taiwan securities association
TRANSCRIPT
Foreword – Message from the Chairman
I. Introduction of TSA
1. History
2. Objectives and Missions
II. TSA Organization
1. TSA Organization Chart
2. General Assembly of the Members
3. Board of Directors
4. Board of Supervisors
5. Committees
6. Administrative Divisions
III. Work Report
1. Major accomplishments in 2009
2. The 2010 focus
Appendices
1. Major Events
2. Profitability analysis of securities companies
3. Comparison of Business Performance by Securities Firms during
the Recent Two Years
Taiwan Securities Association
CO
NT
ENT
S
0206
09
13
31
Message from
the Chairm
an
The last year (2009) had been a year shadowed by the global financial
crisis and economic impacts. While the Taiwan stock market was buried
deep in the aftermath of the financial crisis during the first quarter,
expansionary fiscal and monetary policies were being enforced all over the
world, policies were also introduced in Taiwan to ensure financial stability,
expansion of domestic demand, export growth, and employment etc,
which eventually led the economy to its recovery. The stock market also
responded to the inflow of capital, improved cross-strait relations, and the
recovery of industry fundamentals, and climbed out of its slump. At the end
of 2009, the Taiwan Stock Exchange Capitalization Weighted Stock Index
(TAIEX) closed at 8,188, being 78.35% higher than its 2008 year-end
level, while the GreTai Securities Market Capitalization Weighted
Stock Index (GTEX) closed at 150.05, a 133.11% improvement
over the previous year. The daily trading volumes of both markets
averaged to a total of $139.12 billion, being 17.83% higher than
the 2008 average; market capitalization stood at $22,947.8
billion or 83.90% higher compared to 2008. The EPS across 85
security companies averaged $1.18, which was a tremendous
improvement over the -$0.20 in 2008, this was also the best
performance we have seen since 2007 ($1.62). The business
foundation of our security company remained strong and had
demonstrated great improvements.
The Taiwan Securities Association is committed to serve
its members and to ensure market discipline. Ever since my
appointment as the Chairman on 30 Mar 2007, I have been
fully dedicated to raise the competitiveness of our nation's
securities industry, and encouraged all our colleagues to
perform services with "passion, professionalism, efficiency,
and innovation". We have set goals to reduce the operating
costs of security companies and improve market efficiency
in the short term, expand the business coverage of security
companies while ensuring discipline among members in the
medium term, and raise our global competitiveness over the
long term.
FOREWORD
For the past year, Taiwan Securities Association had achieved the following accomplishments
through persistent efforts to serve our members and raise the competitiveness of our securities
industry:
I. Integration of Taiwan's capital market
During the previous year, the Association had contributed to the establishment of the "Financial
Investment Services and Capital Market Act" together with the local authority and several other
institutions. The Act was intended to remove obstacles among financial service providers across
different industries by integrating all regulations and business activities within the capital market,
thereby allowing security companies to directly compete in other fields while improving the
effectiveness of financial supervisory and enhancing the protection of investors' interests. However
in view of the impacts of the global financial crisis, the authority had decided to complete the capital
market reform in phases; industry participants will continue their segregated businesses while the
market reform takes place progressively in line with the spirit of The Act through revised supervisory
measures.
II. Security companies are permitted to perform wealth management services through trusts
Through the persistent efforts of The Association, the Financial Supervisory Commission
announced the amended version of its "Guidelines to the Wealth Management Services of Security
companies" on 28 Sep 2009, which permitted security companies to hold money trust and securities
trust licenses, and perform wealth management services through three forms of trust: "single purpose
trust", "collective trust", and "specified purpose trust". The usage of entrusted assets are targeted
mainly at security-related instruments including money market instruments such as bank deposits
and treasury bills etc, domestic securities, foreign investments, futures and financial derivatives etc.
The introduction of these services will enable security companies to better satisfy the diverse financial
needs and goals of their wealth management customers, and raise their competitive advantage in
wealth management.
III. Improved the worldwide competitiveness of security companies
The Association is actively involved in international conferences including the International
Organization of Securities Commission (IOSCO), International Councils of Securities Association
(ICSA), Asia Securities Forum (ASF), and International Forum for Investor Education (IFIE);
Securities Association in Taiwan, R.O.C.
> > > > > 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
meanwhile The Association had signed memorandums of understanding (MOU) with the Association
of Stockbroking Companies Malaysia, International Capital Market Association (ICMA), and Hong
Kong Securities Association. Since Sep 2007, The Association had signed MOU with securities
self-discipline organizations from 12 countries. We believe that through international exchange
and cooperation, we may help members explore cross-border business opportunities and raise the
worldwide significance of the Taiwan market.
IV. Reduced the operating costs and facilitated the business development of security companies
Recommendations made to the Taiwan Depository & Clearing Corporation by The Association
to establish a dedicated inquiry system had been adopted. Security companies are estimated to
handle 70-80% fewer execution commands and save $60 million of operating costs per year.
The Association had coordinated with Taiwan Depository & Clearing Corporation to perform
physical settlements for members stationed in remote locations, thereby saving $5 million in cost per
year.
The Ministry of Finance permitted that if investors had arranged for proxy payment of
commission charges with their security brokers, security companies may declare 2% sales tax on
the amounts net of commissions charged by the upstream broker for the purchase or sale of foreign
securities.
The Ministry of Finance and The Ministry of Economic Affairs had continued the 7-year
exemption of securities transaction tax on corporate bonds and financial bonds.
V. Improved the efficiency of the security market and enhanced self-discipline across brokerage companies
For the brokerage business, The Association is working with Taiwan Stock Exchange to
introduce the T+2 DVP settlement that reduces operational risks and facilitates more efficient flow of
cash and securities.
For the underwriting business, Taiwan Stock Exchange had agreed to the recommendations of
The Association to relax the ownership dispersion requirements imposed on public listed companies,
as an attempt to entice the local listing of foreign corporations. The local authority had also agreed
that underwriters may, during the first 10 trading days after the initial listing of Taiwan depository
receipts, sell its subscribed units depending on security performance in order to maintain market
efficiency.
In the area of risk management, The Association is assisting in the implementation of capital
adequacy to security companies, and ensuring the compliance of Basel II "Capital Adequacy"
(Pillar I) and "Risk Supervision" (Pillar II). The Association is also in discussion with Taiwan
Securities Association in Taiwan, R.O.C.
Financial Services Roundtable to establish "Regulations Governing Offshore Structured Products" and
"Supervision and Management Guidelines for Structured Products".
Furthermore, to resolve the unauthorized publication of research reports produced by security
companies, and the market mayhem caused by such conducts, The Association has made available a
"Security company's elaboration on quoted statements" section within its website for security companies
to openly elaborate on their comments quoted by the media. The Association had also enhanced self-
discipline through the establishment of several principles such as "Self-Discipline Guidelines to the
Promotion of Wealth Management Services for Security companies" and the amendment of "Self-
Discipline Guidelines to the Guidance of Security Issuance for Underwriters" etc.
