Securities and Futures Bureau

Financial Supervisory Commission's Order of Punishment Recipient: Original copy Date of issue: August 2, 2012 Issue number: Financial Management Securities Penalty No. 1120383536 Person punished: Taishin Comprehensive Securities Co., Ltd. Unified number of profit-making enterprises: 23534956 Address: 13th Floor, No. 96, Section 1, Jianguo North Road, Zhongshan District, Taipei City Name of representative or manager: Guo ○○ Address: Abbreviated Purpose: In accordance with the provisions of Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act at the time of the conduct, the person shall be subject to The person punished was fined NT$720,000. Facts: The Commission conducted a general business inspection on the person being disposed of in August 2011 and found that the person being disposed of was engaged in the exchange business of convertible bond assets and did not confirm whether the customer held it in the name of others and circumvented the upper limit of customer commitment ratio stipulated in the law. ; When handling securities underwriting operations through price inquiry, the reasons for different placement standards and proportions were not specified, and the placement was still given to customers who did not meet certain customer requirements; for cases involving directors with interests, there was no It was submitted to the board of directors in the form of a discussion proposal, without explaining the important content of its interests and the reasons why it should be withdrawn or not; when handling the appointment of consultants, the amount and calculation method of remuneration were not specified in the contract, and there was no stipulation on the consultant's involvement. Procedures for conflicts of interest; when handling customer review operations, the customer's geographical information was not fully considered, which affected the accuracy of the customer's risk level assessment; when handling brokerage customer order fee discount operations, the review conditions were excessively relaxed; the person subject to punishment The Risk Management Department failed to implement the control mechanism and operating procedures for market risk exceeding the limit, which showed that the person being punished did not implement the internal control system and violated Article 2, Paragraph 2 of the Securities Dealers Management Rules. Reasons and legal basis: 1. According to Article 2, Paragraph 2 of the Securities Dealers Management Rules, the business of a securities firm shall be conducted in accordance with laws, articles of association, and the established internal control system. In addition, according to Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act at the time of the act, a securities firm that fails to implement an internal control system shall be fined not less than NT$240,000 but not more than NT$4.8 million. 2. The Inspection Bureau of this Commission conducted a general business inspection on the person subject to punishment from August 12, 2011 to August 31, 2020, and found that the person subject to punishment had the following deficiencies: (1) The handling of convertible bond asset exchange business for customers Keeping the same email to engage in options trading on the same underlying convertible corporate bonds, failing to confirm whether it is held in the name of others and circumventing the upper limit of customer commitment ratio stipulated by law, violates the standard regulations of the internal control system of securities firms (hereinafter referred to as securities firms) Internal Control Standards) CA-17400 "Business Premises Operating Derivative Financial Instruments Transactions" (33) 1. and Article 37-1 of the Securities Dealers' Business Premises Operating Derivative Financial Instruments Transactions Business Rules of the Securities Over-the-Counter Trading Center of the Republic of China . (2) Conducting securities underwriting operations through price inquiry, failing to specify the reasons for different allotment standards and proportions, and still alloting customers who do not meet certain customer requirements, violating the internal control standards of securities firms CA - 15112 "Inquiry-based Purchase Operations" 8 (1) and (2) and Article 2 of the Securities Underwriters' Inquiry-based Purchase and Placing Measures of the Securities Business Association of the Republic of China. (3) In the operation of board meetings, when reporting performance appraisals of personnel assigned to subsidiaries, cases involving directors who have interests are not reported to the board of directors in the form of discussion proposals; directors or non-attendees have personal interests in meeting matters. , failed to explain to the board of directors the important content of its interests and the reasons for evasion or non-recusal, violating Article 14-3 of the Securities and Exchange Act, Articles 16 and 17 of the Procedures for the Board of Directors of Publicly Offering Companies, and the Corporate Governance Questions and Answers - Board of Directors Meetings It is stipulated in point 20 of the Measures Chapter. (4) When handling the appointment of consultants, the amount and calculation method of remuneration, the reimbursement of business expenses and the basis for performance appraisal are not stated in the contract in accordance with the "Administrative Measures for the Appointment of Consultants", and the company has not stipulated that consultants are involved in conflicts of interest. The operating procedures violated the provisions of CW-11000 "Personnel Recruitment Operations" (25) of the internal control standards for securities firms. (5) When handling customer review operations, because there is no mechanism to control dual nationality, or the customer's geographical information corresponding to the CRS investigation is not linked, the location of the customer's head office is not considered, which affects the accuracy of the customer's risk level assessment and violates the internal control of the securities firm. Standard CA-18100 "Prevention and Control of Money Laundering" (2), 2. Regulations. (6) When handling fee discounts for brokerage clients’ orders, the review conditions were excessively loose, violating the provisions of Securities Firms’ Internal Control Standard CA-11600 “Business Income and Records” (4). (7) The risk management department of the person being punished failed to implement the control mechanism and operating procedures for market risk exceeding the limit. For example, the board of directors approved the risk management department to increase the company's overall value at risk (VaR) limit and take effect retrospectively. The trading department made use of other matters before obtaining the consent of the chief financial officer and chairman of the board of directors, and failed to handle matters in accordance with Article 5 of the risk management measures, violating the internal control standards of securities firms CM-19500 "Use of Model Management Operations" (1) and CA-17210 "Operations for Issuance of Subscription (Place) Warrants" (3) Regulations. 3. The above-mentioned deficiencies indicate that the person being punished has failed to implement the internal control system and has violated the provisions of Article 2, Paragraph 2 of the Securities Dealers Management Rules, and complied with the provisions of Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act at the time of the act. The punishment is as per the purpose. Payment method: 1. Payment deadline: Pay within 10 days from the day after this sanction is served. 2. Please make payment according to the precautions on the payment slip attached to the (agency). Notes: 1. If the person subject to punishment is dissatisfied with this punishment, he shall file a petition through this Association (Banqiao District, New Taipei City) in accordance with the provisions of Article 58, Paragraph 1 of the Petition Law within 30 days from the day after the punishment is served. 18th Floor, No. 7, Section 2, Xianmin Avenue) filed a petition with the Executive Yuan. However, according to Article 93, Paragraph 1 of the Petition Act, unless otherwise provided by law, the filing of an appeal does not stop the execution of this sanction, and the person subject to the sanction shall still pay the fine. 2. If the person subject to punishment fails to pay the fine within the payment period specified in this punishment, the person shall be transferred to any branch of the Administrative Enforcement Agency of the Ministry of Justice for administrative enforcement in accordance with the proviso of Article 4, Paragraph 1 of the Administrative Enforcement Act. Original: Taishin Comprehensive Securities Co., Ltd. (Representative: Mr. Guo○○) Copy: Omitted