Amendments


Title: Operating Rules of the Taiwan Stock Exchange Corporation(2011.01.26)
Date:
Article 43-1   Where any issuer sells its own call (put) warrants, public announcement shall be made on the date of the sale. The public announcement shall include the issuance terms of the call (put) warrant, numbers issued, issuing price, location of sale, period of sale, projected listing date, date of premium payment, issuance date of call (put) warrant, credit rating information of the issuer or guarantor, the required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants, and other particulars required to be disclosed to protect the public and the investor.
Upon the approval of the TWSE for listing of call (put) warrants by an Issuing Company, and the approval of the Competent Authority of the Agreement for Listing, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing, upon the notice of the TWSE, such Issuing Company shall provide the prospectus to the TWSE for its distribution to securities firms. Further, 2 days prior to the listing of such securities, the Listing Company shall enter information related to the listing into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE.
The public announcement referred to in the preceding paragraph shall include the following particulars:
1. Reference number of Listing Agreement approval
2. Date of issuance and period of validity.
3. Detailed information on the underlying index, underlying securities, or basket of underlying securities.
4. Type of call (put) warrants, volume, and total issuance price.
5. Terms of issuance (including issuance price, strike price or strike index, exercise period. Issuance of Knock-out Call Warrant (up and out with full rebate) or Knock-out Put Warrant (down and put with full rebate) shall be explained using bold lettering).
6. A description of the calculation of the issue price, including the price of the underlying securities or the underlying index, strike price or strike index, term, interest rate, volatility and other reference factors used in the calculation, and a table of comparison with the warrants with the same listed securities as underlying securities in the past year shall be provided.
7. Detailed information on guarantor, contents of the guaranty agreement or collateral.
8. The required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants
9. Procedures for exercising the option, and procedures for canceling exercised call (put) warrants.
10. Planned strategy on offsetting risks.
11. Stipulations regarding the adjustment of the call (put) warrant strike price and related matters when the Issuing Company of the underlying securities distributes dividends or bonuses, increases or decreases capital, or undergoes a stock split, merger or consolidation, or conducts other related matters; when a SITE distributes dividends on an underlying exchange-traded fund or conducts other related matters; or when an offshore fund institution distributes dividends on an underlying offshore exchange traded fund or conducts other related matters. If an issuer does not adopt the TWSE reference adjustment formula, it shall explain the matter in the public offering prospectus using bold lettering. If the underlying is a foreign security, the issuer shall itself determine the formula for adjustment.
12. Methods for handling the matter in the event of any merger or consolidation, placement of stock under an altered trading method, halting of trading, suspension of trading, or delisting of the stock of the Issuing Company of the underlying securities; the delisting of an underlying exchange-traded fund due to the dissolution, bankruptcy, or voidance of approval of the securities investment trust enterprise; or the beneficial certificates of an underlying offshore exchange traded fund are delisted by the TWSE after approval by the Competent Authority; or the index provider announces suspension of the compilation of the index.
13. The procedures for listing of the call (put) warrants, and for handling when the stock exchange delists, suspends trading of, or halts trading of, the warrants.
14. Provision specifying that upon the expiration of the period of validity, for call warrants with domestic securities or a domestic index as the underlying, there is exercise value if the simple arithmetic mean trade price of the underlying securities during the 60 minutes before market close or the simple arithmetic mean value of the underlying index during the 30 minutes before market close is higher than the strike price or strike index of the call warrant (or for put warrants, the strike price or strike index is higher than the simple arithmetic mean trade price of the underlying securities during the 60 minutes before market close or the simple arithmetic mean value of the underlying index during the 30 minutes before market close); if there is no trade price during that period, then the calculation shall be based on the most recent trade price. For call warrants with foreign securities or a foreign index as the underlying, there is exercise value if the most recent closing price of the underlying securities or the most recent closing value of the underlying index is higher than the strike price or strike index of the call warrant (or for put warrants, the strike price or strike index is higher than the most recent closing price of the underlying securities or the most recent closing value of the underlying index). If the terms of exercise require cash settlement, then it shall be deemed that the call (put) warrant has been exercised and has given notice to that effect.
15. Provisions specifying that the issuer may not independently exchange the contracted call (put) warrant with another call (put) warrant or securities which has a longer period of validity.