In 2010, Taiwan Securities Association remains dedicated to serve its members by bridging the
communication with the local authority, seeking industry-wide consensus, and strive to maximize the
competitiveness of the entire market and its participants:
(1) Align with the worldwide supervisory development following the global financial crisis. Assist in the
risk management enhancements of security companies and their protection of investors' interests.
(2) Research with the authority for the position and future prospects of security companies. Introduce
security-integrated services and improve the competitiveness of security companies.
(3) Research for the position and future prospects of The Association. Revise the relevant rules to
enforce self-discipline within The Association.
(4) Promote security exchange between China and Taiwan with the signing of MOU and ECFA. Assist
in the exploration of market opportunities in China.
(5) Consolidate settlement/clearance funds. Revise the existing collective settlement responsibility
system.
(6) Collaborate with Taiwan Stock Exchange and the GreTai Securities Market to promote warrants.
We target to raise the weight of daily average warrant transactions from 0.4% (2009) to 5.0% of the
entire securities market trading volume.
2009 was a prosperous year for Taiwan's security market and its participants. However, we must
learn our lessons from the global financial crisis to carefully yet actively carry out our capital market
reform and our road to globalization. Following our experience with the 2008-2009 financial turmoil,
Taiwan's capital market will be reborn and rise up to embrace new challenges in 2010 with unmatched
momentum – as long as we believe that nothing is impossible.
Chairman
Passion.Professionalism.Efficiency.Innovation
06 Taiwan Securities Association 2009 Annual Report
Introduction of TSA
1. History
(1) On 26 January 1998, the Ministry of the Interior officially approved the establishment of the Taiwan Securities Association (TSA). Three preparatory meetings have since been convened during the period of February to March 1998. The TSA commenced to solicit membership from 27 February 1998.
(2) On 4 April 1998, the TSA convened its first meeting for the first General Assembly of the Members to elect its directors and supervisors, who afterwards elected the chairman and chief supervisor for the Association.
(3) The Association became a national securities association following its merger with the Taipei Securities Dealers Association on July 31, 1999 and then the Kaohsiung Securities Dealers Association on December 31, 1999. By the end of 2009, members of the TSA included 150 headquarters and 1,0004 branches.
2. Objectives and Missions
(1) Objectives
a. Protecting the interest of investorsb. Facilitating national economic developmentc. Promoting cooperation among member companiesd. Pursuing mutual benefits
(2) Missions
a. Supporting economic development of the country; facilitating the full-functioning of the securities market.
b. Operations in connection with the coordination, investigation, statistics and consulting service, R&D and publications, etc. in the domestic and overseas securities market.
c. Assisting the government in the promotion, research and recommendation of economic policies and securities-related regulations.
d. Encouraging self-regulation by members to achieve operational improvement; facilitating
the communication and coordination among members.
e. Establishment and compilation of business regulations in connection with the common operations of members.
f. Strengthening the organization structure of the Association to facilitate its development.
g. Rectifying operational defects by the members.h. Conducting professional training or seminars for
employees of member companies.i. Organizing charity or public welfare activities for
the members.j. Safeguarding the legal rights and interests of
members.k. Executing disciplinary actions in case of any
violation by the members.l. Mediating or arbitrating disputes among members
or between members and investors.m. Establishing operational regulations or fair trade
rules for members.n. Providing services to members with regard to the
application, change, replacement of certificates or licenses, as well as other services.
o. Par t i c ipa t ing in in te rna t iona l secur i t ies organizations and contributing to the improvement of Taiwan's international relationship through non-governmental activities.
p. Providing additional services entrusted by government organizations or civil associations.
q. Participating in social activities.r. Ensuring fair trades in the securities market and
protecting the investors.s. Preventing frauds, price manipulation, inadequate
fee charge, and other behaviors involving undue profit-making in the securities market.
t. Administer ing the qual i f icat ion tests and registration of associated persons in securities firms.
u. Other matters required by law or recommended by members as appropriate.
I
TSA Organization
07Taiwan Securities Association 2009 Annual Report
TSA Organization
1. TSA Organization Chart
II
Administrative Division
Brokerage Business Committee
Dealing Business Committee
Discipline Committee
R&D Committee
Risk Management Committee
Education & Training Committee
Finance Committee
International Affairs Committee
Mainland Affairs Committee
Financial Futures Committee
Brokerage of Foreign Securities Committee
New Financial Products Committee
Foreign Brokers Committee
Public Affairs Committee
Underwriting Committee
Bond Market Committee
Taxation and Accounting Committee
E-Commerce Business Committee
Wealth Management Committee
Shareholder Service Committee
Auditing Committee
Investor Education Committee
Overseas Management Strategy Committee
Tendering Committee
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 D
ept.
Business S
ervice Dept.
Education &
Training Dept.
International Affairs D
ept.
Kaohsiung O
ffice
Passion.Professionalism.Efficiency.Innovation
08 Taiwan Securities Association 2009 Annual Report
2. General Assembly of the Members
The General Assembly of the Members is the supreme decision-making body of the
TSA. Members of the Association are required to appoint representatives to attend the
General Assembly, who shall be referred as "Member Representatives". The number of
member representatives for each member shall be determined in accordance with the
following criteria:
(1) Members engaged in underwrit ing business should appoint one member
representative.
(2) Members engaged in securities dealing business should appoint one member
representative.
(3) Members engaged in securities brokerage business should appoint one member
representative.
(4) Members engaged in two or three items described above should appoint two or three
member representatives.
As at 31 December 2009, the TSA has a total of 275 member representatives.
3. Board of Directors
The board of directors is an executive unit of the Association. It is also an executive
unit responsible for planning and facilitating the overall operation of the Association. At
present, there are 33 directors in TSA's board of directors, including 11 executive directors
and a chairperson.
4. Board of Supervisors
The Board of Supervisors is the supervising unit of the Association, responsible for
supervising and rectifying, if necessary, the operations and financial management of the
Association administered by the board of directors. The TSA has 11 supervisors now,
including 3 executive supervisors and a chief supervisor.
5. Committees
The TSA has a total of 24 committees currently, including brokerage business,
dealing business, discipline, R&D, education & training, finance, international affairs,
mainland affairs, financial futures, new financial products, foreign brokers, public affairs,
underwriting, bond market, brokerage of foreign securities, taxation and accounting, risk
management, e-commerce, wealth management, shareholder service, auditing, investor
education, overseas management strategy and tendering committees. In accordance with
the articles of the Association, the committees shall be supporting units of the board of
directors, responsible for R&D in the securities market as well as recommendation and
TSA Organization
09Taiwan Securities Association 2009 Annual Report
integration of various business proposals, so as to ensure smooth business operation of the
Association. Also, TSA has established a tendering group responsible for the negotiation of
major procurement projects, aiming to achieve a centralized control of major expenses and
cost-saving for the Association.
6. Administrative Divisions
Administrative divisions of the Association play key roles in managing the operations of
the Association. The TSA's administrative divisions are supervised by a secretary general
and two deputy secretary generals. There are two divisions under their management,
respectively, the administrative division and business development division. The
administrative division is further divided into four departments, respectively, secretariat,
finance, information management and planning; while the business development division
consists of three departments including business service, education and training and
international affairs departments.
