A Taiwan-area securities firm that meets the conditions of each of the following subparagraphs may apply to the competent authority for permission for investment by the Taiwan-area securities firm or its third-region subsidiary in a securities subsidiary, securities investment fund management subsidiary, or futures subsidiary in the Mainland Area:
1. Its net worth stated in the financial report for the most recent period, audited or reviewed by a CPA, is greater than NT$10 billion, and it furthermore has net worth per share no lower than par value.
2. It simultaneously operates securities brokerage, underwriting, and proprietary trading business.
3. It is legally compliant, soundly operating, and has not received any material disposition or sanction, or has received a material disposition or sanction but the circumstances of the violation have been concretely improved and the improvement has been recognized by the competent authority.
4. It had a regulatory capital adequacy ratio above 200 percent for the most recent year.
5. It has professional experience in international securities or futures business.
When a Taiwan-area securities firm submits an application under the preceding paragraph, it may simultaneously apply for the establishment by that subsidiary of a branch office. The establishment of that branch office shall be completed within 1 year counting from the date of the permission by the competent authority. If it has not been established by that time, the competent authority may revoke its permission.

A Taiwan-area SITE that meets the conditions of each of the following subparagraphs may apply to the competent authority for permission for investment by the Taiwan-area SITE or its third-region subsidiary in a securities investment fund management subsidiary in the Mainland Area.
1. Its net worth stated in the financial report for the most recent period, audited or reviewed by a CPA, is greater than NT$1.5 billion, and it furthermore has net worth per share no lower than par value.
2. It is legally compliant, soundly operating, and has not received any material disposition or sanction, or has received a material disposition or sanction but the circumstances of the violation have been concretely improved and the improvement has been recognized by the competent authority.
3. It has professional experience in international securities or futures business.

A Taiwan-area FCM that meets the conditions of each of the following subparagraphs may apply to the competent authority for permission for investment by the Taiwan-area FCM or its third-region subsidiary in a futures subsidiary in the Mainland Area:
1. Its net worth stated in the financial report for the most recent period, audited or reviewed by a CPA, is greater than NT$1 billion, and it furthermore has net worth per share no lower than par value.
2. It is legally compliant, soundly operating, and has not received any material disposition or sanction, or has received a material disposition or sanction but the circumstances of the violation have been concretely improved and the improvement has been recognized by the competent authority.
3. In the most recent year, the monthly simple arithmetic mean of the percentage of its adjusted net capital to the total amount of customer margins required for the open positions of futures traders may not have been lower than 40 percent in any month.
4. It has professional experience in international futures business

A Taiwan-area securities firm applying for permission for investment pursuant to Article 24-1 shall submit the following documents:
1. An application form.
2. A business plan, specifying the matters listed below:
A. An investment proposal: shall include the strategic purposes of the investment, expected benefits, funding sources, utilization plan, and capital recovery plan.
B. Business management principles: shall include the location of the subsidiary, its capitalization, the lines of business and business items it engages in, and a business management strategy.
C. The subsidiary's shareholder structure, organizational structure, division of duties, and personnel staffing.
D. A financial assessment of the subsidiary for the upcoming 5 years.
E. Risk assessment: Assessment of operating risks and a concrete risk management plan.
3. Minutes of the relevant directors meeting.
4. A financial report for the most recent period, audited or reviewed by a CPA, and the financial reports for the most recent 3 fiscal years, audited by CPAs.
5. A list of domestic and foreign investee enterprises as of the date of application.
6. Investment agreement documents: content shall include documentary evidence of the ability to obtain financial and operational information of the subsidiary and to carry out the strategic purposes of the investment.
7. Provisions for internal control and internal audit systems, operational management, and performance appraisal of the Mainland-area subsidiary.
8. Intended list of directors and supervisors and their academic qualifications and professional experience.
9. Other information or documents required to be submitted pursuant to regulations of the competent authority.