16. Procedures for delivery when the holder exercises the option.
17. Provisions specifying that where the exercise of the option referred to in the preceding subparagraph is required to be done in cash, the cash settlement amount shall be calculated on the basis of the closing price of the underlying securities or the closing index of the underlying index on the exercise date. If the exercise date is the expiration date of the warrants, the cash settlement amount shall be calculated on the basis of the simple arithmetic mean price trade price of the underlying securities during the 60 minutes prior to market close, or the simple arithmetic mean value of the underlying index during the 30 minutes prior to market close; if there is no trade price during that period, then the calculation shall be based on the most recent trade price. However, when the underlying is a foreign security or foreign index, the exercise shall be handled in accordance with the TWSE Guidelines for the Exercise of Call (Put) Warrants.
18. Provisions specifying that where the issuer has failed to satisfy its obligation by tendering the underlying securities or the cash differential, the procedures for handling the securities kept in a central securities depository as guaranty for performance.
19. Date of public announcement.
20. Address at which the public may review the prospectus.
21. Printing the following disclaimer (standard format): "The Taiwan Stock Exchange Corporation shall not be responsible for the contents of this public announcement, and expresses no opinion on its accuracy or completeness, and it is expressly stated that it shall not assume any liabilities arising out of all or a part of the contents of this public announcement or be liable for damages resulting from reliance on such contents."
22. Date of listing for call (put) warrant.
23. Other items required by the TWSE.
The approval for listing shall be revoked in case the issuer of the call (put) warrant fails to determine the date of listing with the TWSE within the business days from the date of approval of the Listing Agreement by the competent authority in charge.
Before the listing of call (put) warrants by an issuer, if it is discovered that, before or subsequent to the effectiveness of the Agreement for Listing, valid facts show that any of the circumstances enumerated in Articles 8 or 9 of the Rules Governing Examination of the Listing of Warrants has occurred, the TWSE may suspend the listing of the call (put) warrants, and conduct an investigation, and report to the Competent Authority. In the event the issuer refuses the investigation of the TWSE or refuses to supply the necessary information, or it is confirmed that it is inappropriate for listing, the TWSE may, upon approval of the Competent Authority, revoke its Agreement for Listing or delist the warrants. In the event it is shown that there are no inappropriate circumstances for listing, the TWSE may, upon report to and recordation with the Competent Authority, notify the company to resume the listing process.
Within 20 days prior to the expiration of the call (put) warrant, the issuer shall enter the following particulars into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE. Issuer of Knock-out Call (Put) Warrant may be exempt from the aforesaid provision regarding public announcement within 20 days prior to expiration of the call (put) warrant; provided that matters concerning public announcement shall be handled on the business day next to the date which is deemed as the last day of trading.
1. Date of expiration of call (put) warrant, last day of trading, and date of delisting.
2. Strike price and exercise ratio.
3. Method of settlement when the holder exercises the right.
4. Process for requesting fulfillment of contract.
5. Other information required by the TWSE.
Listed call (put) warrants shall be assigned by the TWSE a code number, and an abbreviated name for uniform usage.
Article 58   The validity of trading orders relating to the automated computer trading system shall be limited to the day on which the order is placed. Unless otherwise provided, trading orders entered prior to a halting of trading and unexecuted are void.
Unless otherwise provided, trading orders for the automated computer trading system may be keyed-in 30 minutes prior to the opening of the market trading by the participating securities brokers or dealers. Such orders shall include the code of the securities firm, serial number of the brokerage order ticket (or serial number of the proprietary trading order), type of order ticket (margin purchase, short sale, securities lending, central depositary, self-custody), account number of the principal (or of the dealer), code of the securities, type of trade (normal, block, odd-lot), price, volume, and sale/purchase. Upon acceptance by the computer of the TWSE, a trade confirmation slip shall be printed. When a matching trade is made, an execution report will be printed on the printer of the participating securities firms. The items printed on the trading order confirmation slip or the execution report may be adjusted by the TWSE depending on actual need.
The serial number of the brokerage order ticket to be keyed-in by the participating securities brokers as referred to in the preceding paragraph shall be sequentially assigned in the order that the orders were received. The serial number of proprietary trading orders by securities dealers shall be sequentially numbered in the order that the orders were placed.
