CHAPTER I GENERAL PRINCIPLES
|
| Article 1 | These Operating Rules ("Rules") are prescribed in accordance with Article 138 of the Securities and Exchange Act and Article 44 of the Articles of Incorporation of this Corporation. |
| Article 2 | Except as otherwise provided for in the relevant laws and regulations and the Articles of Incorporation of this Corporation, the operation of this Corporation shall be in accordance with these Rules.
Under Article 98 of the Securities and Exchange Act, this Corporation, with the approval of the Competent Authority, may operate other business in addition to providing a centralized securities exchange market.
The “other business” referred to in the preceding paragraph, unless provided for by these Operating Rules, shall be regulated by specific provisions separately adopted by this Corporation for such business |
| Article 2-1 | Normal notices, public announcements, and other documents and information sent by this Corporation to securities firms, listed companies, and informational companies and other institutions that have executed agreement with this Corporation may be transmitted through the Internet, dedicated data lines, electronic mail, and other electronic mass media. As applied to securities firms, this Corporation may effect substitute delivery by delivering such notices in the mailbox established by this Corporation on their behalf.
Emergency notices or demand notices to be given by this Corporation to the institutions referred to in the preceding Pparagraph may be given orally, via telephone, or via other means. |
CHAPTER II EXCHANGE MARKET
|
| Article 3 | The trading hours of the centralized securities exchange market established by this Corporation ("Exchange"), unless otherwise provided, shall be from 9:00 a.m. to 1:30 p.m. Where in the opinion of this Corporation it is needed, or upon the recommendation of the securities dealers association, request may be made to the Competent Authority for its amendment. |
| Article 4 | The off-days of the Exchange shall be identical with those of banks, provided that where in the opinion of this Corporation it is needed, or upon the recommendation of the securities dealers association, request may be made to the Competent Authority for its amendment. |
| Article 5 | Participation in the Exchange to transact in securities shall be limited to securities brokers and securities dealers (collectively "securities firms") that has executed a contract for the usage of the centralized securities exchange market ("market usage contract").
Securities firms with the permission of the Competent Authority to concurrently engage in other securities businesses or related businesses, or securities underwriters which have engaged this Corporation to process business matters shall execute their business in accordance with the relevant rules and regulations (Amended on October 30, 1997). |
| Article 6 | No one may enter the Exchange except as to the following persons and those with the permission of this Corporation who shall wear entrance passes or visitor passes:
1. Supervisory personnel assigned by the Competent Authority to this Corporation.
2. Associated persons of securities firms that have been registered and approved by this Corporation.
3. Floor implementing staff and floor working staff of this Corporation. |
| Article 7 | (deleted) |
| Article 8 | (deleted) |
| Article 9 | (deleted) |
| Article 9-1 | In order to maintain trading order in the Exchange, this Corporation shall, in accordance with the Regulation Governing the Administration of Securities Exchange prescribe the Measures for Implementation of a System for the Surveillance of Stock Market and related regulations (Added on September 24, 1994). |
| Article 9-2 | (deleted) |
| Article 9-3 | For purposes of enhancing the quality of credit inquiries and extensions of credit by securities firms and preserving the security of this Corporation's exchange market, this Corporation shall promulgate Regulations Governing the Joint Credit Rating System for Securities Firms. |
| Article 10 | Enterprises applying for usage of the transactionstrading information of this Corporation shall enter into with this Corporation either the "Contract for the Provisioning of Trading Information" or the "Contract for Usage of Trading Information" and comply with the obligations set forth in the "Guidelines for the Usage of Trading Information" prescribed by this Corporation.
The content of the contract and the guidelines referred to in the preceding Pparagraph shall be separately prescribed.
Enterprises applying to utilize the trading information provided by this Corporation shall utilize the trading information and facilities provided by this Corporation in accordance with the regulations of this Corporation. If for reasons attributable to the responsibility of securities firms this Corporation suffers any damages, such firms shall be liable for compensation.
Where the trading information and facilities provided by this Corporation suffers loss of connection or malfunctions such that normal operation is not possible, this Corporation shall not be responsible for compensation. |
| Article 11 | Subsequent to each market closing, the names or the code numbers of securities traded, the volume, the price, and the code of the selling and purchasing securities firms shall be produced into a computer file by this Corporation, and terminals shall be provided at suitable locations for review by the public.
Subsequent to each market closing, the names or the code numbers of securities traded, the volume, the opening price, the highest price, the lowest price, the closing price, the change in closing price compared with the previous trading day, and the stock index shall be tabulated and publicly announced by this Corporation in a daily securities market report.
In the event orders are placed, but there are no completed transactionsexecuted trades, the daily securities market report shall incorporate the highest buy price offer and the lowest sell offer. |
| Article 12 | During market trading, if abnormal events occur, this Corporation may announce the suspension of trading. TransactionsTrades completed executed prior to the announcement shall remain valid.
When the event referred to in the preceding Pparagraph ceases, this Corporation may announce the resumption of trading. |
CHAPTER III SECURITIES FIRMS
|
| Article 13 | In order to establish distinctions, a securities firm participating in the Exchange shall clearly designate its role as a securities broker or securities dealer when using the name of "securities firms" in outside transactionsexternal business. |
| Article 14 | Securities firms participating in the Exchange shall complete and submit three copies each of the application, executed market usage contract, and the following documents to this Corporation:
1. Copy of securities firm permit.
2. Copy of company documentation following company registration (or amendment registration) and business license (if a non-corporate financial institution with a concurrent operational permit, then the establishment permit).
3. Articles of incorporation, business plan, business bylaws, and shareholders list and their respective shareholdings.
4. List of directors, supervisors, and managers, registration forms of same, copy of household registry or National Identity Card, and declaration that declaring that the person does not fall within any of the categories under Article 53 of the Securities and Exchange Act.
5. List of various levels of associated persons, registration form of same, copy of household registry or National Identity Card, and declaration that declaring that the person does not fall within any of the categories under Article 54 of the Securities and Exchange Act.
6. Financial reports audited and certified by a certified public accountant (CPA).
The format of the registration forms referred to in Subsubparagraphs 4 and 5 of the preceding Pparagraph shall be prescribed by the Competent Authority. |
| Article 15 | A securities firm shall wait until this Corporation signs and returns the market usage contract, and paid the settlement and clearing fund before it may trade in the Exchange. |
| Article 16 | In the event the paid-in capital, articles of incorporation, business address, or chairman of the board of any securities firms is changed, within five days of such change, the firm shall submit three copies of the application for amendment, relevant certifying documents, and registration fees for amendment to this Corporation for issuance of its opinion letter, and then transferred by this Corporation to the Competent Authority for its approval and registration.
Where the director, supervisor, general manager, and associated persons of various levels is changed, such changes shall be reported in accordance with the procedures of the Rules Governing Responsible Persons and Associated Persons of Securities Firms. |
| Article 17 | Various levels of associated persons of securities firms shall possess the qualifications specified by the Competent Authority in the "Rules Governing Responsible Persons and Associated Persons of Securities Firms." |
| Article 18 | A securities firm shall be responsible for the acts of its employees, whether they are traveling outside to conduct businesses, or within the Exchange.
The persons referred to in the preceding Pparagraph shall comply with and not plead ignorance to the Articles of Incorporation of this Corporation, these Rules, public announcements made by the Exchange, and other regulations. |
| Article 19 | The registration of the personnel of securities firms shall lose its effectiveness if the securities firm discharges or changes his position.
Where the Competent Authority orders the discharge of registered personnel of securities firms, or the responsible person or associated person of securities firms falls within any of the categories under Pparagraph 3 of Article 12 of the Rules Governing Responsible Persons and Associated Persons of Securities Firms, this Corporation shall cancel their registration.
When any amendment is made to the registered personnel of a securities firm, the securities firm shall not be relieved of liability for such personnel’s behavior until registration of the amendment is completed.
When a securities firm receives permission for termination of the Market Usage Contract it has entered into, all of its personnel registered with this Corporation shall ipso facto lose their registered status. |
| Article 20 | A securities firm shall establish its business premises at the registered office, and may not share its business premises with other securities firms. In case of a major event of force majeure such that it may not normally operate at its business premises, a securities firm may search for a temporary business premises and apply to this Corporation for continued operation. The use of such premises shall not exceed three months, and before the expiration of this time period, a permanent business premises shall be located. Such replacement location shall conform with the Standards for Business Premises and Facilities of Securities Firms prescribed by this Corporation, and the changes shall be reported in accordance with the regulations before it may commence business.
The standards for business premises and facilities shall be drafted by this Corporation and approved by the Competent Authority.
The price competition terminal equipment used for direct or indirect linkage between the securities firms and this Corporation shall be installed as follows:
1. Securities brokers shall install such equipment at the business counters of the business premises of their head offices and branches.
2. Securities dealers shall install such equipment at their business premises.
In the event that a major event of force majeure occurs to the information transmission system of a securities firm such that its terminal equipment develops malfunction, the securities firm may either -
1. borrow the terminal equipment of its head office or branch and report in writing to this Corporation on the following business day for recordation, or
2. borrow the spare terminal equipment of this Corporation in the market, limited to two sets. The securities firm shall contact this Corporation by telephone in advance and submit an application bearing its corporate seal and the seal of its responsible person to this Corporation. |
| Article 21 | Securities firms which have been approved by the Competent Authority to establish domestic branch offices and have been issued such permit certificates shall submit in duplicate the following documents to this Corporation for recordation before commencing business:
1. Photocopy of permit certificate for establishment of branch office.
2. List of directors, supervisors, and managers, registration forms of same, copy of household registry or National Identity Card, and declaration that declaring that the person does not fall within any of the categories under Article 53 of the Securities and Exchange Act.
3. List of various levels of associated persons, registration form of same, copy of household registry or National Identity Card, and declaration that the person does not fall within any of the categories under Article 54 of the Securities and Exchange Act.
Where there are changes in the business location of a domestic branch office or its manager, within five days of such changes, three copies of the application for amendment registration, along with the relevant documentary evidence and registration fees for amendment, shall be sent to this Corporation for issuance of its opinion letter, and then transferred by this Corporation to the Competent Authority for its approval and registration.
The provisions of Pparagraph 2 of Article 20 of these Rules shall apply to the business locations and facilities of the domestic branch office of a securities firm. |
| Article 21-1 | Securities firms which have been approved by the Competent Authority to establish foreign branch offices or representative offices shall submit in duplicate the following documents to this Corporation for recordation before commencing business:
1. Photocopy of the permit for establishment issued by the domestic Competent Authority and of the documents of approval of establishment issued by the foreign competent authority.
2. List of managers and associated persons or representatives of the branch office or representative office.
3. Date of establishment and detailed address of the branch office or representative office.
Where there are changes in the business location or the manager or representative of a foreign branch office or representative office, within 10 days of such changes, three copies of the application for amendment registration, along with the relevant documentary evidence, shall be sent to this Corporation, which will transfer them to the Competent Authority. |
| Article 22 | Upon receiving permission for establishment of a branch office, a securities firm shall receive the permit certificate and in accordance with Article 118 of these Rules pay additional settlement and clearing fund before it may commence business. |
| Article 23 | A securities firm and its branch offices shall display their permit certificates at a prominent location in its business premises. |
| Article 24 | A securities firm shall maintain complete accounts, and make accurate book entries. Its accounting and financial reports shall be processed in accordance with the Standards for Preparation of Financial Reports of Securities Firms. |
| Article 25 | A securities firm shall maintain all accounts and related trading certificates, vouchers, books and statements, and contracts at its business location.
This Corporation may send personnel to examine and review the trading certificates, vouchers, books and statement, and contracts referred to in the preceding Pparagraph, and securities firms shall not avoid or refuse such examinations; the securities firm shall consent that this Corporation may query the Joint Credit Information Center for information concerning the securities firm’s credit with financial institutions.
Except as otherwise provided in the Business Accounting Act, the number of years that the books and accounts and relevant trading certificates, vouchers, books and statements, and contracts shall be kept shall be in accordance with the Table on Number of Years for Securities Firms to Keep Their Books, Accounts, and Records prescribed by this Corporation.
When deemed necessary, this Corporation may request securities firms to provide their financial and business information, and disclose them to the public.
Government bonds which are in bearer form that are obtained by securities firms by utilizing their assets pursuant to Article 18 of the Regulations Governing Securities Firms shall be deposited with a depositary institution. |
| Article 26 | The financial reports produced by a securities firm in accordance with the regulations prescribed by the Competent Authority shall be audited and certified by a CPA, approved by the board of directors, recognized by the supervisor, and then publicly announced in a newspaper.
Where they are semi-annual in nature, five copies of the financial report referred to in the preceding Pparagraph (including assets and liabilities statement, profit and loss statement, statement of change in shareholders equity, cash flow statement and its notes or attachments), minutes of board of directors meeting, supervisor's review report, and public announcements shall be sent to this Corporation within two months of the end of each semi-annual fiscal year, with two copies sent to the Competent Authority by this Corporation. Where they are annual in nature, five copies of the above shall be sent to this Corporation within four months of the end of each fiscal year, with two copies sent to the Competent Authority by this Corporation. In addition, the OTC securities firms shall, within one month of the end of the first and third quarters of each fiscal year, submit three copies each of the CPA-audited financial report and newspapers containing the public announcement to this Corporation, and this
Corporation shall then submit one copy of the said documents to the Competent Authority.
When sending financial reports within the time-limit as prescribed in the preceding Pparagraph, a securities firm shall report, through Internet transmission to this Corporation, basic information regarding its investments in other enterprises, numbers of TSE- or- OTC-listed securities at the end of the reporting period respectively held by the securities firm and its invested enterprises, respective cost of shareholding, derivatives trading of domestic TSE- or- OTC-listed securities, and acquisition and disposal of major assets. The increase, decrease, and changes of shareholding in invested enterprises of a securities firm shall also be reported to this Corporation through Internet transmission.
The shareholders meeting of a securities firm shall be convened within six months after the end of the fiscal year. Within 20 days of their recognition by the shareholders meeting, the minutes of the shareholders meeting and the business report shall be sent to this Corporation in triplicate. Where the annual financial report recognized by the shareholders meeting differs from the financial report publicly announced and sent to this Corporation, within two days of its occurrence, it shall be publicly announced and reported to this Corporation for its ultimate transmittal to the Competent Authority.
Securities firms shall prepare one copy each of the monthly accounting statement summary, and the income statement and attachments. On a monthly basis, specialized securities broker firms and securities dealer firms shall also prepare one copy of the bank deposit statement. In March and September of each year, specialized securities brokers shall prepare one copy each of the bank deposit statement of proof and adjustment form. All of the above items shall be sent to this Corporation seven days after the start of the next month. Where there are branch offices, those portions shall be separately sent. Reports in electronic media form may be substituted for the branch office portions.
One copy of the various financial reports, and monthly statementaccounting summaries of securities firms shall be made available for public inspection in print or electronic medium.
Securities firms shall prepare one copy of the monthly capital sufficiency statement, and send such statement to this Corporation within ten days after the start of the next month; compilation and calculation regarding the capital sufficiency statement shall be handled in accordance with the Rules Governing Securities Firms. This Corporation shall furthermore make quarterly disclosures thereof itemized as provided by the Competent Authority.
Securities dealers shall prepare one copy of the monthly securities inventory report (investment and trust companies shall include the trust funds), and send such statement to this Corporation within seven days after the start of the next month.
The various financial reports, forms, and monthly capital sufficiency statement to be reported via electronic media shall be announced by this Corporation.
The procedures for said reporting shall be separately prescribed by this Corporation.
Where the Competent Authority has provided otherwise than as set forth in the provisions of Pparagraph 1 and Pparagraph 2 concerning public announcement by newspaper and submission of the newspaper announcement, the provisions of the Competent Authority shall prevail.
This Corporation may, depending on operational needs, notify securities firms to send additional copies of the various materials required to be submitted under Pparagraph 4, Pparagraph 5, Pparagraph 7, and Pparagraph 8; the securities firms shall deliver them to this Corporation within the time limit. |
| Article 27 | Securities firms shall comply with the restrictions prescribed by the Competent Authority under Article 49 of the Securities and Exchange Act requiring that the aggregate liabilities of a securities firm shall not exceed a prescribed multiple of its net capital; and the aggregate current liabilities shall not exceed a prescribed percentage of its aggregate current assets.
Except as to securities firms concurrently operated by financial institutions acting in compliance with the provisions of the Banking Act, a securities firm shall not purchase real estate which is not used for its business purposes. The aggregate business-purpose fixed assets shall not exceed 60 percent of its aggregate assets.
Securities firms shall comply with the regulations of the Competent Authority and set aside a portion of its annual after-tax profit as special reserve. |
| Article 28 | A securities brokerage firm shall not deposit its funds in an institution other than one engaged in the banking business.
Without the approval of the Competent Authority, a securities brokerage firm shall not use its own funds to invest in non-listed securities; where its own funds are invested into listed securities, the amount of investment shall not exceed the amount limit set by the Competent Authority.
When the regulatory capital adequacy ratio of a securities broker is less than 100 percent, it may not use its own funds to purchase listed (OTC) stocks, and may make only sell trade dispositions. The standards and measures relating to the lifting of these restrictions after corrections have been made shall be governed, mutatis mutandis, by the provisions of Article 28-1, paragraph 2.
Unless otherwise prescribed by this Corporation, a securities brokerage firm shall not use its own funds or securities, or funds or securities borrowed from others to process securities trading settlement for its principals. |
| Article 28-1 | Where the total of brokerage or dealer trading orders placed by a securities firm in a single day exceeds twenty times its net funds available for use, this Corporation may suspend the placing of additional trading orders.
Where the net worth of a securities firm is below less than its paid-in capital but more than fifty percent thereof, the multiple referred to in the preceding Pparagraph may be adjusted to ten times. Where the net worth is less than fifty percent of the paid-in capital, the multiple may be adjusted to five times. Where the net worth is less than fifty percent of the paid-in capital for three consecutive months, the multiple may be adjusted to two times. Where the regulatory capital adequacy ratio of the securities firm is lowerless than the amount specified in Article 65 of the Rules Governing Securities Firms, the multiple referred to in the preceding paragraph may be adjusted to fifteen times. Where the regulatory capital adequacy ratio of the securities firm is lower than the amount specified in Article 66 of the Rules Governing Securities Firms, further downward adjustment may be made. The criteria for such adjustment shall be separately prescribed by this Corporation. However, when its monthly
statements show that the reason for adjustment has been extinguished, the multiple may be adjusted based on the extent of extinction; and where the ratio of a securities firm's net worth to its paid-in capital increases as a result of a capital reduction, its regulatory capital adequacy ratio must simultaneously increase before its multiple may be adjusted pursuant to the above-cited provisions.
The method of calculation of the net funds available for use referred to in Pparagraph 1 shall be prescribed by this Corporation.
If for three consecutive months, the financial ratio as shown in the monthly statements accounting summaries of a securities firm fails to satisfy the requirements of Article 13 or Article 16 of the Regulation Governing Securities Firms, and the Competent Authority issues the first notice of improvement to be made within a time period, but no improvement is made, this Corporation may adjust the multiple referred to in Pparagraph 1 to fifteen times; upon the second notice of the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to ten times; for each additional notice by the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to half the previous multiple as the total amount oflimit on trading for customers' account and its own account. After the above adjustments, the highest allowable amount shall not exceed four times the net worth. Once improvement is made, the original multiple shall
be restored.
In the event any securities firm falls within any of the categories under Article 3 of the Rules for Assistance to and Examination of Securities Firm of this Corporation, or subsequent to assistance, improvements cannot be made, this Corporation may lower the multiple referred to in Pparagraph 1. Where improvement has been made, the original multiple shall be restored. |
| Article 28-2 | In the event of abnormalities in the price or the trading situation of any listed securities sufficient to affect market trading, clearing, and settlement, this Corporation may limit the amount of brokerage or proprietary transactionstrading of all or part of securities firms, or take other measures as resolved by the Supervisory and Assistance Commission.
The standards for determining the abnormalities and the limitations on amount of transactionstrading shall be drafted by this Corporation and approved by the Competent Authority before its implementation. The same procedure applies with amendments to the same. |
| Article 29 | Where any securities firm, its directors, supervisors, managers, or employees becomes a defendant in a civil or criminal proceeding by reason of their official duties, or is bankrupt or is a debtor in compulsory execution, or has their checks returned or banks have declined their accounts, then such incidents shall be reported by the securities firm to this Corporation for transmittal to the Competent Authority.