The TSA's Kaohsiung office takes charge of all the training programs, member
coordination, seminars and forums, as well as other related issues for TSA members in the
southern part of Taiwan.
The Association received the Excellence Award
during the 2008 "Nationwide Taiwan Industrial,
Commerc ia l , and Profess iona l Assoc ia t ions
Performance Review" held by the Ministry of
Internal Affairs on 6 Nov 2009. This marked the
sixth consecutive award The Association had been
honored with since 2003, and represented the
authority's acknowledgement for the operations of The
Association as well as services to its members.
Under the leadership of the chairman, The
Association strives to achieve the following objectives
with "passion, professionalism, efficiency, and
innovation":
1. Short term goal: reduce the operating costs of
security companies, improve the operations of the
security market to achieve high market efficiency.
2. Medium term goal: expand the business scope
of security companies, improve the profitability of
security companies while enhancing self-discipline
among members.
3. Long term goal: raise the world competitiveness of
security companies, assist in their transformation
into multi-dimensional investment banks through
the integration of capital market regulations
and the implementation of effective supervisory
mechanisms.
The Associat ion had made many practical
accomplishments with the help of its colleagues and
members, the summary of which are listed below:
1. Major accomplishments in 2009
(1) Reduced the operat ing costs o f secur i ty
companies
1. Maintained the exemption of securi t ies
transaction tax to corporate bond and financial
bond transactions.
2. Reduced security companies' costs of handling
execution commands.
3. Resolved issues related to the physical
settlements of members stationed in remote
locations.
4. Removed regulatory requirements that stock
purchases and stock sales must be printed in
different colors.
5. Waived the printing of order placement history
for non-electronic transactions.
6. Commission charges collected on behalf of
upstream brokers were exempted from the 2%
sales tax.
7. Widened the scope of businesses permitted to
securities and futures specialists.
8. Waived the regulatory requirement that security
companies must provide special earnings
reserves when these reserves were used to
offset previous losses.
Work ReportIII
TSA signed the MOU with ICMA in London, UK, on September 7th
Passion.Professionalism.Efficiency.Innovation
10 Taiwan Securities Association 2009 Annual Report
9. Reduced the training hours of risk management
personnel.
10. Developed a "Training Certificate Online
Access System".
11. Strived for reasonable allocation of joint
education promotion expenses.
(2) Improved the operations of the security market
1. Flexibly adjusted the volumes of Taiwan
depository receipt (TDR) issuance.
2. Relaxed the thresholds of forced conversion,
subscription, and recall clauses applicable to
convertible corporate bonds and corporate
bonds with embedded options.
3. R e l a x e d t h e o w n e r s h i p d i s p e r s i o n
requirements for public listed preference
shares.
4. Recommended for the temporary relaxation of
convertible bond issuance.
5. Relaxed the regulatory requirements of
ordinary share and convertible bond issuance.
6. Introduced new underwriting methods to
preference shares.
7. Created guidelines relating to the underwriting
of corporate bonds (or preference share) with
standalone options.
8. Deleted Section 54 of the "Rules Governing
the Trading of Securities".
9. Resolved the inconvenience of trading, settling
and clearing corporate bonds with embedded
conditions.
10. S imp l i f ied the aud i t and superv is ion
procedures conducted by security company
headquarters to their branches.
11. Audit reports that are more than two years old
may be stored in digital form.
12. All anti-money laundering matters associated
with the wealth management services of
security companies are handled by the Head
of Legal & Compliance.
TSA signed the MOU with ASCM in Kuala Lumpur, Malaysia, on April 9th
TSA signed the MOU with HKSA in Hong Kong, China, on November 24th
Work Report
11Taiwan Securities Association 2009 Annual Report
13. Waiver of certificate authority for orders
placed through Direct Market Access.
14. Simplified the procedures for amending
personal information of electronic trading
account customers.
15. Electronic trading account customers may
reset passwords using certificate authority.
16. Introduced the DVP T+2 settlement system.
17. Adjusted the effective timing of cash capital.
18. The waiver of advance deposits for shares
placed on alert under certain circumstances.
19. Permitted the continual use of accounts with
settlement defaults, after the default had been
discharged.
20. Permitted the opening of multiple default
processing accounts under the same security
company.
21. Waived the requirement for a securi ty
brokerage company to verify the sufficiency
of shares in the depository account plus any
physical shares deposited, when executing
sell orders for insurance companies and
banks without depository.
22. Waiver for the transmit ion of proxy security
trading agent details for FIA accounts.
23. Col laborated in the estab l ishment o f
"Regulations Governing Offshore Structured
Products" and "Supervision and Management
Guidelines for Structured Products".
24. Clarified the account opening restrictions for
insiders of brokerage companies of foreign
securities when investing in the domestic
security market.
25. Establ ished rules of cooperat ion wi th
brokerage companies of foreign securities.
26. Permitted customers to sell securities one
business day after the termination of financial
derivatives.
27. Improved the electronic batch reporting of
warrant transactions.
28. Reduced the parameters used in capital
adequacy calculations.
The Chairman of TSA, Dr. Min-Juh Hwang, the President of TWSE, Mr. Samuel J.S. Hsu and the President of GTSM, Mr. Yui-Chun Wu at the AGM of IOSCO
The Vice Chairman of TSA, Mr. Kwang-Hsiung Wu (middle) attended the AGM of ASF
Passion.Professionalism.Efficiency.Innovation
12 Taiwan Securities Association 2009 Annual Report
The Chairman of TSA, Dr. Min-Juh Hwang pictured with the Commissioner of FSC, Dr. Tzong-Rong Tsai (right), the Chairman of TWSE, Dr. Chi Schive (second from left) and the President of ICMA, Mr. Rene' Karsenti (left)
TSA paid a visit to RHB Investment Bank Berhad in Kuala Lumpur, Malaysia
29. Adopted the Delta-Plus analysis as reference
to the risk management review of security
companies.
30. Involved in the amendments of "RISK
M A N A G E M E N T B E S T - P R A C T I C E
PRINCIPLES FOR SECURITIES FIRMS" and
"Risk Management Progress Evaluation for
Securities Firms".
(3) Expanded the business scope of secur i ty
companies
1. Security brokerage companies are permitted to
act as distributors of futures funds.
2. Security companies may perform wealth
management services through trust.
3. Relaxed the regulatory restrictions for the
investment of structured products by insurance
companies.
(4) Enhanced members' self-discipline
1. Created the "IPO compliance checklist for
lead underwriter (recommending security
company)".
2. Added conditions for corporate bond issuance.
3. Specified that the outcome of price stability
measures undertaken by the underwriter will
not be returned to security issuers.
4. Added commiss ion covenan ts t o t he
underwriting agreement.
5. Reviewed foreign structured products.
6. Trust companies may open more than two
accounts for the trading of foreign securities.
7. Relaxed the requirements for an ordinary
investor to be regarded as a professional
investor.
