The Financial Supervisory Commission promulgated Articles 3, 8-10, 14, 19, 21, 24 and 25 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities as amended (hereinafter, the “Regulations”) via the Jin-Guan-Zheng-Juan-1060035566 Directive of October 6, 2017 to enhance the convenience of buying and selling foreign securities. The amendments are highlighted below:
For starter, Article 9 of the Regulations as amended provides that for account opening through electronic means such as the Internet with documentation supporting the identity of a natural person such as alien resident certificates or permanent resident certificates, a securities firm may suspend the deposit of a specimen seal or signature and deposit the same only when the client entrusts the trading to the securities firm in person or by fax.
In addition, to make it convenient for investors seeking to commission the trading of foreign securities to sign a recommendation contract or terminate recommendations through simple and speedy means of operation, Article 14, Paragraph 2 of the Regulations is amended to allow communications or electronic means sufficient to confirm the identity of the applicant and the indication of his/her intent. Article 19 of the Regulations as amended also allows a securities firm to be entrusted to trade foreign securities by stipulating that the relevant information about entrusted transactions on the day of successful trading may be communicated to the entrusting party by fax, short messages, voice mail, web programs in addition to notification via telephone or email.
Finally, to enhance convenience and reduce settlement risks associated with a securities firm’s trading of foreign securities entrusted by investors, Article 21, Paragraph 2 of the Regulations as amended specifically stipulates that with the permission of the entrusting party, a securities firm may retain the foreign currency settlement payment designated by the entrusting party for the trading of foreign securities or receivables derived from the holding of foreign securities in a dedicated foreign currency account set up for the customer in a domestic bank having transaction relations with the securities firm. Except for making due payments for the entrusting party, the securities firm shall not use such fund.