The price of the trading orders shall be within the daily price fluctuation limit placed in accordance with paragraphs 1 and 2 of Article 63.
The TWSE shall disclose, on a real-time basis during trading hours, execution prices and volumes, and the order prices and volumes of the highest unexecuted buy orders and lowest unexecuted sell orders.
Application of securities firms for changes to the trading orders, except in the case of orders reducing the volume to be traded, shall be accomplished by first canceling the original trading order, and then placing new trading orders.
Article 58-3   The competitive auction for trading orders shall without exception be conducted by call auction. Trade prices shall be determined based on the following principles:
1. Satisfying the maximum trade volume such that buy orders with prices higher than the determined price and sell orders with prices lower than the determined price shall be all satisfied.
2. Where there are buy and sell orders with prices equal to the determined price, at least one side shall be all satisfied.
3. Where two or more prices conform to the principles set forth in the preceding two subparagraphs, the price closest to the most recent traded price in the current session shall be used. If there is not yet any traded price in the current session, the price closest to the auction reference price at market opening of the current session.
The aforesaid auction reference price at market opening of the current trading session shall be determined by the following principles:
1. Use the closing price for the preceding day.
2. Where there is no closing price for the preceding day, the auction reference price shall be determined by the following principles:
(1) If, on the preceding day, the highest buy order price at the close of market was higher than the auction reference price at the opening of market, use the highest buy order price.
(2) If, on the preceding day, the lowest sell order price at the close of market was lower than the auction reference price at the opening of market, use the lowest sell order price.
(3) When neither of the above circumstances applies, use the auction reference price at the opening of market of the preceding business day.
3. In the case of an initial listing, price adjustment due to ex-rights or ex-dividend trading, or resumption of suspended trading, use the price arrived at by processing, pursuant to Article 62 herein, the reference price as set in accordance with Article 59, 59-1, 67, or 67-1, or other rules.
The opening price of a security is the price of the first matched trade for the current session. Trading orders entered prior to market opening (i.e. the commencement of trading hours) that are unexecuted shall continue to be matched in the order as originally randomly assigned by the computer. The closing price shall be the price of trades matched upon accumulation of all trading orders over a period of time prior to market closing (i.e. the close of trading hours). Where unexecuted, the closing price shall be the last traded price during the current session.
During the period from the first matched trade of a security during the current session until the period of time prior to market closing, if the execution price as test-calculated prior to each matching fluctuates beyond a certain range from the previous traded price, the TWSE shall immediately postpone the current matching for a period of time, and continue to accept entries, cancellations, and changes of trading orders for that security. Matching will then proceed sequentially at the conclusion of the postponement period. However, this restriction shall not apply to newly listed common stocks during the period when no price fluctuation limit is imposed, or securities for which extended matching intervals have been implemented under rules or regulations of the TWSE, or securities for which the opening auction reference price is lower than a certain price.
Article 58-5   After the cause of halting of trading of listed securities ceases to exist, the TWSE may resume the trading. But if the cause of the halting of trading ceases to exist during a period of time prior to the close of trading hours, trading will not be resumed on that day.
Article 58-6   The time of commencement of a halt of trading or resumption of trading of listed securities shall be determined by the time of execution by the TWSE computer.
During a period of halted trading of listed securities, the TWSE will cease accepting trading orders.
When trading of listed securities is resumed during trading hours, the first matching of the securities will be done by call auction a period of time after the resumption of acceptance of trading orders.
The proviso to paragraph 1 of the preceding article, and the provision of the paragraph preceding hereto, do not apply to other trading methods such as block trading, odd-lot trading, after-hours fixed price trading, auction, or reverse auction.
Article 58-7   The "period of time," "certain range," and "certain price" in Article 58-3 and the preceding two articles shall be prescribed by the TWSE and publicly announced for implementation after approval and recordation by the Competent Authority.
Article 59-1   Where trading of the TWSE listed securities of a TWSE listed company has been suspended or halted, unless otherwise provided, the price fluctuation limit of such securities on the first day of resumption of the suspended or halted trading shall be calculated based on the closing price of the last trading day. If there is no closing price for the last trading day, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein.