Securities and Futures Bureau

Financial Supervisory Commission’s disciplinary action recipient: Original copy Date of issue: October 26, 2012 Issue number: Financial Management Securities Penalty No. 1120336432 Person punished: HUA NAN SECURITIES Unified number of profit-making enterprises of a joint stock company: 22955774 Address: Name of the representative or manager: Huang ○○ Address: Brief 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 handling of NT$72 A fine of NT$10,000 shall be imposed, and a fine of NT$500,000 shall be imposed in accordance with Article 7, Item 5 of the Money Laundering Prevention Act. Facts: The Inspection Bureau of the Chamber of Commerce conducted a general business inspection on the person subject to punishment from September 15 to October 4, 2011, and found that the person subject to punishment failed to open accounts for internal personnel in accordance with regulations, failed to implement the handling of customer entrusted trading quotas, and Financial resources collection and review work, failure to verify the reasons and rationality of orders placed by the same IP, failure to accurately handle the notification and disclosure of entrusted transaction transaction data and custodian information, and statements of customer transactions sent to the email address of internal personnel of the person being punished and failure to handle the quotation operations of general board stock liquidity providers in accordance with regulations, which shows that the person being punished has not implemented the internal control system and audit mechanism, violated the provisions of Article 2, Item 2 of the Securities Dealers Management Rules, and failed to Deficiencies such as the regular review of customer accounts for the prevention of money laundering and the fight against financing of terrorism, and the failure to review suspected money laundering transactions in accordance with customer risk levels constitute a violation of paragraphs 1 and 3 of Article 5 of the Measures for Preventing Money Laundering by Financial Institutions. , Article 8 and Article 15, paragraph 1. 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 accordance with the provisions of 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 the internal control system shall be fined not less than NT$240,000 but not more than NT$4.8 million. In addition, in accordance with Article 7, Paragraph 5 of the Money Laundering Prevention Act, if a financial institution violates the scope of confirming customer identity, the scope, procedures, and methods of retaining confirmation information, the central industry competent authority shall impose a fine of not less than NT$500,000 on the financial institution. A fine of less than 10 million yuan. 2. The Inspection Bureau of this Association conducted a general business inspection on the punished persons from September 15 to October 4, 2011, and found the following deficiencies: (1) When handling the account opening operation of internal personnel, the internal personnel and their The accounts of spouses or minor children are distinguished from other principals. When the minor children of insiders reach adulthood, they do not change the account to a general principal and return it to their own use, etc., which violates the regulations of insiders of Taiwan Stock Exchange Co., Ltd. securities firms in their respective securities companies. Items 1 and 2 of Article 3 of the Measures for the Administration of Account Opening and Entrusted Trading of Securities, and the Standard Specifications for Internal Control Systems of Securities Firms (hereinafter referred to as the Internal Control Standards and Specifications) ca-11110 General Trading Account Opening Procedures and Review Operation Regulations. (2) Handle the review of clients’ entrusted trading quotas and financial resources collection. The client is a restricted person whose single-day trading quota exceeds NT$20 million, and the total single-day trading quota of cross-branches customers reaches NT$5 million. The above-mentioned persons have not collected proof of their ability to withdraw 30% of the total trading quota, which violates Article 10, Item 1, Article 15, and Article 10 of the Self-Discipline Rules for Understanding the Client and Credit Information and Quota Management for Members of the Securities and Exchange Association of the Republic of China when handling entrusted trading business. 22 and Internal Control Standards CA-11120 Customer Credit Collection and Granting Operation Regulations. (3) When handling brokerage business, failure to verify whether the order was placed personally by the client and the reason and rationality of placing the order using the same IP address violated the Internal Control Standards and Regulations CA-11210 on entrusted trading and transaction operations. (4) When handling the entrusted trading of foreign securities, the relevant information of the entrusted trading was not notified by telephone or other means or a transaction report was prepared and delivered to the client on the confirmation day, and the entrusted financial institution was not published in detail in a non-professional institution. The investor's statement violates Paragraph 1 of Article 23 of the Regulations for the Administration of the Entrusted Trading of Foreign Securities by Securities Dealers, Paragraph 2 of Article 19 of the Securities Dealers Association of the Republic of China Administration of the Regulations for the Administration of the Entrusted Trading of Foreign Securities by Securities Dealers, and the Internal Control Standards and Regulations ca-18330 Entrusted trading and transaction operation regulations. (5) When handling the entrusted trading of securities, statements for client transactions were sent to the email addresses of internal personnel of the company without checking their rationality, which violated the internal control standards ca-11140 customer account management regulations. (6) When handling the quotation operation of the stock liquidity provider on the general board of the emerging market, failing to set the adjustment ratio limit and processing procedures for the first quotation of the recommended stock on each business day, which violates the over-the-counter trading of securities of the Republic of China. The internal operating procedures of securities firms recommending stocks on the general board of the central government shall comply with point 3 of the key points of recording matters and the provisions of the Internal Control Standard CA-18210 Negotiation and Trading Operations of Recommended Securities Firms (General Board). (7) When conducting periodic review of customer accounts to prevent money laundering and combating terrorism financing, it failed to follow its customized customer name verification, comparison and screening logic; improperly used the name verification date as the date of the regular review; and failed to collect and withdraw funds. The information related to the customer identity certificate of foreign institutional investors violates the provisions of Article 5, paragraph 1, paragraph 3, and Article 8 of the Measures for Preventing Money Laundering of Financial Institutions and Article 11 of the Precautions for Money Laundering and Terrorism Financing Risk Assessment. (8) Handling the inspection of suspected money laundering transactions. For transactions that meet the status of suspected money laundering transactions, if there are any discrepancies in the review statements that are inconsistent with the facts, it violates the provisions of Article 15, paragraph 1, of the Measures for Preventing and Controlling Money Laundering by Financial Institutions. 3. The above-mentioned deficiencies indicate that the person being punished failed to implement the internal control system and inspection mechanism and violated money laundering prevention laws. The verification has violated Article 2, Item 2 of the Securities Dealers Management Rules and Article 5, Item 1 of the Measures for the Prevention of Money Laundering by Financial Institutions. The provisions of paragraphs, paragraphs 3, 8 and 15, paragraph 1, are subject to the provisions of Article 178-1, paragraph 1, paragraph 4 of the Securities and Exchange Act and Article 7, paragraph 5 of the Money Laundering Prevention Act. 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: South China Yongchang Securities Co., Ltd. (To be served: Representative: Mr. Huang ○○) Copy: Taiwan Stock Exchange Co., Ltd. (Representative: Mr. Lin ○○), Securities Over-the-Counter Trading Center of the Republic of China (Representative) Mr. Chen ○○), Securities Business Association of the Republic of China (represented by Mr. Chen ○○), Financial Supervision and Administration Commission Inspection Bureau, Securities and Futures Bureau Controller’s Office, Securities and Futures Bureau Secretary’s Office, Securities and Futures Bureau Securities Dealers Management Group