8. Relaxed the restrictions to security dealing
companies' buy/sell quotations.
9. Establ ished "Pr inc ip les re lat ing to the
clarification on research reports quoted by
media".
10. Established Self-Discipline Guidelines to the
Promotion of Wealth Management Services
for Security companies.
Work Report
13Taiwan Securities Association 2009 Annual Report
Time Venue Conference
01/13-21 Tokyo, Japan The 4th ASF Training Conference
03/02-03 Washington D.C., U.S.A The 2009 IFIE and IOSCO Investors Education Conference
03/17-19 Hainan, China 2009 Boao Forum for Asia
05/05-09 Beijing and Shanghai, China Site inspection of China's security institutions
05/10-12 Washington D.C., U.S.A The 22nd ICSA Annual Conference
06/07-14 Tel Aviv-Yafo, Israel The 34th IOSCO Annual Conference
08/12-16 Kuala Lumpur, MalaysiaSeminar "Corporate Investment and Public Listing in Taiwan"
09/06-11 London, UKOverseas Taiwan Investment Forum and promotion for the local listing of foreign corporations
10/11-13 Sydney, Australia The 14th Asia Securities Forum
10/22 Tokyo, Japan The 2009 IFIE and JSDA Investors Education Conference
12/03-10 Tokyo, Japan The 5th ASF Training Conference
11. Relaxed regulatory requirements on legal training; condensed the 4-day, 2 hours per day
course into one single day.
(5) Extended international relations
1. Involvements of international conventions
2. Signing of MOUs with securities industry associations around the world
time venue description
04/09 Kuala Lumpur, Malaysia Signed the MOU with the Association of Stockbroking Companies Malaysia (ASCM)
09/07 London, UK Signed the MOU with the International Capital Market Association (ICMA)
11/24 Hong Kong, China Signed the MOU with the Hong Kong Stockbrokers Association Ltd. (HKSA)
Passion.Professionalism.Efficiency.Innovation
14 Taiwan Securities Association 2009 Annual Report
The Vice Chairman of TSA, Mr. Kwang-Hsiung Wu (middle) led the delegation to Osaka Stock Exchange, Japan
The Executive Director of TSA, Mr. Kang-Chi Chou led the delegation to Macquarie Securities Group, Australia
The Honorary Chairman of TSA, Mr. Hung-Wen Chien led the delegation to HSBC, Australia
(6) Investors education
1. To assist in the promotion of accurate financial concepts
to investors and enable campus instructors' teaching
capability on the finance subject, The Association had
organized "Capital Market Workshops" in accordance with
the 2006 and 2009 curriculum announced by the Ministry
of Education. This workshop was intended to enable
teachers to teach students the right finance concepts,
and a total of 278 high school teachers had attended the
workshop.
2. Promoted investment education● Printed the monthly and quarterly periodicals of Taiwan
Securities Association and distributed to security
companies, securities-related institutions, academic
groups, libraries, and the authority. The electronic
copies of these publications were made available for
download from The Association's website.
The member representatives of TSA paid a visit to Hongta Securities, Kunming, China
Work Report
15Taiwan Securities Association 2009 Annual Report
The Executive Director of TSA, Mr. Guh-Bin Huang and Mr. Kung-Liang Yeh led the delegation to JSDA Osaka office, Japan
The member representatives of TSA paid a visit to Shenying & Wanguo Securities, Shanghai, China
● Created the on-job training materials for wealth management personnel. Topics included "Basic financial
planning", "Employee welfare and pension planning", "Risk management and insurance planning",
"Leases, taxes, and asset transfer".● Subsidized the organization of "personal investment finance overview courses" by non-finance
departments of tertiary institutions. These subsidies were intended to help promote the right financial
concepts to tertiary students. A total of 1,127 students participated in these courses.● Promoted education on investment and finance in accordance with government policies. Subsidized the
teaching of proper investment and financial concepts during high school morning gatherings. A total of 5
schools had applied for the subsidy.● Collaborated with Chinese Association of Business and Intangible Assets Evaluation to conduct practical
business valuation courses for underwriter sales staffs and accounting personnel.● Joined the seminars organized by the Chinese Society for Training and Education to improve the depth
and scope of the various courses conducted by The Association.● Following the approval of the Ministry of Education in Aug 2009, The Association had become the teachers
training center for "Exploring the Stock Market".
(7) Training and education of industry participants
1. Training and education of industry participants
Name of course2007 2008 2009
No. of courses Participants No. of courses Participants No. of courses Participants
On-job training 92 7,869 128 12,311 131 12,872
Basic 4 384 4 409 3 327
Advanced 78 6,352 113 10,515 117 11,263
Passion.Professionalism.Efficiency.Innovation
16 Taiwan Securities Association 2009 Annual Report
Name of course2007 2008 2009
No. of courses Participants No. of courses Participants No. of courses Participants
Security brokerage 60 5,238 66 6,184 70 7,079
Security Dealing 2 126 1 73 3 309
Security underwriting 2 139 2 148 3 305
Share financing 2 75 1 40 3 258
Share administration 1 28 0 0 0 0
Wealth management 0 0 1 37 0 0
Foreign investors (5) 53 (13) 88 (7) 74
Other personnel training 1 8 0 0 1 11
Middle and senior management 10 685 42 3,945 37 3,227
Middle management 10 1,133 11 1,387 11 1,282
Senior management 9 959 10 1,198 10 1,109
Senior executives 1 174 1 189 1 173
Legal discipline 11 118 5 110 4 69
Professional training18 2191 21 1458 25 1,463
Corporate governance
Professional training0 0 0 0 17 903
Risk management
Professional training9 930 5 505 6 247
Business personnel
Business conference 0 0 2 200 1 100
Investors education8 410 5 1500 5 3,950
Finance seminar at campus
Labor safety personnel training 6 315 2 79 13 680
Wealth management sales personnel 19 1445 41 3,105 31 2,862
Eligibility workshop
Wealth management staff15 723 26 1,312 29 1,027
Eligibility exams
Total 178 14,001 235 20,580 262 24,173
Work Report
17Taiwan Securities Association 2009 Annual Report
Enrolments and results of the 2009 Securities Business Personnel Eligibility Exam
Method exam Exam category Enrolments Present Absence Present % Qualified Qualified %
Paper exam
Senior Securities Specialist 12,932 8,119 4,813 62.78 2,659 32.75
Securities Specialist 14,754 11,614 3,140 78.72 2,830 24.37
The Securities Exchange Act and Real Practices
1,317 1,042 275 79.12 644 61.80
Subtotal 29,003 20,775 8,228 71.63 6,133 29.52
Computer exam
Senior Securities Specialist 6,427 4,885 1,542 76 1,888 38.65
Securities Specialist 4,962 4,123 839 83.09 1,508 36.58
The Securities Exchange Act and Real Practices
1,060 938 122 88.49 573 61.09
Subtotal 12,449 9,946 2,503 79.89 3,969 39.91
Foreigners' exam
Senior Securities Specialist 22 20 2 90.91 11 55.00
Securities Specialist * * * * * *
Subtotal 22 20 2 90.91 11 55.00
Total 41,474 30,741 10,733 74.12 10,113 32.90
2. Eligibility exams
The Securities and Futures Institute had conducted the "2009 Securities Business Personnel Professional
Eligibility Exam" on behalf of The Association. Statistics related to the enrolments and results of the Securities
Business Personnel Eligibility Exam are detailed below:
Passion.Professionalism.Efficiency.Innovation
18 Taiwan Securities Association 2009 Annual Report
The member representatives of TSA at Yunnan Dali, China
The member representatives of TSA in front of Sydney Opera House, Australia
2. The 2010 focus
(1) Align with the worldwide supervisory development
following the global financial crisis. Assist in the
risk management enhancements of security
companies and their protection of investors'
interests.