Where any securities firm or its personnel has been adjudicated bankrupt by a court, or has been confirmed to have civil or criminal responsibility by a final and unappealable court judgment, or confirmed to have their checks returned or banks have declined their accounts, this Corporation shall immediately request the Competent Authority to process the matter in accordance with the law. |
| Article 30 | Securities firms shall not supply false or inaccurate information in any of their reports to this Corporation. |
| Article 31 | (deleted) |
| Article 32 | (deleted) |
| Article 33 | This Corporation shall assign a code number to each securities firm. All forms and vouchers related to trading and clearing shall contain the code as well as the name of the securities firm. |
| Article 34 | Where anyIf a securities firm suspends its business, before until it has it winds-wound up its securities transactions orand matters of its consignment duties undertaken by it in on the Exchange, its business within the scope of those transactions and matters shall be deemed as not suspended. |
| Article 35 | Where any securities firm is liquidated, its permit is suspended, the market usage contract is terminated, or due to other reasons it loses its right to operate, this Corporation shall offset the outstanding rights and obligations of the said firm to this Corporation, and if there are amounts remaining, they shall be returned to the said firm, and if the amount is insufficient, compensation shall be sought from the said firm. |
| Article 36 | Where any securities firm receives permission to terminate its market usage contract, the original executed contract shall be returned to this Corporation for cancellation. |
| Article 37 | Securities firms shall not have any investment, loan, or guaranty relations with any personnel of this Corporation, nor shall they concurrently hire or give honorary title to any personnel of this Corporation in any manner. |
| Article 38 | Where any informant points out violations of the laws or regulations or the rules of this Corporation by securities firms or their employees, the informant shall supply his true name and address. Informant statements which use aliases or are anonymous will not be accepted.
In order to investigate the informant statement referred to in the preceding Pparagraph, this Corporation may notify the person being informed against to supply detailed written responses. Where necessary, the Corporation may also request the securities dealers association to investigate the matter.
This Corporation shall treat a pending investigation as a confidential matter. Upon completing the investigation, if there is clear evidence of violations of laws and regulations or the rules of this Corporation, this Corporation shall report the matter to the Competent Authority for its processing, or alternatively handle the matter in accordance with the rules of this Corporation. |
| Article 39 | Upon the permission of this Corporation, government bond brokers may participate in the market to trade government bonds, and shall comply with relevant regulations prescribed by this Corporation. The same shall apply to securities finance enterprises with respect to engaging in competitive bid borrowing the required listed of securities required in connection with stock loans. |
| Article 40 | Where any securities firm broadcasts to the public information related to securities, two copies of such broadcast shall be sent to this Corporation for its recordation. |
CHAPTER IV LISTING OF SECURITIES
|
| Article 41 | The notice of listing for sale, suspension of sale, or delisting of bonds issued by the government ("Government Bonds") shall be given by the Competent Authority to this Corporation for its public announcement. Where the listed Government Bond has been redeemed at maturity, this Corporation may directly publicly announce its delisting.
The listing for sale, suspension of sale, or delisting of securities publicly issued by a company limited by shares ("Issuing Company"), beneficiary certificates of closed-end securities investment trust funds (“closed-end funds”), exchange traded securities investment trust funds (“exchange traded funds”) duly issued by securities investment trust companies ("SITEs"), beneficiary securities duly issued by trustee institutions, asset-backed securities duly issued by special purposes companies, real estate investment trust (REIT) beneficiary securities or real estate asset trust (REAT) beneficiary securities duly offered and issued by securitization trustee institutions, Taiwan Depositary Receipts issued by foreign issuers and their depositary institutions, and call (put) warrants issued by issuers pursuant to the law, shall be processed and publicly announced in accordance with the various types of securities listing contracts ("Agreement for Listing") executed between this Corporation and the Issuing
Company, SITEs, trustee institution, special purpose company, securitization trustee institution, depositary receipt issuer, or call (put) warrant issuer.
The Agreement for Listing referred to in the preceding paragraph shall be executed in accordance with the Rules Governing the Agreement for Listing reported by this Corporation to and approved by the Competent Authority. Upon the effectiveness of the Agreement for Listing, where the Rules Governing the Agreement for Listing is amended such that discrepancy in the internal content occurs, the amended rules shall be applicable.
After the financial report of financial bonds issued by financial institutions, if certified in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies, has been audited and certified by a CPA or approved and publicly announced by an auditing institution, reference may be made to paragraph 2 of this Article for listing processing. |
| Article 42 | An Issuing Company applying for listing of its securities shall complete the application for listing of securities and enclose the signed Agreement for Listing and other required documents to this Corporation.
The format and the required documents for application of securities listing shall be determined by this Corporation in accordance with the type and the nature of the securities being listed.
The securities being applied for listing by an Issuing Company shall be certified in accordance with the "Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies." However, securities for which no physical ("scrip") security is printed to represent the rights thereof are exempt from the requirement of certification.
In reviewing the application for securities listing by an Issuing Company, in addition to the documents supplied, this Corporation may consult other credit reports and process the application in accordance with the Rules Governing the Review of Securities Listings, and the "Industry Categorization and Adjustment Guidelines for Listed Companies".
The Rules Governing the Review of Securities Listings and the Industry Categorization and Adjustment Guidelines for Listed Companies shall be drafted by this Corporation and sent to the Competent Authority for its approval and public announcement.
Issuing Companies applying for initial public offering listing shall, in accordance with the regulations of the Competent Authority, reserve a set ratio of the listed stocks for public sale by securities underwriters or wholesale by securities brokers. This Corporation may use the information to be obtained from the results of the sale as reference for share dispersal review of listed securities.
The provisions of Pparagraphs 1 through 5 of this Article shall apply mutatis mutandis to the listing of beneficiary certificates issued by SITEs, beneficiary securities issued by trustee institutions, asset-backed securities issued by special purposes companies, REIT beneficiary securities or REAT beneficiary securities duly offered and issued by securitization trustee institutions, or Taiwan Depositary Receipts issued by foreign companies and their depositary banks.
The provisions of Pparagraphs 1, 2, 4 and 5 of this Article shall apply mutatis mutandis to the listing of call (put) warrants. |
| Article 42-1 | Where the Competent Authority has imposed restrictions on the listing for trading of certain securities and the restrictions have not yet been lifted, such securities that have been privately placed shall still not be for trading upon the lapse of the period of restriction of transfer of privately placed securities. If the event that was the grounds for the restriction on listing for trading occurs before the resolution of a shareholders' meeting to conduct the private placement of securities, the restriction shall be thoroughly explained at the shareholders' meeting. If the event that was the grounds for the restriction on listing for trading occurs after the resolution of a shareholders' meeting to conduct the private placement of securities, it shall be thoroughly and explicitly disclosed in the private placement procedures. |
| Article 43 | Upon the approval of this Corporation for listing of securities by an Issuing Company, and the approval of the Competent Authority of the Agreement for Listing, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing, upon the notice of this Corporation, such Issuing Company shall upload an electronic file of the prospectus onto the Internet information reporting system designated by this Corporation and shall deliver a physical copy of the full prospectus to this Corporation for its distribution to securities firms. Further, one day prior to the listing of such securities, the Listing Company shall report information related to the listing to the Internet information reporting system designated by this Corporation, and shall send the downloaded information to this Corporation.
The public announcement referred to in the preceding Pparagraph shall include the name of the company, type of listed securities, volume, rights, obligations, date of listing, date, and document reference number of listing approval letter issued by the Competent Authority, name of the agency handling share transfer matters, name of the underwriter, underwriting period, price, volume, and other matters to be publicly announced.
Where the stocks of companies applying for initial public offering listing were not completely sold within three months from the date the approval for Agreement for Listing was obtained from the Competent Authority pursuant to Pparagraph 1 of this Article, its listing shall be cancelled. However, with valid reasons, and upon the approval of this Corporation and the Competent Authority, the period may be extended for a single term of three additional months. The suspension period referred to in Pparagraph 4 shall not be counted.
Before the listing of stocks by an Issuing Company, if it is discovered that, before or subsequent to the effectiveness of the Agreement for Listing, valid facts show that any of the inappropriate circumstances for listing enumerated in the Rules Governing the Review of Securities Listings has occurred, this Corporation may suspend the listing of the securities, and conduct an investigation, and report to the Competent Authority. In the event the listing company refuses the investigation of this Corporation or refuses to supply the necessary information, or it is confirmed that it is inappropriate for listing, this Corporation may, upon approval of the Competent Authority, revoke its Agreement for Listing or terminate its listing. In the event it is shown that there are no inappropriate circumstances for listing, this Corporation may, upon report to the Competent Authority, notify the company to resume the listing process. While the unsuitability of listing has not been confirmed, this Corporation may
continue to suspend the listing of such securities.
The listed securities shall be assigned by this Corporation a code number, and an abbreviated name for uniform usage.
The provisions of Pparagraphs 1, 2, and 5 of this Article shall apply mutatis mutandis to the listing of beneficiary certificates issued by SITEs, Taiwan Depositary Receipts issued by foreign issuers and their depositary institutions, or stocks or bonds issued by foreign issuers. |
| Article 43-1 | Where any issuer sells its own call (put) warrants, public announcement shall be made on the date of the sale. The public announcement shall include the issuance terms of the call (put) warrant, numbers issued, issuing price, location of sale, period of sale, projected listing date, date of premium payment, issuance date of call (put) warrant, credit rating information of the issuer or guarantor, and other particulars required to be disclosed to protect the public and the investor.
Upon the approval of this Corporation for listing of call (put) warrants by an Issuing Company, and the approval of the Competent Authority of the Agreement for Listing, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing and the payment of the performance bond for each call (put) warrant in accordance with the regulations of this Corporation, upon the notice of this Corporation, such Issuing Company shall provide the prospectus to this Corporation for its distribution to securities firms. Further, two days prior to the listing of such securities, the Listing Company shall enter information related to the listing into the Internet information reporting system designated by this Corporation, and deliver the downloaded material to this Corporation.
The public announcement referred to in the preceding paragraph shall include the following particulars:
1. Reference number of Listing Agreement approval
2. Date of issuance and period of validity.
3. Detailed information on the underlying securities or a basket of underlying securities.
4. Type of call (put) warrants, volume, and total issuance price.
5. Terms of issuance (including issuance price, strike price, exercise period. Issuance of Knock-out Call Warrant (up and out with full rebate) or Knock-out Put Warrant (down and put with full rebate) shall be explained using bold lettering).
6. A description of the calculation of the issue price, including the price, strike price, term, interest rate, fluctuation rate of the underlying securities and other reference factors used in the calculation, and a table of comparison with the warrants with the same listed securities as underlying securities in the past year shall be provided.
7. Detailed information on guarantor, contents of the guaranty agreement or collateral.
8. Procedures for exercising the option, and procedures for canceling exercised call (put) warrants.
9. Planned strategy on offsetting risks.
10. Policy of the issuer on the adjustment of the strike price of call (put) warrant and other related items upon the distribution of dividends and bonuses, increase of capitalization, decrease of capitalization, stock splits and consolidations, and handling of other related matters by the Issuing Company of the underlying securities, or upon distribution of dividends on an underlying exchange-traded fund or handling of other related matters by a securities investment trust enterprise; where the issuer is not following the reference adjustment formula promulgated by this Corporation, the prospectus shall explain the matter using bold lettering.
11. Procedures for handling in the case of merger, change of trading method, suspension of trading, or delisting of stock by the Issuing Company of the underlying securities, or delisting of an underlying exchange-traded fund for a reason such as dissolution, bankruptcy, or cancellation of permission of the securities investment trust enterprise.
12. The listing of the call (put) warrants, and procedures for handling when the stock exchange suspends trading or terminates listing.
13. Provision specifying that upon the expiration of the period of validity, in case the market price of the underlying securities is higher than the strike price of the call warrant (or the strike price of put warrant is higher than the market price of the underlying securities) and there is value in the exercise thereof, if the terms of exercise require cash settlement, then it shall be deemed that the call (put) warrant has been exercised and has given notice to that effect.
14. Provisions specifying that the issuer may not independently exchange the contracted call (put) warrant with another call (put) warrant or securities which has a longer period of validity.
15. Procedures for delivery when the holder exercises the option.
16. Provisions specifying that where the exercise of the option referred to in the preceding subparagraph is required via cash, the cash settlement amount shall be calculated on the basis of the closing price of the underlying securities on the exercise date.
17. Provisions specifying that where the issuer has failed to satisfy its obligation by tendering the underlying securities or the cash differential, the procedures for handling the securities kept in a central securities depository as guaranty for performance.
18. Date of public announcement.
19. Address at which the public may review the prospectus.
20. Printing the following disclaimer (standard format): "The Taiwan Stock Exchange Corporation shall not be responsible for the contents of this public announcement, and expresses no opinion on its accuracy or completeness, and it is expressly stated that it shall not assume any liabilities arising out of all or a part of the contents of this public announcement or be liable for damages resulting from reliance on such contents."
21. Date of listing for call (put) warrant.
22. Other items required by this Corporation.
The approval for listing shall be revoked in case the issuer of the call (put) warrant fails to complete the sale in accordance with the procedures within ten business days of the approval by this Corporation of its issuance plan, or fails to determine the date of listing with this corporation within the business days from the date of approval of the Listing Agreement by the competent authority in charge.
Before the listing of call (put) warrants by an issuer, if it is discovered that, before or subsequent to the effectiveness of the Agreement for Listing, valid facts show that any of the circumstances enumerated in Articles 8 or 9 of the Rules Governing Examination of the Listing of Warrants has occurred, this Corporation may suspend the listing of the call (put) warrants, and conduct an investigation, and report to the Competent Authority. In the event the issuer refuses the investigation of this Corporation or refuses to supply the necessary information, or it is confirmed that it is inappropriate for listing, this Corporation may, upon approval of the Competent Authority, revoke its Agreement for Listing or terminate its listing. In the event it is shown that there are no inappropriate circumstances for listing, this Corporation may, upon report to and recordation with the Competent Authority, notify the company to resume the listing process.
Within twenty days prior to the expiration of the call (put) warrant, the issuer shall enter the following particulars into the Internet information reporting system designated by this Corporation, and deliver the downloaded material to this Corporation. Issuer of Knock-out Call (Put) Warrant may be exempt from the aforesaid provision regarding public announcement within twenty days prior to expiration of the call (put) warrant; provided that matters concerning public announcement shall be handled on the business day next to the date which is deemed as the last day of trading.
1. Date of expiration of call (put) warrant, last day of trading, and date of delisting.
2. Strike price and exercise ratio.
3. Method of settlement when the holder exercises the right.
4. Process for requesting fulfillment of contract.
5. Other information required by this Corporation.
Listed call (put) warrants shall be assigned by this Corporation a code number, and an abbreviated name for uniform usage. |
| Article 43-2 | After this Corporation has approved an application by a trustee institution for listing of beneficiary securities issued by it or an application by a special purpose company for listing of asset-backed securities issued by it, and the Agreement for Listing has been submitted to and approved by the Competent Authority and taken effect, listing fees shall be paid in accordance with the Agreement for Listing, and, upon receiving notice from this Corporation, the issuer shall upload an electronic file of the prospectus onto the Internet information reporting system designated by this Corporation and shall deliver a physical copy of the full prospectus to this Corporation for distribution to securities firms. Further, one day prior to the date it has set with this Corporation for commencement of listing for trading, the trustee institution or special purpose company shall report information related to the listing onto the Internet information reporting system designated by this Corporation, and shall send the
downloaded information to this Corporation.
The information related to listing referred to in the preceding paragraph shall include the following particulars:
1. Date and reference number of the Competent Authority's approval of issuance.
2. Date and reference number of the approval of the Agreement for Listing.
3. Date of commencement of listing for trading.
4. Names, addresses, telephones, and Internet addresses of the trustee institution and the trust supervisor or the special purpose company and the supervisory institution.
5. Name, address, telephone, and Internet address of the originator.
6. Date of issue and period of validity.
7. Total monetary amount and total number of units to be issued.
8. Summary data of the beneficiary securities or asset-backed securities.
9. Asset pool contents.
10. Name, address, and telephone of the service institution and backup service institution.
11. Name, address, and telephone, of the securities underwriter; underwriting period, price, and volume.
12. Any other particulars required to be publicly announced.
In cases of applications by trustee institutions for listing of beneficiary securities issued thereby or by special purpose companies for asset-backed securities issued thereby, where public sale is not completed in accordance with provisions within three months from the date the approval of the Agreement for Listing is obtained from the Competent Authority under Pparagraph 1, the listing shall be cancelled. With legitimate reasons, and upon approval by this Corporation and approval for recordation by the Competent Authority, the period may be extended for a single term of three additional months. However, a suspension period referred to in paragraph 4 shall not be counted therein.
Before the commencement of listing for trading of beneficiary securities or asset-backed securities under the preceding paragraph, if concrete evidence is discovered of the likelihood of existence, before or subsequent to the effectiveness of the Agreement for Listing, of any circumstance under which listing would be inappropriate, or if the Competent Authority voids or revokes the effective registration or approval for the public offering, this Corporation may suspend the listing of the beneficiary securities or asset-backed securities, conduct an investigation, and file a report with the Competent Authority for recordation. In the event the trustee institution or special purpose company refuses to submit to investigation by this Corporation or to supply necessary information, or the circumstances inappropriate to listing are verified through investigation, this Corporation may, upon approval of the Competent Authority, void its Agreement for Listing or terminate its listing. In the event it is shown upon
investigation that there are no inappropriate circumstances for listing, this Corporation may, upon obtaining approval for recordation by the Competent Authority, notify the company to resume the listing process. However, where there remains any uncertainty about appropriateness for listing, this Corporation may continue to suspend the listing of the beneficiary securities or asset-backed securities for trading.
Listed beneficiary securities and asset-backed securities shall be assigned by this Corporation a code number and an abbreviated name for uniform usage. |
| Article 43-3 | After this Corporation has approved an application by a real estate securitization trustee institution for listing of REIT beneficiary securities or REAT beneficiary securities offered and issued by it or, and the Agreement for Listing has been submitted to and approved by the Competent Authority and taken effect, listing fees shall be paid in accordance with the Agreement for Listing, and, upon receiving notice from this Corporation, the issuer shall upload an electronic file of the prospectus onto the Internet information reporting system designated by this Corporation and shall deliver a physical copy of the full prospectus to this Corporation in the number of copies prescribed by this Corporation.
Further, by the business day prior to the date it has set with this Corporation for commencement of listing for trading, the real estate securitization trustee institution shall report information related to the listing onto the Internet information reporting system designated by this Corporation, and shall send the downloaded information to this Corporation.
The information related to listing referred to in the preceding paragraph shall include the following particulars:
1. Date and reference number of the Competent Authority's approval of issuance.
2. Date and reference number of the approval of the Agreement for Listing.
3. Date of commencement of listing for trading.
4. Names, addresses, and telephones of the trustee institution and the originator institution that entrusted the real estate management.
5. Date of issue and period of validity.
6. Total monetary amount and total number of units to be issued.
7. Basic policies, scope, and investment strategy for utilization of the fund, or method of management and disposition of the trust property.
8. Method of calculation and public announcement of net asset value per beneficiary unit.
9. Kinds, times, and payment methods of distributions of yield on REIT fund investment or method of distribution of trust property capital or any benefits, interest, or other income derived therefrom.
10. Name, address, and telephone, of the securities underwriter; underwriting period, price, and volume.
11. Any other particulars required to be publicly announced.
In cases of applications by real estate securitization trustee institutions for listing of REIT beneficiary securities or REAT beneficiary securities offered and issued thereby, where public sale is not completed in accordance with provisions within three months from the date the approval of the Agreement for Listing is obtained from the Competent Authority under Pparagraph 1, the listing shall be cancelled. With legitimate reasons, and upon approval by this Corporation and approval for recordation by the Competent Authority, the period may be extended for a single term of three additional months. However, a suspension period referred to in paragraph 4 of this article shall not be counted therein.
Before the commencement of listing for trading of REIT beneficiary securities or REAT beneficiary securities under the preceding paragraph, if concrete evidence is discovered of the likelihood of existence, before or subsequent to the effectiveness of the Agreement for Listing, of any circumstance under which listing would be inappropriate, or if the Competent Authority voids or revokes the approval for offering and issuance, this Corporation may suspend the listing of the beneficiary securities, conduct an investigation, and file a report with the Competent Authority for recordation. In the event the securitization trustee institution refuses to submit to investigation by this Corporation or does not cooperating in supplying necessary information, or the circumstances inappropriate to listing are verified through investigation, this Corporation may, upon approval of the Competent Authority, void its Agreement for Listing or terminate its listing. In the event it is shown upon investigation that there are
no inappropriate circumstances for listing, this Corporation may, upon obtaining approval for recordation by the Competent Authority, notify the company to resume the listing process. However, where there remains any uncertainty about appropriateness for listing, this Corporation may continue to suspend the listing of the beneficiary securities for trading.
