The Financial Supervisory Commission (hereinafter, the "Commission") issued the Jin-Guan-Zheng-Juan-1030033903 Circular of August 29 (hereinafter, the "Circular") in accordance with Article 27 of the Guidelines for Handling the Internal Control System Established by Service Enterprises in the Securities and Futures Markets to require an integrated securities firm which operates securities underwriting, trading and brokerage business to set up a legal compliance unit reported to the president to take charge of the planning, management and execution of its legal compliance system.
The Circular first requires an integrated securities firm that operates securities underwriting, trading and brokerage business to set up a legal compliance unit reported to its president with responsibilities for the planning, management and execution of its legal compliance system. Meanwhile, this Circular also requires that such legal compliance unit to be staffed with a legal compliance supervisor and sufficient qualified business personnel. The legal compliance supervisor shall take general charge of compliance with laws and regulations, shall not serve concurrently in another internal position other than the supervisor of the legal affairs unit, and shall meet the qualification requirements for senior sales personnel of securities firms under Article 5 of the Regulations Governing Responsible Persons and Sales Personnel of Securities Firms. Internal sales personnel shall also meet the qualification requirements for the sales personnel of securities firms under Article 6 of the same regulations. If a securities firm has not met the above-mentioned conditions and requirements, the Circular requires adjustment within six months after the promulgation date of the Circular.
In addition to the above requirement for allocating the personnel of the legal compliance unit, the Circular also indicates that before a securities firm launches a new product or service or applies to the Commission for a new type of business, the supervisor of the legal compliance unit is required to issue an opinion indicating compliance with laws and regulations and internal requirements and affix his/her signature to assume responsibilities.