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These Guidelines are adopted pursuant to Article 44, paragraph 2 of the Taiwan Futures Exchange Corporation (TAIFEX) Operating Rules.
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The term "pre-account opening procedures conducted outside the place of business" as used in these Guidelines mean pre-account opening procedures that a futures commission merchant (FCM) conducts, as necessary for business purposes, with a principal by sending its personnel to the location of the principal at the request of the principal.
The term "pre-account opening procedures" in the preceding paragraph means the provision of an account opening application form for the principal to fill out, identity verification, receipt of application documents, or interview with the principal, and does not include the review of the account opening application or the credit check.
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An FCM assigning personnel to the location of a principal to conduct pre-account opening procedures at the request of the principal shall comply with the following provisions:
- An FCM may assign personnel to conduct pre-account opening procedures at the location of a principal, subject to the requirement that the principal has submitted an application for such procedures, and the FCM shall retain the relevant application records. The application submitted by the principal shall include 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 must be its registered address), and contact telephone number.
- An FCM shall set up a website or telephone hotline for a principal to verify the identity of its associated persons. An associated person conducting the aforementioned pre-account opening procedures shall wear his/her work permit prepared and issued by the Chinese National Futures Association, and an employee ID, and may not refuse to answer a principal’s inquiries about the associated person's identity.
- The location of the premises, and time of the visit, at which FCM personnel conduct pre-account opening procedures with a principal should be one that suitably allows for explanation of the contract content, futures trading procedures, risk disclosure, and the verification and confirmation of such principal’s identity and basic personal information. The 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.
- When an FCM assigns personnel to conduct pre-account opening procedures, the procedures may be conducted jointly at the principal's location by a staff member responsible for account opening and the associated person responsible for brokerage trading business; or the procedures may be conducted by a staff member responsible for account opening at the principal's location, together with the associated person responsible for brokerage trading business at the FCM's place of business, by means of a simultaneous video link; or the procedures may be conducted by having the principal issue a written statement agreeing that the FCM may use electronic means to explain the contract content, futures trading procedures, and risk disclosures, and having the staff member responsible for 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 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.
- When an FCM 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 FCM shall comply with the following requirements:
- The assignment for the conduct of outside cross-location pre-account opening procedures shall first be approved by 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.
- 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.
- 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.
- 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.
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An FCM conducting pre-account opening procedures pursuant to these Guidelines shall adopt the following control measures:
- 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.
- When, pursuant to the preceding point, a futures trading account is opened at the principal's location jointly by a staff member responsible for account opening and the associated person responsible for brokerage trading business, a third party other than the staff member responsible for account opening shall perform confirmation with the principal via telephone. Unless such confirmation has been performed, the account opening information and the account number may not be input into the TAIFEX's computer system. A recording of the aforementioned telephone confirmation must be retained as a record for at least 2 years.
- When, pursuant to the preceding point, a futures trading account is opened by a staff member responsible for account opening at the principal's location, together with the associated person responsible for brokerage trading business at the FCM's place of business by means of a simultaneous video link, an audio-visual record of the simultaneous video communications 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.
- 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.
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An FCM shall include the content of these Guidelines in its internal control system and internal audit operations, which shall be submitted for the approval of its board of directors. The internal audit personnel of an FCM shall conduct itemized audits of account opening operations, and keep records.
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An FCM conducting, as necessary for business purposes, pre-account opening procedures with a principal outside its place of business shall do so in compliance with these Guidelines. Matters not provided for herein shall be governed by the TAIFEX Operating Rules, and other applicable regulations.
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These Guidelines, and any amendments hereto, shall be implemented upon public announcement following approval and recordation by the competent authority.
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