taiwan securities association tsa annual report.pdf · 6. strive for easing the restrictions on...

Taiwan Securities AssociationPassion．Professionalism．Efficiency．Innovation

Annual Report 2011

Taiwan Securities Association6FL., NO. 268, Section 2, Fu-Shin South Rd., Taipei 106, Taiwan

Tel: 886-2-2737-4721 Fax: 886-2-2732-1307

http://www.twsa.org.tw

Taiwan Securities Association

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Foreword – A Message from the Chairman

I. Introduction

1.Profile

2.PurposeandMission

II. TSA Organization

1.TSAOrganizationChart

2.GeneralAssemblyoftheMembers

3.BoardofDirectors

4.BoardofSupervisors

5.Committees

6.AdministrativeDivisions

III.Reductionofsecuritiesfirms’operatingcost

IV. Upgradingofsecuritiesmarket’soperation

efficiency

V. Expansionofsecuritiesfirms’businesslines

VI.Enhancementofsecuritiesindustry’sself-

disciplinaryfunction

VII.Activeparticipationininternationalevents

VIII.Enhanceinvestmentspecialists’andinvestors’

training

Appendix

FOREWORD

A M

essage from

the Chairm

an

Forsecuritiesfirms, lastyear (2011)wasadifficultyear. In thefirsthalfof2011,

the Fed continued theQuantitative EastingMonetary Policy again and thereby

enrichedthecapital in theworld.Meanwhile, thecapitalwasgreatly investedin the

emergingmarketsinAsia.TheTSECweightedindexstayedat8,000pointsaboveand

theentiresecurities firms’EPSwas$0.60,whichwasconsidered fairperformance.

Notwithstanding,afterthePolicywasliftedinthesecondhalfof2011,the

economyrecoveredsluggishlyintheU.S.A.Meanwhile,uponoutbreak

oftheEuropeanDebtCrisis,theconsumermarketsinEuropeandthe

U.S.A.weredepressedandconsequentlytheeconomyinChinawas

affectedandcouldstayfairandstableonly.TheeconomyinTaiwan

wasdeclininggiventheglobaleconomy,andtherefore, thestock

marketwasdepressedandtheentiresecuritiesfirms’EPSsuffered

lossinTaiwan.

TheyearlyTSECmarketindexdroppedfrom8,972pointsto

7,072points,adecreaseof21.2%.TheGTSMmarket index

droppedfrom143pointsto93points,adecreaseof35.0%.

Thetotalsecuritiesmarket (includingGTSMmarket)value

alsodeclined fromNT$25,790billion toNT$20,640

billion,adecreasebyNT$5,150billion,namely19.97%.

Theyearlyearningsof the total84dedicatedsecurities

firmswereNT$17.153billion,with theaveragedEPS

declining fromNT$1.020 in2010 toNT$0.505. If the

gainsfromsaleofKimEngSecuritiesSingaporebyYuanta

Securitieswereexcluded, theentire securities firms’

earningswouldhavebeenNT$9.593billionwithEPS

NT$0.283.

Compared to local banks,which received the

unprecedentedearnings for thepastdecade,namely

NT$200billionwithROE9.33%, in last year, itwas

reallyadifficultyearforsecuritiesdealers.

> > > > > T a i w a n S e c u r i t i e s A s s o c i a t i o n

I. TheAssociationhasAchievedRemarkableEffectsinHelpingSecuritiesfirmsUpgradeCompetitiveness.

In thepastyear, inorder toupgrade securitiesdealers’competitiveness, theAssociationhas

aimedat thefourmajorobjectives,namelyreductionofsecuritiesdealers’operatingcost,upgrading

of securitiesmarket’soperationefficiency, expansionof securitiesdealers’ business lines and

enhancementofsecuritiesindustry’sself-disciplinaryfunction,andachievedthefollowingeffects:

1. Reduction of securities firms’ operating cost

TheAssociationhasachievedaremarkableeffect inhelpingreducingsecurities firmsoperating

cost.Asa result, the securities firmsareexpected to saveNT$0.9billionperyear.Meanwhile,

securitiesfirmsmayalsorefundtheco-accountabilityclearingandsettlementfundintheamountof

NT$2.4billionapproximatelyinFebruary2012.

(1)Reductionofbrokeragecommissionsandservicefee

(2)ReductionofwarrantTSEC(GTSM)listingfee

(3)Reductionofsecuritiesexchangetaxpaiduponmaturityofwarrants

(4)Reductionofdataprocessingfeeandinformationequipmentutilizationfee

(5)Reductionofcentrallydepositedsecuritieservicechargesforbook-entryoperations

(6)Reductionofprotectionfundsallocationratio

(7)Reductionofco-accountabilitysettlementfundscale

2. Upgrading of securities market's operation efficiency

(1)Define theuniformregulationsgoverningsuspension/resumptionof transactions, irrelevantwith

whetherthesuspension/resumptionoftransactionsinthesecuritiesmarketiscausedbythemarket

stabilitymechanismorfailureintheexchangesystem.

(2)Asecurities firm’s subsidiarymaybeexempt from the restrictionsdefined inArticle45of the

FinancialHoldingCompanyAct,ifitisengagedinsuchfinancialplanningbusinessasexchangeof

stakeholders’stockbymeansoftrust.

(3) Securitiesfirms’e-tradingaccountsmayenterelectronicsignatureintothe“PrimaryListed(OTC)

RiskNotice”inthesamemannerapplicabletothe“WarrantRiskNotice”.

(4) Thechairmanoftheboardofanysecuritiesdealerthatmeetsspecificrequirementswasallowedto

assumethepresidentconcurrently.

(5) Easingtherequirementsaboutidentificationofprofessionalinvestors’qualifications.

> > > > > T a i w a n S e c u r i t i e s A s s o c i a t i o n

(6)Announcingtheamendments totheAssociation’s“SampleSecuritiesFirms’AccountingSystem”to

thepublic.

3. Expansion of securities firms’ business lines

(1) Permit theofferingofknock-outcallwarrants (callablebull)andknock-outputwarrants (bear

contract):OfficiallytradedinTSECandGTSMasofJuly1,2011.

(2) Securitiesfirmsmayengageinwealthmanagementbusinessbymeansoftrusts:Securitiesfirmsmay

engageinwealthmanagementbusinessbymeansof“moneytrusts”and“securities trusts”,andin

thethreetypes,including“non-discretionaryindividualmanagement”,“non-discretionarycollective

management”and“semi-discretionaryindividualmanagementforwhichtheprincipaldesignatesthe

scopeormethodofuse”.

(3) Securities firmsmayplaceorderswith securities firms inMainlandChinadirectlyonbehalfof

professional investors:Securities firmsmayplaceorderswithsecurities firms inMainlandChina

directlytoexchangesecuritiesinMainlandChinaonbehalfoftheprofessionalinvestorsapprovedby

thecompetentauthoritytoinvestsecuritiesinMainlandChina.

(4) Easingthescopeofsecuritiesfirm’tradingsecuritiesforitsownaccount:Includeoffshorestructured

notes,EEBissuedbydomesticlisted(OTC)enterprises,andoffshorecorporatebondwithwarrant.

