| Title： |
Taiwan Stock Exchange Corporation Regulations Governing Trading of Beneficiary Certificates(2006.04.21) |
| Date： |
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Article 1
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The Regulations herein are set forth pursuant to Article 55 of the Operating Rules of Taiwan Stock Exchange Corporation (TSEC).
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Article 2
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The term "beneficiary certificates" in these Regulations includes beneficiary certificates issued by a securities investment trust enterprise for the offering of a closed-end securities investment trust fund in accordance with the Regulations Governing Securities Investment Trust Funds, or for the establishment of an exchange-traded Fund (the latter hereunder referred to as “ETF beneficiary certificates”), and real estate investment trust beneficiary securities offered and issued by a trustee institution for the establishment of a real estate investment trust fund in accordance with the Real Estate Securitization Act. Applications may be filed for the listing and trading of such beneficiary certificates on the TSEC.
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Article 3
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ETF beneficiary certificates traded on TSEC shall be settled through book entry transfer of central depository and may not be withdrawn.
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Article 4
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The trading of beneficiary certificates shall be conducted in accordance with the Regulations herein. For matters not specified herein, relevant rules and regulations of TSEC shall apply.
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Article 5
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The quantity of beneficiary certificates traded shall be one trading unit or its integer multiples, where one trading unit equals to 1,000 beneficiary units.
Where the volume of an order is less than one trading unit, trading shall be handled under the mutatis mutandis application of the TSEC Regulations Governing Odd-Lot Trading of Listed Shares.
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Article 6
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The trading price asked or offered shall be based on per beneficiary unit.
The up/down tick of ETF and real estate investment trust beneficiary certificates shall be one cent for beneficiary unit quoted less than NT$50, and five cents for beneficiary unit quoted more than NT$50.
The provisions for up/down tick of listed stock prices shall apply mutatis mutandis to the up/down tick of beneficiary certificate other than those described in the foregoing paragraph.
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Article 7
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Relevant provisions on the daily fluctuation limit for the prices of listed stocks shall apply mutatis mutandis to listed beneficiary certificates.
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Article 8
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The price fluctuation limit for beneficiary certificates on the first trading day shall be based on the net asset value per beneficiary unit on the previous day calculated by the securities investment trust enterprise according to Article 13 of the Regulations Governing Securities Investment Trust Funds or by the real estate investment trust fund established by the trustee institution according to the stipulations of the real estate investment trust contract.
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Article 9
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The income derived from the beneficiary certificates shall be distributed by the securities investment trust enterprise pursuant to Article 25 of the Regulations Governing Securities Investment Trust Funds or by the real estate investment trust established by the trustee institution pursuant to the real estate investment trust contract. Transactions settled after the record date for suspension of title transfer shall be ex-dividend transaction. The daily fluctuation limit for beneficiary certificates on the ex-dividend starting date shall be calculated based on the closing price on the previous day minus the income distributed.
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Article 10
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Provisions for stocks in the Operating Rule of TSEC shall apply mutatis mutandis to the clearing and settlement of beneficiary certificates.
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Article 11
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A securities firm shall sign the relevant agreements with the securities investment trust enterprise and TSEC respectively before it may begin to conduct in-kind creation/redemption of ETF beneficiary certificates for itself or on behalf of its customers.
A securities firm shall report its in-kind creation and redemption operations as specified in the preceding paragraph to TSEC. The guidelines will be separately prescribed by TSEC.
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Article 12
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If a securities firm creates ETF beneficiary certificates in-kind by buying sufficient quantity of portfolio of stocks represented in said ETF for itself or on behalf of its customers under the same account, or buying such stocks, which in combination with the original holding, borrowed stocks, balance of stocks bought on the previous day, and redeemed in-kind on the previous day are sufficient for in-kind creation of said ETF beneficiary certificate, and then sell the ETF beneficiary certificate on the same day; or if a securities firm redeems ETF beneficiary certificates in-kind in exchange for the portfolio of stocks represented in said ETF by buying sufficient units of beneficiary certificates for itself or on behalf of its customers under the same account, or by buying such beneficiary certificates, which in combination with the original holding, borrowed beneficiary certificates, balance of beneficiary certificates bought on the previous day, and created in-kind on the previous day are sufficient
for in-kind redemption of said ETF beneficiary certificate, and then sell the portfolio of stocks represented in the ETF, the settlement of such transactions shall be effected in accordance with the following provisions:
1. The securities firm shall submit the application for same-day buying and selling to TSEC via the computer link-up on the date of transaction.
2. If the ETF beneficiary certificates sold or the portfolio of stocks represented in the ETF sold by the securities firm were not settled before 6:00PM on the first business day after the transaction date, but the securities firm has submitted the application in line with the preceding item, TSEC will prepare statement and electronic file and deliver them to the central depository to carry out relevant operations accordingly. The aforesaid operations shall override the application of Article 109 of the Operating Rules of TSEC.
3. For securities firms that sell ETF beneficiary certificates, TSEC will, on the second business day after the transaction date, notify the central depository to deliver and transfer the portfolio of stocks represented in the ETF to the securities firm after the said securities firm has settled with TSEC for the portfolio of stocks bought and other payment and charges, so said securities firm can create the same beneficiary certificates in-kind from the securities investment trust enterprise and make delivery.
4. For securities firms that sell portfolio of stocks represented in said ETF, TSEC will, on the second business day after the transaction date, notify the central depository to deliver and transfer the ETF beneficiary certificates to the securities firm after said securities firm has settled with TSEC for the beneficiary certificates bought and other payment and charges, so said securities firm can redeem the same portfolio of stocks from the securities investment trust enterprise and make delivery.
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Article 13
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The fee schedule for stock trading as prescribed by TSEC shall apply mutatis mutandis to the service fee and handling fee charged by the securities broker and TSEC for the transaction of beneficiary certificates.
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Article 14
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The Regulations herein shall be in force upon promulgation after approval by the competent authority; the same shall apply to all revisions hereto.
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