These Regulations are adopted pursuant to Article 80, paragraph 4 of the Futures Trading Act ("the Act").

A leverage transaction merchant shall adopt an internal control system pursuant to the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets prescribed by the competent authority, and the Rules Establishing Standards for the Internal Control Systems of Leverage Transaction Merchants jointly prescribed by the GreTai Securities Market (GTSM) and the Taiwan Futures Exchange Corporation (TAIFEX).
A leverage transaction merchant shall be operated in accordance with laws and regulations, its articles of incorporation, and the internal control system of the preceding paragraph.
For trades of a certain dollar amount or greater, or suspected of involving money laundering, the leverage transaction merchant shall retain documentation sufficient for a full and complete understanding of the trade, records of verification of the customer's identity and relevant reporting, and shall comply with the provisions of the Money Laundering Control Act and the internal control system.
The adoption of and any amendments to the internal control system referred to in paragraph 1 shall be reported to the board of directors for approval and retained for reference. Any amendment required by a notice from the competent authority or the GTSM shall be made within the specified time limit.

Given the occurrence of any of the following, a leverage transaction merchant shall report to the competent authority:
1.The commencement, suspension, resumption, or termination of business operations.
2.The opening, change, or closing of a customer margin account.
3.The leverage transaction merchant or any of its responsible persons, associated persons, or other employees, as the result of the conduct of business, becomes involved in litigation or arbitration or is subject to compulsory execution as an obligor, or the leverage transaction merchant is a bankrupt or has a negotiable instrument dishonored or is refused services by a bank.
4.Any of the circumstances referred to in Article 28 of the Act applies to the responsible persons or any associated persons of the leverage transaction merchant.
5.There is factual evidence that a responsible person or associated person of the leverage transaction merchant has engaged in or been involved in other dishonest or improper activities, demonstrating their unsuitability for conducting futures trading.
6.A responsible person, associated person, or other employee of the leverage transaction merchant has violated the Act or any order issued by the competent authority in accordance with the Act.
7.Any other matter for which the competent authority requires reporting.
The matters under subparagraph 1 of the preceding paragraph shall be reported in advance by the company; the matters under subparagraphs 2 through 6 shall be reported by the company within 5 business days from either the date on which it becomes aware of the matter or the day on which the matter occurs.
Matters that must be reported pursuant to paragraph 1 shall be submitted to the competent authority via the GTSM.
The term "business day" as used in these Regulations means a trading day on the domestic futures markets.

The provisions of Article 5 and Articles 8 to 10 of the Regulations Governing Futures Commission Merchants apply mutatis mutandis to leverage transaction merchants.