| Title： |
Taiwan Stock Exchange Corporation Rules Governing Trading of Beneficial Certificates(2008.02.18) |
| Date： |
|
|
Article 1
|
These Rules are adopted pursuant to Article 55 of the Operating Rules of Taiwan Stock Exchange Corporation (TSEC).
|
|
Article 2
|
The term "beneficial certificate" as used in these Rules includes any beneficial certificate for an offering of a closed-end securities investment trust fund, or for the establishment of an ETF ("ETF beneficial certificates"), issued by a securities investment trust enterprise (SITE) pursuant to the Regulations Governing Securities Investment Trust Funds; and also any beneficial certificate offered and issued by a trustee institution for the establishment of a real estate investment trust (REIT) fund pursuant to the Real Estate Securitization Act. Application may be filed to trade such beneficial certificates on the TSEC market.
|
|
Article 3
|
Book-entry settlement of ETF beneficial certificates listed for trading on the TSEC's centralized securities exchange market shall be conducted by a central securities depository, and the trustor may not apply to withdraw those beneficial certificates.
|
|
Article 4
|
The trading of beneficial certificates shall be conducted in accordance with these Rules. For matters not specified herein, relevant rules and regulations of TSEC shall apply.
|
|
Article 5
|
The quantity of beneficial certificates traded shall be one trading unit or its integer multiples, where one trading unit equals 1,000 beneficial 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.
|
|
Article 6
|
The trading price asked or offered shall be based on per beneficial unit.
The up/down tick of ETF and real estate investment trust beneficial certificates shall be one cent for beneficial unit quoted less than NT$50, and five cents for beneficial 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 beneficial certificates other than those described in the preceding paragraph.
|
|
Article 7
|
The relevant daily price fluctuation limit provisions for listed stocks shall apply mutatis mutandis to beneficial certificates after they are listed, provided that if the component stocks of the underlying index that the ETF beneficial certificates track, simulate, or replicate include foreign stocks, no price fluctuation limits are imposed.
|
|
Article 8
|
The reference price for the price fluctuation limit on trades of an initial listing of beneficial certificates conducted by competitive bidding shall take the net asset value per unit of beneficial interest on the day before listing of the securities investment trust enterprise (SITE) as calculated pursuant to Article 72 of the Regulations Governing Securities Investment Trust Funds, or as recorded in the REIT contract of the real estate investment trust fund (REIT) fund established by the trustee institution.
|
|
Article 9
|
Any beneficial certificate trade for which gains are distributed by the securities investment trust enterprise (SITE) pursuant to Article 77 of the Regulations Governing Securities Investment Trust Funds or by the real estate investment trust (REIT) established by the trustee institution pursuant to the REIT contract, and for which settlement is conducted after the date of suspension of changes to entries in the register of beneficial owners, shall be an ex-dividend transaction. On the commencement date of ex-dividend trading, the price fluctuation for those trades shall be calculated based on the previous day's closing price minus the dollar amount of distributed gains.
|
|
Article 10
|
The relevant portions of the provisions regarding stocks of the TSEC Operating Rules shall apply mutatis mutandis to the clearing and settlement of beneficial certificates.
|
|
Article 11
|
A securities firm shall sign the relevant agreements with the securities investment trust enterprise or the TSEC before it may begin to conduct creation or redemption of ETF beneficial certificates, whether in kind or through delivery by a method specified in the securities investment trust contract, for its own account or on behalf of its customers.
A securities firm shall report any creation or redemption operations as specified in the preceding paragraph to the TSEC. The guidelines will be separately prescribed by TSEC.
|
|
Article 12
|
If on a same day the amount of underlying portfolio stocks of an ETF beneficial certificate purchased by a securities firm for its own account or on behalf of a single account, or the total amount of the aforementioned purchased stocks plus that securities firm's original holdings and borrowings thereof and the amount of portfolio stocks it purchased or acquired through in-kind redemption on the preceding day, meets the requirements for in-kind creation of that ETF beneficial certificate, and on that same day it sells the same quantity of that beneficial certificate; or if on a same day the amount of ETF beneficial certificates that a securities firm purchases for its own account or on behalf of a single account, or the total amount of the aforementioned purchased certificates plus that securities firm's original holdings and borrowings thereof and beneficial certificates it purchased or acquired through in-kind creation on the preceding day, meets the requirements for in-kind redemption of the underlying portfolio stocks of that ETF beneficial certificate, and on that same day it sells the same quantity of those underlying portfolio stocks; then that securities firm's settlement, and subsequent related matters, shall be conducted according to the following provisions:
1. On the transaction date, the securities firm, via computer link, shall report to the TSEC and submit an application to postpone settlement.
2. If the securities firm reports the sale of ETF beneficial certificates or an ETF's underlying portfolio of stocks and applies to postpone settlement pursuant to the preceding subparagraph, after the TSEC has reviewed and approved the application it shall prepare a statement and transmit an electronic file thereof to the central securities depository to conduct the relevant operations accordingly. The provisions of Article 109 of the TSEC Operating Rules do not apply to the aforementioned operations.
3. After the securities firm has completed settlement on the second business day after the transaction date for underlying stock portfolios of ETF beneficial certificates, or for beneficial certificates, that it has purchased, and for any price payable for other purchases, the portfolio stocks or beneficial certificates receivable by it shall be transferred to serve as collateral for the postponed settlement, and the TSEC will notify the central securities depository to thereupon apply to the SITE for the in-kind creation of that beneficial certificate, or in-kind redemption of that beneficial certificate's underlying portfolio stocks to unwind the position.
4. If the stock portfolio underlying an ETF beneficial certificate listed for trading on the GreTai Securities Market ("GreTai") includes exchange-listed stocks, after the TSEC receives notification from the GreTai regarding the portion of listed stocks sold by the securities firm, the TSEC shall prepare a statement for that portion and transmit an electronic file thereof to the central securities depository pursuant to subparagraph 2.
The provisions of the preceding paragraph do not apply if the component stocks of the underlying index that the ETF beneficial certificates track, simulate, or replicate include foreign stocks.
|
|
Article 13
|
After the execution of a beneficial certificate trade, the fee rate provisions for stock transactions apply mutatis mutandis to any commission or transaction charge collected by the securities broker that accepted the order and the TSEC.
|
|
Article 14
|
These Rules, and any subsequent amendment thereto, shall be implemented after being submitted to and approved by the Competent Authority.
|