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The liquidity contract shall at least prescribe the following matters with respect to the responsibilities and obligations of a liquidity provider (the standards below shall apply to the period from commencement of trading to a certain period of time prior to close of trading):
- The calculation formula for the best bid/ask spread of the ETF beneficial certificates as disclosed in the TWSE centralized securities exchange market is as follows:
(the best bid/ask spread) = [(lowest unexecuted ask quote) - (highest unexecuted bid quote)]/( lowest unexecuted ask quote)
- The minimum valid quote time by a liquidity provider for the ETF beneficial certificates. The valid quote time means the circumstance where a buy or sell order in which the price is within a specified range above the previous lowest unexecuted ask quote, within a specified range below the previous highest unexecuted bid quote, or within a specified range above and below the execution price. Minimum requirements shall be set for valid quote time and numbers of bid and ask quotes as calculated.
- The minimum amount of buy/sell quotes that a liquidity provider shall make during a suspension of matching when there occurs a circumstance specified in paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules with respect to the ETF beneficial certificates beneficial certificates during the trading session.
- The disclosure of market trading prices is limited only by the duration of time of bid or ask prices except when the price of the ETF beneficial certificates goes limit-up or limit-down or when the disclosed best buy price or sell price is the market price; however, the aforesaid calculation of time may exclude the matching postponement period when matching time must be postponed due to a circumstance specified in paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules.
- Agreement that the TWSE provide to the SITE, the futures trust enterprise, or the general agent for offshore funds all the buy/sell quotes and itemized statements of trading of the ETF beneficial certificates done through the liquidity provider's segregated ETF account.
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