(2) Research with the authority for the position and
future prospects of security companies. Introduce
security-integrated services and improve the
competitiveness of security companies.
(3) Research for the position and future prospects
of The Association. Revise the relevant rules to
enforce self-discipline within The Association.
(4) Promote security exchange between China and
Taiwan with the signing of MOU and ECFA. Assist
in the exploration of market opportunities in China.
(5) Consolidate settlement/clearance funds. Revise
the existing collective settlement responsibility
system.
1. Consolidate settlement/clearance funds across
different markets.
2. Maintain the consolidated fund balance at
NTD5 billion. Return excess funds to security
companies.
3. Revise the existing method of collecting
settlement/clearance fund contributions.
(6) Collaborate with Taiwan Stock Exchange and the
GreTai Securities Market to promote warrants.
We target to raise the weight of daily average
warrant transactions from 0.4% (2009) to 5.0% of
the entire securities market trading volume. The
association shall strive to:
1. Introduce callable bull/bear contracts.
2. Permit the offsetting of warrant transactions.
3. Relax warrant listing requirements.
4. Enhance the education of warrant trading.
Work Report
19Taiwan Securities Association 2009 Annual Report
January
1.01
To reduce the operating costs of security companies through practical operations, The Association
had dismissed its securities postal unit since 1 Jan 2009 and requested the assistance of Taiwan
Depository and Clearing Corporation in the postal operations of security companies.
1.08
On 8 Jan the Taiwan Stock Exchange convened a meeting to discuss the use of its $60 million public
interests funds into securities personnel training. During the meeting, The Association gave its
best effort to persuade the use of the entire budget to benefit security companies and their staffs by
extending the subsidy period, fully subsidizing courses organized by The Association, and removing
the $20 million cap imposed on The Association, Taiwan Academy of Banking and Finance, and the
Securities and Futures Institute.
1.14
Chairman Hwang of The Association, along with the Financial Investment Services and Capital
Market Act development team, Professor Chou Shing-Yi, Professor Lin Ren-Kuang, Professor
Chiu Hsien-Bi, and lawyer Chuang Yue-Ching of Tsar & Tsai Law Firm et.al visited the Financial
Supervisory Commission to brief Chairman Sean Chen, Vice Chairman Li Ji-Ju, Vice Chairman Wu
Tang-Jie and the senior committees on the topic: "The Necessity of the Financial Investment Services
and Capital Market Act".
1.19The Association signed up to join the international organization XBRL, and consented to act as the
convener of XBRL Taiwan Branch.
1.22
Announced the amendment to Section 3 of The Association's "Guidelines on Information to be
Published in Securities Underwriting Contracts", The Association's "Declaration of underwriting
contracts for securities firms", and The Association's "Rules Governing Underwriting and Resale
of Securities by Securities Firms". These amendments were effective from the date of the
announcement.
Passion.Professionalism.Efficiency.Innovation
20 Taiwan Securities Association 2009 Annual Report
Major events
Appendix
February
2.06
To improve the quality and efficiency of education and training conducted by The Association, provide
more convenient enrolment access to the human resources departments of member companies,
and to facilitate faster understanding in each training session, The Association had consolidated the
questions that were frequently asked during training courses, provided clarifications and printed into
Q&A booklets for easy reference.
2.10
Announced the amendment of The Association's "Guidelines for Information to be Published in
Assessments of Securities Underwriters for Offering and Issuance of Securities by Foreign Issuers",
"Assessment and Audit Procedures for Security Underwriters to the Issuance of Securities by Foreign
Securities Issuers", the appendix of "Rules for Information to be Published in Securities Underwriter
Evaluation Reports on Offering and Issuance of Securities by Securities Issuers", "Audit Procedures
of Securities Underwriter Evaluation Reports on Offering and Issuance of Securities by Securities
Issuers" and its appendix. These amendments were effective from the date of announcement.
2.11
The Financial Supervisory Commission agreed to the recommendations made by The Association
and amended Section 3 of the "Regulations Governing Information to be Published in Order Tickets,
Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving
Orders to Buy or Sell Securities" to remove the requirement that the buy/sell reports must be printed
in different colors. Security companies may consolidate investors' transactions into one single report
for cost-saving purposes. This amendment was announced and implemented on 11 Feb 2009.
2.11Announced the amendment to Section 61 of The Association's "Rules Governing Underwriting and
Resale of Securities by Securities Firms"; effective from the date of announcement.
2.11Published the "2008 common errors found during audits on security firms". Members were urged to
enhance their internal control and internal audit practices.
2.16Vice Chairman Wu Kuang-Hsiung of The Association attended the Second Shanghai Financial Forum
from 16 to 19 Feb and visited the Chinese financial authority.
Appendix
21Taiwan Securities Association 2009 Annual Report
2.17
The Department of Secondary Education, Ministry of Education convened the conference:
"The Continuing education of high school teachers of citizens and society "; the Department of
Technological and Vocational Education, the Central Region Office of the Ministry of Education,
the Education Bureau of Taipei and Kaohsiung City Governments, and teachers of the citizens and
society subject from 22 cities and counties were all invited to participate. The Association conducted
briefings and discussions on capital market studies in hope to contribute to the education of the
nation's teachers, pass on proper financial knowledge to their students, and ensure the protection of
investors' interests from school education.
2.18
Announced the amendments to Section 8 of The Association's "Directions Governing the Underwriting
Procedures to be Followed by Underwriters in Conducting an Initial Listing on a Stock Exchange or
Over-the-Counter Market", effective from the date of announcement.
2.20
Announced the amendment of The Association's "Rules for Information to be Published in Securities
Underwriter Evaluation Reports on Offering and Issuance of Securities by Foreign Securities Issuers"
4-6, "Assessment and Audit Procedures for Security Underwriters to the Issuance of Securities by
Foreign Securities Issuers" 3-6, and Section 4-1 of "Rules Governing Underwriting and Resale of
Securities by Securities Firms"; effective from the date of announcement.
2.24
Taiwan Securities Association and Taiwan Stock Exchange established memorandums of
understanding with Taiwan Academy of Banking and Finance, Securities and Futures Institute and
several other units for the training of security market talents.
March
3.02
The Association organized workshops for senior executives of security companies, with guests
from government authorities. The lead economic counselor Liu Yi-Ru of Chinatrust discussed "How
security companies should respond to the 2008 financial crisis".
