Securities and Futures Bureau

Financial Supervisory Commission’s disciplinary action recipient: Original copy Date of issue: April 19, 2012 Issue number: Financial Management Securities Penalty No. 1110360776 Person punished: IBF Securities Unified number of profit-making enterprises of a joint-stock company: 23535744 Address: 1st Floor, B1, No. 199, Section 3, Chongqing North Road, Datong District, Taipei City Representative or manager’s name: Wang ○○ Address: B1, No. 199, Section 3, Chongqing North Road, Datong District, Taipei City Purpose: A fine of NT$480,000 is imposed in accordance with Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act. Facts: The Taiwan Stock Exchange Co., Ltd. (hereinafter referred to as the Stock Exchange) conducted an inspection on the Beitou Branch of the person being punished on April 11 and 12, 2011, and July 7, 8 and 12, 2011. It is discovered that the manager and the customer have borrowed money, failed to verify the reason and rationality of orders placed by the same IP and kept records, failed to accurately conduct credit and limit review, and accepted transactions entrusted by agents who are not themselves and do not have a letter of authorization from the customer. It has been verified that it has violated the provisions of Article 2, Paragraph 2 and Article 37, Paragraph 13 of the Securities Dealers Management Rules. Reasons and legal basis: 1. According to the provisions of Article 2, Paragraph 2 of the Securities Dealers Management Rules, the business of securities firms shall be conducted in accordance with laws, articles of association and the established internal control system; the same provisions of Article 37, Paragraph 13 of the Rules, Securities firms engaged in securities business shall not accept the subscription, purchase, sale or delivery of securities by persons other than themselves or by agents who do not have a letter of appointment from the client. According to the provisions of Article 178-1, Paragraph 1, Paragraph 4 of the Securities and Exchange Act, securities firms that fail to implement internal control systems shall be fined not less than NT$240,000 but not more than NT$4.8 million. 2. The stock exchange conducted an inspection on the Beitou Branch of the person being punished on April 11 and 12, and July 7, 8, and 12, 2011, and found that the person being punished had the following deficiencies: (1) ) The branch manager had a loan with a client, which violated the provisions of Article 18, Item 2, Item 9 of the Rules for the Management of Persons in Charge and Business Personnel of Securities Dealers. (2) Failing to verify the reason and rationality of orders placed by the same IP address and keeping records in the case of insiders placing online orders with customers and between customers, violating the standard specification ca-11210 of the securities firm’s internal control system, entrusted trading and transactions Assignment (47) regulations. (3) The entrusted trading business personnel failed to verify the client’s credit information sheet in detail, that is, handle the credit report and limit review, and accept transactions entrusted by agents who are not themselves and do not have a client’s letter of appointment, which violates the standards and regulations of the internal control system ca -11120 Customer Credit Collection Operation (1) 1. and the provisions of Article 37, Paragraph 13 of the Securities Dealers Management Rules. 3. The above-mentioned deficiencies indicate that the person being punished has failed to implement the internal control system and has violated Article 2, Paragraph 2 of the Securities Dealers Management Rules and Article 37, Paragraph 13 of the same rules, in accordance with Article 178-1 of the Securities and Exchange Act Paragraph 1, paragraph 4, stipulates that the punishment shall be 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: IBF Securities Co., Ltd. (To be served: Representative: Mr. Wang ○○) Copy: Taiwan Stock Exchange Co., Ltd. (Representative: Mr. Lin ○○), Securities Over-the-counter Trading Center of the Republic of China (Representative: Mr. Chen ○○ ), Securities Business Association of the Republic of China (representative Mr. Chen ○○), Securities and Futures Bureau (Accounting Office), Securities and Futures Bureau (Secretary’s Office), Securities and Futures Bureau (Securities Management Group) -------- -------------------------------------------------- --------------------------------------- Recipients of the Financial Supervisory Commission's ruling: if Date of issuance of original and copy: April 19, 2012, Republic of China No. of issuance: Financial Management Securities No. 11103607762 Person to be punished: Zhang ○○ National identity card unified number or foreigner’s nationality and residence permit number: omitted address: omitted subject: omitted Order Hongyuan Securities Co., Ltd. (hereinafter referred to as Hongyuan Securities) to stop the execution of the punished person's business for two months, and report the execution status to the meeting for review within 10 days from the day after the punishment is served. Facts: The Taiwan Stock Exchange Co., Ltd. (hereinafter referred to as the Stock Exchange) announced on April 11 and 12, 2011, and July 7, 8 and 12, 2011 IBF Securities Co., Ltd. (hereinafter referred to as Guotai Securities) Beitou Branch conducted an inspection and found that the person being punished had borrowed money from a customer and had violated the provisions of Article 18, Item 2, Item 9 of the Rules for the Management of Persons in Charge and Business Personnel of Securities Dealers . Reasons and legal basis: 1. According to the provisions of Article 18, Paragraph 2, Item 9 of the Rules for the Management of Persons in Charge and Business Personnel of Securities Dealers, business personnel are not allowed to borrow money from clients. In accordance with Article 56 of the Securities and Exchange Act, if the competent authority discovers that an employee of a securities firm has violated this Act or relevant laws and regulations, thereby affecting the normal execution of securities business, the competent authority may order the affiliated securities firm to cease its business for less than one year. Execute or remove their duties. 2. The stock exchange conducted an inspection on Guoqiao Securities Beitou Branch on April 11 and 12, 2011, and July 7, 8, and 12, 2011, and found that the person being punished had borrowed money from its customers. It has been verified that it has violated the provisions of Article 18, Item 2, Item 9 of the Rules for the Management of Persons in Charge and Business Personnel of Securities Firms. 3. If the violation is revealed, and the behavior of the person being punished has affected the normal execution of the securities business, the punishment shall be in accordance with the provisions of Article 56 of the Securities and Exchange Act. Note: If the person subject to punishment is dissatisfied with this punishment, he should submit a written petition through this Association (County Citizen of Banqiao District, New Taipei City) in accordance with 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, Avenue) filed a petition with the Executive Yuan. However, in accordance with Article 93, Paragraph 1 of the Appeals Act, unless otherwise provided by law, the filing of an appeal does not stop the execution of this sanction. Original: Hongyuan Securities Co., Ltd. (To be served: Representative: Mr. Jiang ○○), Mr. Zhang ○○ Copies: Taiwan Stock Exchange Co., Ltd. (Representative: Mr. Lin ○○), Taiwan Securities Co., Ltd. Over-the-Counter Trading Center (representative: Mr. Chen ○○), Securities Business Association of the Republic of China (representative: Mr. Chen ○○), IBF Securities Co., Ltd. (Sendee should be served: Representative Mr. Wang○○)