4. Enhancement of securities industry's self-disciplinary function

(1)Amend theAssociation’s self-disciplinary rules inorder todealwith theFinancialConsumer

ProtectionActresearchedanddraftedbythecompetentauthority.

(2)Amend theRegulationsGoverningSecuritiesFirmsAcceptingOrder toTradeForeignSecurities,

establish the investors'hierarchicalmanagementmechanism, increase thecontrolovermarketing

process,andaddsuchrequirementsforprotectionofinvestors’interestandrightasthe“KnowYour

Products”systemandinformationdisclosure.

(3)RestatethatsecuritiesdealersshallfulfillandunderstandtheKnowYourCustomer(KYC)evaluation

operationandcategorizeinvestorsintoprofessionalornon-professionalones,andsecuritiesdealers

shallbeobligatedtoconductinvestigationwithduediligenceandasktheinvestors forreasonable

andreliableevidencetomeetthesuitabilityofinvestmentobjects.

(4)Adjust the scope and frequencyof the internal audit adequately, research andpropose the

summarizationof suggestionson theexisting internalcontrol systemstandardsand regulations

(includingsecuritiesfirms,futuresdealersandfuturesintroducingbrokers),andaskvarioussecurities

organizations inwriting to take thesuggestions intoconsiderationwhenamending their internal

controlsystemstandardsandregulations.

II. TheAssociationWillWorkHardtoDevelopBusinessforSecuritiesFirmsThis Year.

Thisyear,theAssociationwillstilladheretotheprincipleofservicingourmembers,complywiththe

competentauthority’sguidanceandworkhardtodevelopbusinessforsecuritiesfirms.Iherebypropose

thesevenworkprioritiesandwishtoworkwitheachoneofyoutoachievethesame:

1.Urge securities firms inTaiwan toprocessoutboundsecuritiesbusiness.By referring to the

OffshoreBankingAct,strivefor taxationcredit, freeflowofcapitalandupgradingflexibilityof

operation,andplantheenactmentof“OffshoreSecuritiesBusinessRegulations”.

2.Strive foreasing the restrictionson full-timeassociatedpersonofa securities firm.Without

violating theprinciples forconflictof interestandoperating risk, theassociatedpersonmay

assumeotherfunctionsconcurrentlyiftheypossesstherelevantlicensesand,therefore,itisnot

necessarytosetrestrictionsoneachbusinessline.

3. Promote thecommunicationbetweencross-strait securities firmsandmutuallyapprove the

operation.Broadenthere-consignedportfolioscopeandeasetherestrictionsoninvestment in

MainlandChinabysecuritiesfirms.

4. Workwith thecompetentauthority toproceedwitheffectivecontrol.Respect theprinciple

for“supervisionlocalization”,andtake thesupervisionmeasures imposingstrict requirements

on financeand lenient requirementsonbusinessagainstsecurities firms.Expresslydefine the

scopeofgovernanceby thecompetentauthority,self-disciplinaryorganizationandcorporate

governance.

5. Striveforreductionofsecuritiesexchangetaxforwarranthedgingtradingfrom3/1000to1/1000.

6. Striveforeasingtherestrictionsonsecuritiesfirms’venturecapitalinvestmentandshareholding,

andpermittingsecuritiesfirmstoinvestventurecapitalandadvisorycompanies.

7. Helpsecurities firmsunderstand the lawsandregulationsanddefine therelevant regulations,

inorder todealwith theenforcementofFinancialConsumerProtectionAct,PersonalData

ProtectionActandInternationalFinancialReportingStandardsIFRS.

III SecuritiesMarketWillBringAboutaRadicalChangeThisYear.

2012is theYearof theDragon,or“RenChen”Year. “Ren”meanswaterand“Chen”meansearth.

Meanwhile, theKunHexagramrepresentsMotherNature’snourishingallcreaturesand“SeasonRain

HasFallenEverywhere”.Thatis,variouswalksoflifehaveverygoodchancetodevelopthisyear.Forthe

securitiesmarketinTaiwan,thereischancetobringaboutaradicalchangethisyear. Iherebywishto

workwitheachofyoutoachievethegoalhighlighting"stable-yet-progressiveandmovingonwardand

upward”.Also,Iwishyouhealthyandasuccessfulcareerthisyear.

Chairman

Passion．Professionalism．Efficiency．Innovation

0706 Taiwan Securities Association 2011 Annual ReportTaiwan Securities Association 2011 Annual Report 0706 Taiwan Securities Association 2011 Annual ReportTaiwan Securities Association 2011 Annual Report

Introduction

1.Profile

(1) TheAssociationwas incorporateduponofficial

approvalof theMinistryof InterioronJanuary26,

1998.A totalof threepreparatorymeetingshave

beenheld fromFebruary toMarch1998,and the

enrollmentofmemberscommencedofficiallyfrom

February27,1998.

(2) TheAssociationcalledthefirstgeneralmeetingof

1st termonApril4,1998, inwhich thedirectors/

supervisorsof 1st term, and theChairmanand

convenerofsupervisors'meeting,wereelected.

(3) TheAssociation consolidatedTaipei Securities

AssociationandKaohsiungSecuritiesAssociation

on July 31, 1999 and December 31, 1999

respectively, and became the only securities

association throughout thenation.ByDecember

31, 2011, theAssociationhas enrolled a total

of 151 securities dealermembers and 1,050

subsidiariesthereof.

2.PurposeandMission

(1) Purpose

1. Protectallinvestors

2. Developnationaleconomy

3. Coordinaterelationswiththesametrade

4. Advancemutualinterest

(2) Mission

1. Exercise the functions toboost the securities

market to copewith thenational economic

planninganddevelopment

2. Communicat ion, invest igat ion, s tat is t ic

consultation,R&Dandreleaseofpublications

related to domestic and foreign securities

businesses

3. Assist in implementing, researching and

proposingmotions about the government

economical policies and the Securities and

ExchangeAct

4. Work together to improve,communicateand

coordinate the issues about promotion of

memberself-discipline

5. Definitionandpreparationofthecommonrules

andregulationsinthesametrade

6. Promotewell-foundedmembers'organization

andthedevelopmentthereof

7. Correctdefectsinmembers'operations

8. Organizethecompetencytrainingandbusiness

seminarforemployeesinthesametrade

9. Organizepublicserviceenterprisesformembers

10.Maintainmembers'legalinterestandrights

11.Disciplinesaboutmembers'non-conformance

withrules

12.Meditationandarbitrationofdisputebetween

members,andmembersandinvestors

13. Enactmentoftheregulationsorfairtraderules

governingmembers'business

14. Request,changeandre-issuanceofmembership

certificates,andotherservices

15. Join internationalsecuritiesorganizationsand

strengthennationaldiplomacy

16. Provideservicescommissionedbyentitiesand

groups

17. Participateinsocialmovements

18.Maintain fairnessof securitiesexchangeand

protectinvestors

19. Prevent fraudulent securities exchange,

marketmanipulation, collection of illegal

servicechargesandfees,andanyotherunjust

enrichment

20.Handle securities specialists' qualification

testingandregistration

21. Performanyotherdeliverablesrequiredunder

lawsorsuggestedbymembers

I

0706 Taiwan Securities Association 2011 Annual ReportTaiwan Securities Association 2011 Annual Report

》 TSA Organization



TSAOrganization

1. TSA Organization Chart

II

Administrative Division

BrokerageBusinessCommittee

DealingBusinessCommittee

DisciplineCommittee

R&DCommittee

RiskManagementCommittee

Education&TrainingCommittee

FinanceCommittee

InternationalAffairsCommittee

MainlandAffairsCommittee

FinancialFuturesCommittee

BrokerageofForeignSecuritiesCommittee

NewFinancialProductsCommittee

ForeignBrokersCommittee

PublicAffairsCommittee

UnderwritingCommittee

BondMarketCommittee

TaxationandAccountingCommittee

E-CommerceBusinessCommittee

WealthManagementCommittee

ShareholderServiceCommittee

AuditingCommittee

InvestorEducationCommittee

OverseasManagementStrategyCommittee

TenderingCommittee

General Assembly of the Members

Board of Supervisors

Board of Directors

Chairman

Secretary General

Deputy Secretary General

Business Development

Division

Secretariat

Finance Dept.