Passion.Professionalism.Efficiency.Innovation
22 Taiwan Securities Association 2009 Annual Report
3.09
The Association advised to the Taiwan Depository and Clearing Corporation to permit document
delivery of security and depository matters between security companies and the Taiwan Depository
and Clearing Corporation through direct mail, for the purpose of reducing operating costs. This
proposal was agreed by the Taiwan Depository and Clearing Corporation and the authority, and
was effective since 9 Mar 2009. To facilitate the implementation of new practices, The Association
appointed its staffs to act as witnesses at Taiwan Depository and Clearing Corporation from 5 Jan
2009 to 6 Mar 2009.
3.10
President Hu Ji-Zhi of Guosen Securities China, along with his senior management staffs, visited
The Association and exchanged opinions relating to the joint development of the security markets
between China and Taiwan.
3.20
To facilitate financial and security exchanges between Taiwan and Hong Kong, Hong Kong Securities
Association (HKSA) visited Taiwan in a group of 37, led by Chairman Li Yiu-Sun. The Association
arranged HKSA's visit to the Taiwan Stock Exchange, Taiwan Futures Exchange, Taiwan Depository
& Clearing Corporation, Sinopac Securities, Hantec Securities Consultants Ltd and other industry
participants on 20 Mar.
3.31The Association convened the third members' general meeting under the fourth Chairman, and
awarded committees' excellence of performance during the meeting.
April
4.01
Announced the amendments to The Association's "Rules Governing Underwriting and Resale of
Securities by Securities Firms" and "Rules of Self-Discipline to Underwriters Guiding the Security
Issuance" with regards to the underwriting of preference shares; effective from the date of
announcement.
4.01
The Executive Yuan passed the amendments to the Income Tax Law, in an attempt to apply
consistent taxation basis across a wide range of financial products including securitized products,
short term notes, structured products, and bond repurchases. From 2010 onwards, a separation tax
of 10% will be applicable to individual investors on all these products.
Appendix
23Taiwan Securities Association 2009 Annual Report
4.02
The Association, the Chinese Futures Association, and the Securities Investment Trust & Consulting
Association organized the conference: "Exploration of the Chinese Market by securities, futures,
investment trusts, and consulting industries" jointly with Taiwan Competitiveness Forum and the
National Policy Foundation.
4.09Announced the amendments to Sections 16 and 20 of The Association's "Rules of Self-Discipline to
Underwriters Guiding the Security Issuance", effective from the date of announcement.
4.09Chairman Hwang Min-Juh of The Association signed a MOU with the Association of Stockbroking
Companies Malaysia (ASCM).
4.15
The Association accompanied Korea Financial Investment Association (KOFIA) to their visit to
Committee Sean Chen of the Financial Supervisory Commission. Both parties exchanged their
opinions toward capital market reforms.
May
5.10
Convener Shih Kang and Officer Chu Kuei-Ting of the Research and Development Committee of The
Association attended the ICSA annual meeting in Washington D.C., USA from 10 May to 12 May,
2009.
5.19Announced the amendments to Sections 30-2 and 31 of The Association's "Rules of Self-Discipline to
Underwriters Guiding the Security Issuance", effective from the date of announcement.
5.27
To held corporations raise capital, security issuers declaring fund usages as repaying convertible
corporate bonds with embedded put options maturing before 31 Dec 2009 were exempted from
Section 4 of The Association's "Rules of Self-Discipline to Underwriters Guiding the Security Issuance
of Securities Issuers" with regards to the calculation of outstanding shares.
Passion.Professionalism.Efficiency.Innovation
24 Taiwan Securities Association 2009 Annual Report
June
6.07Chairman Hwang Min-Juh and the Head of International Affairs, Hsu Bing-Chun of The Association
attended the 34th IOSCO annual meeting in Tel-Aviv, Israel from 7 Jun to 14 Jun.
6.11
Announced the amendments to Sections 25 and 37 of The Association's "Rules of Self-Discipline
to Underwriters Guiding the Security Issuance of Securities Issuers", effective from the date of
announcement.
6.17
Announced the amendments to Sections 4-1 and 5 of The Association's "Rules Governing the
Book Building Method of Security Issuance by Securities Underwriters"; effective from the date of
announcement.
6.23
The Association organized the seminar: "Adaptation of Internal Financial Reporting Standards
(IFRS) in Taiwan", and invited accountant Huang Jin-Ze of PricewaterhouseCoopers to discuss
the implications of IFRS adaptation in Taiwan. This seminar was held to facilitate members'
understanding and early responses to the differences between IFRS and the current accounting
standards in Taiwan.
July
7.09
A group of 12 visitors led by General Manager Wen De-Jun of Guosen Securities departed from the
Wuhan City of Hubei Province, China and visited The Association on 9 Jul. Both parties shared their
experiences on the prospects, business operations, and regulatory restrictions of security industries
in China and Taiwan. The visitors were especially interested in how Taiwan's security companies
broaden the foundation of their profitability and how The Association plays its role to ensure self-
discipline across the industry. This meeting is believed to be helpful to our future exchanges and co-
operations.
7.17
The Managing Director of The Association, and the Chairman of Dah Chang Securities, Chuang
Huei-Yao had turned Dah Chang Securities profitable through exceptional leadership and contributed
greatly to the development of the securities and futures markets. He received the Excellent Enterprise
Leader Award in "The Tenth Securities and Futures Achievement Award" held on 17 Jul.
Appendix
25Taiwan Securities Association 2009 Annual Report
August
8.11
Typhoon Morakot swept through Taiwan causing major disasters all over Taiwan, and the disaster
area was in need of immediate help. The Association responded to the government's rescue efforts
through acts of care and donated $5 million into the "Ministry of Internal Affairs Relief Account". The
Association also mobilized its staffs to donate their one day income as empathy to the suffered, and
to rally more care from the society to help them through the crisis.
8.21
The Association organized the conference: "The Integration and Supervision of Capital Markets
between China and Taiwan – The Forming of a West Strait Economics Zone" on 21 Aug. The
Association invited the Head of WISE, Xiamen University, Hong Yongmiao, and Professor Cheng
Ming to conduct speeches on "Ideas of a cross-strait economic district and financial experiment –
interpreting the development of a West Strait Economics Zone" and "Strategic research on the co-
operation and supervision of cross-strait security industries under a new framework". Approximately
110 industry participants were present and the responses were overwhelming.
8.27
Secretary General Wang Hong-Song of Beijing Arbitration Commission visited Chairman Hwang of
The Association and exchanged opinions related to the trading and arbitration of security industries in
China and Taiwan. Both parties had also exchanged security regulations and arbitration cases from
both sides and assured of their future co-operation.
8.27
Announced the amendments to The Association's "2009 Standards of Internal Control Policies
of Security Firms Consigned for the Trading of Foreign Securities" and Sections 18 and 43 of
"Operations for the Re-Consignment of Foreign Security Trading by Security Firms".