Listed REIT beneficiary securities and REAT beneficiary securities shall be assigned by this Corporation a code number and an abbreviated name for uniform usage. |
| Article 44 | Listed companies shall establish a professional stock affairs services agent or stock affairs services unit in the area where this Corporation is located. Further, such companies shall notify this Corporation of the business address and the name of the responsible person of the stock affairs services agent, and the specimen of chops that must be chopped on the stock certificates to effect valid transfer within three days of their decision. The same process shall apply in case of amendments.
The transfer or the splitting of stocks handled by listed companies shall be completed within three days after the application therefor is received.
The professional stock affairs services agent or stock affairs services unit referred to in paragraph 1shall have stock-affairsservices handling personnel and equipment that comply with the provisions of the Regulations Governing Handling of Stock Affairs Services by Public Companies promulgated by the Competent Authority, and it shall conduct securities stock affairs matters in compliance with the above Regulations Governing Handling of Stock Affairs.
The provisions of Pparagraphs 1 and 2 of this Article shall apply mutatis mutandis to SITEs processing the transfer of beneficiary certificates, trustee institutions processing the transfer of beneficiary securities, special purpose companies processing the transfer of asset-backed securities, real estate securitization trustee institutions processing the transfer of REIT securities or REAT securities or foreign issuers processing the transfer of stocks, or foreign issuers and their depositary institutions processing the transfer of Taiwan Depositary Receipts. |
| Article 45 | Where the name, type of securities, price per unit, outstanding shares, or other contents are changed, the changes shall be processed in accordance with the laws, and further the "Application for Amending the Listed Securities Registers," and the "Plan for Exchange of Securities Certificates" shall be sent to this Corporation to apply for change of content of the listed securities. The listed company shall send the required documents to this Corporation and file a report on the Internet information reporting system designated by this Corporation during the time period specified by this Corporation, and before the last day the shareholders list may be changed. In the case of change of the company name, within three years from the approval date of such change, all the issued securities and other information to be published as required shall be disclosed in the new name as well as the old name. For three consecutive months after the company name change, the said information shall be publicly announced on the
Internet information reporting system designated by this Corporation. In the case of capital decrease registration, the procedural provisions for delivering the new securities by scripless book-entry transfer shall be carried out within three months from the date on which the exchange plan in the "Plan for Exchange of Securities Certificates" submitted to the Competent Authority is approved. Thereafter, the said exchange plan shall be actually implemented. If the exchange of new share certificates resulting from capital decrease is likely to fall behind schedule or there might be any abnormal situation, this Corporation shall be notified in writing in advance; provided, however, that exchange of securities certificates may be waived in the case of buy back of treasury stocks and cancellation of shares under Article 28-2 of the Securities and Exchange Act.
The Plan for Exchange of Share Certificates referred to in the preceding Pparagraph shall be formed in accordance with the "Procedures for Exchange of Securities Certificates by Listed Companies" prescribed by this Corporation.
Where the volume of the total exchanged stocks has reached thirty percent of its total listed shares, the listed company may designate the listing date of the new shares (identical with the last day of trading of old shares), and submit an application to this Corporation, for public announcement and implementation after review and approval by this Corporation.
Where the volume of the total exchanged stocks has not reached thirty percent of total listed shares of the listed company, if the listed company makes a written undertaking that starting from the date the new shares are traded, the replacement procedures will be commenced and any old shares received will be exchanged with new shares on the same date, the procedures enumerated in the preceding Pparagraph shall apply. If it does not issue the written undertaking, the designation of the listing date of the new shares (identical with the last day of trading of old shares) shall not at the latest be later than 30 days after the first date on which the old shares are replaced with new shares. Further, commencing from the above date, it shall continue with the replacement procedures and issue new replacement shares on the same date on which it receives the old shares.
The provisions of Pparagraphs 1 through 4 of this Article shall apply mutatis mutandis to changes to the securities represented by shares issued by foreign issuers, or Taiwan Depositary Receipts issued by foreign issuers and their depositary institutions. |
| Article 45-1 | Where a listed company issues new shares, the new shares shall be traded on the day such shares are delivered to the shareholders. In the event the company has any conditions enumerated in Pparagraph 1 of Article 156 of the Securities and Exchange Act and the Competent Authority has restricted its trading, the shares shall be prohibited from being traded.
The company issuing the new shares referred to in the preceding Pparagraph shall, before the share certificates representing the new shares are delivered and within the time period specified by this Corporation, provide to this Corporation a report for listing of new capital stock, copy of the amended certification after change of registration, and certification of registration of scripless issuance. Upon review by this Corporation for their completeness, such shall be publicly announced to the securities firms.
The report for listing of new capital stock referred to in the preceding Pparagraph shall form an integral part of the original Agreement for Listing. |
| Article 46 | Where a listed company suspends changes to the shareholders roster in accordance with Article 165 of the Company Act, it shall, before the last date the shareholders roster may be changed and within the time period required by this Corporation, publicly announce on the website reporting system designated by this Corporation the reason for the suspension, date of suspension, amount of dividends and bonuses to be distributed, and allocation of rights. However, in special circumstances, where the reasons are stated, the company may simply publicly announce in advance the reasons for convening a shareholders meeting and the date of the meeting. In such cases, it shall follow up, at least 40 days prior to the date of the shareholders meeting, with a public announcement on the above-mentioned website designated by this Corporation of the amount of dividends and bonuses to be distributed or rights to be allocated.
If there is subsequently any change in information publicly announced by a listed company under the preceding paragraph, or the public announcement is not made by the listed company within the time period specified by this Corporation, then the listed company shall bear full liability for any resultant trade dispute or damage suffered by a party to a trade.
The provisions of Pparagraph 2 of this Article shall apply mutatis mutandis to SITEs setting a time period for changes to the beneficiaries list or date of distribution of profits when handling matters set forth in Article 3, Article 25, and Article 27 of the Regulations Governing Securities Investment Trust Funds.
The provisions of Pparagraphs 1 and 2 of this Article shall apply mutatis mutandis to the time period during which the shareholders list, the beneficiaries list, and the foreign bond holders list may not be changed due to the distribution of stock dividends, bond interests, profits, or other interests in accordance with the laws of its local jurisdiction, in respect of stocks or bonds issued by foreign issuers and their agents, or foreign securities represented by Taiwan Depositary Receipts that is issued by foreign issuers and their depositary institution.
The provisions of Pparagraphs 1 and 2 shall apply mutatis mutandis when a trustee institution sets a record date for suspension of changes to entries in the register of beneficiaries or for distribution of income because of the convening of a beneficiaries meeting or distribution of profit on a special purpose trust, or when a special purpose company sets a record date for suspension of changes to entries in the register of holders of asset-backed securities or a record date for distributions because of the convening of a meeting of holders of asset-backed securities or distribution or repayment of principal, profit, interest, or other income rights in accordance with an asset securitization plan.
The provisions of Pparagraphs 1 and 2 shall apply mutatis mutandis when a securitization trustee institution sets a record date for suspension of changes to entries in the register of beneficiaries or for distribution of income because of the convening of a beneficiaries meeting or distribution of income. |
| Article 46-1 | On the date when the issuing company of the underlying securities represented by a call (put) warrant commences to distribute dividends and bonuses, increase capitalization, decrease capitalization, or split or consolidates stocks, or where the strike price has to be adjusted as it meets the criteria for resetting, or upon distribution of dividends on an underlying exchange-traded fund or handling of other related matters by a securities investment trust enterprise, such issuer or enterprise shall, by the deadline prescribed by this Corporation, enter the following particulars into the Internet information reporting system designated by this Corporation, and deliver the downloaded material to this Corporation:
1. Name of the call (put) warrant.
2. Date of maturity for call (put) warrant.
3. Adjustments and changes to the strike price, exercise ratio, and other related matters in the call (put) warrant.
4. Effective date.
5. Other relevant information required by this Corporation. |
| Article 47 | A listed company shall provide the following information within the prescribed time period:
1. With the exception of announcements of suspension of changes to entries in the shareholders' roster because of the convening of a regular shareholders' meeting, special shareholders' meeting, or target date fixed by the company for distribution of dividends, bonus, or other benefits under Article 165 of the Company Act, for which it is not necessary to send the downloaded information to this Corporation, for all other announcements related to the rights and obligations of shareholders, the relevant particulars shall be entered into the Internet information reporting system designated by this Corporation, and the downloaded information shall be sent to this Corporation. Where particulars that should be publicly announced were not announced, or where the announced items were not sufficiently explanatory, this Corporation may inform the company to make the announcement or to supplement or amend the announcement.
2. Before convening a shareholders meeting, the board meeting minutes along with the public announcement of suspension of changes to entries in the shareholders' roster shall be entered into the Internet information reporting system designated by this Corporation in accordance with the preceding article.
3. Within twenty days of the general shareholders meeting, two copies of the annual report to the shareholders meeting shall be submitted.
4. Where approval is granted for the issuance of securities, at least 2,000 copies of the prospectus shall be submitted; provided, a company that opts to transmit the materials in the form of electronic files and that has complied with the applicable provisions of the Criteria Governing Information to be Published in Public Offering and Issuance Prospectuses may submit only 4 printed copies.
5. Two copies of the documents, reports or forms required to be provided to this Corporation pursuant to Pparagraph 4 of Article 36 of the Securities and Exchange Act, and when the annual financial reports are submitted, two copies of the consolidated financial statements of the affiliates shall be provided; where financial reports are submitted, the company shall produce and provide the list of companies which it controls or is a subsidiary of, their profit-seeking enterprise uniform numbers, and the stock codes of listed and OTC-listed companies which each respective company holds and the total shareholdings thereof at the end of the quarter. And where the related enterprises of such company make increases or decreases in shareholdings, such changes shall be reported to this Corporation within 20 days of the change.
6. Other information as required by the Competent Authority and this Corporation.
Where a listed company issuing foreign stocks in a foreign stock exchange is required by the laws and regulations of the jurisdiction in which the listing is to take place to provide or disclose certain information, a copy of such information shall be provided to this Corporation within two days after such information has been so provided. |
| Article 47-1 | SITEs shall provide the following information within the prescribed time period:
1. Where an announcement is related to the rights of beneficiaries, the relevant particulars shall be entered into the Internet information reporting system designated by this Corporation. Where particulars that should be publicly announced but were not announced, or where the announced items were not sufficiently explanatory, this Corporation may inform the company to make the announcement or supplement or amend the announcement.
2. Upon receiving notification from this Corporation of approval for offering and issuance of beneficiary certificates, a SITE shall upload the electronic file [of the prospectus] onto the Internet information reporting system designated by this Corporation and provide four [physical] copies of the prospectus.
3. At the same time that they are filed with the Competent Authority, two copies of the annual report and monthly balance sheet report shall be provided.
This Corporation may provide original or abstract copies of the information provided to it pursuant to the preceding Pparagraphs for review by the public. |
| Article 47-2 | Any foreign issuer and its agent institution that issues securities, or any foreign issuer and its depositary institution that issues Taiwan Depositary Receipts shall provide the following information within the prescribed time period:
1. Foreign issuers designating specific time periods or record dates for confirmation of its shareholders for purposes of distribution of dividends, warrants, and other rights shall on the commencement date or twelve business days before the record date report the particulars and other concrete contents regarding such events on the Internet information reporting system designated by this Corporation.
2. Within thirty days of the shareholders meeting of a foreign issuer, its agent institution or depositary institution shall provide at least 1,000 copies of the shareholders meeting agenda and the minutes of the shareholders meeting, ten copies of the financial report audited by a CPA and opinion of an ROC CPA on such report, and two copies of the annual report to this Corporation for review by the public.
3. In accordance with regulations, at least 2,000 copies of the prospectus must be provided to this Corporation for review by the public when the stock or Taiwan Depositary Receipt begins trading on the Exchange.
4. The form "Items that Shall be Publicly Announced and Reported to this Commission when A Foreign Issuer Offers and Issues Securities" produced in accordance with the regulation of the Competent Authority shall be provided.
The preceding documents or public announcement, if in English, shall have Chinese translations, or shall be made in Chinese. |
| Article 47-3 | (deleted) |
| Article 47-4 | The trustee institution or special purpose company shall provide the following information within the prescribed time period:
1. When rights or interests of beneficiaries or holders are publicly announced, the relevant particulars shall be entered into the Internet information reporting system designated by this Corporation. Where particulars that should have been publicly announced were not announced, or where the announced items were not sufficiently explanatory, this Corporation may give notice via letter to make the announcement or to supplement or amend the announcement.
2. When trading of beneficiary securities or asset-backed securities on this Corporation's market commences, four copies of the prospectus shall be submitted.
3. Two copies of each shall be submitted at the time that the balance sheet, profit and loss statement, and trust property management and application report prepared by the trustee institution with respect to the trust property of the special purpose trust are reported to the trust supervisor and notice is given to the beneficiaries; and at the time that the report prepared by the special purpose company with respect to the management and disposition of the assigned assets, profit/loss and distribution amounts, book balance, withdrawn capital or other interests, overdue receivables and bad debts, and other material information, is reported to the supervisory institution and notice is given to all holders.
4. When the special purpose company performs reporting and public announcement in accordance with Article 36 of the Securities and Exchange Act, two copies of all such information shall be submitted.
This Corporation may provide the originals or abstracts of any information provided to it pursuant to the preceding Pparagraphs for review by the public. |
| Article 47-5 | The real estate securitization trustee institution shall provide the following information within the prescribed time period:
1. When rights or interests of beneficiaries are publicly announced, the relevant particulars shall be entered into the Internet information reporting system designated by this Corporation. Where particulars that should have been publicly announced were not announced, or where the announced items were not sufficiently explanatory, this Corporation may give notice via letter to make the announcement or to supplement or amend the announcement.
2. When trading of REIT beneficiary securities or REAT beneficiary securities on this Corporation's market commences, four copies of the prospectus shall be submitted.
3. Two copies shall be submitted of the trust property assessment report publicly announced every three months by the real estate securitization trustee institution.
4. Two copies of each shall be submitted at the time that the balance sheet, profit and loss statement, and trust property management and application report prepared by the real estate securitization trustee institution are reported to the trust supervisor and notice is given to the beneficiaries.
5. Two copies of the beneficiaries meeting minutes shall be submitted within 20 days after the beneficiaries meeting.
6. Other information as required by the Competent Authority and this Corporation.
This Corporation may provide the originals or abstracts of any information provided to it pursuant to the preceding Pparagraphs for review by the public. |
| Article 48 | Within two days of the occurrence or of the effectiveness of the following events, a listed company shall report to this Corporation:
1. Where any of the conditions specified in Article 49 and Article 50 of these Rules occurs.
2. Amendment of its articles of incorporation, or increase/decrease of capitalization.
3. Issuance of preferred classes of shares, or the issuance, maturity or redemption of corporate bonds, or the conversion of convertible bonds into shares in accordance with its terms.
4. Addition or reduction or substitution in value of the security for the bond.
5. Change in the director, supervisor, or manager.
6. Change in the major business.
7. Occurrence of any conditions specified in Article 282 of the Company Act.
8. The reaching of a resolution referred to in Article 185 of the Company Act, the purchase of shares referred to in Article 186 of the Company Act, or the negotiation and determination of the purchase price of shares referred to in Article 187 of the Company Act.
9. The pledge, mortgage, sale, or write-off of a major business asset.
10. Decreased or total stoppage of the manufacture of all or partial products due to major disasters.
11. The commencement or termination of major litigious matters and tax matters.
12.Any changes in the specimen stock certificate of listed securities.
13. Any action of the promoters or directors that under the Company Act carries civil liabilities.
14. Any resolutions of the normal or special meeting of shareholders which have been revoked by a court in accordance with the law.
15. Where reports are made to the Competent Authority pursuant to Article 25, and Pparagraph 2 of Article 36 of the Securities and Exchange Act.
16. Any judicial decision on the reported loss of, and deprivation of rights for listed securities, or the attachment or provisional attachment thereof, or its holder is adjudicated to be bankrupt.
A SITEs satisfying to which any of the following conditions applies shall report to this Corporation:
1. Any changes in the specimen certificate of a beneficiary certificate.
2. Any events specified in Article 19 or Article 32 of the Regulations Governing Securities Investment Trust Funds.
3. Any events specified in Article 35, Article 36, Article 50, or Article 52 of the Rules Governing Securities Investment Trust Enterprises.
Upon receiving any notice made pursuant to the preceding two Pparagraphs, or where it learns such information from other sources, in order to provide reference material to the public, this Corporation shall, in addition to processing the matter in accordance with regulations or reporting to the Competent Authority for its disposal, publicly announce the matter or notify the listed company in writing to report it on the Internet information reporting system designated by this Corporation. |
| Article 48-1 | Any foreign issuer and its depositary institution that issue Taiwan Depositary Receipts shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Listed Foreign Securities prescribed by this Corporation.
Upon receiving approval from the Competent Authority to issue call (put) warrants, a call (put) warrant issuer shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Listed Warrants/Stocks prescribed by this Corporation.
A trustee institution or special purpose company shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Trustee Institutions and Special Purpose Companies prescribed by this Corporation.
A real estate securitization trustee institution shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Real Estate Securitization Trustee Institutions prescribed by this Corporation. |
| Article 49 | If any of the following circumstances applies to a listed company, this Corporation may place its listed securities under an altered trading method:
1.The latest individual financial report as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report. For a holding company, its net worth refers to the amount of shareholders equity stated on the consolidated financial report, less minority interest. However, when a listed company records as a deduction from shareholders equity the cost of shares bought back by it pursuant to Article 28-2 of the Securities and Exchange Act or of shares held in said listed company by subsidiaries thereof, the par value of treasury stock held in said listed company by the listed company and subsidiaries thereof may be deducted from the share capital stated on the financial report in the calculation of the above-stated ratio. When stock subscription proceeds are recorded as an addition to shareholders equity, the par-value share-issue equivalent of the stock subscription proceeds shall
be added to the calculation of the share capital in the calculation of the above-stated ratio.
2. A shareholders meeting has not been held within six months after the end of the fiscal year; provided that with valid reasons and with the approval of the competent authority of the Company Act, the meeting is held within the approved time period, the above shall not be applicable.
3. Where an audit or review report issued by the CPA for the latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates substantial doubt about the going-concern assumption, or the certifying CPA issues a qualified audit report for the semi-annual or annual financial reports, or for a company other than a holding company issues a qualified review report for the semi-annual consolidated financial report, as publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act, because there were restrictions on the scope of the audit, or because the accountant deems there to be anything improper in the choices of accounting policies by the management or in the disclosure of the financial statement; however, this restriction shall not apply to a semi-annual financial report where the CPA has issued the qualified audit report for the reason that an amount of long-term equity investment and profit/loss thereupon is
calculated on the basis of statements of the invested company that have not been certified by a CPA, and the certifying CPA fully discloses in the audit report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned invested company is a major subsidiary included in the preparation of the consolidated statement or a subsidiary of a financial holding company, its semi-annual financial report shall also be reviewed or audited by a CPA in accordance with applicable laws and regulations.
4.Violation of relevant rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
5. Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
6. An application for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
7. Half or more of the directors of the company have changed so that the shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing, or its incumbent directors, supervisors, or president meet any of the conditions under subparagraph 8 of paragraph 1 of Article 9 of this Corporation's Rules Governing the Review of Securities Listings and fail to make improvement within a specified time period ordered by this Corporation.
8. The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
9. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where this Corporation is aware of such dishonor.
10. After a split, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, paragraph 1, subparagraph 2 or Article 5, subparagraph 1, respectively, of the Rules Governing the Review of Securities Listings.
11. The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as the result of share conversion, general assignment, assignment of business, or split, this shall not apply within one year of the date of listing for trading.
12. Failure to abide by an undertaking to purchase the shares of minority shareholders of a listed (or OTC) subsidiary in which it has shareholding of more than 70 percent.
13. Failure to handle stock services matters in compliance with Article 44, paragraph 3, or discovery in an audit by Taiwan Depository & Clearing Corporation of deficiencies and failure to make corrections by a deadline imposed for making corrections for a serious violation in a specific case.
14. Where explanations given in a press conference concerning material information fail to clarify points in question, and this Corporation deems it necessary to protect the rights and interests of investors.
15. Upon other necessary reasons as determined by this Corporation.
If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, this Corporation may resume trading of the company's securities by the normal trading method:
1.Where the change of trading method was ordered pursuant to subparagraph 1 of the preceding paragraph, if the latest-period financial report indicates that the CPA has already issued an audit or review report stating that there is no longer any substantial doubt about the ongoing-concern assumption, or the annual and semi-annual individual financial reports for the most recent two periods audited and certified by a CPA and registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report, and each has shown no decline from the net worth stated on the annual and semi-annual individual financial reports for the preceding period audited and certified by a CPA and duly registered and publicly announced. For a holding company, its net worth refers to the amount of shareholders equity stated on the consolidated financial report, less minority interest.
2.Where the change of trading method was ordered pursuant to subparagraph 2 of the preceding paragraph, and the shareholders meeting has been held.
3.Where the change of trading method was ordered pursuant to subparagraph 3 of the preceding paragraph, and the new audited financial report has shown improvements and the auditor renders a clean audit opinion or a clean review report, or the semi-annual financial report of the invested company has been duly reviewed or audited by a CPA.
4.Where the change of trading method was ordered pursuant to subparagraph 4 of the preceding paragraph, and disclosure proceeding is commenced in compliance with the notice.
5. After the trading method was changed pursuant to subparagraph 5 of the preceding paragraph, the preliminary injunction order was cancelled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
6. After the trading method was changed pursuant to subparagraph 6 of the preceding paragraph, the application for re-organization was withdrawn; provided that the execution period of the changed trading method shall not be less than three months.
7. After the trading method was changed pursuant to subparagraph 7 of the preceding paragraph, correction and improvement was made.
8. After the trading method was changed pursuant to subparagraph 8 of the preceding paragraph, the company repaid liabilities or reached settlement agreement with the creditors.
9. Within three months of the trading day next following the date the trading method was changed pursuant to subparagraph 9 of the preceding paragraph, the listed company has completed any of the remedial procedures enumerated hereinbelow, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by this Corporation. The form shall be signed and certified by a CPA and an attorney at law and submitted to this Corporation along with the other relevant documents and materials for approval and recordation:
(1) Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
(2) Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
(3) Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
10. Where correction or improvement has been made by the listed company within three months of the trading day next following the date the trading method of the securities was changed pursuant to subparagraph 10 of the preceding paragraph.
11. Where correction or improvement has been made within three months after the change of trading method of the securities pursuant to subparagraph 11 or subparagraph 12 of the preceding paragraph.
12. Where correction or improvement has been made after the trading method was changed pursuant to subparagraph 13 of the preceding paragraph.
13. Where the points in question have been clarified after the trading method was changed pursuant to subparagraph 14 of the preceding paragraph, provided that if this Corporation determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least three months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
14. After the trading method was changed pursuant to subparagraph of the preceding paragraph, correction or improvement is made upon the request of this Corporation.
Where this Corporation changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where this Corporation restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within one month of such action, this Corporation shall report such action to the Competent Authority for recordation. |
| Article 49-1 | If a foreign issuer breaches an undertaking executed at the time of its application for listing, this Corporation may depending on the case impose a breach penalty of NT$30,000 and order it to make supplementation or corrections within a certain period of time.
If a foreign issuer fails to make supplementation or corrections within the period of time under the preceding paragraph, this Corporation may place its listed securities under an altered trading method. |
| Article 49-2 | If any of the following circumstances applies to a listed company, this Corporation may impose the periodic call auction trading method for its listed securities pursuant to the Rules Governing Trading of Securities Placed Under Altered Trading Methods:
1. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 6.
2. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 8.
3. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 9.
4. Its latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates that its net worth is lower than three-tenths of its share capital stated on the financial report.
5. This Corporation deems it necessary to do so for any other reason.
Where the periodic call auction trading method has been imposed for listed securities of a listed company because of a circumstance specified in a subparagraph of the preceding paragraph, and no circumstance specified in any other subparagraph of the preceding paragraph exists, this Corporation may lift the requirement of the periodic call auction trading method if the respective requirement listed among the following subparagraphs is satisfied:
1. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 1 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 6.
2. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 2 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 8.
3. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 3 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 9.
4. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 4 of the preceding paragraph: satisfy the requirement that the net worth stated on the listed company's latest-period financial report audited and certified by a CPA and publicly announced and registered under Article 36 of the Securities and Exchange Act be not less than three-tenths of the share capital stated on the financial report.
5. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 5 of the preceding paragraph: have made supplementation or correction as demanded by this Corporation.
If this Corporation imposes the periodic call auction trading method for a listed company's securities under paragraph 1, or lifts the requirement of the periodic call auction trading method for a listed company's securities under paragraph 2, it shall report the measure to the Competent Authority for recordation within one month after execution. |
| Article 50 | If any of the following circumstances applies to Where a listed company satisfies any of the following conditions, this Corporation shall in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to suspend the trading of such securities, or such company may apply to terminate its listing pursuant to Pparagraph 4 of Article 50-1; provided, where the circumstance in subparagraph 2 applies to a listed company, this Corporation may first proceed to announce suspension of trading of its listed securities and then apply to the Competent Authority for recordation:
1. Failure to produce and register and publicly announce financial reports or financial projections by the deadlines provided in laws and regulations.
2. Where any condition specified in Article 282 of the Company Act exists, and a court has prohibited the transfer of its shares pursuant to Subsubparagraph 5 of Pparagraph 1 of Article 287 of the Company Act.
3. Any document or information that has been submitted is suspected to be untrue, and upon the request of this Corporation to explain the matter, no explanation is provided within the prescribed time period.
4. The securities transfer institution established at the location of this Corporation is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of this Corporation to correct the situation within a time period, no correction is made.
5. The financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act was not produced pursuant to relevant laws and regulations and generally accepted accounting principles, such violations were serious and corrections or rewrites were not made within the specified time period; or the CPA certifying the publicly announced and registered semi-annual or annual financial report issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse opinion or disclaimer of opinion in the review report.
6. Violation of relevant rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
7. Where a listed company has violated the undertaking it gave when applying for listing.
8. Where a listed company, going public in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, critically delays its construction schedule or materially violates provisions prescribed in the concession contract.
9. Violation of the provisions of Subsubparagraph 8 of Pparagraph 1 of Article 49, and failure to satisfy Subsubparagraph 8 of Pparagraph 2 of the same Article within three months.
10. Violation of the provisions of Subsubparagraph 9 of Pparagraph 1 of Article 49, and failure to carry out, within three months of the trading day next following the date the trading method was changed, remedial procedures as provided in Subsubparagraph 9 of Pparagraph 2 of the same Article and to submit relevant evidentiary documentation.
11. Loss of controlling interest, as defined in Subsubparagraph 1 of Article 4 of the Financial Holding Company Act, in a subsidiary, where a competent authority has ordered it to make corrections within a certain period.
12. Violation of Pparagraph 1, Subsubparagraph 10, Subsubparagraph 11, or Subsubparagraph 12 of Article 49, and inability to achieve compliance with Pparagraph 2, Subsubparagraph 10, Subsubparagraph 11, or Subsubparagraph 12 of the same article within three months from the trading day next following the date of change of trading method.
13. Other events deemed necessary to suspend the trading in securities.
Where trading of the listed securities of a listed company satisfies the conditions specified above such that its trading has been suspended because of a circumstance in a subparagraph of the preceding paragraph, upon satisfying the below conditions, and upon not satisfying being free of any other of the above conditionscircumstances, this Corporation may in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
1. Where the suspension of trading was ordered pursuant to Subsubparagraph 1 of the preceding Pparagraph, and a new financial report or financial projection has been publicly announced and registered in accordance with laws and regulations.
2. Where the suspension of trading was ordered pursuant to Subsubparagraph 2 of the preceding Pparagraph, and the judicial order prohibiting transfer has expired, and reorganization has not been ordered by the court, or a dismissal of application for reorganization has not been rendered pursuant to Subsubparagraph 2 of Pparagraph 3 of Article 285-1 of the Company Act.
3. Where the suspension of trading was ordered pursuant to Subsubparagraph 3 of the preceding Pparagraph, and corrections have been made in accordance with regulations or explanations have in fact been provided upon the request of this Corporation.
4. Where the suspension of trading was ordered pursuant to Subsubparagraph 4 of the preceding Pparagraph, and substantive improvements have in fact been made in accordance with regulations.
5. Where the suspension of trading was ordered pursuant to Subsubparagraph 5 of the preceding Pparagraph, and corrections or rewrites are made to the financial report in accordance with relevant regulations and generally accepted accounting principles; or there has been a re-audit by the CPA, who has issued an audit report without the original disclaimer of opinion or adverse opinion or a review report without the original adverse opinion or disclaimer of opinion, or an audit report without a qualified opinion under, or review report that is not qualified under, Subsubparagraph 3 of Pparagraph 1 of Article 49.
6. Where the suspension of trading was ordered pursuant to Subsubparagraph 6 of the preceding Pparagraph, and corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
7. Where the suspension of trading was ordered pursuant to Subsubparagraph 7 of the preceding Pparagraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
8. Where the suspension of trading was ordered pursuant to Subsubparagraph 8 of the preceding Pparagraph, and substantive corrections or improvements have in fact been made pursuant to relevant laws and regulations.
9. Where the suspension of trading was ordered pursuant to Subsubparagraph 9 of the preceding Pparagraph, and corrections or improvements have been made in accordance with relevant regulations.
10. Where the suspension of trading was ordered pursuant to Subsubparagraph 10 of the preceding Pparagraph, and remedial procedures as set forth in Subsubparagraph 9 of Pparagraph 2 of the preceding article have been carried out within six months of the trading day next following the date of suspension of trading, and the listed company has produced relevant evidentiary documentation that it has carried out the remediation.
11. Where the suspension of trading was ordered pursuant to Subsubparagraph 11 of the preceding Pparagraph, and corrections have been made by the deadline set by the competent authority for the target industry.
12. Where the suspension of trading was ordered pursuant to Subsubparagraph 12 of the preceding Pparagraph, and corrections or improvements have been made within six months of the trading day next following the date of suspension of trading.
13. Where suspension of trading was ordered pursuant to Subsubparagraph 13 of the preceding Pparagraph, and corrections or improvements have been made in accordance with relevant rules and regulations. |
| Article 50-1 | If any of the following circumstances applies to any listed company, this Corporation shall, in accordance with Article 144 of the Securities and Exchange Act, report to and obtain the approval of the Competent Authority to delist its securities:
1. Any conditions specified in Article 9, Article 10, Article 11, paragraph 2 of Article 17, subparagraphs 1 through 8 of paragraph 1 of Article 315, or Article 397 of the Company Act or Article 21 or Article 54 of the Financial Holding Company and a relevant competent authority has revoked its company license, ordered its dissolution, or voided its approval.
2. Any conditions specified in Article 251 or Article 271 of the Company Act or the relevant authority has revoked its approval for other reasons.
3. Confirmation of bankruptcy by any court.
4. Confirmation of reorganization by any court, or denial of reorganization motion issued in accordance with subparagraph 2 of paragraph 3 of Article 285-1 of the Company Act.
5. The scope of the business of the company has changed substantially, and this Corporation believes that it is no longer appropriate for listing.
6. The total amount of its listed preferred shares is less than 200 million New Taiwan Dollars.
7. The trading of its securities has been suspended pursuant to any subparagraph of paragraph 1 of the preceding Article, and after six months, conditions described in any subparagraph of paragraph 1 of the preceding Article still exists; or, where trading of the securities is resumed after having been suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article for less than six months, and, within six months from the resumption of trading, trading is again suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article, and the aggregate period of suspension of trading exceeds six months.
8. Record of refusal of financial institutions to transact with the company or of the circumstances referred to in subparagraph 9 of paragraph 1 of the preceding Article where the company has failed to carry out remedial procedures as set forth in subparagraph 9 of paragraph 2 of Article 49 and submit relevant evidentiary documentation within six months of the trading day next following the date of suspension of trading. However, if the negotiable instrument is retrieved by means of a settlement, an application may be filed with this Corporation for re-calculation of the duration of the period of suspension of trading as from a date approved by this Corporation. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials. Only one such extension may be granted.
9. Where the latest individual financial report as publicly announced and registered in accordance with Article 36 of the Securities and Exchange Act shows a negative net worth. Likewise, where a subsequently publicly announced and registered individual financial report of a non-holding company or consolidated financial report of a holding company shows a negative net worth. For a holding company, its net worth refers to the amount of shareholders equity stated on the consolidated financial report, less minority interest.
10. The business of the company has completely stopped and cannot commence quickly, or there is no business revenue; provided such provisions shall not be applicable to a company, listed in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, which has no business income during the period of construction under the concession contract.
11. Any conditions specified in Article 156 of the Securities and Exchange Act exists and the Competent Authority has ordered the suspension of trading of all of its securities for at least three months.
12. A corporate split or a merger with another company, where the resulting entity does not satisfy the requirements for continued listing under Article 51-2 or Article 51 respectively.
13. Material breach of the Agreement for Listing.
14. Final confirmation by a judicial authority that any of the following circumstances applies to the listed company:
i. The financial reports, accounting books, etc. provided by the company during the application for listing contain false and concealed items, and upon discounting for such false and concealed items, its profitability does not conform to the listing requirements; provided, the above shall not be applicable if five years have passed between the listing date and the date of confirmation by a judicial authority.
ii. Satisfies the proviso of the preceding sub-item, and the false and concealed items still exists at the time of the final confirmation of judgment, and upon discounting for such false and concealed items, its current revenue generating ability does not conform to the listing requirements.
15. Over 70 percent of its total issued shares or total capital is held by another listed (or OTC) company.
16. Circumstances set forth in paragraph 1, subparagraph 12 of the preceding article and inability to achieve compliance with paragraph 2, subparagraph 12 of the same article within six months from the trading day next following the suspension of trading.
17. The competent authority for the target industry duly appoints a receiver to take receivership of the financial institution.
18. Other events requiring delisting.
If a listed company's securities have been suspended from trading by this Corporation because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, or if the circumstance in subparagraph 8 of the preceding paragraph existed, and this Corporation has announced but not yet implemented the delisting of its securities, if the listed company satisfies the requirements of the respective subparagraphs below, is free from any other circumstance in the subparagraphs of the preceding paragraph, and submits an application to this Corporation together with relevant materials and evidence at least 8 business days prior to the delisting implementation date, then after filing for and receiving approval from the Competent Authority, this Corporation may publicly announce a waiver of implementation of the delisting.
1. Where a listed company's securities have been suspended from trading by this Corporation because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, and it submits the periodic financial report it failed to submit by the deadline, or it duly corrects or restates the relevant financial report in accordance with regulations.
2. Where, after public announcement of delisting for reasons in subparagraph 8 above, the record of refusal of transaction by a financial institution or the dishonor of a negotiable instrument because of insufficient funds on deposit has been resolved by carrying out remedial procedures as set forth in subparagraph 9 of paragraph 2 of Article 49 and submitting relevant evidentiary documentation.
A listed company that makes full supplementations or corrections before the implementation date after its listed securities have been publicly announced for delisting shall be eligible for a waiver of implementation of delisting only if such listed company has never previously been granted a waiver of delisting based on the same reasons.
Where delisting is occasioned by the circumstances set out in subparagraph 17 of paragraph 1, after receiving the notice of receivership from the Competent Authority, this Corporation shall immediately announce that beginning from the next day the trading of the company's listed securities shall be suspended for a period of 10 days, and before the expiration of the period of suspended trading shall announce that beginning from the next day following expiration of the suspension, the securities shall be traded for 20 days under the altered trading method in periodic call auction trading, after which the listed securities shall be delisted.
A listed company applying for delisting of its securities in accordance with Article 145 of the Securities and Exchange Act shall process the application in accordance with "Procedures for Handling Applications for Delisting by Listed Companies."
Where a listed company delists in accordance with paragraph 1, subparagraph 15 herein, or terminates OTC trading of its securities in accordance with Article 12-2, paragraph 1, subparagraph 17 of the GreTai Securities Market Rules Governing Securities Trading on Over-the-Counter Markets, the listed parent company shall undertake to unconditionally purchase the remaining outstanding shares of the listed (or OTC) subsidiary to delist. |
| Article 50-2 | This Corporation may publicly announce the delisting of beneficiary certificates when the period of validity of a securities investment trust fund has expired, or when the securities investment trust contract has terminated.
Where any of the following circumstances exists with respect to a closed-end fund managed by any SITE, this Corporation may report to and obtain the approval of the Competent Authority to delist its beneficiary certificates:
1. Any circumstance specified in paragraph 2 of Article 30 of the Regulations Governing Securities Investment Trust Funds.
2. Change to an open-ended investment fund upon the resolution of the meeting of the beneficiaries, and reported to and approved by the Competent Authority, or in accordance with the terms of the securities investment trust contract.
3. The total issued value of the securities investment trust fund falls below 800 million New Taiwan Dollars due to opening of redemption.
4. Where for any other reason this Corporation deems it necessary to delist the beneficiary certificates.
Where any of the following circumstances exists with respect to an exchange traded fund managed by any SITE, this Corporation may report to and obtain the approval of the Competent Authority to delist its beneficiary certificates:
1. Any circumstance specified in paragraph 2 of Article 30 of the Regulations Governing Securities Investment trust Funds.
2. Any circumstance stipulated in the securities investment trust contract of the listed beneficiary certificate as grounds for termination of the contract, where the securities investment trust enterprise has applied to this Corporation for delisting.
3. Where for any other reason this Corporation deems it necessary to delist the beneficiary certificates. |
| Article 50-3 | If any of the following conditions applies to any listed foreign stock, Taiwan Depositary Receipt, or foreign bond, this Corporation may report to and obtain the approval of the Competent Authority to terminate its listing:
1. The foreign stock or the underlying foreign securities represented by the Taiwan Depositary Receipt has suspended trading or is delisted in its home exchange.
2. The foreign stock, the underlying foreign securities represented by the Taiwan Depositary Receipt, or the foreign bond has been adjudicated by a court of its home jurisdiction to be non-transferable.
3. The foreign issuer, depositary institution, or agent of the foreign issuer violates governmental laws and regulations or the regulations and publicly announced rules of this Corporation, or refuses to pay the listing fee, or refuses to fulfill the obligations contained in the Agreement for Listing.
4. Any circumstance that in the opinion of this Corporation is sufficient to affect market order or the rights of investors such that it is necessary to delist foreign securities, Taiwan Depositary Receipts or foreign bonds.
If due to the expiration of the issuing period, or if in accordance with the provisions of Article 145 of the Securities and Exchange Act the foreign issuer and its depositary institution, or the agent of the foreign issuer applies for the delisting of foreign securities, Taiwan Depositary Receipts or foreign bonds, such application shall be made to this Corporation for inclusion of its opinion, and then reported to and approved by the Competent Authority before the delisting becomes effective. |
| Article 50-4 | When the underlying securities represented by listed call (put) warrants undergo a change in trading method, are suspended from listing, or are delisted, this Corporation, pursuant to the handling procedures listed in Articles 49, 50, and 50-1, may change the trading method of the warrants and file a report with the Competent Authority for recordation within one month, or after reporting to and obtaining the approval of the Competent Authority may suspend the trading of the warrants or delist them, or may first publicly announce suspension of their trading and subsequently file a report with the Competent Authority for recordation.
If any of the circumstances of Article 50 or Article 50-1 applies to an issuer of call (put) warrants, this Corporation shall file a report with and obtain the approval of the Competent Authority for the suspension of trading or for the delisting of the warrants, or first make a public announcement of the suspension of trading of the warrants and subsequently file a report with the Competent Authority for recordation. |
| Article 50-5 | Once the rights to exercise the warrants attached to a listed company's listed corporate bonds with warrants or preferred shares with warrants have expired or have been completely exercised, this Corporation may publicly announce the delisting of such bonds or preferred shares for which the warrants have become void. An issuer that wishes to continue the trading on the centralized securities exchange market of such corporate bonds or preferred shares for which the warrants have become void shall reapply for listing. However, if the rights and obligations of the remaining preferred shares for which the warrant rights have become void are the same as those of other preferred shares of the issuer already listed and traded on the exchange, such remaining preferred shares may be listed together with such other preferred shares with no need to reapply for listing. |
| Article 50-6 | This Corporation may publicly announce the delisting of listed beneficiary securities or asset-backed securities upon the maturity thereof.
Where any of the following events occurs with respect to the trustee institution or special purpose company, this Corporation may report to the Competent Authority for approval to suspend trading of its beneficiary securities or asset-backed securities:
1. Failure to produce, and report and publicly announce, relevant forms, statements, or account books in accordance with Articles 36, 91, and 92 of the Financial Assets Securitization Act.
2. An event of resignation or dismissal of the trustee institution as set forth in Article 47 of the Financial Assets Securitization Act.
3. Any other cause that in the opinion of this Corporation necessitates the suspension of trading.
If trading of beneficiary securities or asset-backed securities is suspended due to any event enumerated in the preceding paragraph, [the trustee institution or special purpose company] may, upon extinction of the given cause and in the absence of any other cause under the preceding paragraph, submit relevant supporting documents to apply for reinstatement of trading. This Corporation may publicly announce the reinstatement of trading after obtaining the approval of the Competent Authority under Article 147 of the Securities and Exchange Act.