Information M

anagement D

ept.

Planning Dept.

Business Service D

ept.

Education & Training D

ept.

International Affairs D

ept.

Kaohsiung O

ffice



2.GeneralAssemblyoftheMembers

TheGeneralAssemblyof theMembers is the supremedecision-makingbodyof theTSA.

MembersoftheAssociationarerequiredtoappointrepresentativestoattendtheGeneralAssembly,

whoshallbereferredas "MemberRepresentatives".Thenumberofmemberrepresentatives for

eachmembershallbedeterminedinaccordancewiththefollowingcriteria:

(1)Membersengagedinunderwritingbusinessshouldappointonememberrepresentative.

(2)Membersengagedinsecuritiesdealingbusinessshouldappointonememberrepresentative.

(3)Membersengagedinsecuritiesbrokeragebusinessshouldappointonememberrepresentative.

(4)Membersengagedintwoorthreeitemsdescribedaboveshouldappointtwoorthreemember

representatives.

Asat31December2009,theTSAhasatotalof275memberrepresentatives.

3.BoardofDirectors

Theboardofdirectors isanexecutiveunitof theAssociation. It isalsoanexecutiveunit

responsibleforplanningandfacilitatingtheoveralloperationoftheAssociation.Atpresent,there

are33directorsinTSA'sboardofdirectors,including11executivedirectorsandachairperson.

4.BoardofSupervisors

TheBoardofSupervisorsisthesupervisingunitoftheAssociation,responsibleforsupervising

and rectifying, if necessary, theoperations and financialmanagement of theAssociation

administeredby theboardofdirectors.TheTSAhas11supervisorsnow, including3executive

supervisorsandachiefsupervisor.

ChairmanDr.Min-JuhHwangsubmittedthe proposal on securities policy toPrimerWuDen-YihattheNorthDistrictDirectors’Seminar2011.


》 TSA Organization



5. Committees

TheTSAhasatotalof24committeescurrently,includingbrokeragebusiness,dealingbusiness,

discipline,R&D,education& training, finance, internationalaffairs,mainlandaffairs, financial

futures, new financial products, foreignbrokers, public affairs, underwriting, bondmarket,

brokerageof foreignsecurities, taxationandaccounting, riskmanagement,e-commerce,wealth

management, shareholder service,auditing, investoreducation,overseasmanagement strategy

and tenderingcommittees. Inaccordancewith thearticlesof theAssociation, thecommittees

shallbesupportingunitsof theboardofdirectors, responsible forR&Din thesecuritiesmarket

aswellasrecommendationandintegrationofvariousbusinessproposals,soas toensuresmooth

businessoperationof theAssociation.Also,TSAhasestablishedatenderinggroupresponsible for

thenegotiationofmajorprocurementprojects,aiming toachieveacentralizedcontrolofmajor

expensesandcost-savingfortheAssociation.

6.AdministrativeDivisions

Administrativedivisionsof theAssociationplaykey roles inmanaging theoperationsof the

Association.TheTSA'sadministrativedivisionsaresupervisedbyasecretarygeneralandtwodeputy

secretarygenerals.Therearetwodivisionsundertheirmanagement,respectively,theadministrative

divisionandbusinessdevelopmentdivision.Theadministrativedivisionis furtherdividedintofour

departments, respectively,secretariat, finance, informationmanagementandplanning;while the

businessdevelopmentdivisionconsistsof threedepartments includingbusinessservice,education

andtrainingandinternationalaffairsdepartments.

TheTSA'sKaohsiungoffice takeschargeofall the trainingprograms,membercoordination,

seminarsandforums,aswellasotherrelatedissuesforTSAmembersinthesouthernpartofTaiwan.

TheTurkish CapitalMarketsDay event isheld successfully inTaipeionOctober282011.

1.Reductionofco-accountabilitydelivery(payment)andsettlementfundscale

Inordertoenhancetheoperationandmanagement

efficiency inmarketand to increase thesecurities

firms’capitalutilization, theAssociationsuggested

thecompetentauthority tomodify thecurrentco-

accountabilitydelivery(payment)andsettlementfund

scaleandsystem.Thecompetentauthorityadopted

ourmotionandadjustedthesettlementfund.Thatis,

thefundwasreducedfromNT$8billiontoNT$6.4

billion(NT$3billiontotheTSECandNT$3.4billion

tosecuritiesfirms)intheTSECmarket,fromNT$2.8

billion toNT$2billion inGTSM (NT$0.4billion

toGTSMandNT$1.6billion tosecuritiesdealers).

Upon adjustment, securities firmsmay refund

NT$2.4billion in total (NT$1.6billion to theTSEC

marketandNT$0.8billiontotheGTSMmarket),and

thealternativepolicywas implemented inorder to

dealwiththereductionofsettlementfundscale.

2.Reductionofsecuritiesfirms’brokeragecommissionsandservicecharges

Inorder to reduce securities firms’ operating

cost, theAssociation suggested the competent

authority to reduce the brokerage commissions

and service charges.The competent authority

adoptedourmotion.TheTSECandGTSMreduced

thecharges fromDecember1,2011 respectively.

Reductionofsecuritiesfirms’operatingcost

III



The As soc i a t i onstaffwashonoredasexcellentworkersbyMinistryof Interiorin2010.

That is, thebrokeragecommissionswere reduced

from0.572/10000of tradingvalue to0.52/10000

of tradingvalue.Theservicechargeswerereduced

from0.65/10000of tradingvalue to0.585/1000of

tradingvalue.Asaresult,securities firmsmaysave

approximatelyNT$0.42billioneachyear.

3. Reductionofprotectionfundsallocationratio

In order to upgrade securities firms’ fund

utilization efficiency and competitiveness, the

Association suggested the competent authority

to reduce the securities firms’ protection funds

allocationratio.Thecompetentauthorityadoptedour

motionandpromulgatedanorderunderArticle18of

theSecurities InvestorandFuturesTraderProtection

ActonSeptember2,2011.Asaresult,thesecurities

firms’protectionfundsallocationratiowasadjusted

fromJuly1,2011toDecember31,2012, reduced

from0.0285/10000oftradingvalueto0.0185/10000

of the trading value, i.e. a decrease byNT$60

million.

