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Article 3
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Where any beneficiary certificate has been listed for more than six (6) months, the stock exchange may publicly announce that margin purchase and short sale are allowed for such beneficiary certificate and shall collectively report to the SFC on monthly basis; provided, beneficiary certificates of exchange-traded securities investment trust funds (hereinafter referred to as “exchange-traded fund beneficiary certificates”) may be exempted from the requirement of listing for six months.
The provisions in Paragraphs 3 and Paragraph 4 of the preceding Article shall apply mutatis mutandis to beneficiary certificates except for exchange-traded fund beneficiary certificates.
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Article 5
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Where any beneficiary certificate allowed for margin purchase and short sale transactions has any of the following conditions, the stock exchange may make public announcement of suspension of the margin purchase and short sale transactions of such beneficiary certificate, or adjust the margin purchase ratio or the percentage of margin for short sale within the scope prescribed by SFC and report same to SFC for recordation:
1.Where listing of the beneficiary certificate has been terminated;
2.Where the issuer has failed to punctually file and make public announcement of financial reports;
3.Where the securities investment trust enterprise managing the securities investment trust fund has any of the conditions under Article 50 of the Rules for Administration of Securities Investment Trust Enterprises;
4.Where the price fluctuation is too drastic;
5.Where the ownership of beneficiary interests is over-centralized;
6.Where the trading volume is excessively abnormal; or
7.Where there is any other event for which continued margin purchase or short sale transaction is improper.
Where margin purchase or short sale transaction is suspended or margin purchase ratio or percentage of margin of short sale is adjusted in accordance with the provisions in the preceding Paragraph, if the reason for suspension or adjustment no longer exists, the stock exchange shall make public announcement of the reinstatement and report to the SFC for recordation.
The concrete determination standards and operational procedures of the provisions referred to in the Items of the preceding two Paragraphs shall be prescribed by the stock exchange and approved by the SFC.
The provisions of subparagraphs 4 to 6 of paragraph 1 do not apply to exchange-traded fund beneficiary certificates.
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Article 6
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When the balance of margin purchase or short sale for each type of stock allowed for margin purchase or short sale transaction reaches 25% of the listed or OTC-listed shares of such stock, the margin purchase or short sale shall be suspended. When the balance is below 18%, the margin purchase and short sale shall be reinstated.
Though the balance of short sale referred to in the preceding Paragraph does not reach 25% or is below 18% but if the balance thereof exceeds the balance of margin purchase, short sale shall be suspended. When the balance has equalized, the short sale shall be reinstated.
In executing the provisions referred to in Paragraph 1 above, the stock exchange and OTC exchange may conduct distribution and report to SFC. When a securities finance enterprise and a securities firm dealing with margin purchase and short sale of securities conducts margin purchases or short sale, the number of stock certificates distributed by the stock exchange and OTC exchange for margin purchase and short sale shall not be exceeded.
The provisions in the preceding three Paragraphs shall apply mutatis mutandis to beneficiary certificates; provided, the calculation of the number of beneficiary units of exchange-traded fund beneficiary certificates shall be done on the basis of the total number of issued beneficiary units as of the preceding business day.
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