TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
Also, under the Crypto AML Registration Regu - lations, a VASP offering virtual asset exchange services must establish and publicly disclose its policy for preventing conflicts of interest. Additionally, the VASP is required to implement reasonable measures to protect customer inter - ests and ensure the prompt and fair execution
each security token under an STO programme may be traded only on a single platform. For tokens without the nature of securities: The VASP is silent in this regard. Please, how - ever, note that pursuant to the VASP Guidelines, a VASP should ensure that transactions are con - ducted in a fair and transparent manner. Specifically, a VASP should establish mecha - nisms to ensure fair market transactions, includ - ing measures such as abnormal price alerts, as well as regulations to prevent market abuse and avoid conflicts of interest. Therefore, as long as the rules outlined in the VASP Guidelines are fol - lowed, such practice should be allowed. Also, under the Crypto AML Registration Regu - lations, a VASP offering virtual asset exchange services must establish and publicly disclose its policy for preventing conflicts of interest. Additionally, the VASP is required to implement reasonable measures to protect customer inter - ests and ensure the prompt and fair execution According to the STO regulations, when a cus - tomer defaults on a settlement obligation, the securities firm (ie, platform operator) shall can - cel the trade and, after immediately notifying the customer, shall itself pursue compensation. There is no other rule specifically governing mar - ket integrity and market abuse on the part of the traders under the STO regulations. For tokens without the nature of securities: As was similarly stated in 6.5 Order Handling Rules , there is no law or regulation specifically governing market integrity and market abuse. of customer exchange instructions. 6.8 Market Integrity Principles For security tokens:
of customer exchange instructions. 6.6 Rise of Peer-to-Peer Trading Platforms
Please see 2.2 Regulatory Regime , 2.14 Impact of AML and Sanctions Rules , 6.1 Permissible Trading Platforms and 6.3 Impact of the Emer- gence of Cryptocurrency Exchanges regarding crypto exchanges and trading platforms. For peer-to-peer lending platforms, please refer to 2.2 Regulatory Regime . 6.7 Rules of Payment for Order Flow We assume that “payment for order flow” refers to a fee/compensation received by an exchange or trading platform for routing/connecting a buy/ sell order to a specific market maker/trader, who takes the other side of the order, and in such case, such market maker would be the seller to any buy order or buyer to any sell order. For security tokens: Trading (secondary market) for security tokens must completely follow the STO regulations, so the trading mechanism may not be freely struc - tured as the “payment for order flow” method indicated above. Pursuant to the STO regula - tions, the platform operator should obtain a securities dealer licence and handle the trading by way of price negotiation. The platform opera - tor should be the counterparty to every trans - action and should offer a reasonable reference quotation based on the market conditions. Also,
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