4. Reduction of the warrant TSEC (GTSM)listingfee

Inorder to rationalizesecurities firms’warrant

operatingcost forperpetualoperationofwarrants,

theAssociation suggested theTSECandGTSM to

reducethewarrant listingfee.Asaresult, theTSEC

andGTSM reduced thewarrant listing fee from

January26,2011.ThecollectionofwarrantTSEC

(GTSM)listingfeewascategorizedintothreegrades

subject to the total issuedamount.That is, in the

caseof theissuedamountless thanNT$15million,

theannualTSEC(GTSM)listingfeewasNT$80,000;

in thecaseof theissuedamountmorethanNT$15

millionbutlessthanNT$30million,theannualTSEC

(GTSM) listing feewasNT$70,000. In thecaseof


》 Reduction of securities firms' operating cost



TheAssociationwashonoredas theexcellent groupunderthenational socialgroupandoccupationgroupperformanceassessment o f Minis t ry o fInteriorin2010.

theissuedamountmorethanNT$30million,the

annualTSEC(GTSM)listingfeewasNT$60,000.

Inotherwords, securitiesdealersmaysave the

TSEC (GTSM) listing feebyat leastNT$10,000

foreachfund.Intermsof thetotal15,150funds

issuedby securities firms’underwarrantTSEC

(GTSM)listingfromFebruarytoDecember2011,

thewarrant issuersmaysave theTSEC (GTSM)

listingfeebyNT$0.22billionapproximately.

5. Reduction of securities exchange

taxpaiduponmaturityofwarrants

The competent authori ty modif ied the

nature of call (put)warrant cash settlement

exchangefrom“underlyingsecurities”into“other

marketablesecurities”onOctober4,2011.That

is, thecall (put)warrantholdersmay resell the

same to issuers at the exerciseprice.The re-

definitionofnatureofstockwarrantperformance

cashsettlementexchangeresolvedthecall (put)

warrantperformancecash settlement taxation

issue.When the call (put)warrants issuedby

securities firmsmatures, or areperformedby

meansofcash settlementbeforematurity, it is

not necessary topay the securities exchange

taxequivalent to3/1000of theexerciseprice

ormarket valueof theunderlying stock and,

therefore, the securi t ies f i rms’ operat ing

cost forwarrantsmay be reduced and some

positivebenefitmaybebroughtabout toward

TSAMemberTour toZhangjiajie on Sep3rd 2011.

TSAIncentiveTour toAngkorWaton June30rd 2011.

ChairmanDr.Min-JuhHwangattendedthe36th

IOSCOAGMinCapeTowninSouthAfrica.



TheTSAdelegationvisitedMilaninOctober2011forsigningtheMOUwithASSOSIM.

thedevelopmentofdomesticwarrantmarket.Warrant issuersmaysave the

securitiesexchangetaxbyNT$34million.

6. Reductionofdataprocessingfeeandinformation

equipmentutilizationfee

TheAssociationnegotiatedwiththeTSECandGTSMforthemotionabout

reductionofdataprocessing feeand informationequipmentutilization fee.

Themotionwasapprovedbythecompetentauthorityandimplementedasof

January1,2012.TSECwillchargethedataprocessingfeeat85%ofthecurrent

rate,andGTSMwillchargetheinformationequipmentutilizationfeeat95%of

thecurrentrate.


》 Reduction of securities firms' operating cost



1. EasethescopeofutilizationofcollateralsdenominatedinUSDacceptedbysecuritiesfirmsbecauseofborrowedsecurities

Inordertoreducesecuritiesfirms’operatingcost,

theAssociationsuggestedTSECtopermitsecurities

firmshandling securities lending independently

toaccept thecollateralsdenominated inUSDas

offeredbyoverseasChineseandforeignerstosecure

the securities borrowed fromTSEC’s securities

lendingsystem.TheTSECadoptedourmotion,and

themotionwas implementedasofMay3,2011

todealwith theamendment toArticle33of the

TSEC’s“RegulationsGoverningSecuritiesLendingby

SecuritiesFirms”.

2. Easerestrictionsonloansbysecuritiesfirms

Inorder tosaveinvestors fromtroubleinraising

fund,theAssociationsuggestedtheTSECandGTSM

topermit investors tobuy stockonTday, and it

wouldnot be impossible to request loans given

suspensionofmarginpurchaseandshortsaleofthe

stockduetodisposalofthestockispublishedwhen

requesting loan fromsecurities firmsonT+1and

T+2days.ThemotionwasadoptedbytheTSEC,and

publishedandimplementedfromOctober17,2011

inordertodealwiththeamendmentstoArticle13of

the“OperatingRules forSecuritiesBusinessMoney

LendingbySecuritiesFirms”.

3. Strive for deferment of enforcement offundremunerationdisclosuresystem

Fund investmentorganizationswere supposed

toenforce the fundremunerationdisclosuresystem

in accordancewith the “GuidelinesGoverning

Members’ and InvestmentOrganizations’ Fund

Remunerat ion Disclosure" of the Securi t ies

InvestmentTrust&ConsultingAssociationof the

R.O.C.asofMarch3,2011andtoadvise investors

of thefundremunerationcollectedbythempriorto

saleof the funds.Notwithstanding,becausedealers

reflectedthattheyneededtimetoprepareforit,the

Association,TrustAssociationof theR.O.C.andthe

Securities InvestmentTrust&ConsultingAssociation

of theR.O.C. individually suggested deferment

of enforcement of such system.As a result, the

competentauthorityagreed togrant thesix-month

configuration period.During the configuration

period, the investment organizations shall take

preliminaryactionsandposttherangeofrateforthe

fundsontheirofficialwebsites.

4. Identificationofprofessionalinvestors’qualifications

Pursuant to laws, the investorswhomet the

professional investors’qualificationsabout single

investmentmore thanNT$3millionshould invest

morethanNT$3millionineachsingle transaction.

Asa result, itwasdifficult for securities firms to

Upgradingofsecuritiesmarket’soperationefficiency

IV



complywith the requirementand tradingdispute

arouse frequently. In order to protect investors'

interestandrightandtohelpsecuritiesfirmsprocess

the transactions successfully, theAssociation

proposed amotion.The competent authority

responded toourmotion inwriting, stating that

“thequalification shouldbeheldmet in the first

transaction, and it is notnecessary for investors

to investmore thanNT$3millionper transaction

subsequently, provided that securities dealers

shouldverify that investorshavealreadymet the

requirementsabout investmentofmore thanNT$3

million in each single transactionwithin three

months before the consigned transaction takes

place”.Consequently,themotionwasenforcedasof

September23,2011.

5. Foreignissuers’stockdividendpolicy

Inorder toprotectourTDR investors’ interest

and right, theAssociationadded the requirements

defining that underwriters should evaluate the

certaintyof foreign issuers’ stockdividendpolicies

andverifywhethertheforeignissuershaveallocated

stockdividend in accordancewith their articles

of incorporationand relevant requirements in the

most recent years and, therefore, amended the

Association’s “GuidelinesGoverningNotes in

EvaluationReport ofUnderwriters of Securities

Offeredand IssuedbyForeign Issuers”and“Audit

Procedure inEvaluationReportofUnderwritersof

SecuritiesOfferedand IssuedbyForeign Issuers”.

The amendedprovisionswerepromulgated and

enforcedasofMay20,2011.

