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Taiwan Stock Exchange Corporation Rules for Administration of Additional Deposits by Securities Firms to the Clearing and Settlement Fund(2002.07.05) |
| Date： |
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Article 1
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These Rules are adopted pursuant to Article 10 of the Regulations Governing Securities Firms and Article 6 of the TWSE Rules for Administration of the Joint Responsibility System Clearing and Settlement Fund.
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Article 2
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The TWSE may, upon a resolution by the Special Management Committee of the Joint Responsibility System Clearing and Settlement Fund (the “Committee”), notify a securities firm to make an additional deposit to the Clearing and Settlement Fund (the “Fund”) if any of the following circumstances occurs to the securities firm:
1. Irrevocable execution of assets by a court.
2. Dishonor of any issued negotiable instrument due to insufficient funds, where the record of dishonor thereof has not been canceled.
3. A substandard rating under the TWSE Operational Rules for Early Warning of Operational Risk of Securities Firms, or consecutive deficits and net worth lower than three-fifths of paid-in capital.
4. A substandard rating for internal auditing, where improvements still have not been made after repeated guidance and evaluation
5. Any deficiency in credit review or credit extension operations, where improvements have not been made or are substandard after repeated notices to make improvements.
6. Any material violation of laws or regulations or TWSE rules or bylaws, where improvements still have not been made after repeated sanctions by the competent authority or the TWSE.
7. Other material unforeseen event or upon the instructions of the competent authority.
If any relevant unit of the TWSE finds any circumstance under the preceding paragraph with respect to a securities firm in the course of auditing the business and finances of the securities firm or through the surveillance system, the unit shall submit regular reports to the Committee.
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Article 3
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If any circumstance under the preceding Article applies to a securities firm, the TWSE may, depending on the severity of the circumstance, submit a concrete proposal to the Committee and request a resolution as to whether the securities firm should be required to make an additional deposit to the Fund and the amount of the additional deposits.
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Article 4
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When the TWSE, upon a resolution by the Committee, notifies a securities firm to make an additional deposit to the Fund, the securities firm shall, within three days from the date of the notice by the TWSE, make the additional deposit.
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Article 5
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If a securities firm fails to make an additional deposit to the Fund as required by a notice under the preceding Article, the TWSE will proceed forthwith to adjust the trading amount that the firm may report on a daily basis pursuant to Article 6 of the TWSE Rules for Administration of the Joint Responsibility System Clearing and Settlement Fund, and the adjusted amount may not exceed five times the amount that it has deposited to the Fund.
If the securities firm makes the additional deposit to the Fund after the TWSE has adjusted the trading amount that the firm may report on a daily basis pursuant to the preceding paragraph, the TWSE may restore the trading amount that the firm was permitted to report before the adjustment.
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Article 6
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If a circumstance under Article 2, paragraph 1 no longer applies to the securities firm after it has made an additional deposit to the Fund, upon a resolution by the Committee, all or part of the amount of the additional deposit may be reimbursed to the firm.
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Article 7
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These Rules, and any amendments hereto, shall be passed by the Committee, and shall be implemented by public announcement of the TWSE following submission to and approval by the Competent Authority.
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