Where any of the following events occurs with respect to the trustee institution or special purpose company, this Corporation may delist its beneficiary securities or asset based securities after obtaining approval of the Competent Authority:
1. The special purpose trust deed is terminated or the date of expiry of the special purpose company is reached.
2. The trustee institution or special purpose company is sanctioned by the competent authority for the target industry under Article 106 of the Financial Assets Securitization Act.
3. The special purpose company shall be dissolved because of any of the events set forth in Article 96 of the Financial Assets Securitization Act.
4. Trading is suspended under paragraph 2 of this Article, and corrections have not been made after six months.
5. Any other cause that in the opinion of this Corporation necessitates delisting. |
| Article 50-7 | This Corporation may publicly announce the delisting of listed REIT beneficiary securities or REAT beneficiary securities upon the maturity date thereof.
Where any of the following events occurs with respect to the real estate securitization trustee institution, this Corporation may report to the Competent Authority for approval to suspend trading of its REIT beneficiary securities or REAT beneficiary securities:
1. Failure to produce, and report and publicly announce, relevant forms, statements, or account books in accordance with Articles 26, 27, and 36 of the Real Estate Securitization Act.
2. A change in the REIT plain or REAT plan, where there is a likelihood of material impact on beneficiary rights or interests.
3. An event under subparagraphs 1 to 3 of paragraph 1 of Article 6 of the Regulations Governing the Offering or Private Placement of Real Estate Investment Trust or Real Estate Asset Trust Beneficiary Securities by Trustee Institutions, where corrections are not made by the deadline under subparagraph 4 of the same article and paragraph.
4. Any other cause that in the opinion of this Corporation necessitates the suspension of trading of the securities.
If trading of a real estate securitization trustee institution's REIT beneficiary securities or REAT beneficiary securities is suspended due to any event enumerated in the preceding paragraph, [the trustee institution] may, upon extinction of the given cause and in the absence of any other cause under the preceding paragraph, submit relevant supporting documents to apply for reinstatement of trading. This Corporation may publicly announce the reinstatement of trading after obtaining the approval of the Competent Authority under Article 147 of the Securities and Exchange Act.
Where any of the following events occurs with respect to the real estate securitization trustee institution, this Corporation may delist its REIT beneficiary securities or REAT beneficiary securities after obtaining approval of the Competent Authority:
1. The duration expires; or the fund is turned into an open-end fund by a resolution of the beneficiaries meeting and approval of the Competent Authority, or under the REIT contract.
2. The REIT contract or REAT contract is terminated.
3. The competent authority for the target industry orders it to transfer the trust property to a new trustee institution under Article 55 of the Real Estate Securitization Act.
4. Trading is suspended under paragraph 2 of this Article, and corrections have not been made after six months.
5. Any other cause that in the opinion of this Corporation necessitates delisting of its REIT beneficiary securities or REAT beneficiary securities. |
| Article 51 | Upon a merger between listed companies or between a listed company and an OTC company, if the surviving company remains a listed company, the securities of the non-surviving company shall be delisted. If by reason of the merger, the surviving company issues new shares or certificates of entitlement to new shares of the same class of stocks that are already listed, listing of the shares may commence from the record date of the merger; provided, trading of the securities of the non-surviving company shall be suspended eight trading days before the record date of the merger (and non-inclusive of that date), and a delisting application shall be completed and filed with this Corporation, annexing the relevant documents, at least 13 trading days before the record date of the merger (and non-inclusive of that date).
Where a listed company merges with an unlisted or non-OTC company by using as consideration an follow-on issue (whether by public offering and issuance or private placement) of shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger remains a listed company, except in the case of a securities, financial, or insurance company with special approval from the authority in charge of the industry concerned, all the following conditions shall be met by the unlisted or non-OTC company:
1. The financial data of the unlisted company or non-OTC company that was merged and the consolidated financial data of the two merged companies satisfy the profitability requirements of listed companies enumerated in Article 4 of the Rules Governing the Review of Securities Listings; provided, the said provision shall not apply where the net worth per share of the surviving company, both in the most recent financial year and on the most recent pro-forma financial report, is higher than the net worth per share of the original listed company. Where the above proviso is satisfied, if the listed company or the merged unlisted (non-OTC) company, from the date next following the date of the balance sheet in the most recent financial report to the date the application is filed with this Corporation, undergoes any material change in capital affecting the net worth per share, such as a capital increase or reduction or distribution of dividends, the net worth per share of the surviving company shall be higher than
the net worth per share of the original listed company, and the certifying CPA shall submit a review opinion following the imputed adjustment.
2. The unlisted company or non-OTC company being merged is free of the circumstances specified in subparagraphs 1, 3, 4, 6, 8, and 11 of paragraph 1 of Article 9 of the Rules Governing the Review of Securities Listings.
3. The most recent annual financial reports of the unlisted company or non-OTC company being merged have been audited by a CPA approved by the Competent Authority to audit publicly listed companies, and the auditor issues an unqualified opinion.
4. Where the merged unlisted/non-OTC company is a foreign company meeting the conditions set forth in Article 21 of the Business Mergers and Acquisitions Act, the listed company shall submit the following documents for reference. Provided, that subparagraphs 1 and 2 and paragraph 4 shall not apply where the foreign company complies with Article 27, paragraph 1, subparagraphs 2 and 4 of this Corporation's Rules Governing the Review of Securities Listings:
(1) documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
(2) financial report for the unlisted or non-OTC company being merged, and an audit report with an unqualified opinion issued by the certifying CPA.
(3) an opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
(4) a written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the listed company and the foreign company, issued by a CPA other than the original certifying CPA who is approved by the Competent Authority to perform financial certification for public companies.
For the new shares issued as a result of the merger referred to in the preceding two paragraphs, if such shares are of a different class from the listed securities, then such shares shall conform to paragraph 2 of Article 14 of the Rules Governing the Review of Securities Listings.
Where a listed company undertakes a merger pursuant to paragraph 2, and the additional common shares or overseas depositary receipts issued (whether by public offering or private placement) due to the merger will account for 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed companies, any directors, supervisors, and shareholders holding more than 10 percent of the issued shares of the company being merged shall place in centralized custody in compliance with all the below-listed provisions any additional common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued due to the merger that they hold, with the exception that a listed company that merges into itself a subordinate company in which it holds 50 percent or more of the issued shares may be exempted from the provisions regarding the ratio of total shares that shall be placed in centralized custody; provided, this requirement may be waived where
a listed company merges with a subordinate company of which it holds 90 percent or more of the outstanding shares in accordance with Article 316-2 of the Company Act:
1. Such persons obtaining common shares publicly offered and issued due to the merger shall place into centralized custody with the central securities depository approved for establishment by the competent authority all of the common shares publicly offered and issued due to the merger that they hold, and in aggregate not less than the number of shares calculated under paragraph 2 of Article 10 of this Corporation's Rules Governing the Review of Securities Listings for the total amount of common shares offered and issued as a result of the merger. In case of shortage, negotiation shall be made with other shareholders holding common shares publicly offered and issued due to the merger to make up the shortfall. Of the shares placed in central custody, one-half may be withdrawn after a full six months has elapsed from the date that listed trading thereof commences. The remaining portion of shares may be withdrawn in full only after one full year has elapsed from the date that listed trading commences.
2. Such persons obtaining privately placed common shares due to the merger shall issue a written undertaking not to transfer the shares within a certain period. The written undertaking shall furthermore state: “The Taiwan Stock Exchange Corporation may from time to time send personnel to carry out spot checks to ascertain whether I have faithfully abided by my undertaking not to transfer the common shares I have obtained through private placement due to the merger. After expiration of the period in which I have undertaken restricted transfer, for those shares I obtained due to the merger that are still classified as privately placed common shares, I shall continue to abide by the restrictions on transfer under Article 43-8 of the Securities and Exchange Act.” The total ratio of privately placed common shares subject to the undertaking regarding restriction of transfer referred to above and the period of the restriction of transfer shall accord with the provisions of the preceding subparagraph.
3. Such persons obtaining overseas depositary receipts issued for capital increase due to merger shall provide a written undertaking that for a certain period of time they shall not redeem or transfer the overseas depositary receipts held by them, and shall incorporate provisions restricting redemption into the contract signed and entered into with the custodian institution. The total ratio of global depositary receipts subject to restriction of redemption or transfer and the period of the restriction shall accord with the provisions of subparagraph 1.
Where a listed company will undergo, as a non-surviving company, a statutory merger with an unlisted company, or will undergo, as a non-surviving company, a statutory consolidation with any other company, the listed company shall submit an application, with relevant documentation, to this Corporation no later than 30 business days before the record date of the merger or consolidation. After this Corporation has filed for and received approval from the Competent Authority, trading of the listed company's securities shall be suspended beginning two business days prior to (and non-inclusive of) the book closure date, and its securities shall be delisted from the record date of the merger.
Where a listed company, pursuant to the Business Mergers and Acquisitions Act, Company Act, or other laws or regulations, acquires shares, business, or assets of an unlisted/non-OTC company, with shares or securities that may be converted into or may be used to subscribe shares as consideration, if such transaction reaches any of the following standards, such unlisted/non-OTC company shall additionally comply with all of the conditions set out in paragraph 2, and that unlisted/non-OTC company and any director, supervisor, or shareholder holding 10 percent or more of the shares thereof who has holdings of the new common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued by the listed company for such capital increase shall also deposit the share certificates into central custody in accordance with the provisions of paragraph 4:
1. If the book entry amount of the shares or securities that may be converted into or may be used to subscribe shares that are obtained by the unlisted/non-OTC company as a result of being acquired reaches 70 percent or more of its book net asset value, or the shares or securities that may be converted into or may be used to subscribe shares that are paid by the listed company for the acquisition reach 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed companies.
2. If the total number of shares acquired from shareholders of the unlisted/non-OTC company reaches 70 percent or more of its issued shares.
3. If the operating revenue or operating profit or book net asset value of a division being spun off from the unlisted/non-OTC company to the listed company reaches 70 percent or more of its entire operating revenue or operating profit or book net asset value, or reaches 10 percent or more of the entire operating revenue or operating profit or book net asset value on the listed company's pro forma financial statements.
When a listed company files an application under paragraph 1, paragraph 2, or the preceding paragraph, it shall fill in the application form and submit relevant documents (attachments). After this Corporation has examined and approved the application, a written opinion approving the merger (or acquisition) shall be sent to the company. The said written opinion shall state "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of merger (or acquisition). If the registration filing fails to become effective, this approval letter shall become void."
If an unlisted/non-OTC company that is acquired or assigns business operations as set out in paragraph 6 is a foreign company, the provisions of paragraph 2, subparagraph 4 shall apply mutatis mutandis. |
| Article 51-1 | Where a single listed company is converted into a financial holding company pursuant to Article 29 of the Financial Holding Company Act, and after this Corporation has reported to and obtained approval from the Competent Authority, the securities of the financial holding company shall be listed for trading from the record date of the share conversion, and the securities of the originally listed company shall be delisted on the same date.
The provisions of the preceding paragraph shall also apply in cases where multiple listed or OTC companies, at least one of which is a listed company, are converted into a single financial holding company. However, if an unlisted/non-OTC company(ies) are converted together with other listed or OTC companies, such unlisted/non-OTC company(ies) shall conform to the following conditions:
1. It shall be free of any of the circumstances specified in subparagraphs 1, 3, 4, 6, 8, or 11 of paragraph 1 of Article 9 of this Corporation's Rules Governing the Review of Securities Listings.
2. Its most financial report for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to audit public companies and have received an unqualified opinion from such CPA.
Where circumstances in paragraph 1 or paragraph 2 apply to a listed company(ies), the listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the financial holding company shall carry out with this Corporation the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, after this Corporation has obtained approval from the Competent Authority, the trading of such company's(ies') original listed securities shall be suspended eight trading days prior to (and non-inclusive of) the record date of the share conversion:
1. An Application for Listing of Shares of a Listed Company Converted into a Financial Holding Company shall be completed and filed, along with all specified attachments, with this Corporation at least fifteen trading days prior to (and non-inclusive of) the record date of the share conversion.
2. A Declaration of Suspension of Share Transfer Registrations shall be completed and filed by (inclusive of) the application date in the preceding subparagraph. This Corporation shall directly make an announcement to the market of suspension of amendments to entries in the shareholder rosters of the listed companies participating in the conversion into a financial holding company.
Where a financial holding company is established by means of assignment of operations by a listed company pursuant to Article 24 of the Financial Holding Company Act and the financial holding company holds 100 percent of the shares of the assigned company, an application for amendments to listed securities, accompanied by relevant documentation, shall be filed with this Corporation pursuant to Article 45; however, the provisions of subparagraph 5 of paragraph 1 of Article 50-1 shall not apply to the change in business scope.
Where shares of a single or multiple company(ies) limited by shares are converted into shares of a listed financial holding company pursuant to Article 29 of the Financial Holding Company Act, the financial holding company shall complete the relevant documentation and submit an application to this Corporation according to the procedures in paragraph 3 hereof. After this Corporation has obtained approval from the Competent Authority, the listed securities shall be delisted on the record date of the share conversion and the shares of the financial holding company into which they are converted shall be listed on the same day; provided, any unlisted/non-OTC company(ies) limited by shares participating in the share conversion shall conform to the requirements set forth in subparagraphs 1 and 2 of paragraph 2
Where circumstances set forth in paragraphs 1, 2, or 5 apply to a company limited by shares participating in the share conversion and the company was a listed (or OTC) company before conversion, shares that prior to conversion were already duly placed in centralized custody by the company's directors, supervisors, and major shareholders at the time of initial listing (or OTC listing) shall remain in centralized custody after the conversion until the expiry of the custody period. If a converted company was an unlisted/non-OTC company prior to conversion and it is anticipated that the company's converted shares will account for 10 percent or more of the financial holding company's issued shares and shares anticipated to be issued by it, the centralized custody of shares of the directors, supervisors, and major shareholders of such unlisted/non-OTC company shall be handled in accordance with Article 51, paragraph 4, subparagraph 1. However, this restriction shall not apply where the circumstances set forth in
paragraph 2 of Article 31 of the Financial Holding Company Act exist as a result of the share conversion.
A financial holding company established after conversion and meeting the requirements of Article 13 of this Corporation's Criteria Governing Information to be Published in Prospectuses for Initial Applications for Securities Listing, or a financial holding company converted from a single listed company or multiple listed or OTC companies, may prepare a simplified prospectus. |
| Article 51-2 | If a listed company that has carried out a split of one or more departments capable of operating independently pursuant to applicable law wishes to continue listed trading of its listed securities, or if the existing company or newly incorporated company that acquired the business of the aforesaid department(s) after the split (the "assignee company of the split") wishes to list its securities for trading, the company shall without exception comply with the provisions of this Article, and shall carry out applicable procedures for a company split and for listing.
The provisions of the preceding paragraph shall also apply where a single listed company splits simultaneously into multiple assignee companies of the split, or multiple listed companies split simultaneously into a single assignee company of the split.
A listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies shall apply to this Corporation at least 30 business days before the record date of the split. Where this Corporation has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them to be free of all of the [negative] criteria set out in the subparagraphs below, the company may continue to be listed:
1. The pro-forma operating income as shown on the pro-forma financial statements for each of the most recent two accounting years excluding the financial data for the split department(s) and audited by a CPA, is down by 50 percent or more from the operating income shown on the financial statements for the same period.
2. The pro-forma operating loss as shown on the pro-forma financial statements for each of the most recent two accounting years excluding financial data for the split department(s) and audited by a CPA, is greater than the operating loss shown on the financial statements for the same period.
Where a listed company establishes an investment holding company for reasons of carrying out a split under paragraph 1 or 2, the listed company that undergoes the split may continue to be listed if it complies with Article 4, paragraph 1, subparagraphs 1, 2, 4, 5, 7, 8, and 9 of this Corporation's Regulations Governing the Review of Stock Listing Applications by Investment Holding Companies; the provisions of subparagraphs 1 and 2 of the preceding paragraph shall not apply.
When a listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies files an application for continuation of listing, it shall submit an opinion of an independent expert on the share exchange ratio for the split, the reasonableness of the acquisition price, and the effect on the shareholders’ equity of the listed company.
Except under any of the circumstances listed below, a listed company to which any circumstance set forth in paragraph 1 or 2 applies shall file to carry out the procedures for the split and the capital reduction and issuance of new securities certificates as a consolidated case. The trading of its listed securities shall be suspended 10 trading days prior to the record date of the split and such suspension shall continue until 30 trading days (or 15 trading days if the securities are not issued in physical form) after the record date of the split (i.e. the record date of the capital reduction), during which period the company shall have completed the procedures for issuing the new securities certificates in accordance with Article 45 and points 1, 2, and 3 of the Procedures for the Exchange of Securities Certificates by Listed Companies :
1. Where a listed company splits but does not carry out a capital reduction, and issue of replacement shares is unnecessary.
2. Where the split of the listed company does not involve subsequent confirmation of the shareholder roster, or there is no difference in shareholder equity before and after the record date of the suspension of share transfer, and suspension of margin purchase and short sale or compulsory covering of short sale positions are unnecessary.
Where a listed company carries out capital reduction due to a split referred to in paragraph 1 or 2, and the newly incorporated company that acquires its business issues new shares for which the acquired business is the consideration, and issues them in full to the original shareholders of the split company on a pro-rata basis, approval may be given for listing and trading of the securities of the newly incorporated assignee company if it complies with all of the conditions listed below; provided, simultaneous application may not be made of related conditions such as those concerning lesser capital amount or profitability in Article 5, Article 6, or Article 6-1 of this Corporation's Rules Governing the Review of Securities Listings:
1. Capitalization: the share capital on the pro forma financial statement for the most recent period at the time of application complies with the provisions of Article 4, paragraph 1, subparagraph 2 of this Corporation's Rules Governing the Review of Securities Listings.
2. Profitability: complies with the provisions of Article 4, paragraph 1, subparagraph 3 of this Corporation's Rules Governing the Review of Securities Listings, according to the pro-forma financial statement.
3. No circumstance in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, or 11 of this Corporation's Rules Governing the Review of Securities Listings applies.
4. The pro forma financial statements for the most recent fiscal year shall be audited and certified by a CPA approved by the Competent Authority to perform financial certification for public companies, and an audit report containing an unqualified opinion issued.
5. Centralized custody of shares and pre-listing public sale shall be carried out pursuant to Article 10 or Article 10-1, and Article 11, of this Corporation's Rules Governing the Review of Securities Listings.
If in a split referred to in the preceding paragraph the split company does not carry out capital reduction or carries out only a partial reduction, the newly formed assignee company of the split, when applying to this Corporation for listing, shall comply with all of the below-listed conditions, in addition to complying with the requirements of the preceding paragraph:
1. Incorporation period: the time of incorporation of the split department, as shown in the financial data of the split company, shall comply with Article 4, paragraph 1, subparagraph 1 of this Corporation's Rules Governing the Review of Securities Listings.
2. Shareholding dispersion: shall comply with Article 4, paragraph 1, subparagraph 4 of this Corporation's Rules Governing the Review of Securities Listings.
3. There shall exist none of the circumstances set forth in Articles 18 or 19 of the Rules Governing the Review of Securities Listings under which listing is undesirable.
If the assignee company of a split is an existing company and the operating revenue or operating income of a single listed company of which it is the assignee accounts for 50 percent or more of the total operating revenue or operating income on its pro forma consolidated financial statements, and accounts for 10 percent or more of the overall operating revenue or discernible assets of the split company, it shall comply with all the subparagraphs of paragraphs 7 and 8, but its pro forma financial statements shall be prepared as consolidated statements with those of the single or multiple independently operating departments of the listed company of which it is the assignee.
If more than one listed company splits and makes an assignment to a single assignee on the same record date, the calculation of the incorporation period under paragraph 8 or 9 shall be based upon the listed company that assigned the business of which the operating revenue or operating income accounts for 50 percent or more of the total operating revenue of the assignee company and accounts for 10 percent or more of the overall operating revenue or discernible assets of such listed company. If more than one independently operating department was split, that with the longer period of incorporation may be selected as the basis for calculation.
In a split referred to in paragraphs 7, 8, or 9, where the period of listing, or combined period of listing and OTC-listing, of the securities of the split listed company is no less than three years and the assignee company of the split submits an application accompanied by the relevant documents to this Corporation in accordance with prescribed procedures within one year of the day of completion of amendment registration of the split, all of the below-listed provisions shall be complied with:
1. A newly formed assignee company of a split according to paragraph 7 whose listing application has passed review for completeness of the submitted application documents and passed review by the management department for compliance with regulations may apply to the Competent Authority for approval and announcement of listing.
