After completion of corporate registration, a futures commission merchant shall lodge an operating bond with a financial institution designated by the FSC, in accordance with the following provisions:
1. futures broker: 50 million New Taiwan Dollars.
2. futures dealer: 10 million New Taiwan Dollars.
3. merchant operating both businesses in the preceding two subparagraphs: sum total of the amounts referred to in the preceding two subparagraphs.
4. branch unit: additional 5 million New Taiwan Dollars for each branch.
The provisions in subparagraphs 1 through 4 above shall apply mutatis mutandis to other enterprises concurrently engaged in futures trading and to foreign futures commission merchants, both of which shall further be governed by the following provisions:
1. Other enterprises applying to concurrently engage in brokerage of the type of futures contracts set forth in Article 25, paragraph 2, subparagraphs 1 to 3 or Article 40, paragraph 2, subparagraphs 1 to 3 of the Regulations Governing the Establishment of Futures Commission Merchants shall lodge an operating bond of 15 million New Taiwan Dollars.
2. Other enterprises applying to concurrently engage in brokerage of the type of futures contracts set forth in Article 25, paragraph 2, subparagraph 4 or Article 40, paragraph 2, subparagraph 4 of the Regulations Governing the Establishment of Futures Commission Merchants shall lodge an operating bond of 25 million New Taiwan Dollars.
3. A foreign futures commission merchant applying to engage only in the sub-brokered foreign futures trading services set forth in Article 20, paragraph 2 of the Establishment Criteria of Futures Commission Merchants shall lodge an operating bond of 15 Million New Taiwan Dollars.
The financial institutions referred in paragraph 1 are those banks that have been approved by the FSC to provide custodian services, and which meet the conditions prescribed by the FSC.
A financial institution concurrently engaged in futures trading shall lodge its operating bond with another financial institution.
The operating bond referred to in paragraph 1 above shall be lodged in the form of cash, government bonds, or financial bonds
The operating bond lodged by a futures commission merchant may not be placed in divided custody, reported lost, or canceled. The items lodged as bond, and the associated custodial receipt, shall not be encumbered in any way, nor shall they be withdrawn or replaced without the approval of the FSC.

(deleted)

(deleted)

The total amount of liabilities of a futures commission merchant minus futures traders' equity shall not exceed its shareholders' equity. The total amount of its current liabilities shall not exceed the total amount of its current assets.
Other enterprises concurrently engaged in futures trading shall, in making the calculation referred to in the preceding paragraph, do so under the account items of an independent department.

Futures commission merchants (except those concurrently operated by other enterprises, as these are governed by other relevant acts and regulations) that have already issued securities under the Securities and Exchange Act shall take 20 percent from annual after-tax profit and set it aside as the special reserve set forth under Article 41 of the Securities and Exchange Act; provided that funds for this special reserve need no longer be set aside once the accumulated reserve equals the amount of the company's paid-in capital.
Futures commission merchants that have not issued securities under the Securities and Exchange Act shall set aside a 20 percent special reserve from the annual after-tax profit; provided that funds for this special reserve need no longer be set aside once the accumulated reserve equals the amount of the company's paid-in capital.
The FSC may increase or decrease the percentages under the preceding two paragraphs based on business needs.
The special reserve referred to in the preceding three paragraphs shall not be used for purposes other than covering the losses of the company or, when the accumulated special reserve reaches 25 percent of the amount of paid-in capital, the portion in excess of 25 percent of the amount of paid-in capital may be capitalized; provided, that this rule shall not apply if the FSC has provided otherwise.

A futures commission merchant offering and issuing securities shall comply with the provisions of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers or the Regulations Governing the Offering and Issuance of Overseas Securities by Issuers in addition to the provisions of these Regulations.
The FSC shall separately prescribe the required filing documents and rules applicable to issuance of securities by futures commission merchants that have not publicly issued stock.

Where any of the following circumstances applies to a futures commission merchant, the FSC may reject its filing to carry out a capital increase for cash or issue corporate bonds; provided, this restriction shall not apply where the reason is a merger of the futures commission merchant, or where concrete improvement has been made and the improvement has been recognized by the FSC:
1. Within the past 3 months, it has been sanctioned with a warning by the FSC.
2. Within the past half year, it has been sanctioned by the FSC with an order to discharge or replace a director, supervisor, or managerial officer.
3. Within the past 1 year, it has been sanctioned by the FSC with suspension of business.
4. Within the past 2 years, it has been sanctioned by the FSC with voidance or revocation of a license of any branch office or any portion of its business.
5. Within the past 1 year, its has been suspended or restricted from trading by the Taiwan Stock Exchange (TWSE), the Taipei Exchange (TPEx), the TAIFEX, or a futures clearing house, pursuant to bylaws thereof.
Calculation of the periods in the subparagraphs of the preceding paragraph shall commence from the effective date of the FSC sanction or the disposition by the TWSE, TPEx, TAIFEX, or futures clearing house.

