| Title： |
Taiwan Stock Exchange Corporation Rules Governing Implementation of the Stock Market Surveillance System(2010.11.30) |
| Date： |
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Article 1
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These Rules are prescribed pursuant to Article 22 of the Regulations Governing Stock Exchanges and Articles 9-1, 28-2, and Article 143, paragraph 3 of the Operating Rules of the Taiwan Stock Exchange Corporation (the "Operating Rules").
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Article 2
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The TWSE shall establish a dedicated unit to administer these Rules. A Surveillance Operations Oversight Committee (hereinafter "Committee") shall also be formed by the executive officers of the following Units:
1. Listing Promotion Department
2. Trading Department
3. Compliance and Inspection Department
4. System Development Department
5. Market Data and Corporate Systems Department
6. Surveillance Department
7. Other designated units or personnel
The Committee is charged with the drafting and planning of the surveillance system and coordination with the relevant Units. The Committee shall also appoint a Senior Executive Vice President responsible for overseeing surveillance operations and convening the Committee. One executive secretary shall be duly appointed under the Senior Executive Vice President.
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Article 3
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Should the TWSE discover that abnormal trading in securities has reached a certain level in the centralized securities exchange market (the "Market") established by the TWSE, the TWSE may publicly announce the names of the securities and trading information to the market to alert investors.
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Article 4
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When abnormal trading as specified in the preceding Article is likely to seriously affect market trading, the TWSE shall make a public announcement to the Market and may take the measures listed below:
1. Conducting trade matching for the securities with manually controlled trade matching terminals.
2. Restricting the amount of the securities that securities firms can buy and sell.
3. Instructing securities brokers to precollect buy-side payment or sell-side securities up to a certain percentage from all principals or from those who place large numbers of orders with securities brokers for securities that are being traded abnormally.
4. Notifying all securities firms to make an additional submission to the Clearing and Settlement Fund when trading the security involved in irregular trading.
5. Temporarily suspending margin purchases and short sales of the given security
6. Reporting to and obtain the permission of the Competent Authority to suspend the trading of such securities for a prescribed period.
The TWSE shall draft guidelines for the standards, manner, and duration of the measures in the preceding paragraph as well as the standards for abnormal trading and manner of public announcement in Article 3. These guidelines shall take effect after having been reported to the competent authority and approved for recordation.
When the TWSE deems that abnormal trading of securities has occurred and has affected the security of market settlement, or under other necessary circumstances, the measures listed in paragraph 1 or other measures adopted by the resolution of the Surveillance Operations Oversight Committee may prevail.
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Article 5
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When the TWSE discovers abnormal quoting or trading of securities, the TWSE may, either before market opening or during trading, request the attention of the entrusted securities firm and may, pursuant to Article 22, paragraph 2 of the Regulations Governing Stock Exchanges, query or review relevant information from securities firms and listed companies, or require them to provide information explaining such trading. When necessary, the TWSE may publicly announce this information and explanation through information systems or at the places of business of securities firms.
In the event of abnormal trading of securities as referred to in the preceding paragraph, the TWSE's Special Management Committee of the Joint Responsibility System Clearing and Settlement Fund may be informed if necessary.
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Article 6
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If a securities firms violates these Rules or, when orders to buy or sell abnormally traded securities are placed, fails to take the necessary steps to comply with account opening procedures, creditworthiness assessment procedures, investment review performance procedures, and order brokering procedures, the TWSE may, subject to the seriousness of the violations, instruct the securities firm to make improvement, warn the securities firm, and restrict or halt buying and selling by the securities firm under Articles 135, 136, and 141 of the Operating Rules.
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Article 7
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The TWSE shall investigate and pursue all forms of abnormal trading and establish a complete file of relevant information for purposes of verification. The TWSE shall also report those, if any, suspected of violating laws and administrative orders or submit an investigative report of such violations to the competent authority.
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Article 8
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The TWSE shall publicly announce market rumors or false media reports through information systems or in the places of business of securities firms after having investigated and confirmed the existence of such rumors or reports.
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Article 9
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These Rules shall be promulgated and take effect after having been reported to the competent authority for its approval.
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