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Taiwan Stock Exchange Corporation Regulations Governing Trading of Foreign Stocks  CH

Amended Date: 2012.06.07
Article 1     These Measures are stipulated pursuant to Article 55 of the Operating Rules of the Taiwan Stock Exchange Corporation (the TWSE).
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Article 2     Foreign stocks which are issued by a foreign issuer in accordance with the Guidelines for the Handling Offering and Issuance of Securities by Foreign Issuers and which are approved by the TWSE for a primary or a secondary listing after application in accordance with the TWSE's Rules Governing Review of Securities Listings may be traded on the stock exchange of the TWSE.
Article 3     The purchase and sale of listed foreign stocks shall be transacted in accordance with the provisions of these Measures. With regard to matters not provided for in these Measures, the Operation Rules or other relevant regulations of the TWSE shall govern.
Article 3-1     With the exception of professional institutional investors, a principal that makes an initial trade of a listed foreign stock shall first sign a risk disclosure statement before the securities broker may accept the principal's trading order.
    The risk disclosure statement of the preceding paragraph is to be announced by the TWSE.
    The term "professional institutional investor" as used in paragraph 1 means a foreign or domestic bank, insurance company, bills finance company, securities firm, fund management company, government investment institution, government fund, pension fund, mutual fund, unit trust, securities investment trust company, securities investment consulting company, trust enterprise, futures commission merchant, futures service enterprise, and any other institution approved by the competent authority.
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Article 4     Securities firms that intend to carry on the business of brokerage or of purchase or sale for their own accounts of foreign stocks with the prices of which are denominated in foreign currencies shall first obtain a permit from the Central Bank of China.
Article 5     The currency for the purchase or sale of foreign stocks shall be the same currency designated by the foreign issuer when applying for listing with the TWSE. A customer shall first open a foreign currency saving account at a foreign exchange bank designated by the securities broker before it may buy or sell foreign stocks which are settled in foreign currency.
Article 6     The trading unit for a primary listing of a foreign stock shall be 1000 shares, and the stock may be no-par-value or may be exempted from the requirement for an NT$10 par value per share. The trading unit for a secondary listing of a foreign stock shall be identical with that of the foreign stocks originally traded on the [foreign] stock exchange.
    The volume quoted for purchase or sale of a foreign stock shall be one trading unit or a multiple thereof; volumes of less than one trading unit shall be traded in accordance with the Regulations Governing the Trading of Odd-Lot Shares.
Article 7     The price quoted for purchase or sale of foreign stocks shall be for one share thereof. With respect to the up/down unit for price fluctuation of foreign stocks, the relevant provisions of the TWSE governing the up/down unit for listed stocks shall apply mutatis mutandis.
Article 8     The provisions of this Article 63 of Corporation's Operating Rules shall apply mutatis mutandis with respect to the upper and lower limits of the allowable range for daily price fluctuation of a foreign stock with a primary listing. Unless otherwise prescribed by the Competent Authority, there shall not be any limitation on the upper and lower limits of the allowable range for daily price fluctuation of foreign stocks with a secondary listing.
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Article 9     A foreign stock with a primary listing whose settlement takes place after a suspension of changes to entries in the shareholders' register (i.e., a book closure date) due to the setting of a date of record for distribution of rights in accordance with the market regulations of the TWSE for the distribution of dividends, bonuses, or other interests shall be ex-dividend or ex-rights transactions, and the allowable range of price fluctuation from the commencement date of ex-dividend or ex-rights trading shall be calculated by mutatis mutandis application of the relevant provisions of the TWSE's Operating Rules.
    The provisions of the preceding paragraph do not apply to a foreign stock with a secondary listing.
Article 10     The purchase and sale of foreign stocks shall be automatically transacted through computer system. Quotations for purchase and sale shall be valid only on the date on which the quotation is given.
    Entrustment for purchase or sale of foreign stocks shall be limited to entrustment at a designated price.
Article 11     For matching a transaction, the order of priority of quoted purchase and sale shall be determined in the following manner:
  1. Quotations for purchase at higher prices shall take precedence over purchase at lower prices and selling at lower prices shall take precedence over selling at higher prices.
  2. The order of priority of quotations at the same prices shall be determined in accordance with the sequence of their respective keyed-in time; provided that the order of priority of quotations keyed-in before opening of the market shall be determined randomly by the computer.

Article 12     Competitive auctions for trading orders of foreign stocks shall without exception be call auctions. The principles for determining the transaction prices shall be those of Article 58-3, paragraph 1 of the Operating Rules of the Taiwan Stock Exchange Corporation, applied mutatis mutandis.
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Article 13     Bid and offer prices and volumes shall be posted in accordance with the mutatis mutandis application of Article 58, paragraph 5 of the Operating Rules of the Taiwan Stock Exchange Corporation.
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Article 14     The responsible institution designated by a foreign issuer shall deliver the following information to the TWSE:
  1. The most recent closing price on the stock exchange of its original listing for a foreign stock with a secondary listing in Taiwan shall be delivered to the TWSE one half-hour prior to the opening of the TWSE's centralized securities exchange market.
  2. The details concerning the distribution of dividends, bonuses or other benefits of foreign stocks shall be delivered to the TWSE within 12 business days from the date on which the same is determined by the foreign issuer, provided that in case the time limit is less than 12 business days according to the laws and regulations of its jurisdiction, such laws and regulations shall prevail.

Article 15     The trading hours of the stock exchange of the TWSE shall apply mutatis mutandis to the trading of foreign stocks.
    In case of the tentative cessation of the trading at the stock exchange on which foreign stocks are originally listed, such foreign stocks shall be continuously traded at the stock exchange of the TWSE.
Article 16     A separate clearance statement shall be prepared for the settlement of foreign stock transactions conducted in foreign currencies. For the clearing and settlement of foreign stocks, the provisions of the Operation Rules of the TWSE shall apply mutatis mutandis, and the currency used therein shall be the same currency used for the listed trading of the foreign stock.
Article 17     In respect of the handling fee chargeable to customers by a securities firm entrusted to purchase or sell foreign stocks and of the handling fee chargeable by the TWSE to securities firms, the relevant provisions governing the fee schedules for listed stocks shall apply mutatis mutandis.
Article 18     These Measures shall take effect after having been submitted to and approved by the Competent Authority and publicly announced by the TWSE. Subsequent amendment to these Measures shall be effected in the same manner.