2. For a newly formed assignee company of a split or existing assignee company of a split according to paragraph 8 or 9, the procedures for reviewing the listing application shall be governed by this Corporation's procedures for reviewing initial listing application cases.
Where a listing application by an assignee company of a split is rejected by this Corporation, the applicant company may, within 20 days from the issuance date of this Corporation's rejection notice letter, submit relevant materials along with a request to this Corporation for reconsideration on the basis that the grounds for the original rejection were erroneous. This Corporation shall follow the provisions of the below subparagraphs after accepting the applicant's reconsideration application for processing:
1. For a request for reconsideration of a listing application under paragraph 7, the managing department shall review whether the grounds for the original rejection decision were erroneous and whether any other conditions have subsequently arisen rendering the applicant unsuitable for listing.
2. A request for reconsideration of a listing application under paragraph 8 or 9 shall be governed by subparagraphs 3 to 7 of Article 27 of this Corporation's Procedures for Review of Securities Listings.
If an assignee company of a split is unable to apply to this Corporation for listing in accordance with prescribed procedures, annexing relevant documents, within one year of the day of completion of amendment registration of the split, it may separately do so in compliance with the relevant provisions of this Corporation's Rules Governing the Review of Securities Listings, but the provisions of paragraph 8, subparagraph 1, paragraph 9, or paragraph 10 may respectively be applied mutatis mutandis to the calculation of the incorporation period thereof.
Within two years of the date of listed (or OTC) trading of securities of an assignee company of a split of a listed company pursuant to paragraphs 7, 8, or 9 herein, or to Article 16-3 of the ROC Over-the-Counter Securities Exchange Rules Governing Securities Trading on Over-the-Counter Markets, any further assignee company of a split of such listed company may not apply for listing of its securities pursuant to this article.
Where an OTC company carries out a split, and the assignee company of the split applies for listing, the applicable provisions of this Corporation's Regulations for the Review of Securities Listings and Procedures for the Review of Securities Listings shall be complied with.
If a listed company, after carrying out a split, wishes to apply for termination of listed trading of its securities, or such company is extinguished due to the split of its entire operations or assets, this Corporation shall terminate the listing of its listed securities after applying and obtaining approval from the Competent Authority pursuant to Article 144 of the Securities and Exchange Act. |
| Article 51-3 | Where a single listed company, pursuant to Article 31 of the Business Mergers and Acquisitions Act, converts its shares to another newly established or already-listed existing company, and becomes a 100 percent held subsidiary of such newly established or already-listed existing company, after the Competent Authority has given approval, the securities of the newly established or already-listed existing company shall be listed after completion of applicable listing procedures, and the listing of the securities of the original listed company shall be terminated on the record date of the share conversion.
The provisions of the preceding paragraph shall also apply in cases where a single or multiple company(ies) limited by shares convert shares into a newly established or already-listed existing company; provided that if an unlisted (non-OTC) company(ies) converts shares together therewith, the operating revenue or operating income from said unlisted (non-OTC) company(ies) shall not exceed 50 percent of the total operating revenue or operating income on the pro-forma post-conversion consolidated financial statements of said newly established or already-listed existing company for the most recent fiscal year, and said unlisted (non-OTC) company(ies) limited by shares shall conform to the provisions of all the following subparagraphs:
1. Profitability shall conform to subparagraph 3 of paragraph 1 of Article 4 of this Corporation's Rules Governing the Review of Securities Listings.
2. There shall not exist any circumstance specified in subparagraphs 1, 3, 4, 6, 8, or 11 of paragraph 1 of Article 9 of this Corporation's Rules Governing the Review of Securities Listing.
3. The financial report for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to audit public companies and issued an unqualified opinion from such CPA.
If any unlisted (non-OTC) company included in a conversion as set out in the preceding paragraph is a foreign company, the listed company shall submit the following documents for reference. Provided, that subparagraphs 1 and 2 of the preceding paragraph, and paragraph 7, shall not apply where the foreign company complies with Article 27, paragraph 1, subparagraphs 2 and 4 of this Corporation's Rules Governing the Review of Securities Listings:
(1) documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
(2) the submitted financial report, and an audit report with an unqualified opinion issued by the certifying CPA.
(3) an opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
(4) a written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the listed company and the foreign company, issued by a CPA other than the original certifying CPA who is approved by the Competent Authority to perform financial certification for public companies.
Where an investment holding company is established by means of share conversion in accordance with paragraph 1 or paragraph 2, such investment holding company shall comply with the provisions of subparagraphs 1, 2, 4, 5, 7, 8, and 9 of paragraph 1 of Article 4 of this Corporation's Rules Governing the Review of Listing Applications by Investment Holding Companies before it may be listed.
Where circumstances in paragraph 1 or 2 apply to a company limited by shares, the listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the newly established or already-listed existing company shall carry out with this Corporation the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, where this Corporation has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them in compliance with regulations, after approval has been applied for and obtained from the Competent Authority, the trading of such company's(ies') originally listed securities shall be suspended two trading days prior to (and non-inclusive of) the book closure date; provided, where shares of a single or multiple listed or OTC companies are converted into a newly established company to form an investment holding
company, the securities of the investment holding company may be listed and traded from the record date of the share conversion, but trading of the originally listed securities shall be suspended beginning eight days before the record date of the share conversion (counting non-inclusively of that date).
1. An Application for Listing of Shares of a Newly Established Company or Listed Company Receiving Assignment of Shares shall be completed and filed, along with all specified attachments, with this Corporation no later than 30 trading days prior to (and non-inclusive of) the record date of the share conversion.
2. An Application for Suspension of Share Transfers shall be completed and this Corporation shall directly make an announcement to the market of suspension of amendments to entries in the shareholder rosters of the listed company(ies) among the companies participating in the share conversion.
Where a listed company, or that company and another company(ies), converts its shares into shares of an unlisted existing company pursuant to Article 31 of the Business Mergers and Acquisitions Act and become that existing company's wholly-owned subsidiary, the listed company shall file an application with relevant documentation to this Corporation no later than 30 business days before the share conversion record date; trading of its securities shall be suspended beginning two business days before (but non-inclusive of) the book closure date, and shall be delisted beginning from the record date of the share conversion.
If the pro forma post-share-conversion consolidated financial statement for the most recent year of the unlisted existing company that receives a transfer of shares through a share conversion under the preceding paragraph shows that more than 50 percent of its total operating revenue or operating income is derived from the listed company that participated in the share conversion, and the unlisted existing company meets all of the requirements in the subparagraphs of paragraph 2, then after this Corporation has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them in compliance with regulations, and after approval has been applied for and obtained from the Competent Authority, the unlisted company's securities may be listed for trading. However, if shares are simultaneously also being converted from a non-exchange-listed/non-OTC-listed company, such company shall also meet the requirements under paragraph 2.
Where pursuant to Article 27 of the Business Merger and Acquisition Act a listed company undergoes general assignment to an investment holding company incorporated under Article 185, paragraph 1, subparagraph 2 of the Company Act, and such investment holding company complies with subparagraphs 1, 2, 4, 5, 7, 8, and 9 of paragraph 1 of Article 4 of this Corporation's Regulations Governing the Review of Stock Listing Applications by Investment Holding Companies, and it holds 100 percent of the assignee company's shares, it shall apply to this Corporation for amendment of content of listed securities pursuant to Article 45. However, the provisions of subparagraph 5 of paragraph 1 of Article 50-1 shall not apply to any change in business scope.
Under the circumstances set forth in paragraphs 1, 2, or 7, where before the conversion the company is a listed (or OTC-listed) company, those shares already duly placed in centralized custody by directors, supervisors, and major shareholders thereof at the time of initial listing (or OTC listing) shall remain in centralized custody after the conversion until the expiration of the custody period; if before the conversion the company was an unlisted (non-OTC) company, and the total number of shares anticipated to be converted will account for 10 percent or more of the shares already issued and anticipated to be issued by the company that is the assignee of the shares, the centralized custody of shares held by the directors, supervisors, and major shareholders of such unlisted (non-OTC) company in the company that is the assignee of the shares shall be handled in accordance with Article 51, paragraph 4, subparagraph 1. In addition, a company that applies for exchange listing pursuant to paragraph 7 shall
place shares in centralized custody pursuant to Article 10 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings before listing securities.
When a company carries out a case under paragraphs 1, 2, or 7, after this Corporation has examined and approved the application, a written opinion approving the share conversion shall be sent to the company, stating "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of share conversion. If the registration fails to become effective, this approval letter shall become void." Provided, where shares of a single or multiple listed or OTC companies are converted into a newly established company to form an investment holding company, the case shall be submitted directly to the Competent Authority after examination and approval by this Corporation. |
| Article 51-4 | When a listed company merges with an unlisted company and the listed company is the non-surviving company, the surviving unlisted company, within one year after the merger record date, may apply to this Corporation for listing if it meets the requirements set out in all the following subparagraphs:
1. At the time of the application for merger, at least 80 percent of its operating revenue and identifiable assets as stated on its latest-period financial report audited or reviewed by a CPA is derived from business items or assets originally from the merged listed company, and its liabilities may not exceed two-thirds of its total assets.
2. Capitalization: complies with the provisions of Article 4, paragraph 1, subparagraph 2 of this Corporation's Rules Governing the Review of Securities Listings.
3. Profitability: after imputation based on the surviving unlisted company's latest-period financial data, complies with the provisions of Article 4, paragraph 1, subparagraph 3 of this Corporation's Rules Governing the Review of Securities Listings. However, this requirement does not apply if the post-merger surviving company's net worth per share on the latest-period financial report audited or reviewed by a CPA is greater than the non-surviving listed company's net worth per share on its financial report audited or reviewed by a CPA for the latest period before the merger record date.
4. Shareholding dispersion: complies with Article 4, paragraph 1, subparagraph 4 of this Corporation's Rules Governing Review of Securities Listings.
5. The non-surviving listed company was free of any and all circumstances set out in Articles 49, 50, and 50-1 before the merger record date, and its net worth per share was stated at not less than NT$10 on the financial reports audited or reviewed by a CPA for both the most recent period and most recent fiscal year before the merger record date.
6. Financial reports: a CPA shall have audited or reviewed the latest-period financial report, and issued a signed audit or review report containing an unqualified opinion; or, if an audit report containing other than an unqualified opinion is issued, it does not affect the fair presentation of the financial report.
7. Complies with Articles 18 and 19 of this Corporation's Rules Governing Review of Securities Listings and is free of any of the circumstances set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 11 of those Rules.
Once a listing application case under the preceding paragraph has been inspected for completeness of the application documents and reviewed for compliance with regulations, it may be submitted to the Competent Authority for approval, upon which its listing shall be publicly announced. Before its securities are listed, the surviving unlisted company shall deposit stock in central custody and conduct a pre-listing public offering in accordance with Articles 10 and 11 of this Corporation's Rules Governing Review of Securities Listings. |
| Article 52 | Unless there are provisions to the contrary, 40 days prior to the delisting of securities as approved by the Competent Authority, this Corporation shall publicly announce such facts and inform the over-the-counter trading exchanges and such company that the securities may by applied for as managed stocks.
This Corporation shall announce the delisting of securities in accordance with Article 50-2, Article 50-6, Article 50-7, Article 51, paragraph 1, or Article 51-1 of these Rules five days prior to such event.
Upon notification by this Corporation that its securities are to be delisted, a listed company or SITE shall report such notification on the Internet information reporting system designated by this Corporation within two days, and send the downloaded information to this Corporation for its recordation. However, where the maturity period of bonds has been reached or upon other special circumstances, with approval of the Competent Authority, the preceding restriction on public announcements shall not be applicable.
The preceding paragraph shall apply mutatis mutandis to notification by this Corporation to a trustee institution that its beneficiary securities have been delisted, notification by this Corporation to a special purpose company that its asset-backed securities have been delisted, notification by this Corporation to a real estate securitization trustee institution that its REIT beneficiary securities or REAT beneficiary securities [have been delisted], notification by this Corporation to a foreign company and its designated depositary institution that its Taiwan Depositary Receipt has been delisted, or notification to an issuer that its call (put) warrant has been delisted. |
| Article 52-1 | Upon approval by the Competent Authority for suspension of trading of listed securities, the listed company may not apply for the return of securities listing fee that it has already paid. Upon approval for delisting, a pro rata share of the listing fee shall be returned based on the months that it has been listed (partial months counted as whole months).
The preceding paragraph shall apply mutatis mutandis to notification by this Corporation to a trustee institution that its beneficiary securities have been delisted, notification by this Corporation to a special purpose company that its asset-backed securities have been delisted, notification by this Corporation to a real estate securitization trustee institution that its REIT beneficiary securities or REAT beneficiary securities have been delisted, notification by this Corporation to a foreign company and its designated depositary institution that its Taiwan Depositary Receipt has been delisted, or notification to an issuer that its call (put) warrant has been delisted. |
| Article 53 | In accordance with regulations or upon valid reasons, this Corporation may inform a listed company to provide information related to the listed securities within a limited time.
Any financial or business reports or information filed by a listed company may be publicly announced or displayed, in original or abstract form, by this Corporation for viewing by the public.
The listed company shall be responsible for any false or untrue statements made in the preceding reports or information. |
CHAPTER V TRADING ON THE EXCHNAGE
|
| Article 54 | The trading of securities on the Exchange, unless specified by other laws and regulations, shall be made on a cash to physical delivery settlement basis. |
| Article 55 | The trading of securities on the Exchange shall be conducted by automated computer trading. Where it is deemed necessary by this Corporation, other trading method may be employed.
The regulations governing the trading of bonds, beneficiary certificates, depositary receipts, call (put) warrants, convertible bonds, certificates carrying rights to convert bonds into shares, corporate bonds, securities with warrants, and foreign stocks shall be separately prescribed by this Corporation.
If beneficiary securities or asset-backed securities issued under the Financial Asset Securitization Act, or REAT beneficiary securities issued under the Real Estate Securitization Act, are debt-type securities, the method of trading of such securities listed on this Corporation's market shall be subject, mutatis mutandis, to the regulations governing trading of corporate bonds under the preceding paragraph. |
| Article 56 | Unless otherwise permitted by the proviso of Article 150 of the Securities and Exchange Act, securities publicly announced for listing or trading by this Corporation shall be traded on the Exchange. |
| Article 57 | The trading of securities over the Exchange shall be divided into the following three categories:
1. Normal settlement.
2. Trade date settlement.
3. Designated date settlement.
The settlement of normal settlement trades shall take place two business days after the trade date.
The settlement of trade date settlement trades shall be effected by written agreement of both parties, and settlement shall take place on the trade date.
The rules regarding the settlement of designated date settlement trades shall be prescribed by this Corporation and reported to and approved by the Competent Authority before implementation. |
| Article 57-1 | The performance of obligations relating to call (put) warrants shall be handled through securities firms that have executed a market usage contract with this Corporation; provided that where the holder or the issuer has entered into the market usage contract with this Corporation, they may process matters on their own.
Upon receiving a commission referred to in the preceding paragraph, or when requesting performance of obligation on its own behalf, a securities firm shall confirm the related details of the performance of obligation on the next business day, and complete the transfer of the money/certificate before 10 a.m. of the second next business day.
The processing of the performance of obligations relating to call (put) warrants, confirmation of related details of the performance of obligation, and the process of transfer of money/certificate shall be performed by this Corporation and the central securities depository. |
| Article 58 | The validity of trading orders relating to the automated computer trading system shall be limited to the day on which the order is placed.
Unless otherwise prescribed, trading orders for the automated computer trading system may be keyed-in 30 minutes prior to the opening of the market trading by the participating securities brokers or dealers. Such orders shall include the code of the securities firm, serial number of the brokerage order form (or serial number of the proprietary trading order), type of order form (margin purchase, short sale, securities lending, central depositary, self-custody), account number of the principal (or of the dealer), code of the securities, type of trade (normal, block, odd-lot), price, volume, and sale/purchase. Upon acceptance by the computer of this Corporation, a trade confirmation slip shall be printed. When a matching trade is made, an execution report will be printed on the printer of the participating securities firms. The items printed on the trading order confirmation slip or the execution report may be adjusted by this Corporation depending on actual need.
The serial number of the brokerage order form to be keyed-in by the participating securities brokers as referred to in the preceding paragraph shall be sequentially assigned in the order that the orders were received. The serial number of proprietary trading orders by securities dealers shall be sequentially numbered in the order that the orders were placed.
The price of the trading orders shall be within the daily fluctuation limit placed in accordance with paragraphs 1 and 2 of Article 63.
This Corporation shall disclose, on a real-time basis during trading hours, execution prices and volumes, and the order prices and volumes of the highest unexecuted buy orders and lowest unexecuted sell orders.
Application of securities firms for changes to the trading orders, except in the case of orders reducing the volume to be traded, shall be accomplished by first canceling the original trading order, and then placing new trading orders. |
| Article 58-1 | (deleted) |
| Article 58-2 | In principle, the priority for satisfying trading orders are based on price priority and time priority, and the priority for satisfying trading orders shall be based on the following principles:
1. Price priority principle: higher-priced buy orders shall have priority over lower-priced buy orders. Lower-priced sell orders shall have priority over higher-priced sell orders. Where orders are placed at the same price, priority shall be based on time priority principle.
2. Time priority principle: For orders placed prior to the opening of the market, priority shall be determined randomly based on computer arrangement. For orders placed after the opening of the market, priority shall be made on the order in which the orders were placed. |
| Article 58-3 | The competitive auction for trading orders shall without exception be conducted by call auction. Trade prices shall be determined based on the following principles:
1. Satisfying the maximum trade volume such that buy orders with prices higher than the determined price and sell orders with prices lower than the determined price shall be all satisfied.
2. Where there are buy and sell orders with prices equal to the determined price, at least one side shall be all satisfied.
3. Where two or more prices conform to the principles set forth in the preceding two subparagraphs, the price closest to the most recent traded price in the current session shall be used. If there is not yet any traded price in the current session, the price closest to the auction reference price at market opening of the current session.
The closing price of the preceding day is taken as the "auction reference price at market opening of the current session." If there is no closing price for the preceding day, the closing price of the most recent day shall be used; except, if there is no closing price for the preceding day and, for two continuous days, the highest buy order or lowest sell order price has reached the ceiling price or floor price as provided in Article 63, paragraph 2, then such ceiling price or floor price shall be used. If it is an initial listing or the initial day of ex-right or ex-dividend trading, the reference price as set forth in Article 59 or Article 67 shall be used.
The opening price of a security is the price of the first matched trade for the current session. Trading orders entered prior to market opening (i.e. the commencement of trading hours) that are unexecuted shall continue to be matched in the order as originally randomly assigned by the computer. The closing price shall be the price of trades matched upon accumulation of all trading orders over a period of time prior to market closing (i.e. the close of trading hours). Where unexecuted, the closing price shall be the last traded price during the current session.
During the period from the first matched trade of a security during the current session until the period of time prior to market closing, if the execution price as test-calculated prior to each matching fluctuates beyond a certain range from the previous traded price, this Corporation shall immediately postpone matching of that security for a certain period of time, and continue to accept entries, cancellations, and changes of trading orders for that security. Matching will then proceed sequentially at the conclusion of the postponement period. However, this restriction shall not apply to newly listed common stocks during the period when no price fluctuation limit is imposed, or securities for which extended matching intervals have been implemented under rules or regulations of this Corporation, or securities for which the opening auction reference price is lower than a certain price.
The "period of time," "certain range," and "certain price" in the preceding two paragraphs shall be prescribed by this Corporation and publicly announced for implementation after approval and recordation by the Competent Authority.
In case of continuous auction, the determination of the execution price shall be based on the following principles:
1. Where there are announced buy and sell orders, the price satisfying the maximum volume of trades within the scope of the announced ranges.
2. Where only the buy price is announced, the price satisfying the maximum volume of trades within the range two fluctuation basis points higher than the announced buy price; where only the sell price is announced, the price satisfying the maximum volume of trades within the range two fluctuation basis points lower than the announced sell price.
3. Where the buy and sell prices are not announced, the price satisfying the maximum volume of trades within the range two fluctuation basis points higher or lower than the most recent execution price.
4. Where there are two or more prices that conform to the principles set forth in the preceding three subparagraphs, the price that shall be used shall be the most recent execution price or the most recent announced price.