A Taiwan-area securities firm may submit an application in the Mainland Area for investment in a securities or futures institution subsidiary only after receiving permission from the competent authority. When there is any change in the planned location, capitalization, or amount of investment in the securities or futures institution subsidiary, it shall submit the relevant information and report to the competent authority for permission.
The Taiwan-area securities firm, after receiving permission from the competent Mainland-area authority for securities and futures, shall immediately notify the competent authority, and submit the following information to the competent authority for recordation before the securities or futures institution subsidiary commences business:
1. The letter of approval from the competent Mainland-area securities and futures authority.
2. The business items that the competent Mainland-area securities and futures authority has approved for operation.
3. The amount of investment, the subject investee company, and its shareholder structure.
4. The planned date of commencement of business and detailed address.
5. List of names of the managerial personnel of the Mainland-area securities or futures institution subsidiary at and above the rank of assistant general manager.
6. List of the directors and supervisors of the Mainland-area securities or futures institution subsidiary.
7. Other information or documents required to be submitted pursuant to regulations of the competent authority.
If a Taiwan-area securities firm establishes a subsidiary by means of investing in an existing Mainland-area securities or futures institution, it shall, after obtaining the permission from the competent Mainland-area securities and futures authority, immediately report it to the competent authority, and submit the information in subparagraphs 1, 3, and 5 to 7 of the preceding paragraph to the competent authority for recordation.
If a Taiwan-area securities firm will close its Mainland-area securities or futures institution subsidiary, it shall report the intended closure to the competent authority for permission prior to making any application for the closure in the Mainland Area, and after permission is granted by the competent Mainland-area securities and futures authority, the Taiwan-area securities firm shall immediately report it to the competent authority. Before closing the securities or futures institution subsidiary, the Taiwan-area securities firm shall submit the letter of approval from the competent Mainland-area securities and futures authority and the planned date of closure to the competent authority for recordation.

After a Taiwan-area securities firm or its third-region subsidiary has invested in a Mainland-area securities or futures institution subsidiary in the Mainland Area, provided that the Taiwan-area securities firm as not received any material disposition or sanction, or has received a material disposition or sanction but the circumstances of its violation have been concretely improved and the improvement has been recognized by the competent authority, the Taiwan-area securities firm may apply to the competent authority for permission to additionally establish branch offices of that Mainland-area securities or futures institution subsidiary.
To additionally establish a branch office of a Mainland-area securities or futures institution subsidiary, a Taiwan-area securities firm shall apply to the competent authority for permission and submit the following documents:
1. An application form.
2. A business plan.
3. Minutes of the relevant directors meeting.
4. The Mainland-area securities or futures institution subsidiary's financial report for the most recent period, audited by a CPA, and its regulatory compliance status.
5. Provisions for internal control and internal audit systems, operational management, and performance appraisal of the Mainland-area securities or futures institution subsidiary.
6. Other information or documents required to be submitted pursuant to regulations of the competent authority.

Only after a Taiwan-area securities firm has received permission from the competent authority may its Mainland-area securities or futures institution subsidiary firm submit an application in the Mainland Area for establishment of a branch office. After permission is received from the competent Mainland-area securities and futures authority, the Taiwan-area securities firm shall immediately report to the competent authority. The same shall apply in the event of any closure of a branch office.
The Taiwan-area securities firm, after receiving permission from the competent Mainland-area securities and futures authority, shall immediately notify the competent authority, and submit the following information to the competent authority for recordation before the branch office of the securities or futures institution subsidiary commences business:
1. The letter of approval from the competent Mainland-area securities and futures authority.
2. The business items that the competent Mainland-area securities and futures authority has approved for operation.
3. The planned date of commencement of business and detailed address.
4. Other information or documents required to be submitted pursuant to regulations of the competent authority.

