Chapter 1 General Provisions |
| Article 1 | These Rules are adopted pursuant to Article 55 of the Operating Rules of Taiwan Stock Exchange Corporation (TWSE).
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| Article 2 | The term "beneficial certificate" as used in these Rules includes:
- P1: Any beneficial certificate for an offering of a closed-end securities investment trust fund issued by a securities investment trust enterprise ("SITE") pursuant to the Regulations Governing Securities Investment Trust Funds.
- P2: Any of the following beneficial certificates issued for an offering of an exchange-traded securities investment trust fund ("securities investment trust ETF") by a SITE pursuant to the Regulations Governing Securities Investment Trust Funds, for an exchange-traded futures trust fund ("future trust ETF") by a futures trust enterprise (FTE) pursuant to the Regulations Governing Future Trust Funds, or for an offshore exchange-traded fund ("offshore ETF")by an offshore fund manager or its designated institution ("offshore fund entity") pursuant to Regulations Governing Offshore Funds.
- P3: Beneficial certificates issued by a SITE for an active exchange-traded securities investment trust fund ("active securities investment trust ETF")pursuant to the Regulations Governing Securities Investment Trust Funds.
- P4: Any beneficiary securities issued by a trustee institution for the establishment of a real estate investment trust ("REIT") fund pursuant to the Real Estate Securitization Act.
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| Article 2-1 | The beneficial certificates listed in Items 2 and 3 of the preceding article are as follows:
- P1: Beneficial certificates issued by a SITE for an securities investment trust ETF are classified according to the component securities of the underlying index as follows:
- Domestic component securities investment trust ETF:
- Domestic component securities stock securities investment trust ETF: Refers to a fund where all the component securities of the underlying index are domestic stocks.
- Domestic component securities bond securities investment trust ETF: Refers to a fund where all the component securities of the underlying index are domestic bonds.
- Domestic component securities balanced securities investment trust ETF: Refers to a fund where the component securities of the underlying index include both domestic stocks and domestic bonds.
- Foreign component securities investment trust fund:
- Foreign component securities stock investment trust ETF: Refers to a fund where all the component securities of the underlying index are stocks, and the component securities include at least one foreign stock.
- Domestic component securities bond securities investment trust ETF: Refers to a fund where all the component securities of the underlying index are bonds, and the component securities include at least one foreign bond.
- Domestic component securities balanced securities investment trust ETF: Refers to a fund where the component securities of the underlying index include both stocks and bonds, and the component securities include at least one foreign stock or bond.
- As specified in Paragraph 4, Article 37 of the Regulations Governing Securities Investment Trust Funds ("linked securities investment trust ETF").
- Leveraged and Inverse securities investment trust ETF: Refers to a fund that tracks, simulates, or replicates the positive multiple ("leveraged securities investment trust ETF") or the inverse multiple ("inverse securities investment trust ETF") performance of the underlying index.
- P2: Beneficial certificates issued by a FTE for an futures trust ETF. A fund that tracks, simulates, or replicates the positive multiple ("leveraged futures ETF") or the inverse multiple ("inverse futures ETF") performance of the underlying index is called a leveraged and inverse futures ETF.
- P3: Beneficial certificates, fund shares, or investment units ("offshore ETF beneficial certificates") issued by an offshore fund institution for an offshore ETF ("offshore index ETF").
- P4: Beneficial certificates issued by a SITE for an active securities investment trust ETF are classified according to the investment scope as follows:
- Domestic component securities active ETF: Refers to a fund where the investment scope specified in the trust contract consists entirely of domestic securities. Based on the investment targets, it is classified into domestic component securities active ETFs and domestic component securities bond active ETFs.
- Foreign component securities active ETF: Refers to a fund where the investment scope specified in the trust contract includes one or more foreign securities. Based on the investment targets, it is classified into foreign component securities active ETFs and foreign component securities bond active ETFs.