Trading orders that were not satisfied via the opening price produced using the call auction process shall remain effective, and shall be randomly assigned a priority by the computer to continue in the continuous auction process. Where the opening price cannot be produced using the call auction process, an opening price produced using the continuous auction process may be used. |
| Article 58-4 | This Corporation shall stop accepting orders and trades one business day prior to the expiration of the call (put) warrant. |
| Article 59 | When determining the daily price fluctuation limits for competitive auction trading of an initial listing of securities, unless otherwise provided by law, reference shall be made to the public offering price before the listing date. Where the securities in the initial listing are already traded over-the-counter, reference shall be made to the final execution price on the latest trading day or the reference price on the latest trading day before the cessation of over-the-counter trading.
The daily price fluctuation limits for an initial listing of common shares converted from a listed company(ies) into a newly established company under Article 51-1 or Article 51-3 shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the common shares of the listed company whose converted common shares are anticipated to account for the greatest proportion of the anticipated issued common shares of the newly established company) by (the number of shares required for exchange of one new share). The daily fluctuation limits for securities other than common shares shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the listed security or OTC security anticipated to account for the highest proportion of those converted into the security) by (the number of shares [or trading units] required for exchange of one share [or one trading unit] of the new security).
The daily fluctuation limits on initial listings of new capital stock, certificates evidencing right to subscribe to new stocks, and certificate evidencing payment shall be determined with reference to the closing price of the original stock on the previous day minus the value difference on rights; provided where the difference on rights cannot be determined, the fluctuation limit shall be determined with reference to the closing price of the original stock on the previous day. |
| Article 59-1 | Where a listed company suspends trading of its listed securities under the provisions of Article 50, the fluctuation limit of such securities on the first day of resumed trading shall be determined with reference to the closing price of the final trading day prior to the suspension of trading. |
| Article 60 | The trading orders shall be given in a single trading unit or multiples thereof. The trading unit of stocks shall be 1,000 shares of 10 dollar par value stocks. The trading unit of government bonds and corporate bonds shall be bonds with par value of 100,000 dollars.
Where a portion of the principal of government bonds and corporate bonds has been paid, the trading unit shall be calculated based on its remaining principal. |
| Article 61 | The price of trading orders for stocks shall be based on one share of stock. The price of trading orders for government bonds and corporate bonds shall be based on bonds with a par value of one hundred dollars. The trading of bonds shall be interest-free trades, except where the trading order specifies interest or the regulations specifies otherwise.
The calculation of the interest specified in the preceding paragraph shall be based on the actual number of days between the interest-bearing commencement date and the trade date. |
| Article 62 | The fluctuation unit (tick) of the prices of trading orders shall be determined as follows:
1. Where the market price of a stock is less than ten dollars per share, the fluctuation unit shall be one cent, or five cents if the price is from ten dollars to less than fifty dollars, or ten cents if the price is from fifty dollars to less than one hundred dollars, or fifty cents if the price is from one hundred dollars to less than five hundred dollars, or one dollar if the price is from five hundred dollars to less than one thousand dollars, or five dollars if the price is one thousand dollars or more.
2. The fluctuation unit of government bonds and corporate bonds shall be five cents. The fluctuation unit of convertible bonds shall be five cents if the price is less than one hundred fifty dollars, or one dollar if the price is from one hundred fifty dollars to less than one thousand dollars, or five dollars if the price is one thousand dollars or more. |
| Article 63 | The daily fluctuation limit of securities, unless otherwise approved by the Competent Authority, shall be seven percent of the closing price for the previous trading day for stocks, and five percent for bonds; provided, however, that after conversion of the fluctuation limit, the fraction of the price of stocks and beneficiary certificates below one cent shall be deemed one cent, and the minimum price shall be one cent; the fraction of the price of bonds below five cents shall be deemed five cents, and the minimum price shall be five cents.
For newly listed common stocks other than those converted from OTC stocks to listed stocks, there will be no price fluctuation limit imposed for the five trading days beginning from the listing date, and the minimum price shall be one cent.
Where there is no closing price for the previous trading day, and, for two continuous days, the highest buy order or lowest sell order price has reached the ceiling price or floor price, then such ceiling price or floor price may be used as the basis for determining the fluctuation limit. |
| Article 64 | (deleted) |
| Article 65 | (deleted) |
| Article 66 | Where the trading orders of securities firms cannot be satisfied in one trade, the remaining unsatisfied volume shall continue to be competitively bidded at the original trading order. |
| Article 67 | In the trading of stocks, where a listed company distributes dividends, bonuses or other interests pursuant to paragraph 2 of Article 165 of the Company Act, and change to the shareholders list is suspended pending the record date (date on which registration of transfers is suspended), all settlements conducted after such date shall be considered to be ex dividend and ex right.
The daily fluctuation limit after the distribution of dividends shall be based on the closing price of the previous day minus the amount of dividends and bonuses that have been distributed.
The daily fluctuation limit for the ex right date shall be calculated based on the following:
1.Where a listed company uses retained earnings and capital reserve (including the capitalization of undistributed employee bonuses) to increase capitalization, the daily fluctuation limit for the ex right date shall be based on the closing price of the previous day minus the value of the distributed stock dividends.
2.Where a listed company uses cash capital to issue new stocks, the daily fluctuation limit for the ex right date shall be as follows:
(1) In case under cash capitalization the issue price of the newly issued stock is lower than the closing price on the day immediately preceding the ex right date, the daily fluctuation limit for the ex right date shall be the closing price on the day immediately preceding the ex right date for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex right date minus the value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
(2) In case under cash capitalization the issue price of the newly issued stock is higher than the closing price on the day preceding the ex right date, the daily fluctuation limit on the ex right date shall be the closing price on the day immediately preceding the ex right date minus the value of the newly issued cash capitalization stock for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex right date for the purpose of calculating the maximum low.
3.Where a listed company simultaneously uses retained earnings and capital reserve (including the capitalization of undistributed employee bonuses) to increase capitalization, and also uses cash capital to issue new stocks, the daily fluctuation limit shall be calculated as follows:
(1) In case under cash capitalization the issue price of the newly issued stock is lower than the closing price of the day prior to the ex right date minus the value of the capitalized retained earnings and capital reserve (including the capitalized undistributed employee bonuses), the daily fluctuation limit for the ex right date shall be the value of the closing price on the day immediately preceding the ex right date minus the value of the capitalized retained earnings and capital reserve (including the capitalized undistributed employee bonuses) for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex right date minus the value of the capitalized retained earnings and capital reserve (including the capitalized undistributed employee bonuses) and value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
(2) In case under cash capitalization the issue price of the newly issued stock is higher than the closing value of the day prior to the ex right date minus the value of the capitalized retained earnings and capital reserve (including capitalized undistributed employee bonuses), the daily fluctuation limit for the ex right date shall be the value of the closing price on the day immediately preceding the ex right date minus the value of the capitalized retained earnings and capital reserve (including the capitalized undistributed employee bonuses) and the value of the newly issued cash capitalization stock for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex rights date minus the value of the capitalized retained earnings and capital reserve (including the capitalized undistributed employee bonuses) for the purpose of calculating the maximum low.
4.In case any of the procedures in the above subparagraphs cannot be suitably used, the daily fluctuation limit for the ex right date shall be determined by this Corporation in view of the current circumstances.
The value of the rights referred to in the preceding paragraph shall be determined by this Corporation.
The matters relating to ex dividend and ex right in connection with securities eligible for margin purchase and short sale shall be handled in accordance with the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales. |
| Article 67-1 | Where a listed company carries out procedures for capital reduction and issuance of new share certificates, the daily price limits on its stock for the date on which the stock begins to list after the capital reduction shall be calculated based on {the closing price of the final trading day prior to the issuance of the new share certificates} divided by {the ratio of its post-reduction capital amount to the original capital amount}. Provided, that where the company, because it is carrying out a company split, has filed to carry out the procedures for the split and capital reduction and issuance of new securities certificates as a consolidated case, the daily fluctuation limit of its stock for the date on which the stock begins to list after the capital reduction shall be calculated based on the closing price of the final trading day prior to the issuance of the new share certificates.
If under circumstances in the preceding paragraph share money is refunded to shareholders in the form of cash, the daily price limits on the stock for the date on which it begins to list after the capital reduction shall be calculated based on {the closing price of the final trading day prior to the issuance of the new share certificates minus the amount of the cash refund per share} divided by {the ratio of its post-reduction capital amount to the original capital amount}. |
| Article 68 | Upon matching a trading order, the associated person of a securities broker shall in reference to the information contained in the execution report inform the principal of this fact and prepare the relevant vouchers.
The principal may solicit information from a securities broker in regard to the securities for which it has placed brokerage trading orders. The securities broker shall provide the information. |
| Article 69 | Securities firms shall observe good faith commercial practices and institute fair trades. Where it learns of any illegal trading or fraudulent trades by other securities firm, it shall have the responsibility of informing on these acts.
In handling the above informed matter, this Corporation may act in accordance with the provisions of Article 38. |
| Article 70 | A trade shall be considered to be an odd-lot trade if the volume of stocks traded is less than one trading unit. The methods for trading in such stocks shall be separately drafted by this Corporation and reported to and approved by the Competent Authority before its implementation.
This Corporation may appoint designated securities dealers to concurrently operate the business of trading in odd-lot shares, and publicly announce such decision. The same procedure shall be applicable with amendments to the same.
A securities dealer may not refuse the appointment referred to in the preceding paragraph. |
| Article 71 | A trade shall be a block trade if any of the below-listed circumstances is present in a single buy order or sell order:
1. Block trade of a single security: refers to a single buy order or sell order for at least 500 trading units of a single listed security.
2. Block trade of a basket of stocks: refers to a single buy order or sell order for at least five listed stocks with a total value of at least NT$15 million.
Where a block trade is conducted on a continuous trading basis, it shall meet the standards set forth in the preceding paragraph, provided that where the conditions specified in subparagraph 1 of the preceding paragraph are not met but the total value of the single buy or sell order is at least NT$15 million, the trade may be treated as a block trade of a single security conducted on a continuous trading basis.
Where the following conditions are met, a block trade may also be conducted on a cross-trade basis:
1. for a block trade of a single security, where an order is placed for at least 1,000 trading units of a listed security.
2. for a block trade of a basket of stocks, where an order is placed for at least five types of listed stocks with a total value of at least NT$30 million.
Where the conditions of subparagraph 1 of the preceding paragraph are not met but the total value of the single buy or sell order is NT$30 million or more, the trade may be treated as a block trade of a single security conducted on a cross-trade basis.
Regulations regarding block trades shall be separately adopted by this Corporation and implemented after being filed with the Competent Authority for final approval. |
| Article 72 | (deleted) |
| Article 73 | The provisions of related regulations on listed shares shall apply mutatis mutandis to trades in certificates carrying right to subscribe to new stocks or certificates evidencing payment of stocks. |
| Article 74 | Where listed securities meet any of the following conditions, the trading method for such securities may be exempted from the provisions of this Chapter, and the securities may be traded via negotiation, auction, tender, or other methods:
1. Initial offering of bonds and their wholesale trade.
2. Wholesale trade of stocks before their listing.
3. Special circumstances in the trading of securities not warranting the application of usual regulations.
4. Securities trades to which are attached the condition of meeting specified trading volumes, that have been reported to and approved by this Corporation may be conducted after registration.
The method of trading in the above transactions shall be reported to and approved by the Competent Authority before its implementation. |
| Article 74-1 | The hours of the centralized securities exchange market established by this Corporation for trading at fixed price after closing of the market shall be from 2:00 p.m. to 2:30 p.m. All trades shall be matched at the closing price of the same day. The trading rules shall be prescribed by this Corporation and reported to the Competent Authority for approval before the implementation. |
CHAPTER VI SECURITIES BROKERS ACCEPTING TRADING CONSIGNMENTS
|
| Article 75 | Securities brokers conducting brokerage trading of securities shall comply with the following provisions:
1.When accepting an account opening for processing, a securities broker shall first enter into a brokerage contract with the principal, recognize this Corporation's articles of incorporation, operating rules, public announcements, and circular letters, the regulations of the Taiwan Securities Association, and the Rules Governing Brokerage Contracts of Securities Brokers as integral parts of the contract, and specify the date of account opening and the following matters:
(1) For a principal that is a natural person: name, gender, age, occupation, address, telephone number, and National Identity Card number; if there is an agent, the agent's name and National Identity Card number.
(2) For a principal that is a juristic person: the juristic person's name, address, government uniform invoice number, phone number, representative, and authorized person.
2. For a principal that is a person of no legal capacity or limited legal capacity, his/her statutory agent shall sign/seal the brokerage contract and indicate the kinship relationship. All business vouchers for brokerage trading of securities, subscription of securities, and settlement matters shall be signed/sealed by the statutory agent.
3. For a principal that is a juristic person, such juristic person and its representative shall sign/seal the brokerage contract, and a power of attorney shall be provided. All business vouchers for brokerage trading of securities and settlement matters shall be signed/sealed by the authorized person.
4. A director, supervisor, or employee of a securities firm may not open an account, engage in the brokerage trading of securities, purchase securities, or handle settlement-related matters on behalf of any other person, unless he/she is the statutory agent or guardian of the principal.
5.When the principal or his/her/its statutory agent or authorized person signs the brokerage contract, a seal specimen card or signature card of the principal or the principal's statutory agent or authorized person shall be kept, and that same seal or signature shall be used for any orders placed in person for brokerage trading or subscription of securities and for the procedures for carrying out settlement. That same seal or signature shall also be used when the above matters are performed by an agent engaged by the principal or its statutory agent to do so on its behalf.
6. When a principal or his/her/its statutory agent authorizes an agent to engage in brokerage trading, purchase securities or process settlement-related matters, a power of attorney shall be issued, and the seal specimen or signature card of such agent shall be kept for handling.
7. Where settlement of the principal's payment and securities is to be made by the book entry method, and where a letter of consent is signed, signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, information relevant to the brokerage trade shall be given to the principal and a confirmation record shall be kept on file. Where, pursuant to law or regulation, the principal may effect receipt or payment of the purchase price by account transfer (or remittance), signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the brokerage trade to the principal and the custodian institution to be the agent for trade settlement, and shall keep a confirmation record on file.
8. A securities broker may not use computer-set groups in handling securities trading orders. The order ticket and trading order record shall record information pursuant to Articles 4 and 12 of the Regulations Governing Information to be Published in Order Tickets, Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving Orders to Buy or Sell Securities of the Competent Authority, and be prepared in accordance with the following provisions:
(1) Trading through non-electronic media:
i. For trading orders placed in person: the principal or its agent or authorized person that places trading orders for securities in person shall fill out an order ticket and affix their signature/seal thereto.
ii. For trading orders placed via telephone, in writing, or by telegraph: if the principal, or its agent or authorized person places a trading order via telephone, in writing, or by telegraph, the associated person handling the order at the securities broker that accepts the order shall fill out the order ticket by hand or electronic means, print a trading order record, and proceed pursuant to subparagraphs 5, 6, and 7; if trading orders are placed in writing or via telegraph, the letter or telegram shall be attached to the back of the order ticket or trading order record.
Where the securities broker fills out the order ticket by electronic means, if delegation of responsibility for the execution of the trading order can be implemented and the employee handling that trading order confirmed, order tickets need not be printed out individually, provided that they shall be stored using a non-revisable, non-erasable electronic medium. In addition, trading order records shall be printed out in chronological order and, after close of market, signed/sealed by the employee handling the trading order.
(2) Trading through electronic media:
Means that a principal uses voice mail, the Internet, dedicated line, closed private network, or other electronic means approved by this Corporation to place a trading order, which the securities broker shall handle in accordance with the following provisions:
i. Where a trading order is placed through an electronic medium, the securities broker need not prepare or fill out an order ticket on the client's behalf. However, it shall print trading order records in chronological order, and after close of market, have them signed/sealed by the person that handles the order and the department supervisor.
ii. If a trading order is placed via the Internet, the internet protocol (IP) address and electronic signature thereof shall be recorded. If a trading order is placed via voice mail, through coordination with the telecommunications institution the caller-end number display function shall be enabled, the number of the incoming call recorded, and a trading order record immediately printed out, but the matters that shall be recorded as specified by the Competent Authority need not be printed out.
Where the storage operations of the trading order record for a trade conducted through an electronic medium meet the following requirements, the trading order record need not be printed out:
i. A non-revisable, non-erasable electronic storage medium is used, and preparation of trading order records is completed on the day the trade is executed.
ii. Comprehensive indexing and and management procedures are set up.
iii. Management responsibility is assigned to designated personnel, and electronic data files can be converted into print format at any time.
9. The transmission of the order for purchase/sale of securities, order confirmation, execution report, and other electronic documents between a securities broker and the principal who uses an electronic trading method other than voice mail shall carry the electronic signature issued by the institution providing vouchers for identification and confirmation; however, this restriction shall not apply for orders placed between a principal and securities broker electronically over a dedicated line if the connection access points are all located outside the Republic of China and the connection method complies with the local laws and regulations of the country(ies) in which they are located.
10. The order ticket referred to in subparagraph 8 shall be numbered in the order it is received. Its format and particulars to be recorded shall be as prescribed by the Competent Authority. When there is any dispute in connection with a trade, the order ticket shall be kept until the dispute is resolved. When there is no dispute, order tickets shall be kept in accordance with the following provisions:
(1) For unexecuted trades: destroy after one week; however, if an order ticket is filled out by hand, it shall be stamped "Unexecuted".
(2) For executed trades: if there is no dispute, keep for five years together with other business vouchers. |
| Article 75-1 | A securities broker opening an account for a principal shall comply with the following:
1. Except the following situation, if the principal is a natural person, he/she shall open the account against the original identity card and put signature/affix seal personally:
(1) where the principal is of no legal capacity or limited legal capacity, his statutory agent or guardian shall open the account against the original identity cards of the statutory agent or guardian and the principal and put the signature/affix seal personally. If the principal has not received an identity card yet, a transcript of household register or household register may be supplied instead. The guardian shall provide a certificate of guardianship.
(2) where the principal is a person dispatched by a juristic person to work overseas, he may entrust an agent to open the account against the original identity cards of the agent and the principal as well as the power of attorney and certificate of employment overseas issued by the said juristic person, both legalized by an ROC representative office or an institution entrusted by such office.
(3) where the stipulated limit on the daily trading amount of the principal does not exceed NT$1 million, and where a margin trading account is not opened, the securities broker may accept the account opening by the principal through internet, correspondence or other means. The account shall become effective after the brokerage contract has been signed by the principal and confirmed by the securities broker. The securities firm may at its own discretion conduct credit investigation on the account opened in such way; provided that when the limit on the daily trading amount is adjusted in future, credit investigation shall be conducted again in accordance with relevant rules.
2.Where the principal is a juristic person, the authorized person shall provide a copy of the registration document of the juristic person, a copy of the notice of issuance of uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting such copy of notice), the power of attorney, and photocopies of the identification cards of the responsible person of the juristic entity and that of the authorized person for processing. The securities broker shall confirm in writing that the account is opened through authorization.
3. Except for certain account numbers that it may handle as an account without a number under exceptional circumstances for which reasons have been noted, the securities broker shall assign an account number sequentially to each account in the order opened; provided that numbers cancelled in (calendar) years other than the current year may be used sequentially.
A securities broker shall ensure that the items supplied on the applications are error free and complete. It shall not accept any order to trade in or subscribe to securities from the principal unless it completes the account opening process and the written confirmation procedures referred to in subparagraphs 2 of the preceding paragraph and keys-in the account information and account number into the computer system of this Corporation. |
| Article 75-2 | When a securities broker processes an application for opening of an account made by a custodian institution representing a principal in discretionary investment, the name of both the principal and the authorized discretionary trader shall be specified in the account name, an Account Opening and Brokerage Contract for Discretionary Investment Trading of Securities shall be signed, the custodian institution shall be stipulated as the agent for settlement payment and delivery, information required for account opening shall be entered into the computer file of this Corporation as instructed online, and the following documents shall be submitted:
1. Photocopy of written agreement signed by the principal, the authorized discretionary trader, and the custodian institution regarding respective rights and obligations.
2. Where the principal is a natural person, photocopy of his/her National Identity Card shall be submitted; provided that where the said principal is of no legal capacity or with limited legal capacity, photocopy of his/her statutory representative or guardian shall also be submitted. Where the principal is a juristic person or other institution, photocopy of the registration document of the juristic entity, photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting such copy of notice), and photocopy of the National Identity Card of the responsible person of the juristic entity shall be submitted.
3. Photocopy of the corporate registration document of the authorized discretionary trader, and photocopy of the National Identity Card of the responsible person of such company.
4. Photocopy of the National Identity Card of the investment manager (including any deputy thereof) or any other person authorized to execute trades, and the original power of attorney issued by the authorized discretionary trader to the aforesaid personnel.
