National Securities is one of Taiwan's leading full service securities firms. Our client service divisions consist of securities brokerage, credit transactions, in-house dealing, underwriting, registrar and transfer agency services, bond trading, and international business. Our operating efficiency is exceptional. We ranked first in government bond trading, following a formal assessment by Taiwan's central bank, the Central Bank of China in 1994. With the approval of Taiwan's SFC, we were the first securities firm to trade on Taiwan's Over-the-Counter Exchange. We were also the first Taiwan listed securities firm assessed and certified ISO 9002 quality management system standard at the end of 1996. After acquisition the Wan Sheng Securities Co. Ltd. and Ten-Jen Securities Co. Ltd., our paid-in capital and net asset value has substantially increased to NT$ 11.3 billion and NT$ 16.5 billion respectively. NSC's business scope is as follows:

1. Securities Brokerage Division
   The Securities Brokerage Division executes clients' orders to buy or sell shares with a professionalism that promotes confidence in our investors. Since our establishment, we have adhered to our management philosophy of promoting integrity, quality, loyalty, practicality, expertise, and comprehensive service for the investing public. Rigorous in-house training has not only given our salespeople the ability to execute orders accurately and quickly, but also has allowed them to become excellent investment advisors. Members of our Research Department utilize our diverse information resources to provide in-depth industry analyses and timely information for all of Taiwan's listed companies and OTC-traded firms. The research staff is highly capable of providing our clients with reliable, up-to-date investment information and advice on macroeconomic data, political happenings, and technical stock analysis. They are always willing and able to offer their own interpretation of stock index movements, while also providing rigorous fundamental analysis of the stock and bond markets for the purpose of informing and advising clients.
   To protect our clients' interests, we conduct internal auditing according to the regulations set by the Securities & Futures Commission of the Ministry of Finance.
   
   
2. Margin Trading
   We offer to the investing public stock borrowing and margin lending services. Recognizing the inconvenience of limits in margin trading, we began to offer securities lending and financing services in 1991 with the necessary capital and shares backed up by our own capital and, in rare cases, that of securities financing companies. This reliable system provides investors with regulated credit lines at competitive interest rates.
   
   
3. Proprietary Trading
   We engage in proprietary securities trading to enhance market liquidity, reduce market volatility, and regulate supply and demand to help stabilize share trading on the stock market.
   
   
4. Underwriting
   We advise corporations on going public and OTC companies on how to raise capital on the Taiwan Stock Exchange. Our highly professional underwriting staff offers meticulous guidance on public offerings. We are able to assist clients in raising the necessary capital by accessing Taiwan's highly-liquid capital markets.
   
   
5. Stock Registration and Transfer Services
   This division functions as a stock registrar for listed companies. In order to enhance the quality and efficiency of stock registration and transfer, we have both developed and continued to use our own applicable software. In addition to common stock registration, we are experienced in funds, convertible bonds, and preferred stocks registration.
   
   
6. Bond Trading
   The Bond Division is responsible for Taiwan bond trading and dealing. We obtained a Government Bond Dealer License and have participated in the market with professionalism since 1991. Our bond trading operations include the buying and selling of bonds, often with repurchase agreements.
   Bonds provide liquidity, safety and fixed income streams to bond holders in the form of periodic coupon payments. Relying on our bond dealing expertise, we strive to be a market leader and provide valuable bond dealing information to our clients. We are always on the clients' side in creating investment profits.
   
   
7. International Business
   The International Division provides securities trading services to global institutional and private investors. We are the first Taiwan brokerage firm to offer brokerage service for Hong Kong and Japanese listed shares to Taiwan investors. In order to quicken the pace of internationalization, we've set up subsidiaries in Hong Kong and London, and representative offices in Tokyo and Shanghai.
   
   
8. Derivatives Products
   We obtained a license to issue Taiwan equity warrants for hedging operations. We successfully issued an electronics index warrant on March 13, 1998. In 1999 and 2000, we issued seven warrants. We are making continuing efforts to enhance our derivatives hedging abilities and develop hedging programs. In addition to integrating the risk management philosophies of global investment banks and cooperating with other corporations, we are making every effort to minimize the total risks inherent in financial derivatives transactions.
   
   
9. Futures Introducing Broker
   The new business of Taiwan Stock Market index futures was approved on July 20, 1998, while new businesses for financial index futures and electronics index futures were approved on July 21, 1999. We are engaging in the futures intermediary business relying on our extensive business networks to facilitate our clients open accounts and place as well as transfer orders. Our subsidiary, National Futures Corporation, acts as a primary settlement agency.