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Article 2
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With respect to a common stock that has been listed on the stock exchange for a full 6 months, if the stock has a par value of NT$10 per share and the net worth per share of the stock is not less than par value, or if the stock has no par value or a par value other than NT$10 per share and the issuer has no accumulated deficit in the most recent fiscal year, the stock exchange shall publicly announce it as a stock eligible for margin purchase and short sale, and report same to the competent authority on a monthly basis.<br/>With respect to a common stock, other than an OTC managed stock or an emerging stock, that has been listed on the OTC market for a full 6 months, if the stock has a par value of NT$10 per share and the net worth per share of the stock is not less than par value, or if the stock has no par value or a par value other than NT$10 per share and the issuer has no accumulated deficit in the most recent fiscal year, the OTC market shall publicly announce it as a stock eligible for margin purchase and short sale, and report same to the competent authority on a monthly basis.<br/>For Taiwan depositary receipts that have been listed on the stock exchange for 6 months, if the foreign issuer did not post an accumulated deficit in either the CPA-audited and certified consolidated financial report for the most recent fiscal year or the CPA-reviewed half-year consolidated financial report (either report shall have been prepared in compliance with the laws and regulations of the issuer's home country), and if the number of units listed on the stock exchange is 60 million units or more, the stock exchange shall publicly announce the units as eligible for margin purchase and short sale, and report same to the competent authority on a monthly basis.<br/>If any of the following conditions exist with respect to the stock or Taiwan depositary receipts referred to in the preceding three paragraphs, approval may be denied for margin purchase and short sale thereof:<br/>1. Share price is too volatile.<br/>2. Equity ownership is overly concentrated.<br/>3. Trading volume is excessively abnormal.<br/>The specific standards and procedures required in the preceding four paragraphs shall be prescribed by the stock exchange and OTC market and reported to the competent authority for approval.<br/>Where the issuer of Taiwan Innovation Board listed stock that is eligible for margin purchase and short sale applies to transfer to exchange listing, or the issuer of OTC listed or exchange listed stock that is eligible for margin purchase and short sale applies to transfer from OTC listing to exchange listing or vice versa, if the stock has a par value of NT$10 per share and the net worth per share of the stock is not less than par value, or if the stock has no par value or a par value other than NT$10 per share and the issuer has no accumulated deficit in the most recent fiscal year, and there is no over-concentration of equity ownership, the stock shall be immediately eligible for margin purchase and short sale. The procedures under this paragraph shall be prescribed by the stock exchange and OTC market and reported to the competent authority for approval.<br/>The provisions of the preceding paragraph also apply to stock that is transferred to -exchange (or OTC) listing less than 6 months before this amendment enters into force.<br/>When a company with an exchange (or OTC) listing is to be converted into a financial holding company in accordance with the Financial Holding Company Act, if the stock of a financial institution to be converted into the financial holding company are eligible for margin purchase and short sale, where the financial holding company thus created is an exchange (or OTC) listed company, if the stock has a par value of NT$10 per share and the net worth per share of the stock is not less than par value, or if the stock has no par value or a par value other than NT$10 per share and the issuer has no accumulated deficit in the most recent fiscal year, and there is no over-concentration of equity ownership, its stock shall be immediately eligible for margin purchase and short sale.<br/>When a company with an exchange (or OTC) listing is to be converted into an investment holding company through a 100 percent share conversion in accordance with the Business Mergers and Acquisitions Act, if the stock of the company to be converted into the investment holding company is eligible for margin purchase and short sale, where the investment holding company thus created is an exchange (or OTC) listed company, if the stock has a par value of NT$10 per share and the net worth per share of the stock is not less than par value, or if the stock has no par value or a par value other than NT$10 per share and the issuer has no accumulated deficit in the most recent fiscal year, and there is no over-concentration of equity ownership, its stock shall be immediately eligible for margin purchase and short sale.<br/>The procedures required in the preceding two paragraphs shall be prescribed by the stock exchange and OTC market and reported to the competent authority for approval.
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