6. Amendrequirementsaboutsecuritiesfirms’reinvestment

Inordertooffersecuritiesfirmsmorereasonable

investmentdevelopment chance, theAssociation

suggested amending the requirements about

securities firms’ reinvestment by changing the

calculationbasis for limitof investmentfrom“paid-

incapital” to“netvalue”.Themotionwasadopted

by thecompetentauthority, and theamendments

torequirementsaboutsecuritiesfirms’reinvestment

werepromulgatedonJanuary21,2011.Asaresult,

thecalculationbasisforlimitofinvestmentinsingle

object in19 industries investedbysecurities firms

waseasedandchanged from“paid-incapital” to

“net value”.Meanwhile, the limit of investment

by securities firms in securitiesbankingbusiness,

securities investmentconsultingbusiness,securities

investment trustbusinessand futures trustbusiness

wasalsoraisedfrom10%ofpaid-incapital to20%

ofnetvalue.

TheTSASecretaryGeneral,Mr.Tai-PingChuang,attendedthe24thICSAAGMonMay23and24inLondonUK.


》 Upgrading of securities market's operation efficiency



Expansionofsecuritiesfirms’businesslines

V

1.Permittheofferingofknock-outcallwarrant(callablebull)andknock-outputwarrant(bearcontract)

The competent authority approved on June

1,2011 that issuersmayoffer theknock-outcall

warrant (callablebull)andknock-outputwarrant

(bearcontract).Therefore,thebearcontracthasbeen

officiallytradedintheTSECandGTSMasofJuly1,

2011,and theportfolio investment in thewarrant

marketofTaiwanbecamemorecomplete, thereby

makinginvestors’operationsmoreflexible.

2.Securitiesfirmsmayengageinfinancialplanningbusinessbymeansof trust

Accordingto the“Directionsfor theConductof

WealthManagementBusinessbySecuritiesFirms”,

TheTSAChairman,Dr.Min-JuhHwang, led theTSAdelegates toattend2011AFIEannualconference inSeoul,Korea.

securities firmsmayengageinwealthmanagement

businessbymeansof“moneytrust”and“securities

trust”,and in the threemanners, including“non-

discretionary individualmanagement”, “non-

discretionary collectivemanaged” and “semi-

discretionary individuallymanagement forwhich

theprincipaldesignates the scopeormethodof

use”.Until theendofDecember2011,a totalof

9securities firmshaverequested tohandlewealth

managementbusinessbymeansof trust,andallof

theirrequestswereapprovedbyFSC,5outof them

wereapprovedbytheCentralBanktohandleforeign

exchangebusiness.FromFebruary2011to theend

of2011, theasset scalehasamounted toNT$2.5

billion.Sincesuchbusinesswasavailable,securities

firms’ business lines have been expanded and,

therefore,securitiesfirms’businessperformancewas

upgraded.



TheAssociationworkedwithTurkeyCMB andTSPAKB toorganize the“TurkishCapitalMarketsDayinTaiwan”Round-Tablemeeting.

TSAChairman,Dr.Min-JuhHwangattendedthe36th IOSCOAGMinCapeTownin2011.

3. SecuritiesfirmsmayplaceorderwithsecuritiesfirmsinMainlandChinadirectlyonbehalfofprofessionalinstitutionalinvestors

Inorder tosatisfy investors’needsanddevelop

securities firms’ business lines, theAssociation

suggested the competent authority to permit

securities firms to handled consigned foreign

securit ies exchange, so that securit ies f irms

mayengage in exchangeof securities related to

investment byMainlandChina.The competent

authorityissuedainterpretiveorderonFebruary21,

2011stating thatwhenhandlingconsignedforeign

securitiesexchange,securitiesfirmsmayplaceorder

with securities firms inMainlandChinadirectly

on behalf of professional institutional investors

approvedby the industrycompetent authority to

investsecuritiesinMainlandChina,andshallaskthe

FSCforpermissioninaccordancewithArticle7.8of

“RegulationsGoverningApprovalandManagement

ofSecuritiesandFuturesTransactionsandInvestment

BetweentheTaiwanAreaandtheMainlandArea”.

4. Easingthescopeofsecuritiesfirms’exchange of foreign securities

In order to strive for easing the scope of

securitiesdealers’exchangeof foreign securities,

theAssociationsuggested thecompetentauthority

to include offshore structured notes, the Euro

ExchangeableBond(EEB) issuedbydomestic listed

(OTC)enterprises,andoffshorecorporatebondwith

warrantintothescopeofsecuritiesdealers’exchange

offoreignsecurities.Themotionwasadoptedbythe

competentauthority,andpromulgatedandenforced

onSeptember30,2011.

5. Increaseblocktradingportfolioinfuturesmarket

TodealwithTaiwanFuturesExchange’splan to

implementblock tradingsystemthe futuresmarket

inwhichTAIFEX,Mini-Taiex futures andTaiwan

IndexOptiontoprovidetraderswiththeconvenient

channel toprocessblockpositions, theAssociation

suggestedTaiwan Futures Exchange to continue

planning inclusionof stock futurescontracts into

blocktradingportfolios.Themotionwasadoptedby

TaiwanFuturesExchange;therefore,theblocktrading

systemwillgoliveandbepromotedpromptly.


》 Expansion of securities firms' business lines



1.Workwiththecompetentauthoritytoresearchanddraftthelaws,regulationsanddecreesrelatedtotheFinancialConsumerProtectionAct

The“FinancialConsumerProtectionAct”was

promulgatedandenactedon June29,2011,and

enforcedasofDecember30,2011.TheAssociation

workedwith thecompetentauthority to research

anddraftthelawsrelatedtotheFinancialConsumer

ProtectionAct, such as (1)RequirementsAbout

ScopeofFinancialCapacityorProfessionalExpertise

ofQualified Institutional Investors (Article 4.

License), (2)Regulations forAFinancialServices

EnterpriseHandling inPublishingorBroadcasting

Advertisements or Carrying out Solicitation or

PromotionalActivities (Article 8. License), (3)

RegulationsforFinancialServicesEnterpriseEnsuring

Suitability of Products or Services to Financial

Consumers (Article 9. License), (4) Regulations

for Financial Services Explanationof Important

ContractContents andRiskDisclosure Prior to

SupplyofFinancial InstrumentsorServices (Article

10.License), (5)Regulations forDisputeSettlement

Organizations’CollectionofFeesandFundIncome

&ExpenditureCustodyandManagement(Paragraph

5ofArticle13,andParagraph3.2andParagraph

3.3ofArticle14.License),and (6)Regulations for

EmploymentandDischargeofDisputeSettlement

OrganizationReviewBoardMembersandReview

Procedure(Paragraph2ofArticle18andParagraph

ofArticle23.License).The related lawshavebeen

promulgatedonDecember12,2011andenforcedas

ofDecember30,2011.

2.Amendtheregulationsgoverningsecuritiesfirms’consignmenttradingof foreign securities

Todealwiththeamendmentstothe“Regulations

GoverningSecuritiesFirmsAcceptingOrderstoTrade

Enhancementofsecuritiesindustry’sself-disciplinaryfunction

VI

TSAandASSOSIMcelebratedthesigningoftheMOU.



