Chapter 1 General Provisions |
| Article 1 | These Rules are established in accordance with Article 55 of the Operating Rules of the Taiwan Stock Exchange Corporation.
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| Article 2 | For purpose of these Rules, exchange traded notes (ETNs) are the ETNs issued by an issuer in accordance with the Regulations Governing the Issuance of Exchange Traded Notes by Securities Firms.
The ETNs as referred to in the preceding paragraph include:
- Domestic component ETNs that track the index consist of domestic underlyings.
- Foreign component ETNs that track the index consist of one or more foreign underlyings.
- Leveraged and inverse ETNs that track a multiple of the performance ("leveraged ETNs") or a multiple of the inverse performance ("inverse ETNs") within the scope of the preceding two subparagraphs.
- ETNs that track the index consist of a trading strategy portfolio of spot assets, futures, options or related indexes, called options strategy ETNs.
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| Article 3 | ETNs that are listed and traded at the centralized securities exchange market of the Taiwan Stock Exchange Corporation ("TWSE") will be handled by centralized securities depository enterprise for delivery by book-entry transfer, with regard to which no customer may request to receive the ETNs.
The ETNs in the preceding paragraph shall be issued in a non-physical form.
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| Article 4 | When trading ETNs, a customer shall sign a risk disclosure statement before a securities firm may accept an order.
A risk disclosure statement may not be needed for professional institutional investor as defined in the Regulations Governing Offshore Structured Products, private placement securities investment trust fund managed by securities investment trust enterprise, futures trust funds offered to buyers meeting certain qualifications by futures trust enterprise, and discretionary investment accounts managed by securities investment consulting enterprise or securities broker who is also a securities investment consulting enterprise, and discretionary investment accounts managed by managed futures enterprise.
The TWSE shall separately determine the particulars to be included in the risk disclosure statement in the first paragraph.
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| Article 5 | A customer who trades leveraged and inverse ETNs or options strategy ETNs for the first time shall meet the qualifications described in one of the following subparagraphs:
- Has opened a margin transaction account.
- Has completed trading of call (put) warrants in 10 or more orders in the most recent year.
- Has completed trading of futures trading contracts listed at the Taiwan Futures Exchange in 10 or more orders in the most recent year.
- Has records showing completion of trading of leveraged and inverse ETNs or options strategy ETNs.
The customer may submit a trading request to securities firm through correspondence or in an electronic manner sufficiently to prove their identity and expression of intent.
A person who has obtained leveraged or inverse ETNs or futures and options strategy ETNs by inheritance, gift, final and conclusive court judgment, or other cause reported to and approved by the TWSE may, after submitting documentary proof, sell such securities without being subject to the application of paragraph 1.
The provisions of the first paragraph do not apply to professional institutional investor as defined in the Regulations Governing Offshore Structured Products, private placement securities investment trust fund managed by securities investment trust enterprise, futures trust funds offered to buyers meeting certain qualifications by futures trust enterprise, and discretionary investment accounts managed by securities investment consulting enterprise or securities broker who is also a securities investment consulting enterprise, and discretionary investment accounts managed by managed futures enterprise.
If a customer who has met the qualifications in the first paragraph engages in irregular trading, the securities firm shall evaluate whether the customer has had the trading experience as described in the first paragraph and may refuse their trading request where necessary.
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