes shall be distributed to committee members and the TAIFEX board of directors within fifteen days after the corresponding meetings.
The minutes of a meeting shall record the date (year, month, day) and place of the meeting, the name of the chairman, and the names of the committee members present, and shall give a summary of the essential points of the proceedings and state the results.
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| Article 13 |
(Duty of Confidentiality)
Committee members shall uphold impartiality, independence, and objectivity when performing 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.
Except for travel expenses for attending meetings, the committee members serve on an unpaid basis.
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| Article 14 |
(Reasons for Dismissal of Committee Members)
If a committee member is found in any of the following circumstances, TAIFEX shall report the committee member to the board of directors for dismissal.
- Inability of to continue to meet the criteria in Article 4 or violation of Article 10 or the preceding article.
- Having demanded, agreed to accept or accept a bribe or inappropriate gains in the process of performing committee duties.
- Other event factually sufficient to deem the member incompetent.
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| Article 15 |
(Supplementary Provisions)
These Organizational Rules shall be implemented after they are passed with a resolution of the TAIFEX board of directors and filed with and approved by the competent authority. The same shall apply to any amendments hereto.
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