ForeignSecurities”promulgatedby thecompetent

authorityonSeptember3,2010, thatestablished

theinvestors'hierarchicalmanagementmechanism,

increased thecontrolovermarketingprocess,and

addedsuchrequirementsforprotectionofinvestors’

interest and right as the “KnowYour Products”

systemand informationdisclosure, theAssociation

alsoamendedits“RegulationsGoverningSecurities

Firms’Consigned Foreign Securities Exchange”,

“Securities Firms’Consigned Foreign Securities

ExchangeOperation Rules” and “Regulations

Governing Securities Firms’ Referral of Foreign

Securities Exchange toCustomers” and revoked

the “Self-DisciplinaryRules for Securities Firms’

ConsignedForeignSecuritiesExchange”.Uponthe

competentauthority’sapproval, saidamendments

andrevocationwereenforcedasofMarch28,2011.

3. RestatethatsecuritiesfirmsshallfulfillandunderstandtheKYCevaluationoperation

In order to fulf i l l securit ies f irms’ “KYC”

evaluationoperation, theAssociation, asper the

competentauthority’s instruction,workedwith the

TSECandGTSMtosendpersonnel toconducton-

site survey on securities firms’ operation of the

sixbusiness lines, includingmarginpurchaseand

short sale,derivative financial instruments, foreign

securities,borrowingofsecurities,securitiesbusiness

moneylending,andemergingstocktradedbyforeign

enterprises(includingcreditinvestigation,KnowYour

ProductsandKnowYourCustomer).TheAssociation

also issued an announcement to eachmember

inDecember2011, restating that securities firms

shouldfulfilltheKYCoperationwithrespecttotheir

business lines;meanwhile, it shouldbenecessary

tocategorized investors intoprofessionalornon-

professionalonesper requirement, and securities

firmsshouldbeobligated toconduct investigation

withduediligenceandaskinvestors forreasonable

and reliableevidence tomeet theadmissibilityof

investmentobjectexchange.

4. Definetheself-disciplinaryregulationsgoverningsecuritiesfirms’handlingoffundbusiness

Perthecompetentauthority’swritteninstruction,

theAssociation researched the pre-launching

reviewmechanism requirements for fund in the

self-disciplinary regulations.Meanwhile, inorder

to fulfill theKYCoperationand fund investment

associatedpersons’orientation training,well-found

theacceptanceof fundremuneration,andprevent

securitiesfirms’remunerationappraisalsystemfrom

beingoriented toward the salevolumeof fund in

whole and thereby causing inadequate sale, the

Associationdraftedthe“Self-DisciplinaryRegulations

Governing Securities firms’Handling of Fund

Business”andsubmitted thedraft to thecompetent

authorityforapproval.

5.PublishthepenaltiesrenderedagainstsecuritiesfirmsandtheirassociatedpersonforviolationsontheAssociation’swebsite

To help outsiders understand the penalty

renderedagainstsecuritiesdealers, theAssociation

willdisclose thepenalties, includingratificationof

misconductor severer, renderedagainst securities

dealersandtheirstaffbythecompetentauthorityon

theAssociation’swebsitefromtimetotime.


》 Enhancement of securities industry'sself-disciplinary function



The Assoc ia t ion ’s ViceChairman,Kung-LiangYeh,ledthedelegatesconsistingofdirectorsandsupervisorstosigntheMOUwithItalianAssociation of FinancialIntermediaries (ASSOSIM)inMilan,ItalyonOctober4,2011.

Duration Location Meeting

April 17-21 Cape Town, South Africa

The International Organization of Securities Commissions (IOSCO) Annual Assembly of 36th term

May 22-24 London, the United Kingdom

International Council of Securities Associations (ICSA) General Assembly of 24th term

July 31-August 8 London, the United Kingdom Directors and supervisors paid a visit to London Stock Exchange (LSE).

August 18 Taipei A visit was paid by World Federation of Exchanges (WFE).

September 28-30 Osaka, Japan Asian Securities Forum (ASF) of 16th term, 2011

October 2-11 Milan, Italy Sign MOU with Associazione Italiana Intermediari Mobiliari (ASSOSIM)

October 24 Taipei A visit was paid by Japan-based Monext.

October 27-28 Taipei The Association of Capital Market Intermediary Institutions of Turkey (TSPAKB) investment presentation

October 31-November 2 Taipei IOSCO SROCC Workshop & Mid-Year Meeting

November 9-13 Seoul, South Korea Asia Forum of Investor Education (AFIE) of 2nd term

1.Attendanceatinternationalmeetings

Activeparticipationininternationalevents

VII



Duration Location Remark

March26-28 Beijing Attendanceat2011Cross-Strait FinancialWorkshopandBohaiSummitForum

June7 Taipei ReceivedtheIndustrialSecuritiesstudymission

June22 Taipei ReceivedthevisitingSecuritiesAssociationofShandong

July25-August1 Taipei ReceivedthevisitingSecuritiesAssociationofZhejiang

October26 Taipei ReceivedthevisitingSecuritiesAssociationofShanghai

November13-15 Beijing PaidavisittoTaiwanAffairsOfficeoftheStateCouncilPRC,ChinaSecuritiesRegulatoryCommissionandSecuritiesAssociationofChina

2.Cross-straitinterchange

3. TheAssociation is anofficialmemberof such

internationalsecuritiesassociationsas the ICSA,

ASF,IFIE,IOSCOandAFIE,andalsoassumesthe

advisorofAFIE.

4. Since September 26, 2007, theAssociation

has signed anMOUwith the securities self-

disciplinaryassociationsin13countriesincluding

Japan, Korea,Thailand,Vietnam,Mongolia,

Germany,Poland,Australia, Indonesia,Malaysia,

UK,HongKongand Italy.TheAssociationwill

workhard to increase the chance forTaiwan

securities industry toworkwith the securities

industriesinothercountriesthroughthefrequent

regionalorbilateralinterchange.

TheAssociation’sdelegatesconsistingofdirectors/supervisorsheadedforLondon,UKonAugust2,2011topayavisittoLSEandUBSAG.

TSAChairman,Dr.Min-JuhHwang, led thedelegationtoattendthe16thASFAGMinOsakaJapanfromSeptember29toOctober12011.


》 Active participation in international events



Item No. Special study title Principal Investigator

1.Study on investment development of securities industries in Taiwan and Mainland

China under capital controlProfessor Teh-Ming Hou

2. Study on admission and development of cross-strait securities industries Professor Cheng-Tao Liu

3.Study on double taxation issue about income tax and securities exchange tax

both levied in warrant hedging transactionsProfessor Shih-Ming Lin

4.Study on development trend of business activities of securities companies in

Mainland China

Professor Tsang-Hsiang

Lin

1.Finalizethefollowingspecialstudyreport

Enhanceinvestmentassociatedperson’andinvestors’training

VIII

2. Enhanceinvestors’education

(1) Subsidize college/university departments other

than department of finance to organize the

general knowledge courses about personal

investment and financial planning

A total of 51 teachers have filed a request

from January toDecember2011.Asa result,

22 teacherswereapproveduponexamination

(includingfourteacherssponsoredbyTSEC,and

two teachers sponsoredbyGTSMandTDCC

respectively). 19haveorganized the courses

successfully, and a total of 1,392 students

attendedthegeneralknowledgecourses.

