| Article 1 |
These Regulations are issued under Article 39, paragraph 1, subparagraph 2 of the Futures Trading Act to promote the sound development of the futures market and protect the rights and interests of futures traders.
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| Article 2 |
When accepting an order to engage in futures trading, a futures brokerage merchant shall first sign and enter into a brokerage contract with the futures trader.
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| Article 3 |
Futures brokerage merchants and futures traders shall adhere to the principles of fairness, legality, and mutual interest of both parties when entering into brokerage contracts.
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| Article 4 |
Futures brokers shall not enter into a brokerage contract with any of the following persons:
- a person under the age of 20;
- a person who has been adjudicated bankrupt, or has entered liquidation proceedings pursuant to a court ruling, and whose rights have not been reinstated;
- a person who is under guardianship or assistance, where the interdiction has not been voided;
- 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;
- 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;
- 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, power of attorney for the agent, or the declaration from its domestic agent;
- staff and employees of the competent authority, the Futures Exchange, futures clearing houses, futures industry associations, or the Federation of Futures Industry Associations;
- a principal that applies to convert an account it originally opened as a discretionary futures trading account to a futures trading account for its own trading use;
- 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
- 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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| Article 4-1 |
A futures broker may not sign an omnibus account brokerage contract with an offshore foreign futures commission merchant to which any of the following circumstances applies:
- it does not meet the requirements of Article 44-5, paragraph 4, subparagraph 1 or 7 of the TAIFEX Operating Rules;
- within the past 1 year, it, in its home country, or its branch unit in Taiwan, has been sanctioned by a relevant authority or self-regulatory institution for securities or futures by the suspension of the securities or futures brokerage business of its head (or a branch) office;
- within the past 3 years, it has materially violated a market trading contract or its filing obligations;
- within the past 3 years, it has had its omnibus account cancelled by the TAIFEX.
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| Article 5 |
In addition to the content prescribed in Article 29 of the Regulations Governing Futures Commission Merchants, a brokerage contract shall also expressly stipulate the following matters:
- that futures trading laws and regulations, the Operating Rules of the Taiwan Futures Exchange Corporation, these Regulations, other rules and regulations, and public announcements with a bearing on the rights and obligations between the futures broker and the futures trader, are an integral part of the contract;
- that the futures broker shall be liable for dereliction or negligence in performance of the contract by any agent or person acting at its behest just as the futures broker would be for its own dereliction or negligence; and
- that the futures broker shall act with the diligence of a good custodian in carrying out matters mandated for performance in the contract.
A brokerage contract of a futures broker engaging in futures trading on behalf of offshore overseas Chinese and foreign nationals, or of mainland area investors, in addition to containing the content set out in the preceding paragraph, shall also expressly stipulate the following matters:
- Receipt and payment of margins will be done in a foreign currency as publicly announced by the TAIFEX.
- If the domestic agent of an offshore overseas Chinese or foreign national, or of a mainland area investor, is a futures commission merchant, its trades may not involve physical delivery. When any likelihood of physical delivery occurs, the position shall immediately be closed out, or the agent changed to the custodian bank. If the agent is not changed in a timely manner and assignment of the trade at exercise requires physical delivery, it shall be handled pursuant to TAIFEX rules.
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| Article 5-1 |
A futures broker handling omnibus account opening to engage in futures trading for an offshore foreign futures commission merchant shall stipulate the following particulars in the omnibus account brokerage contract, in addition to the content specified in Article 29-1 of the Regulations Governing Futures Commission Merchants:
- The offshore foreign futures commission merchant opening the omnibus account may not accept orders for trading through the omnibus account in the TAIFEX by any persons other than offshore overseas Chinese and foreign nationals.
- The open positions of individual traders under the omnibus account may not exceed the position limits set out in the trading rules for individual futures trading contracts of the TAIFEX
- An institutional investor that has applied for a position limit exemption under the TAIFEX Directions for the Handling of Applications by Institutional Investors for Position Limit Exemptions may not use omnibus accounts to execute futures trades while the period of the position limit exemption is in effect. However, this restriction does not apply to trades undertaken to dispose of pre-existing open positions.
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| Article 6 |
Brokerage contracts shall be entered into in the following manners:
- When a futures brokerage merchant accepts and enters into brokerage contracts, such matters shall be handled by qualified, registered associated persons, who when executing their duties shall wear a work permit issued by a futures industry association.
- A futures brokerage merchant shall provide a brokerage contract, risk disclosure statement, and explanatory documentation setting forth the rights and obligations between the brokerage and the futures trader. Unless the principal opens the account electronically, or the principal's identity has been verified by a staff member responsible for account opening and the principal has issued a written statement agreeing that the explanatory procedures may be done by electronic means, a registered, qualified associated person shall explain to the futures trader in detail the rights, obligations, and risks involved, and the futures trader shall issue a written statement confirming that he/she has received full disclosure and has read and understood the information presented, before the brokerage contract may be entered into.
- Except where otherwise provided, a futures trader who is a natural person shall bear the original of his/her national ID card, and shall sign or seal the brokerage contract in person; a futures trader that is a juristic person shall annex a photocopy of documents evidencing its registration as a juristic person, photocopy of the notice of issuance of a uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting a copy of such notice), the power of attorney, and photocopies of the national ID cards of the representative of the juristic person and the grantee of the power of attorney. The signatures or seals of both the juristic entity and its representative shall be affixed on the brokerage contract
- A futures trader that is an onshore overseas Chinese or foreign national shall submit the required documents for account opening in accordance with Article 44-5, paragraph 1 of the TAIFEX Operating Rules; if such futures trader is a natural person, they shall sign or seal the brokerage contract in person; if such futures trader is a juristic person, the signatures or seals of the juristic entity itself, and its representative, shall be affixed to the brokerage contract. A futures trader that is an offshore overseas Chinese or foreign national, or a mainland area investor, shall submit the required documents for account opening in accordance with Article 44-5, paragraphs 2 and 3 of the TAIFEX Operating Rules, and have its domestic agent or representative affix their signatures or seals to the brokerage contract. A futures trader that is an offshore foreign futures commission merchant and that opens an omnibus account shall submit the required documents in accordance with Article 44-5, paragraph 4, of the TAIFEX Operating Rules, and have its domestic agent affix its signature or seal to the brokerage contract.
- A futures trader shall leave a specimen seal impression card or specimen signature to verify that the same seal or signature has been used in carrying out various relevant trading procedures. However, if the Taiwan agent and custodian institution of an offshore overseas Chinese or foreign national are the same person, the agent account opening and settlement seal of the custodian institution may be taken as the specimen seal.
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| Article 6-1 |
When a futures brokerage merchant processes account opening, the principal shall submit documents necessary for identity verification as required under the Regulations Governing Anti-Money Laundering of Financial Institutions.
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| Article 7 |
These Regulations, and any amendments hereto, shall be publicly announced and implemented after approval and/or recordation by the competent authority.
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