When a futures commission merchant distributes earnings or covers loss, it shall do so based on the financial statements audited and attested by a certified public accountant.

A futures commission merchant shall not act as a guarantor of any nature, endorse the transfer of negotiable instruments, or provide assets for use as collateral by others; provided that this provision shall not apply if the said acts are allowed by law or approved by the FSC.

A futures commission merchant shall not purchase real estate except for purposes related to the operation of its business; provided that this restriction shall not apply where the futures commission merchant holds non-operating real estate because of merger, assignment, closure of branch units, change or reduction of place of business, or approval by the competent authority.

A futures commission merchant, unless concurrently operated by a financial institution, shall not borrow funds from any party that is not a financial or insurance institution; provided that this rule shall not apply to borrowing made for the following purposes:
1. issuance of commercial paper;
2. issuance of corporate bonds;
3. loans needed to meet urgent cash flow needs of the company.
When borrowing funds to meet the urgent cash flow needs referred to in subparagraph 3 of the preceding paragraph, a futures commission merchant shall report to the FSC within 2 days from the date of occurrence of the event.

When the shareholders' equity of a futures commission merchant is less than 60 percent of minimum paid-in capital, or when adjusted net capital is less than 20 percent of the total amount of customer margins required for the open positions of futures traders, the futures commission merchant shall immediately report to the FSC and FSC-designated institutions.
When the shareholders' equity of a futures commission merchant is less than 40 percent of minimum paid-in capital, or when adjusted net capital is less than 15 percent of the total amount of customer margins required for the open positions of futures traders, except where necessary in order to deal with currently outstanding positions, the futures commission merchant shall immediately cease accepting orders from futures traders and submit a rectification plan to the FSC and FSC-designated institutions.
Adjusted net capital shall be calculated in accordance with the rules of the FSC. The percentages set forth in the preceding two paragraphs may be adjusted by the FSC depending on domestic and foreign economic and financial conditions and the business conditions being experienced by ROC and foreign futures commission merchants.
The provisions in paragraph 1 and paragraph 2 above shall apply mutatis mutandis to enterprises concurrently engaged in futures trading.

Unless otherwise approved by the FSC, the funds of a futures commission merchant not required for business operation shall not be loaned to other persons or used for any purposes other than the following:
1. bank deposits;
2. purchase of government bonds or financial bonds;
3. purchase of treasury bills, negotiable certificates of deposit, commercial paper, or other short-term notes and bills approved by the FSC; and
4. other purposes approved by the FSC.

Except in a case involving its equity investment in another enterprise as approved by the FSC, a futures commission merchant, when exercising rights in any investee company shares that it has acquired, shall do so for the greatest benefit of the futures commission merchant, and may not directly or indirectly participate in the operation of the investee company or make any inappropriate arrangement.
Except where otherwise provided by law or regulation, a futures commission merchant, when exercising voting rights of stock it holds in a public company, shall dispatch a personnel member of the futures commission merchant to attend and do so as its representative.

A futures commission merchant shall prepare financial reports in accordance with applicable regulations, and within 3 months after the close of each fiscal year shall publish and report to the FSC annual financial reports that have been audited and attested by certified public accountants, approved by the board of directors, and acknowledged by the supervisors. Within 2 months after the end of each fiscal mid-term, it shall publish and report to the FSC financial reports that have been audited and attested by certified public accountants, approved by the board of directors, and acknowledged by the supervisors. However, a futures commission merchant that has publicly issued stock or a futures subsidiary of a financial holding company shall publicly announce and report its annual financial report no later than 75 days after the close of the fiscal year.
Auditing and attestation of the financial reports referred to in the preceding paragraph shall be performed jointly by two or more practicing certified public accountants of a joint accounting firm approved by the FSC in accordance with the Criteria Governing Approval for Auditing and Attestation of Financial Reports of Public Companies by Certified Public Accountants.
A futures commission merchant shall, by the 10th day of each month, submit to the FSC a monthly accounting summary, monthly statement of financial ratios, and monthly statement of futures trading volume for the preceding month.
The items for reporting referred to in the preceding paragraphs 1 and 3 shall be reported to the FSC via the TAIFEX.