Securities and Futures Bureau

Financial Regulatory Commission Sanctioning Letter Recipient: Original copy Date of issuance: November 7, 2012 Issue number: Financial Management Securities Penalty No. 1120351211 Person punished: Qunyi Jinding Securities Co., Ltd. Unified number of profit-making enterprises: Abbreviated address: Abbreviated Name of representative or manager: Li ○○ Address: Abbreviated Purpose: A fine of NT$480,000 was imposed in accordance with Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act at the time of the act, and money laundering was Article 7, Item 5 of the Prevention and Control Act stipulates a fine of NT$500,000. Facts: The Commission’s Inspection Bureau conducted a general business inspection on the person subject to punishment from April 17 to May 8, 2012, and found that the person subject to punishment had not implemented the management of internal personnel account transactions in accordance with regulations and handled the risk management of warrant business. The stipulated hierarchical responsibility regulations are not actually implemented, and the head of the proprietary department and trader reaches the suspension standard due to investment losses. However, during the suspension period, he continues to buy individual stocks through his designated agent, and it is not included in the scope of the trader's investment review. and other deficiencies, indicating that the person being punished failed to implement the internal control system and inspection mechanism, violated the provisions of Article 2, Item 2 of the Securities Dealers Management Rules, and failed to handle customer risk classification and periodic review work, violating the money laundering prevention measures of financial institutions. The provisions of Article 5, paragraph 3. 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 the Chamber of Commerce conducted a general business inspection on the person subject to punishment from April 17 to May 8, 2020, and found that the person subject to punishment had the following deficiencies: (1) Failure to manage insider account transactions in accordance with regulations : 1. Personnel who are entrusted with the trading business are handling stock buying and selling in their own names, which violates the "Regulations on the Administration of Securities Dealers' Internal Personnel Opening Accounts at Their Affiliated Securities Dealers and Entrusted Trading of Securities" of the Taiwan Stock Exchange Co., Ltd. (hereinafter referred to as the Stock Exchange). Item 6 of Article 2 and the Standard Specifications for Internal Control Systems of Securities Firms (referred to as the Standard Specifications for Internal Control of Securities Firms) CA-11210 "Entrusted Trading and Transaction Operations" (6) stipulates that accepting transactions from insiders should be handled in accordance with the previous management regulations. 2. After opening an account, the spouse of an insider has the qualification or status of an insider, and has not changed it to an insider account (98*) to distinguish it from other clients, which violates the stock exchange's "Insiders of securities firms opening accounts at their affiliated securities firms to entrust trading" Item 1 of Article 3 of the "Securities Management Measures" and CA-11210 "Entrusted Trading and Transaction Operations" of Securities Firms' Internal Control Standards (6) stipulate that accepting transactions from insiders should be handled in accordance with the previous management regulations. 3. Insiders act as authorized trading agents for clients and violate the standards and regulations of securities firms’ internal control systems, CA-11210 "Entrusted Trading and Transaction Operations" (42). When engaging in securities business, they must not violate the "Management of Responsible Persons and Business Personnel of Securities Firms" The provisions of Article 18 of the Rules. (2) The risk management of the warrant business has not been implemented in accordance with the stipulated hierarchical responsibility regulations, which violates the internal control standards of securities firms CM-16000 "Job Authorization System" (3) Provisions on job authorization and hierarchical responsibility: 1. The results of regular inspections of consolidated hedging will not be handled by the risk management office, and the results will not comply with the company's customized "Business Approval Authority List for Derivatives Department" and be approved by the chairman of the board. 2. Some commodities were included in the consolidated hedging for the first time, without confirmation by the risk management office and reported to the chairman for approval, and did not comply with the company's self-made "Derivatives Department Business Approval Authority Table" and approval by the chairman. 3. The supervisor of the Trading Department submitted an application for further adjustments to the fluctuations in the warrant purchase price, which was not approved by the deputy director of the derivatives department (including) or above, and did not comply with the company's self-made "Derivatives Department's Derivatives Financial Product Hedging Operations Rules" "Article 6, paragraph 2. (3) The self-operated department handles investment in domestic stocks. The department head and trader has reached the suspension level due to investment losses. However, during the suspension period, he continued to purchase individual stocks through his designated agent, and was not included as a trader. The scope of the investment review violates the provisions of CA-12130 "Division of Powers and Responsibilities and Review of Trading Decisions" of Securities Firms' Internal Control Standards regarding the division of power and responsibilities of business personnel in the self-operated department and the review of trading decisions. (4) Defects in handling customer risk classification and periodic review: 1. For customers who meet the negative news list or the Ministry of Justice Investigation Bureau’s letter to investigate suspicious transactions, are they classified as high-risk customers in accordance with the regulations, violating the internal control standards of securities firms? CA-18100 "Prevention of Money Laundering (Including International Securities Business)" (9) stipulates that relevant companies should follow their own policies and procedures related to money laundering and risk assessment, as well as money laundering prevention and counter-terrorism financing plans. 2. The regular review of high-risk customers has not been completed for more than one year, which violates Article 5, paragraph 3, of the Measures for the Prevention of Money Laundering of Financial Institutions, and the Internal Control Standards for Securities Firms CA-18100 "Prevention of Money Laundering (including International Securities Business)" (4) Provisions on continuous review and monitoring. 3. The above-mentioned deficiencies indicate that the person being punished has failed to implement the internal control system and has violated Article 2, Item 2 of the Securities Dealers Management Rules and Article 5, Item 3 of the Measures for the Prevention of Money Laundering by Financial Institutions. The sanctions provided for in Article 178-1, paragraph 1, paragraph 4 of the Exchange Act and Article 7, paragraph 5 of the Money Laundering Prevention Act are as intended. 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: Qunyi Jinding Securities Co., Ltd. (Representative Mr. Li ○○) Copy: Omitted