TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
ducted in a fair and transparent manner; (v) the management system for operations, information security and wallets (cold and hot); (vi) disclos - ing relevant information to the public; (vii) imple - menting internal controls and conducting audits; and (viii) the extent to which these guidelines apply to VASPs operating from outside Taiwan. While these guidelines do not carry the force of “hard law” , there is a general expectation that the FSC will progressively mandate compliance with these rules. Also, as specified in 2.14 Impact of AML and Sanctions Rules , VASPs fall within the regula - tory regime of the Taiwan AML Act, and VASPs operating without Crypto AML Registration may be subject to criminal liability. Moreover, according to related news coverage, the FSC is contemplating the possibility of intro - ducing a crypto-specific law, with a potential draft scheduled for announcement around June 2025. Industry participants are advised to close - ly monitor the prospective regulatory changes in Taiwan. 6.4 Listing Standards Please see 10.4 Regulation of “Issuers” of Blockchain Assets for certain regulations regarding listing of security tokens and non- security tokens. 6.5 Order Handling Rules For security tokens: The STO regulations provide for the following trading rules, which may be relevant to order handling: (i) A securities firm (ie, platform operator) shall adopt rules for the negotiated trading of security tokens and know-your-customer procedures, and publish them on its trading platform and
incorporate them into its internal control sys - tem. Such negotiated trading rules shall include the trading platform’s business days and trad - ing hours, price quote method, trade execution principles, price stabilisation mechanism, trad - ing procedures, method for the advance collec - tion of purchase prices and security tokens to be sold, and the handling of settlement and default. (ii) The price quotes provided by the securities firm are nominal quotes, and the securities firm shall provide two-way (buy and sell) quotes. The trade price shall be negotiated between the securities firm and the customer. (iii) A securities firm shall provide reasonable price quotes based on its professional judge - ment, and shall efficiently adjust demand and supply in the market depending on the market situation, and may not give a quote that deviates from a reasonable price, thereby impairing the formation of fair prices. (iv) When making price quotations for and engag - ing in negotiated trading of security tokens that the securities firm issued itself, the securities firm shall pay special attention to reasonable - ness of price, and shall adopt in its internal con - trol system a basis for the determination of price quotes and principles for negotiated trades. For tokens without the nature of securities: There is no law or regulation specifically gov - erning how to handle trading orders. However, pursuant to the VASP Guidelines, a VASP should ensure that transactions are conducted in a fair and transparent manner. Specifically, a VASP should establish mechanisms to ensure fair market transactions, including measures such as abnormal price alerts, as well as regulations to prevent market abuse and avoid conflicts of interest.
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