(2) Sponsor the financial planning seminars

organized by university clubs

Sponsor the “Securities Seminarof10th term”

organizedbyNCCUSecuritiesResearchSociety

and“InvestmentandFinancialPlanningWeek”

EventorganizedbyNationalTaipeiUniversity

SecuritiesStudySociety

(3) Attendance at international meetings related to

investment and wealth management education

a. “AFIE conference call”:AttendedbyVice

Chairman of Investment and Financial

PlanningKnowledgeEducationCommittee,

Ching-Tang Huang, on beha l f o f the

AssociationonAugust31,2011.



b. “AFIE”: ChairmanHuangMing-Chu led

ViceChairmanof Investment andWealth

ManagementKnowledgeEducationCommittee,

Ching-TangHuang,andChiefofInternational

AffairsSection,Bing-ChunHsu,toattendthe

AFIEaorganized inSeoul, SouthKoreaon

November8,2011.

(4) Publication of the investment and wealth

management promotional manual

Inordertostrengtheninvestors’correctinvestment

andwealthmanagementknowledgeandtofound

school students’correct ideaabout investment

and weal th management to upgrade the

Association’s identity infulfillinginvestmentand

wealthmanagementeducation, theAssociation

workedwith thepublicationagency topublish

suchhandbooksas“SecuritiesandI”forgeneral

investorsand“ExplorationofSecuritiesMarket”

for school students (high school faculty and

teachers,anduniversitystudentsotherthanthose

majored in finance”, totaling2,500volumes, in

order tohelp investorsandschoolstudentsget

correctknowledgeandverifypotentialriskabout

securitiesmarket.

3. Businesspromotion

(1) Warrant business

In order to further securi t ies special is ts ’

knowledgeaboutwarrants and toexpand the

trading volume ofwarrants, theAssociation

hasorganized20securitiesassociatedpersons'

warrant training sessions inTaipei,Taoyuan,

Hsinchu,Taichung,Tainan,Chiayi,Changhuaand

KaohsiungfromJuly12toAugust21,2011.The

basicconceptaboutwarrants,warrantinvestment

TSAIncentiveTourtoAngkorWatonJuly16th2011.


》 Enhance investment specialists' and investors' training



TSAMemberTourtoHolland,BelgiumandFranceonMay18th2011.

strategiesandwarrant investment risk,aswell

ascharacteristicsand transactionsofportfolio

related tocallablebullandbearcontract,were

also introduced in the training sessions.The

securitiesassociatedpersonsnationwidewere

soeager toapply foradmissionto thesessions.

Thequotaoftraineeswasfilledforeachsession,

anda totalof2,000 traineeshaveattended the

sessions.TheAssociationorganizedthesessions

verysuccessfully.

(2) Financial consumer protection

Considering that the “Financial Consumer

ProtectionAct”promulgatedbyExecutiveYuan

andenforcedasofDecember30,2011would

affect the business conducted by securities

dealersandtheirassociatedpersonsorrelations

withcustomers, theAssociationhasorganized

six sessions of toll-free special seminars for

“Introduction and Response to Financial

ConsumerProtectionAct” inTaipei,Taichung

andKaohsiung fromDecember15,2011,and

also invited the delegates from competent

authorities,ChairmanofFinancialOmbudsman

Institution,andprosecutorstoassumetrainersat

theseminars.Meanwhile, inorder topropagate

that securities and financial organizations

should report the relevant information and

fo l low adminis t ra t ive operat ing sys tems

after enforcement of theAct, the Financial

OmbudsmanInstitutionorganizedapresentation

onDecember 27, 2011 and entrusted the

Association toworkwith it to process the

applications for admission and promotional

affairs.Thequotaofeachsessionwasfilled,and

more than800 traineesattended the sessions.

Thepromotionswerecompleted successfully.

Inorder tocontinuehelpingsecuritiesfirmsand

their specialists furtherunderstand theActand



TSEC,GTSM,TDCCand theAssociationco-organizedthe“Year100HikingAcitvityofSecuritiesMarket”atSishouHills inTaipeionNovember19,2011.

related laws, theAssociationwillplanvarious

trainingprogramsagaintostrengthenpropagation

oftheAct.

4. Communication activities

(1) 2011Securities&FuturesCupGolfTournament:

Thesixentities includingTSEC,TaiwanFutures

Exchange,GTSM,TDCC, ChineseNational

FuturesAssociation and theAssociation co-

organized2011Securities&FuturesCupGolf

TournamentatSunriseGolf&CountryClubon

May1,2011.Atotalof171playersparticipated

intheGame.

(2) SecuritiesCupTableTennisChampionshipGame

of25th term:The fourentities includingTSEC,

GTSM,TDCCand theAssociationorganized

theSecuritiesCupTableTennisChampionship

Gameof25th termat thegymofNationalTaipei

UniversityofEducationonOctober29,2011.A

totalof320playersparticipatedintheGame.

(3) In order to advance increase co-workers’

interactions and promote leisure activities,

the four entities-TSEC,GTSM,TDCCand the

Associationco-organizedthe“Year100Securities

MarketHikingActivity”onNovember19,2011

(at SishouHills inTaipei) andDecember17,

2011(atKaohsiungChungChingLake).A total

of3,700participantsfromcompetentauthorities,

peripheralorganizations, securitiesassociated

firmsstaffsand their familiesattendedtheTour.

Meanwhile, the hiking activity particularly

integratedwithpublicserviceactivitiesthisyear

tourge theassociatedpersons toperformtheir

social responsibilities at their leisure time, in

ordertoupgradethesecuritiesindustry’simage.


》 Enhance investment specialists' and investors' training



number Securityfirms Income Expense Net Paidupcapital Shareholders’equityProfitincurrent

period(%)EPS(NTD) ROE(%)

Operationrevenue(%)

Networthpershare(NTD)

84 securitiesfirmstotal 444,919 427,766 17,153 339,370 472,230 3.86 0.505 3.63 100.00 13.915

48 General 436,630 421,761 14,869 326,356 446,586 3.41 0.456 3.33 98.14 13.684

36Professionalbrokerage

8,289 6,005 2,284 13,014 25,644 27.56 1.755 8.91 1.86 19.705

66 Localsecuritiesfirms 419,465 406,758 12,707 318,224 429,600 3.03 0.399 2.96 94.28 13.500

34 General 416,550 404,081 12,469 308,580 414,261 2.99 0.404 3.01 93.62 13.425


2,915 2,677 238 9,644 15,339 8.16 0.247 1.55 0.66 15.905

17Foreignsecuritiesfirms

25,454 21,008 4,446 21,146 42,630 17.47 2.102 10.43 5.72 20.160

13 General 20,080 17,680 2,400 17,776 32,325 11.95 1.350 7.42 4.51 18.184


5,374 3,328 2,046 3,370 10,305 38.08 6.072 19.86 1.21 30.579

20Top20securitiesfirms

399,212 385,205 14,007 278,390 379,238 3.51 0.503 3.69 89.73 13.623

1.Backgrounddescriptions:

TheAssociation consists of 151 corporate

members currently.The income statement only

includes the informationabout incomeof the84

securities firmswhich submitmonthly financial

statements toTSEC from January toDecember in

2011.

2.IMFforecasttheglobaleconomicgrowthrate3.3%in2012.

