Important Measure September 2021
2021-11-10
1. FSC amends Article 36-2 of the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets
On 30 September 2021, the Financial Supervisory Commission (FSC) amended Article 36-2 of the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets (the “Regulations”) to enhance the decision-making of securities and futures service enterprises on information security matters. Key points of the amendment are outlined below:
(1) A securities or futures service enterprise meeting certain conditions must appoint a person at the level of deputy general manager (vice president) or higher or a person of equivalent rank to concurrently serve as its chief information security officer, who shall be in charge of promoting information security policy and the allocation of resources.
(2) Each service enterprise must, on an annual basis, have its chief information security officer or highest officer responsible for information security and its board chairperson, general manager (president) and chief audit officer jointly issue the Statement on Internal Control under Article 24 of the Regulations, and submit it to the board of directors for approval within 3 months after the close of the fiscal year.
The certain conditions mentioned above under which a service enterprise must appoint a person at the level of deputy general manager (vice president) or higher or a person of equivalent rank to concurrently serve as its chief information security officer will be set out in an interpretive order to be issued by the FSC following the implementation of the amended Regulations. Service enterprises will have 6 months to complete the required adjustments. The range of service enterprises that will be affected by the new requirements will be as follows:
(1) Securities firms with paid-in capital of NT$10 billion or more or securities firms at which electronically placed orders reach a certain percentage rate. The latter category is defined as securities firms at which the total monetary amount of executed trade orders that were placed online and by direct market access [DMA] reaches 60 percent of the total monetary amount of all executed trade orders, and furthermore whose executed brokerage trades account for a share of 2 percent or more of the monetary amount of all executed brokerage trades in the market, and furthermore whose natural person customers account for 50 percent or more of all of the firm’s customers.
(2) Futures commission merchants (FCMs) meeting the dual conditions of having paid-in capital of NT$2 billion and furthermore having an electronically placed order rate reaching a certain percentage rate. The latter condition is defined as when the number of contracts traded through orders placed online and by direct market access [DMA] reaches 60 percent of the total number of contracts traded through all the FCM’s executed trade orders, and when the FCM furthermore has executed brokerage trades accounting for a share of 2 percent or more of the number of contracts traded in all executed brokerage trades in the market, and furthermore has natural person customers accounting for 50 percent or more of all of the FCM’s customers.
(3) Securities investment trust enterprises and securities investment consulting enterprises with average monthly onshore and offshore managed assets of NT$600 billion or more in the preceding fiscal year.
(4) The Taiwan Stock Exchange, Taipei Exchange, Futures Exchange, and Taiwan Depository and Clearing Corporation.
On 30 September 2021, the Financial Supervisory Commission (FSC) amended Article 36-2 of the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets (the “Regulations”) to enhance the decision-making of securities and futures service enterprises on information security matters. Key points of the amendment are outlined below:
(1) A securities or futures service enterprise meeting certain conditions must appoint a person at the level of deputy general manager (vice president) or higher or a person of equivalent rank to concurrently serve as its chief information security officer, who shall be in charge of promoting information security policy and the allocation of resources.
(2) Each service enterprise must, on an annual basis, have its chief information security officer or highest officer responsible for information security and its board chairperson, general manager (president) and chief audit officer jointly issue the Statement on Internal Control under Article 24 of the Regulations, and submit it to the board of directors for approval within 3 months after the close of the fiscal year.
The certain conditions mentioned above under which a service enterprise must appoint a person at the level of deputy general manager (vice president) or higher or a person of equivalent rank to concurrently serve as its chief information security officer will be set out in an interpretive order to be issued by the FSC following the implementation of the amended Regulations. Service enterprises will have 6 months to complete the required adjustments. The range of service enterprises that will be affected by the new requirements will be as follows:
(1) Securities firms with paid-in capital of NT$10 billion or more or securities firms at which electronically placed orders reach a certain percentage rate. The latter category is defined as securities firms at which the total monetary amount of executed trade orders that were placed online and by direct market access [DMA] reaches 60 percent of the total monetary amount of all executed trade orders, and furthermore whose executed brokerage trades account for a share of 2 percent or more of the monetary amount of all executed brokerage trades in the market, and furthermore whose natural person customers account for 50 percent or more of all of the firm’s customers.
(2) Futures commission merchants (FCMs) meeting the dual conditions of having paid-in capital of NT$2 billion and furthermore having an electronically placed order rate reaching a certain percentage rate. The latter condition is defined as when the number of contracts traded through orders placed online and by direct market access [DMA] reaches 60 percent of the total number of contracts traded through all the FCM’s executed trade orders, and when the FCM furthermore has executed brokerage trades accounting for a share of 2 percent or more of the number of contracts traded in all executed brokerage trades in the market, and furthermore has natural person customers accounting for 50 percent or more of all of the FCM’s customers.
(3) Securities investment trust enterprises and securities investment consulting enterprises with average monthly onshore and offshore managed assets of NT$600 billion or more in the preceding fiscal year.
(4) The Taiwan Stock Exchange, Taipei Exchange, Futures Exchange, and Taiwan Depository and Clearing Corporation.
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Update：
2021-11-10