Chapter IV Trading and Settlement Methods |
| Article 42 | The trading of security tokens shall be conducted through proprietary trading by the securities firm on its trading platform, by means of price negotiation.
The term "proprietary trading" in the preceding paragraph refers to the securities firm, on its trading platform, making price quotes and engaging in negotiated trading with customers for security tokens issued on that platform.
The customers under the preceding paragraph are limited to professional investors meeting the conditions set out in Article 3, subparagraph 5.
A securities firm engaging in negotiated trading of security tokens with customers on its trading platform shall collect in advance from a customer the full amount of the purchase price or the security tokens to be sold, provided that the securities firm may refrain from collecting the purchase price or security tokens in advance after the securities firm has evaluated the credit status of a customer.
The securities firm shall adopt rules for the negotiated trading of security tokens and know-your-customer procedures, and publish them on its trading platform and incorporate them into its internal control system.
The negotiated trading rules under the preceding paragraph shall include the trading platform's business days and trading hours, price quote method, trade execution principles, price stabilization mechanism, trading procedures, method for the advance collection of purchase prices and security tokens to be sold, and the handling of settlement and default.
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| Article 43 | A securities firm operating the business of negotiated trading of security tokens shall open a dedicated account at a financial institution for the collection and payment of funds. The account shall be named "○○○ Securities Security Token Account".
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| Article 44 | A securities firm that will engage in negotiated trading of security tokens with a customer on its trading platform shall examine whether the customer meets the qualifications required of a professional investor under Article 20, paragraph 1, and shall require the customer to complete registration on the trading platform, and furthermore shall confirm that the customer has signed an account opening agreement (Attachment 4) and a risk disclosure statement (Attachment 5), before the customer may begin to engage in negotiated trading.
A securities firm shall stipulate with the customer that trading and transfer of security tokens shall be done on the trading platform on which the security tokens were issued, and the security tokens may not be traded or transferred off of that trading platform.
A securities firm that will engage in negotiated trading of security tokens with a customer shall first confirm that the customer has opened an account at a financial institution in the customer's own name for the receipt and payment of funds, and all related payments and receipts of funds shall be done by means of remittances in New Taiwan dollars from and to the aforesaid account.
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| Article 45 | When a securities firm engages in negotiated trading with a professional investor who is a natural person, it shall first check and verify that the sum of the cost of the investor's inventory balance of the given security token plus the trade amount of the currently intended negotiated trade of that security token will not exceed NT$300,000.
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| Article 46 | A securities firm engaging in negotiated trading of security tokens with its customers on its trading platform shall use New Taiwan dollars as the currency for making price quotes and performing settlement on the platform.
The price quotes under the preceding paragraph are nominal quotes, and the securities firm shall provide two-way, buy and sell, quotes. The trade price shall be negotiated between the securities firm and the customer.
A securities firm shall provide reasonable price quotes based on its professional judgment, and shall efficiently adjust demand and supply in the market depending on the market situation, and may not give a quote that deviates from a reasonable price, thereby impairing the formation of fair prices.
When making price quotations for and engaging in negotiated trading of security tokens that it issued itself, a securities firm shall pay special attention to reasonableness of price, and shall adopt in its internal control system a basis for the determination of price quotes and principles for negotiated trades.
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| Article 47 | When a securities firm engages in negotiated trading of security tokens with its customers on its trading platform, the aggregate trading volume of the purchases and sales of any single security token on any single business day may not exceed 50 percent of the outstanding quantity of that security token.
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| Article 48 | When a securities firm engages in negotiated trading of a security token with its customers on its trading platform, it shall disclose on the trading platform, for querying by its customers, information including its price quotations (including prices and quantities) and trade information.
The trade information referred to in the preceding paragraph shall include the price and quantity of the most recent trade, the cumulative trading volume, and highest, lowest, and weighted average trading price, of that security token during the trading hours.
After the close of daily trading hours, the securities firm shall prepare and externally disclose, for each security token, that day's trading volume, weighted average trading price, and itemized information on trades by and quantities held by overseas Chinese and foreign nationals.
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| Article 49 | If during the trading hours for a given business day the weighted average trading price of a security token rises or falls to 25 percent or more above or below the weighted average trading price of the preceding business day, the securities firm shall halt trading of the security token for 15 minutes. However, if an above circumstance occurs within 15 minutes before the close of trading hours, it shall halt trading of the security token until the close of trading hours for the given day.
On a single business day, the halting of trading under the preceding paragraph shall be done not more than once each for a rise or a fall in price respectively reaching the level set out in the preceding paragraph.
If during the trading hours for a given business day the weighted average trading price of a security token rises or falls to 50 percent or more above or below the weighted average trading price of the preceding business day, the securities firm shall halt trading of the security token until the close of trading hours for the given day, and resume trading from the next business day.
The provisions of paragraphs 1 to 3 do not apply during the first 5 business days when a security token begins to be traded over the counter and on any day when the weighted average trading price of the security token of the preceding business day was below NT$1.
If a halt of trading occurs under the circumstances in paragraph 3, the securities firm shall immediately notify the issuer of that security token to confirm whether any circumstance set out in the subparagraphs of Article 38, paragraph 1 exists, and the issuer furthermore, before the start of trading hours on the following business day, shall input an information disclosure to the information disclosure section designated by the securities firm.
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| Article 50 | When a securities firm engages in negotiated trading of a security token with customers on its trading platform, the collection and delivery of the funds and security tokens with the customers will be completed by the real-time gross settlement method, and the securities firm shall prepare and issue records of the trades to the customers.
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| Article 51 | When a customer defaults on a settlement obligation, the securities firm shall cancel the trade, and after immediately notifying the customer, shall itself pursue compensation.
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| Article 52 | A securities firm engaging in negotiated trading of security tokens with a customer on its trading platform may not collect a commission from the customer.
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| Article 53 | A securities firm shall pay the TPEx a monthly security token business service fee.
The security token business service fee under the preceding paragraph shall be calculated at the rate of 0.002925 percent of the monetary amount traded each month in negotiated trading of a security token on the securities firm's trading platform. If the amount of the fee calculated at the above rate is less than NT$20,000 per security token, it shall be calculated at NT$20,000 per security token.
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