- P5: For the fund raised by the SITE according to item 1, apart from balanced securities investment trust ETF with domestic and foreign component securities, it may additionally list beneficiary certificates in other currencies ("additionally listed ETF beneficiary certificates).
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| Article 3 | Book-entry settlement of beneficial certificates listed for trading on the TWSE's centralized securities exchange market shall be conducted by a central securities depository, and the trustor may not apply for withdrawing those beneficial certificates.
When a principal trades in any of the following ETF beneficial certificates, the securities firm may only accept the order after the principal has signed a separate risk disclosure statement:
- futures ETF beneficial certificates
- leveraged or inverse securities investment trust ETF beneficial certificates
- ETF beneficial certificates traded in foreign currency
- underlying ETF beneficial certificates
- beneficial certificates of securities investment trust ETF, where the total weight of non-investment grade bond components can account for 60% or more of the target index components when applying for listing.
- Beneficial certificates of active ETFs, where the total investment in non-investment grade bonds can account for 60% or more of the fund's net asset value when applying for listing.
- beneficial certificates deemed necessary by the TWSE
The following funds and accounts may be exempted from signing risk disclosure statements: privately placed securities investment trust funds managed by professional institutional investors or SITEs, futures trust funds offered by futures trust enterprises to persons with prescribed qualifications, discretionary investment accounts managed by SITEs, securities investment consulting enterprises or securities brokers concurrently operating securities investment consulting enterprises, and discretionary investment accounts managed by managed futures enterprises.
The matters that must be set out in the risk disclosure statement as referred to in paragraph 2 will be separately prescribed by the TWSE.
"Professional institutional investors" in paragraph 3 means the professional institutional investors defined in the Regulations Governing Offshore Structured Products.
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| Article 4 | A principal that trades in leveraged or inverse securities investment trust ETF beneficial certificates or leveraged or inverse future trust ETF beneficial certificates for the first time is required to meet at least one of the following conditions:
- The principal has opened a margin account.
- The principal has had at least 10 trading orders for call (put) warrants executed within the most recent one year.
- The principal has had at least 10 trading orders of futures trading contracts listed on the Taiwan Futures Exchange executed within the most recent one year.
- The principal has trade confirmation records of leveraged and inverse securities investment trust ETF beneficial certificates or leveraged and inverse futures trust ETF beneficial certificates.
The principal may apply to a securities firm by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent.
Professional institutional investors that conform to the Regulations Governing Offshore Structured Products, privately placed securities investment trust funds managed by investment trust enterprises, futures trust funds offered by futures trust enterprises to persons with prescribed qualifications, discretionary investment accounts managed by investment trust enterprises, securities investment consulting enterprises or securities brokers concurrently operating securities investment consulting enterprises, or discretionary investment accounts managed by futures management enterprises are not governed by paragraph 1.
Should the principal engage in irregular trade in order to fulfill the conditions in the first paragraph, the securities firm shall ascertain whether the principal has actual trading experience in respect of beneficial certificates as mentioned in the first paragraph and may, where necessary, refuse to accept trading orders from the principal.
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| Article 4-1 | A principal trading the beneficial certificates of leveraged or inverse securities investment trust ETF for the first time shall complete a checklist of beneficial certificates of leveraged or inverse securities investment trust ETF for the principal to read carefully and sign before the securities firm may accept the principal’s order. The principal may do so by correspondence, e-mail, facsimile, or electronic means that is sufficient to identify the principal as itself and confirm its indication of intent.
The aforementioned checklist of beneficial certificates of leveraged or inverse securities investment trust ETF shall be created by the TWSE.
Professional institutional investors that conform to the Regulations Governing Offshore Structured Products, privately placed securities investment trust funds managed by SITE, futures trust funds offered by FTE to persons with prescribed qualifications, discretionary investment accounts managed by SITE, securities investment consulting enterprises or securities brokers concurrently operating securities investment consulting enterprises, or discretionary investment accounts managed by managed future enterprises are not governed by paragraph 1.
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