September
9.07Chairman Hwang Min-Juh of The Association signed a MOU with International Capital Market
Association (ICMA) in London.
9.09
Announced amendments to Section 4 of The Association's "Principles for the Trading of Foreign
Securities by Security Firms" and the relevant internal control and internal audit standards; effective
from the date of announcement.
Passion.Professionalism.Efficiency.Innovation
26 Taiwan Securities Association 2009 Annual Report
9.22
Announced the amendments to The Association's "Rules for Information to be Published in Securities
Underwriter Evaluation Reports on Offering and Issuance of Securities by Foreign Securities Issuers",
"Assessment and Audit Procedures for Security Underwriters to the Issuance of Securities by Foreign
Securities Issuers", "Rules for Information to be Published in Securities Underwriter Evaluation
Reports on Offering and Issuance of Securities by Securities Issuers", and "Assessment and Auditing
Procedures for Securities Underwriters Consigned to Prepare Underwriter Assessment Reports for
Offerings and Issuance of Securities by Issuers".
October
10.11Former Vice Chairman Wu Kuang-Hsiung, Secretary General Lin Ying-Zhe, and Senior Officer Hsu
Bing-Chun of The Association attended the 14th Asia Securities Forum held in Sydney, Australia.
10.14
Announced the amendments to The Association's "Rules Governing Underwriting and Resale
of Securities by Securities Firms", "Rules of Self-Discipline to Underwriters Guiding the Security
Issuance", "Rules for Information to be Published in Securities Underwriter Evaluation Reports on
Offering and Issuance of Securities by Securities Issuers", and "Assessment and Auditing Procedures
for Securities Underwriters Consigned to Prepare Underwriter Assessment Reports for Offerings and
Issuance of Securities by Issuers", effective from the date of announcement.
10.14
The Association held the "Securities Dealing Conference", and invited Senior Deputy General
Manager Kao Tze-Jun of the Strategic Trading Department of Yuanta Securities to conduct a speech
on "The past, present, and future of futures trading".
10.21
The short term interest rate indicator, the essential benchmark for pricing and valuing interest rate-
sensitive financial products, has entered into a new era. The Taiwan Bills Index Rate (TAIBIR),
developed by Bills Finance Association and compiled by Taiwan Depository and Clearing Corporation,
was officially in service under the witness of: Chairman Sean Chen of the Financial Supervisory
Commission, The Executive Yuan, Chairman Chang Hsiu-Lien of the Bankers Association, Chairman
Hwang Min-Juh of the Taiwan Securities Association, and other financial industry participants.
Appendix
27Taiwan Securities Association 2009 Annual Report
10.30
Taiwan Stock Exchange designated Wednesday 10 Feb 2010 as the final trading day before the
Chinese New Year; 11 and 12 Feb as the settlement dates, and the market re-opens after Chinese
New Year on Monday 22 Feb. Next year's Chinese New Year period spanned for 9 days starting from
13 Feb to 21 Feb. Since Friday 19 Feb is an extended holiday, market trading will be brought forward
to Saturday 6 Feb.
November
11.06
The Financial Supervisory Commission permitted futures commission merchants to conduct
accessory services to security trading. Accessory services to security trading include: 1. Solicit
investors to the trading of securities; 2. Perform account opening for security investors on behalf
of security firms; 3. Accept security trading orders from investors and deliver to security firms for
execution; 4. Notify security investors of all settlement matters on behalf of security firms; 5. Other
services approved by the authority.
11.16
Chairman Sean Chen of the Financial Supervisory Commission announced that the MOU on
banking, insurance, and securities was officially signed by China and Taiwan. The two parties refer to
each other as "Taiwan" and "China", and had exchanged the signed contracts as a form of good faith.
The contracts shall take effect in 60 days, and regulation amendments will be made to facilitate new
business activities in accordance with the preliminary ECFA negotiations.
11.17Announced the amendments to Section 22, 43, and 43-1 of The Association's "Rules Governing
Underwriting and Resale of Securities by Securities Firms". effective from the date of announcement.
11.18
The Ministry of Finance announced its amended "Enforcement Rules of the Income Tax Act" with
immediate effect. The amended rules provided detailed definition of "structured products" to avoid
disputes between tax payers and the tax authorities. From 1 Jan 2010 onwards, income of any
individual arising from the trading of structured products, with any security firm or any bank, is subject
to 10% separation tax.
11.18Deputy Mayor Chin Min of Qingdao City, China, visited The Association with a group of 10 to discuss
the possibilities of co-operation between the security industries in China and Taiwan.
Passion.Professionalism.Efficiency.Innovation
28 Taiwan Securities Association 2009 Annual Report
11.24Chairman Hwang Min-Juh of The Association signed a memorandum of understanding with Hong
Kong Securities Association (HKSA) in Hong Kong.
December
12.03
Taiwan Stock Exchange is actively promoting the warrants market and had designated the next
year as the "Warrant Year". The Association, security companies and all related institutions were
supporting the growth of this market. Chairman Hwang Min-Juh of The Association stated that
market making in the warrant market will escalate in the next year by as high as 10 times; trading
volume is expected to rise from the current 0.45% to 5% of the entire security market. The "Callable
bull/bear contracts", a widely popular product in the Hong Kong stock market, will be introduced to
Taiwan next year.
12.11
The Executive Yuan passed the motion "To activate trading within the bond market, assist
corporations source new capital, and facilitate the growth of the capital market, corporate bonds and
financial bonds shall be exempted from securities transaction taxes for a period of 7 years, effective
from 1 Jan 2010". This resolution will be implemented once announced by The President.
12.16
The Association organized the conference, "Operations and prospects of the security industries
in China and Taiwan". Chairman Hwang, Director Yeh Kong Liang of Fubon Securities, General
Manager Li Hong-Chi of Yuanta Securities, Officer Wang Li-Rong of the Chung-Hua Institute of
Economic Research, General Manager Hu Ji-Zhi of Guosen Securities China, and Professor Cheng
Ming of Xiamen University all participated in the discussion of the co-operative prospects of the
security industries between China and Taiwan.
12.19
To encourage proper release of work pressure to security industry participants and to promote closer
living with nature, The Association and the Chinese National Futures Association jointly organized a
"2009 Hiking for securities and futures personnel".
