Taiwan Securities Association

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

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0206

09

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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



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


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



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


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



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


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)



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


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



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


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:



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


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.



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


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".



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


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.



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


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.



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


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.



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


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


297,935 263,977 29,822 300,642 404,651 11.40 1.130 8.39 91.31 13.460


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


18,746 16,647 2,099 16,744 27,368 13.08 1.254 7.67 5.74 16.344


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)



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


316,681 280,624 36,057 317,386 432,019 11.39 1.136 8.35 97.05 13.612


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


297,935 263,977 29,822 300,642 404,651 11.40 1.130 8.39 91.31 13.460


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


18,746 16,647 2,099 16,744 27,368 13.08 1.254 7.67 5.74 16.344


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


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


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


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




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