Before a Taiwan-area securities firm or its third-region subsidiary assigns its shareholding in a Mainland-area securities or futures institution subsidiary to any other person, the Taiwan-area securities firm shall submit relevant documents and report to the competent authority for permission.
When any of the following circumstances will apply to its Mainland-area securities or futures institution subsidiary, the Taiwan-area securities firm shall submit the relevant information to the competent authority and apply for permission in advance:
1. A merger with, or assignment of all or major part of assets or business to or from, another financial institution
2. Issuance of securities with equity characteristics.
3. Dissolution or suspension of operations.
4. Change of general manager.
5. Change of company name.
6. Capital increase or capital decrease.
7. Having a de facto relationship of control and subordination with any re-investing or re-invested institution.

A Taiwan-area securities firm shall promptly report to the competent authority if its securities or futures institution subsidiary in the Mainland Area incurs losses. If the losses incurred exceed one-third of the subsidiary's capital, the competent authority may order the Taiwan-area securities firm to propose a business improvement plan and report the status of improvement to the competent authority periodically.
In the event the financial condition of the Mainland-area securities or futures institution subsidiary deteriorates significantly, such that the sound operation of the Taiwan-area securities firm might be adversely affected, the competent authority may order the Taiwan-area securities firm to propose an exit plan and carry it out after receiving permission from the competent authority.

When any of the following events occurs with respect to its Mainland-area securities or futures institution subsidiary, a Taiwan-area securities shall inform the competent authority by submitting a report on the particulars of the event and relevant information:
1. Change of business items or material management policy.
2. Change in the original shareholding ratio of the Taiwan-area securities firm or its third-region subsidiary.
3. Any material re-investment that does not fall under Article 24-8, paragraph 2, subparagraph 7.
4. Change of business address.
5. Undergoing reorganization, liquidation, or bankruptcy proceedings.
6. Adoption of any business practice that is in accordance with local Mainland-area laws and regulations and business customs but non-complying with securities or futures laws or regulations in the Taiwan Area.
7. Any material loss has occurred or is foreseeable.
8. Any material regulatory violation or voidance or revocation of the business license by the competent Mainland-area securities and futures authority.
9. Occurrence of a material contingency or incident of fraud.
10. Change of chairman or one-third or more of the directors.
11. Making of a report on any matter to a local relevant competent authority pursuant to Mainland-area securities or futures laws or regulations.
12. Other material event.
With respect to any event under subparagraphs 1 to 6 of the preceding paragraph, the Taiwan-area securities firm shall report to the competent authority in advance. With respect to any event under subparagraphs 7 to 12, it shall report within 3 business days from the day on which it becomes aware of the event or on which the event occurs.

When a Taiwan-area securities firm or its third-region subsidiary has invested in a Mainland-area securities or futures institution subsidiary after receiving permission from the competent authority, the Taiwan-area securities firm shall do the following:
1. Submit to the competent authority, within 15 days after the end of each quarter, an operations report on the Mainland-area securities or futures institution (including status of operations, revenues and expenditures, and a benefit assessment) and an internal audit report.
2. Submit, along with the monthly accounting summary, a report on the operational status of the Mainland-area securities or futures institution subsidiary.
3. Within 2 days from the date of submitting the annual financial report audited and attested by a CPA to the competent Mainland-area securities and futures authority, submit the financial report for that fiscal year to the competent authority.
4. Within 2 days from the date of receiving the financial examination report prepared by the competent Mainland-area securities and futures authority, submit the examination report and any related materials to the competent authority.
5. Report basic information on the Mainland-area securities or futures institution subsidiary through the competent authority's designated information-reporting system, and scrupulously update the information in the event of any change.
6. Submit any other information or documentation required pursuant to the regulations of the competent authority.

The provisions of Article 24-1, paragraph 2 and of Article 24-4 to the preceding article apply mutatis mutandis to SITEs and FCMs.
The phrase "has not received any material disposition or sanction" in this Section, with respect to a securities firm, means that it complies with Article 16, paragraph 1, subparagraphs 2 to 6; with respect to a SITE, means that it complies with Article 17, paragraph 1, subparagraphs 2 to 5; with respect to an FCM, means that it complies with Article 18, paragraph 1, subparagraphs 2 to 6.