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Article NO. Content

Title:

Taiwan Stock Exchange Corporation Operation Directions Governing Liquidity Providers of Exchange Traded Notes  CH

Announced Date: 2018.12.24 (Articles 8 amended,English version coming soon)
Current English version amended on 2018.09.10 
8      Operating principles for a liquidity provider providing liquidity during the trading period of the TWSE's centralized securities exchange market:
  1. The price quoted by a liquidity provider shall include a bid price and an ask price.
  2. A liquidity provider shall provide quotes at least once every 5 minutes, and such quotes shall remain posted for at least 30 seconds, provided that this 30-second restriction shall not apply when quotes are updated due to fluctuations in the indicative value.
  3. A liquidity provider shall prescribe the highest bid price and the lowest ask price in accordance with the following:
    1. If the components of the ETN's underlying index are domestic, the best bid/ask spread shall not be more than 1%. The calculation formula for the range of best bid/ask spread is (the best bid/ask spread) = [(lowest unexecuted ask quote) - (highest unexecuted bid quote)]/( lowest unexecuted ask quote).
    2. If one or more component of the ETN's underlying index is foreign, the best bid/ask spread shall not be more than 3%. The calculation formula for the range of best bid/ask spread is (the best bid/ask spread) = [(lowest unexecuted ask quote) - (highest unexecuted bid quote)]/( lowest unexecuted ask quote).
  4. Every single bid/ ask quote for ETNs shall be of more than 100 trading units or of a total amount more than NT$1,000,000. However, this restriction will not apply under any of the following circumstances, provided that the quote may not be of less than 10 trading units:
    1. If the underlying index consist of foreign components and during the trading hours of the TWSE's centralized securities exchange market, the foreign trading market for the index components weighing 30% or more is closed.
    2. 5 minutes prior to market close.
  5. The premium/discount spread between the closing price and index value announced after market close of that ETN on the same day shall conform to the following:
    1. If the components of the ETN's underlying index are domestic, the daily premium/discount spread shall not be more than 3%. The calculation formula for the range of premium/discount spread is (closing price - index value announced after market close)/ (index value announced after market close).
    2. If one or more component of the ETN's underlying index is foreign, the best bid/ask spread shall not be more than 6%. The calculation formula for the range of best bid/ask spread is (the best bid/ask spread) = [(lowest unexecuted ask quote) - (highest unexecuted bid quote)]/( lowest unexecuted ask quote).
  6. If an ETN is a stock placed under disposition measures, liquidity provider needs not to provide quotes.