Appendix
29Taiwan Securities Association 2009 Annual Report
CountSecurity
companiesCurrent turnover Current expenses Current earnings Paid up capital
Shareholders’ equity
Current profit (%) EPS ($) ROE (%)Turnover market
shareNet worth per
share
86 Total 326,305 287,341 38,964 331,557 455,700 11.94 1.175 8.55 100.00 13.744
48General security companies
316,681 280,624 36,057 317,386 432,019 11.39 1.136 8.35 97.05 13.612
38Security brokerage companies
9,626 6,716 2,907 14,170 23,681 30.21 2.052 12.28 2.95 16.712
69Local security companies
302,361 267,392 34,960 311,442 420,251 11.56 1.122 8.32 92.66 13.494
35General security companies
297,935 263,977 29,822 300,642 404,651 11.40 1.130 8.39 91.31 13.460
34Security brokerage companies
4,416 3,414 1,001 10,800 15,600 22.67 0.927 6.42 1.35 14.444
17Foreign security companies
23,953 19,949 4,005 20,114 35,449 11.20 1.991 11.30 7.34 17.624
13General security companies
18,746 16,647 2,099 16,744 27,368 13.08 1.254 7.67 5.74 16.344
4Security brokerage companies
5,208 3,302 1,906 3,370 8,081 36.60 5.656 23.59 1.60 23.981
20Top 20 security companies
275,555 245,446 30,109 265,092 364,780 10.93 1.136 8.25 84.45 13.761
1. Background of analysis:
(1) The Associated current had 150 members. This
profitability analysis contained the statistics of 85
security companies who submit regular monthly
reports to the Taiwan Stock Exchange. Analysis
is performed based on cumulative year-to-month
statistics.
(2) The first quarter of 2009 was still shadowed by
the aftermath of the financial crisis; from the
second quarter onwards, expansionary fiscal and
monetary policies introduced by governments all
around the world had sparked the steady recovery
of the world economy. The recovery of emerging
markets, especially China, was relatively stronger
than mature markets such as Europe and The
USA. The growth rates of the world's largest
economies in 2009 were: USA (-2.4%), Europe
(-4.1%), Japan (-5.0%), and China 8.7%
2. Steady recovery of world economy ref lected in s t rong stock market performance
(1) The TAIEX had risen by 78.4% from 4,591 to
8,188; the combined capitalization of both markets
increased by 83.9% from $12.48 trillion to $22.95
trillion. The daily trading volume average $118.3
billion (TSE) and $20.9 billion (OTC) from Jan
to Dec; this was higher than the $104.9 billion
(TSE) and $13.2 billion (OTC) posted in 2008.
The growth of the TAIEX was equivalent to the
remarkable 79.9% growth of the Shanghai Stock
Exchange Index in 2009.
Profitability analysis of security companies:(In NTD Millions)
Passion.Professionalism.Efficiency.Innovation
30 Taiwan Securities Association 2009 Annual Report
CountSecurity
companiesCurrent turnover Current expenses Current earnings Paid up capital
Shareholders’ equity
Current profit (%) EPS ($) ROE (%)Turnover market
shareNet worth per
share
86 Total 326,305 287,341 38,964 331,557 455,700 11.94 1.175 8.55 100.00 13.744
48General security companies
316,681 280,624 36,057 317,386 432,019 11.39 1.136 8.35 97.05 13.612
38Security brokerage companies
9,626 6,716 2,907 14,170 23,681 30.21 2.052 12.28 2.95 16.712
69Local security companies
302,361 267,392 34,960 311,442 420,251 11.56 1.122 8.32 92.66 13.494
35General security companies
297,935 263,977 29,822 300,642 404,651 11.40 1.130 8.39 91.31 13.460
34Security brokerage companies
4,416 3,414 1,001 10,800 15,600 22.67 0.927 6.42 1.35 14.444
17Foreign security companies
23,953 19,949 4,005 20,114 35,449 11.20 1.991 11.30 7.34 17.624
13General security companies
18,746 16,647 2,099 16,744 27,368 13.08 1.254 7.67 5.74 16.344
4Security brokerage companies
5,208 3,302 1,906 3,370 8,081 36.60 5.656 23.59 1.60 23.981
20Top 20 security companies
275,555 245,446 30,109 265,092 364,780 10.93 1.136 8.25 84.45 13.761
(2) The 86 security companies delivered an average
EPS of $1.175, a significant improvement from
the $-0.201 in 2008, 81 companies produced
profits while 5 incurred losses. General security
companies averaged an EPS of $1.136, lower
than the $2.052 of security brokerage companies.
Foreign security companies averaged an EPS of
$1.991, higher than the $1.122 of local security
companies. The 20 local security companies
with the highest paid up capital averaged an EPS
of $1.136; this is slightly lower than the industry
average.
(In NTD Millions)
3. Taiwan's economic growth rate targets at 4.72% in 2010
The Director-General of Budget, Accounting, and
Statistics had posted a GDP growth of (-1.87%) in
2009 and forecasted a GDP growth of 4.72% in 2010
in view of strong recovery in terms of exports and
private investments, and the likely establishment of
ECFA with China. CPI growth rate is estimated at
1.27%, representing the expectation of mild inflation.
If the withdrawals of worldwide expansionary policies
are well-handled, the credit crunch of European
countries are settled, the cross-strait economic
agreements and entries to the financial market are
well-established, we shall expect more stunning
performance from the domestic security market and
its participants.
Appendix
31Taiwan Securities Association 2009 Annual Report
Comparison on Operating Loss
● Total operating revenue in 2009 was 39 billion, which is higher than-7 billion in 2008.
● The average earnings per share of all securities companies in 2009 was NTD1.18 and in 2008 was NTD-0.2.
-10,000
0
10,000
20,000
30,000
40,0002009 2008
(In NTD Million)
-4,503
6,549
12,219
20,198 20,342
11,85310,151 10,434
-890 -2,443 -2,646-6,940
-615
1,0144,724
9,612
16,689
17,219
23,925 24,84630,048
32,48934,597
38,964
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Comparison of Business Performance by Securities Firms during the Recent Two Years
(NTD)
0
100,000
200,000
300,000
400,000 2009 2008
(In NTD Million)
12,620 26,94151,285
97,537
154,907
172,067
215,419236,357
269,211296,995 318,963 326,305
36,07653,446
82,973112,127
140,475
177,703
200,209217,837
249,672 271,562 290,748 305,595
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Comparison on Operating Income
● Total operating income in 2009 was 326.3 billion, which is higher than the 305.6 billion in 2008.
● In the second half of 2009, due to the trading value enlarged and Taiwan stock index rebounded which makes securit ies companies had better income in the operation of brokerage and dealing business.
Comparison on Return on Shareholder's Equity
● The ROE for securities firms was 8.55% and -1.58% in 2009 and 2008 ,
respectively.● Securities firms were greatly benefited
by the stock market bounced up, however the ROE still worse than the figure of 11.22% in 2007.
2009 2008
%
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.00
-0.92
1.312.45
4.00 4.07
2.47 2.17 2.23
-0.20 -0.55 -0.60-1.58
-0.14
0.231.09
2.193.75
3.905.33 5.43
6.476.96 7.36
8.55
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Comparison on Net Worth per Share
● In 2009, the net worth per share for all securities firms was 13.74, which was higher than the 12.69 of 2008.
● Due to the impact of global financial tsunami in the second half of 2008, securities firms net earnings per share decreased which began to rise in early 2009.
12.00
13.00
14..00
15.00
16.00 2009 2008
(NTD)
14.29 14.50 14.48 14.5714.40
13.64 13.69 13.62
13.2512.91 12.86
12.6912.66 12.70 12.7512.95
13.16 13.0813.28 13.29
13.49 13.57 13.63 13.74
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Passion.Professionalism.Efficiency.Innovation
32 Taiwan Securities Association 2009 Annual Report