(1) In the first half of 2011, Fed continued the

QuantitativeEastingMonetaryPolicy(QE2)again

and therebyenriched thecapital in theworld.

Notwithstanding,after theQE2was liftedin the

U.S.A. inthesecondhalfof2011,theeconomy

recoveredsluggishly in theU.S.A.Meanwhile,

uponoutbreakof theEuropeanDebtCrisis, the

consumermarketsinEuropeandtheU.S.A.were

depressed,andconsequently, theeconomy in

Chinawasaffectedandcouldstayfairandstable

only.The IMF forecasted theglobaleconomic

growthrateat3.3%in2012.

(2) In2011, theTSECmarket indexdropped from

8,972points to 7,072points, a decrease by

21.2%.The total securitiesmarket (including

GTSMmarket ) value also decl ined f rom

NT$25,800 billion toNT$20,640 billion, a

decreaseby20.0%.Thedailyaveragedvalue(TSE:

NT$109.3billion/OTC:NT$16.1billion)was

less than that in thesameperiodof2010 (TSE:

NT$115.1billion/OTC:NT$22.4billion).The

Taiwanstockexchangewasalsodecliningdueto

theweakeningdomestic/foreigneconomiesand

theperformancethereofwaspoorin2011.

SecuritiesFirms'IncomeStatment(January–December2011) CurrencyUnit:NTDMillion

Appendix



number Securityfirms Income Expense Net Paidupcapital Shareholders’equityProfitincurrent

period(%)EPS(NTD) ROE(%)

Operationrevenue(%)

Networthpershare(NTD)

84 securitiesfirmstotal 444,919 427,766 17,153 339,370 472,230 3.86 0.505 3.63 100.00 13.915

48 General 436,630 421,761 14,869 326,356 446,586 3.41 0.456 3.33 98.14 13.684


8,289 6,005 2,284 13,014 25,644 27.56 1.755 8.91 1.86 19.705

66 Localsecuritiesfirms 419,465 406,758 12,707 318,224 429,600 3.03 0.399 2.96 94.28 13.500

34 General 416,550 404,081 12,469 308,580 414,261 2.99 0.404 3.01 93.62 13.425


2,915 2,677 238 9,644 15,339 8.16 0.247 1.55 0.66 15.905

17Foreignsecuritiesfirms

25,454 21,008 4,446 21,146 42,630 17.47 2.102 10.43 5.72 20.160

13 General 20,080 17,680 2,400 17,776 32,325 11.95 1.350 7.42 4.51 18.184


5,374 3,328 2,046 3,370 10,305 38.08 6.072 19.86 1.21 30.579

20Top20securitiesfirms

399,212 385,205 14,007 278,390 379,238 3.51 0.503 3.69 89.73 13.623

(3) In2011, thewhole84securitiesfirms’averaged

EPSwasNT$+0.505, less thanNT$+1.020 in

2010.50outof the84securities firmsearned

profits, but the remaining34 securities firms

sufferedlosses.Generalsecuritiesfirms’averaged

EPSwasNT$+0.456, less thanNT$+1.755of

theprofessional brokerage firms.The foreign

securities firms’averagedEPSwasNT$+2.102,

more thanNT$+0.399of the local securities

firms.The local securities firmswith capital

ranking top 20 earned the averaged EPS at

NT$+0.503, less than the averaged value

prevailinginthesametrade.

3. In2012,thetargetedeconomicgrowthrateis3.91%inTaiwan:

TheDirectorate-GeneralofBudget,Accounting

CurrencyUnit:NTDMillion

andStatistics,ExecutiveYuanreleasedthedomestic

economicoutlook.TheGDPgrowth rate in2011

was estimated to be 4.03%, reflecting that the

domesticeconomicgrowthwassluggish,butGDP

wasmore thanUS$20,000. TheGDPgrowth rate

in2012wasestimated tobe3.91%only.Thepoor

internationaleconomywouldaffectdomesticexport

andconsumptionconsequently.Notwithstanding,the

economicgrowthratewasexpectedtobeincreasing

quarterbyquarterandtherebywouldbehelpful to

flourish thestockexchange.Taiwanstockexchange

isexpectedtoperformwellinthesecondhalfofthis

year.Securitiesfirmsshallenhancetheirconstitution

andstabilizetheiroperation,andwillbeexpectedto

gainmoreprofit.


》 Appendix



SecuritiesFirms’IncomeStatementintheRecentTwoYears

ComparisonofSecuritiesFirms’AccumulatedOperatingRevenues

● Entire securi t ies f i rms’ operat ingrevenues:NT$444.919billionin2011,andNT$347.880billionin2010

● Notwithstanding, as ofAugust, theTSE tradingvaluedeclineddue to theinternational trend, and brokeragerevenuewasreduced.

2011 2010

Million

37,570

69,334108,096

143,657

224,298267,148

322,899364,314 385,280

424,191444,919

184,907

138,48339,631

61,734 79,313105,638

157,779 185,940218,854

250,795277,434

307,707347,880

0

100,000

200,000

300,000

400,000

500,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

ComparisonofSecuritiesFirms’AccumulatedOperatingProfit/Loss

● Entire securi t ies f i rms’ operat ingincomes:NT$17.153billion in2011,andNT$34.994billionin2010

● Entire securities firms’ averagedEPS:NT$0.50in2011,andNT$1.02in2010

-10,000

0

10,000

20,000

30,000

40,000100年 99年

Million

-852 -840

4,7947,778 7,029 8,232

14,40717,985

23,97226,580

29,84934,994

4,301 4,6237,239

10,542

19,678 20,12324,993 22,018

18,344 20,267 17,884 17,153


ComparisonofSecuritiesFirms’AccumulatedReturnonShareholdersEquity(ROE)

● Entiresecuritiesdealers’ROE:3.63%in2011,and7.29%in2010

● Thebestsecuritiesdealers’ROEin themost recentyear refers to11.22% in2007.

-2.00

0.00

2.00

4.00

6.00

8.00

10.00 2011 2010

％

0.87 1.462.12

4.05 4.205.17

4.59

3.85 4.24 3.78 3.630.94

-0.19 -0.191.05

1.70 1.54 1.843.18

3.94

5.17 5.656.31

7.29


ComparisonofSecuritiesFirms’NetValuePerShare

● Entire securi t ies f i rms’ net valueper share:NT$13.92 in 2011, andNT$13.99in2010

● Theentiresecuritiesfirms’netvaluepershareremainedNT$14in2011.

12.00

13.00

14.00

15.00

16.00 2011 2010

Dollar

13.68 13.71 13.70 13.75 13.6413.29 13.40 13.44 13.66 13.72 13.80

13.9914.33 14.34 14.42 14.40 14.55

14.20 14.3114.12 14.01 14.05 13.94

13.92



PB28 Taiwan Securities Association 2011 Annual ReportTaiwan Securities Association 2011 Annual Report

Taiwan Securities AssociationPassion．Professionalism．Efficiency．Innovation

Annual Report 2011

Taiwan Securities Association6FL., NO. 268, Section 2, Fu-Shin South Rd., Taipei 106, Taiwan

Tel: 886-2-2737-4721 Fax: 886-2-2732-1307

http://www.twsa.org.tw

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