A securities broker may accept orders for trading of securities through a discretionary investment account referred to in the preceding paragraph only after the procedures for opening the account have been completed and the required information has been entered into the computer files of this Corporation. In case of any change, after account-opening, in the investment manager (including any deputy thereof) or any other person authorized to execute trades, orders for trading of securities may not be accepted unless and until the documents under subparagraph 1 of paragraph 4 have been replaced. |
| Article 75-3 | When a securities broker accepts an application to open an account on behalf of a trustee of trust property, the account name shall indicate that it is a segregated trust account, and the following documents shall be submitted:
1. Where the trustee is a trust enterprise:
(1) Photocopy of the juristic person registration documentation of the trust enterprise and photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities.
(2) Power of attorney and photocopies of the National Identity Cards of the representative of the juristic person and the attorney in fact.
(3) Where the settlor is a natural person, a photocopy of the person’s National Identity Card; where it is a juristic person, a photocopy of the documentation of its juristic person registration.
(4) Summary terms and conditions contract for the trust.
2. Where the trustee is not a trust enterprise:
(1) Where the settlor and trustee are natural persons, photocopies of their National Identity Cards; where they are juristic persons, photocopies of their juristic person registration documentation, and the power of attorney and photocopies of the National Identity Cards of the representative of the juristic person and the attorney in fact.
(2) Photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities.
(3) Photocopy of the trust deed.
Where a trading account under the preceding paragraph belongs to a charitable trust, a photocopy of the approval document by the competent authority for the target industry shall also be submitted.
A securities broker shall make a detailed check of the documents related to opening of the segregated trust account, and shall accept orders to trade securities only after completing the account opening procedures and entering the account opening information into the computer files of this Corporation. |
| Article 75-4 | Each headquarters and branch of a securities firm may open two omnibus trading accounts in its own name, for purposes of accepting securities trading orders from domestic and foreign specific principals respectively.
A specific principal may use an omnibus trading account only after opening a securities trading account; the omnibus trading account may be used to participate in ordinary trading (i.e., trading from 9 a.m. to 1:30 p.m. under Article 3 of the Operating Rules of this Corporation), after-market fixed-price trading, and odd-lot trading of this Corporation. It may also, after carrying out a securities borrowing transaction through a securities firm under this Corporation's Securities Lending and Borrowing Regulations, [use the borrowed securities] to trade through the omnibus trading account. A specific investor that is allowed by regulations to engage in credit trading may engage in credit trading through the omnibus trading account.
"Specific principals" under the preceding paragraph are limited to offshore overseas Chinese and foreign nationals, domestic institutional investors, and discretionary investment customers. The aforesaid "domestic institutional investors" are limited to domestic securities investment trust funds, government agencies, banks, and insurance and group enterprises (meaning "group enterprises" as defined in Article 6 of this Corporation's Supplementary Provisions to the Taiwan Stock Exchange Corporation Regulations for Review of Securities Listings).
If a specific principal has authorized a trader to conduct trades and handle allocation of trade prices and volumes, it shall provide a power of attorney and specify the allocation of trade price and volume and relevant authorized matters. If the authorized trader is an institutional investor, the power of attorney shall be signed/sealed by that institutional investor. However, where a same authorized trader is authorized by offshore overseas Chinese or foreign nationals, domestic funds, or units of a same group, the authorized trader shall provide a statement specifying the principals' ID numbers or uniform invoice numbers, names, and other relevant information. This Corporation may, in accordance with operational needs, require securities firms to provide certifying documents relating to the aforesaid authorizations. |
| Article 75-5 | When a securities firm accepts orders to trade securities through an omnibus trading account, it shall make trading quotes corresponding to the orders placed by the principals or the authorized traders thereof, and shall note the name or symbol of the principal or the authorized trader on the order form or the trading order record.
The securities firm shall transmit the itemized allocations of trade price and volume as instructed by the authorized trader, and the itemized orders of the principals and authorized traders thereof, to this Corporation by 5 p.m. on the trade date.
Operational directions related to omnibus trading accounts will be prescribed by this Corporation. |
| Article 76 | Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
1. Persons without legal capacity or with limited legal capacity, who do not have the agency or authorization of their legal guardian.
2. Personnel or employees of the Competent Authority in charge of securities matters and of this Corporation.
3. Persons declared bankrupt and rights have not been reinstated.
4. Interdicted persons who are not represented by their statutory agents.
5. Juristic persons opening accounts that cannot supply proof that there is authorization to open the account.
6. Securities dealers which have not been approved by the Competent Authority.
7. A principal who has engaged a director, supervisor, or employee of a securities firm to open an account with such securities firm as an agent or representative of the principal.
8. More than one discretionary investment account has been opened at the same business premises of the same securities broker by the same principal with respect to the same authorized discretionary trader; provided, this restriction shall not apply to a principal that is a government fund such as a civil servant pension fund, labor pension fund, labor insurance fund, or postal remittance and savings fund and that, when authorizing the same authorized discretionary trader for discretionary investment, may open, at the same business premises of the same securities broker, different discretionary investment accounts for different brokerage contracts.
9. An offshore foreign institutional investor has opened more than one investment trading account at the same business premises of the same securities broker; provided, this restriction shall not apply if it is one that is permitted under the Directions for Registration Processing for Offshore Overseas Chinese and Foreign Investors to Make Investments in ROC Securities or Engage in Domestic Futures Trading to open more than one investment trading account at the same securities broker (including branches).
Internal personnel of securities firms opening accounts for brokered securities trading shall comply with the Rules Governing Internal Personnel of Securities Firms Opening Accounts at Their Securities Firms for Brokered Securities Trading prescribed by this Corporation.
Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
1. Any person that has breached a contract relating to securities trading, where this Corporation or the Over-the-Counter Securities Exchange have notified all securities brokers of this fact, where the case has not been closed and less than five years have elapsed.
2. Any person that has violated the Securities and Exchange Act or been suspected of forging (altering) listed or OTC securities documents and has been under public prosecution, or has been adjudicated criminally guilty by a final and unappealable court judgment within the last five years.
3. Any person that has breached a futures contract where the case has not been closed and less than five years have elapsed, or that has violated future trading laws or regulations and has been adjudicated criminally guilty by a final and unappealable judgment of a judicial authority within the past five years.
Upon conclusion of a case of breach of a brokerage contract by a principal, the securities broker shall promptly report such conclusion to this Corporation; this Corporation will in turn inform all other securities brokers. |
| Article 77 | When processing account opening and brokerage trading of securities for overseas Chinese or foreign nationals, a securities broker shall obey relevant laws and regulations and comply with the following provisions:
1.Where approval was obtained from the Investment Commission of the Ministry of Economic Affairs, Science-Based Industrial Park Administration, or the Export Processing Zone Administration, a photocopy of the document of approval of sale and tax return power of attorney in the form specified by the tax collection authority (submission of the latter is not compulsory during the period when gains from stock exchange are exempt from taxation), along with the copy of the securities trading brokerage contract, and cover letter shall be submitted to this Corporation for issuance of an approval letter to open the account. Only upon the receipt of the approval letter may sales orders be accepted, and the type of securities trading and trading volume undertaken shall be in conformance with the approved investment plan.
2.Where the securities and the resulting rights for subscription of capitalization increase or stock divided are obtained due to gift, succession, pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235; Article 240; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act, or prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, a copy of the passport and the following documents shall be submitted to a securities firm for account opening. Furthermore, the trading shall be limited to the sale of the aforesaid securities.
(1) Where the securities and the said entitlements are obtained through gift, transfer procedure shall be completed and the paper of tax-payment or tax-exemption for gift issued per Article 41 of the Estate and Gift Taxes Act shall be submitted.
(2) Where the securities and the said entitlements are obtained through succession, transfer procedure shall be completed and the paper of tax-payment or tax-exemption for legacy issued per Article 41 of the Estate and Gift Taxes Act shall be submitted.
(3) Where the securities and the said entitlements are obtained pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235; Article 240; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act, a certificate of employment valid at the time of subscription, issuance of bonus shares, or taking assignment of shares and documents evidencing the subscription , issuance of bonus shares, or assignment of shares shall be submitted.
(4) Where the securities are obtained prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, document proving the source of the securities or other relevant documents shall be submitted.
3. Securities obtained in compliance with the preceding subparagraph may be sold by mutatis mutandis application of Article 82-1.
Foreign banks with branch offices in the Republic of China may use the name of the branch office to open the account in accordance with Article 75. Such account may only accept sales orders, and purchase orders shall not be accepted. |
| Article 77-1 | Securities brokers accepting account opening applications from the domestic agent of a depositary institution for a foreign depositary receipt shall ensure that the account name clearly states its relation with and the rights and obligations of the securities of such listed company, and shall further supply the following documents:
1.Copy of the approval to issue foreign depositary receipts issued by the Competent Authority.
2.Copy of the power of attorney executed by a depositary institution appointing a domestic agent.
3.Photocopies of the National Identity Card, Alien Resident Certificate, or company registration (or amendment registration) certification of the domestic agent/representative of the depositary institution. Provided, if such documentation for the same domestic agent/representative has already been submitted to and placed on file by the broker, it need not be resubmitted.
The trading account referred to in the preceding paragraph may be used only to execute sales orders unless the issuance plan of such depositary receipt, the depositary contract, and the custodian contract specifies that the depositary institution may purchase and then re-issue securities from the centralized exchange market, and such depositary institution files an application, containing copies of the above purchase and issuance documents (including abstract translations), with this Corporation; upon the filing of such application, the securities broker may accept purchase orders for the securities indicated on the depositary receipt.
Domestic agents applying for account opening on behalf of overseas Chinese or foreign nationals investing in foreign depositary receipts and desiring to redeem such depositary receipt into the underlying securities shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to redemption of the foreign depositary receipts, it need not be done anew. |
| Article 77-2 | Securities brokers accepting account opening applications from mainland Chinese shall process such application as follows:
1. Where account opening is done personally, the applicant shall supply his identification documents and Taiwan entry permit as well as proof of payment of estate tax or gift tax issued by a tax collecting bureau or other evidentiary documents.
2. Where account opening is done on behalf of the principal, the agent shall supply identification documents of the principal and the agent, power of attorney (must be notarized by notary office of the Mainland China area and legalized by the Straits Exchange Foundation), and the related documents specified in the preceding subparagraph.
3. When opening the account, the applicant shall also open an account for central custody and book-entry settlement, and shall deliver the securities for custody before sale orders may be placed.
Such account may only accept sales orders and may not accept purchase orders. |
| Article 77-3 | Where an overseas Chinese or foreigner who has made investment in foreign convertible corporate bonds and has requested exchange, conversion, or subscription of securities issued by a domestic issuing company through such foreign convertible corporate bonds appoints his local agent to open an account on his behalf, he shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to exchange, conversion, or subscription for the foreign convertible corporate bonds, it need not be done anew. |
| Article 77-4 | To invest in domestic securities, onshore overseas Chinese and foreign nationals shall submit the relevant documents to a securities broker to carry out registration with this Corporation and obtain an identification number and submit the below-listed documents to the securities broker for purposes of opening an account for securities trading.
1. Overseas Chinese and foreign natural persons: passport and overseas Chinese identity certificate (or alien resident certificate).
2. Foreign institutional investor: Ministry of Economic Affairs Recognition Certificate, Ministry of Economic Affairs Company License, Business License, and National Identity Card (or Alien Resident Certificate or passport) of the responsible person.
Offshore overseas Chinese and foreign nationals shall carry out registration with this Corporation through their designated domestic agent/representative and obtain an identification number and submit photocopies of the domestic agent/representative's national ID card or alien resident certificate or a photocopy of the evidentiary documentation following company registration (or amendment registration) to the securities broker for purposes of opening an account for securities trading (provided, if such documents, for the same domestic agent/representative and having identical content, have already been submitted to and placed on file by the broker, they need not be resubmitted).
If the domestic agent under the preceding paragraph is a bank approved by the Bureau of Monetary Affairs, Financial Supervisory Commission, Executive Yuan, to operate custodial business and it and the securities brokers handling account opening all have network authentication mechanisms, the documents for account opening may be transmitted electronically to open the account.
Where an overseas subsidiary of a listed (or OTC) company carries out registration with this Corporation on the grounds of disposing employee stock option certificates of its overseas foreign national employees, the provisions of paragraph 2 concerning offshore overseas Chinese and foreign nationals shall apply mutatis mutandis, and it shall submit the documents in all the subparagraphs below. In addition, it shall authorize its local agent to open an account with the securities broker, and shall annex the documents listed below, in addition to the documents set out in paragraph 2 above. Trading by said account will be confined to the sale of the certificates of payment of shares or the shares obtained through the exercise of such employee stock options; trading of other securities shall not be engaged in.
1. Original affidavit stating that the overseas subsidiary has actually been authorized by the overseas employees
2. Photocopy of the Financial Supervisory Commission, Executive Yuan, approval letter approving the issue of employee stock option certificates by the listed (or OTC) company.
3. Photocopy of the minutes of the listed (or OTC) company's board of directors' meeting that approved the given issue of employee stock option certificates.
If any of the circumstances in Article 11 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals is present with respect to a registration under paragraph 1, 2, or 3 by an overseas Chinese or foreign national, this Corporation shall not carry out registration; where registration has already been made, the registration shall be voided or revoked, and the securities broker that has opened an account shall be notified that it may not accept purchase orders. After the balance of the account has been liquidated by the account holder, the securities broker shall cancel the account and notify this Corporation of the circumstances of the closure of the case.
The registration operations in this article shall also be handled in compliance with the Directions for Registration Processing for Offshore Overseas Chinese and Foreign Investors to Make Investments in ROC Securities or Engage in Domestic Futures Trading reported by this Corporation to and approved by the Competent Authority. |
| Article 77-5 | Overseas Chinese and foreign nationals investing in share certificates issued overseas by a domestic public company, when entrusting their local agent to open an account with a securities broker on their behalf in accordance with paragraph 2 of Article 37 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, shall carry out registration and account opening in accordance with paragraph 4 of Article 77, provided, if approval has been obtained and an account opened prior to the sale of the overseas share certificates, it need not be done anew. |
| Article 78 | Securities firms that are engaged or act on behalf of others to trade securities using margin purchases or short sales shall handle it in accordance with the Regulations Governing Securities Firms Dealing with Margin Loans and Stock Loans, Rules Governing Securities Finance Enterprises, the Operation Rules for Securities Firms Dealing with Margin Purchases and Short Sales, or the Operation Rules for Securities Finance Enterprises Dealing with Margin Loans and Short Stocks.
If, after execution of a trading order through a securities firm that is engaged or acts on behalf of another to handle business under paragraph 1, or after execution of a sale of borrowed securities in accordance with the Taiwan Stock Exchange Corporation Securities Lending and Borrowing Regulations, there is any change in the trading category, such change shall be handled in accordance with the provisions of the Directions for Securities Firms Handling Changes to Trading Category. |
| Article 79 | Trading orders accepted by securities brokers shall be confined to limit orders. Provided, a securities firm may accept authorization from a juristic person or other institution to decide on its behalf the price and time of placement of an order within the range of the price limits specified by such juristic person or other institution, and the securities firm shall retain the customer authorization record in accordance with regulations.
Where an order referred to in the preceding paragraph is made without specifying the term of validity, such order shall be effective only on the date of the order.
A "limit order" shall mean that the principal engages a securities broker to place a trading order on its behalf and specifies a price limit wherein the execution price may be equal to or lower than the limit price in the case of a purchase, and may be equal to or higher than the limit price in the case of a sale. |
| Article 80 | Purchase or sale orders accepted by a securities broker shall be processed by registered and qualified associated persons.
When executing orders to trade in securities, the registered and qualified associated persons referred to in the preceding paragraph shall wear the registration pass issued by this Corporation. When accepting trading orders, the associated persons shall fill out order forms in accordance with the provisions of subparagraph 8 of Article 75, assign serial numbers to the orders, and process them in the order in which they are received.
When a trading order has been matched, the securities broker shall produce a trade report. The format and the particulars to be specified on the report shall be in accordance with the regulations prescribed by the Competent Authority.
For orders received by telephone, the securities broker shall synchronously record the conversation and shall keep the telephone recording in its place of business.
The above-stated telephone recording shall be preserved for at least two months. Where there are disputes relating to a trading order, the recordings shall be preserved until the dispute has ended. In the event the securities broker suffers facilities breakdowns or it is remiss in its procedures, it shall within two days of the occurrence of the event report to this Corporation regarding the facts and causes and its remedial measures.
The telephone recordings preserved in accordance with the preceding paragraph shall be construed as a type of trade voucher. In case the securities firm avoids or refuses inspection, it shall be punished in accordance with paragraph 2 of Article 25 and the Standards for Determining Securities Firms Avoiding or Refusing Inspections and Handling Procedures Thereof. |
| Article 80-1 | No one shall enter the operating counter of a securities broker except for its chairman, general manager, manager of the business department, branch office manager, and the registered and qualified associated persons referred to in the paragraph 1 of the preceding Article. |
| Article 81 | After accepting a brokerage trading order, a securities broker may cancel or amend particulars of the order only if notified by the principal to do so, and only if the order has not yet been executed. |
| Article 82 | In the case of orders for normal settlement trades, a securities broker shall collect from its principal the payment for securities bought or the securities sold at the time of accepting the order or before noon of the first business day following the trade date. In case its principal is an offshore overseas Chinese or foreign national, the deadline for settlement may be extended to 6 p.m. of the first business day after the trade date.
When the principal is an offshore overseas Chinese or foreign national, and when during the confirmation process there are discrepancies between holidays in different time zones, interruptions in telecommunications, natural disasters, or other occurrences of force majeure, or the custodian institution fails to receive the settlement instructions or the settlement instructions and the trade report are inconsistent, and where such occurrences are verifiable, then after the filing of a report of delayed settlement with the Taiwan Stock Exchange Corporation by the securities broker, the deadline for settlement of the price payable on the securities sold or after mutual offsetting of the prices of securities purchases or sales may be extended to 6 p.m. of the third business day after the trade date.
In the case of margin trade orders, a securities broker shall collect from its principal the legally required margin for margin purchases or margin for short sales before noon of the first business day following the trade date.
Where this Corporation has taken any disciplinary measure against a specific securities in accordance with the "Regulations for Implementation of Stock Market Monitoring System" and other relevant operation rules, a securities broker shall, on the date it accepts the order, collect in advance from its principals the funds or securities, or the margin for margin purchases, or the margin for short sales.
Where a securities broker believes that there are any defect on the rights of the securities delivered by its principal for sale or there is legal dispute or other doubtful matter, it may decline to sell such securities; provided that the above shall not be applicable where its principal has provided adequate collateral as approved by the securities broker. |
| Article 82-1 | Where a securities broker accepts an order to sell a registered stock that has never been transferred and its principal is not the owner of the stock, it shall handle the settlement in accordance with the Guidelines for Reporting by Securities Brokers of Sale of Stock Not Owned by the Principal as stipulated by this Corporation.
The provisions of the preceding paragraph shall apply mutatis mutandis where a securities broker accepts an order to sell a registered stock that has been transferred and for which transfer registration procedures have been carried out with the issuing company, and that meets any of the following conditions:
1. Stock of a defaulting investor after the case is closed and withdrawal has been effected.
2. Stock acquired through an inheritance or gift.
3. Stock acquired through underwriting before November 1997.
4. Collateral in the form of spot securities that a securities finance company or securities firm operating its own margin purchase and short sale operations has required an investor to deposit to offset a decline in share price to below the maintenance ratio.
5. Stock that a bank has required a customer to pledge in the form of spot securities.
6. Stock obtained through a final and unappealable court judgment.
7. Other conditions reported to and approved by this Corporation. |
| Article 82-2 | Securities borrowing and lending by principals through the securities borrowing system of this Corporation shall be conducted in accordance with the provisions of Chapter 1 and Chapter 2 of the Securities Lending and Borrowing Regulations of this Corporation. |
| Article 82-3 | A securities firm handling, or acting as an agent for, securities lending and borrowing business shall do so in compliance with the Regulations Governing Securities Lending by Securities Firms, Rules Governing Securities Finance Enterprises, Operating Rules for Securities Firms Handling Securities Lending and Borrowing, or Operating Rules for Securities Finance Enterprises Offering Refinancing to Securities Firms. |
| Article 83 | A securities broker shall keep complete and true records and vouchers when receiving or delivering securities or payments in connection with brokerage trading.
The vouchers referred to in the preceding paragraph shall include receipts for funds and securities collected in advance, vouchers on securities delivered, and trade reports. The format thereof and the particulars to be entered therein shall conform to the regulations prescribed by the Competent Authority.
Where a financial institution concurrently engages in the business of a securities broker and has opened specific accounts for depositing funds which can be verified, it need not use trade reports.
A securities broker shall handle the receipt of securities or funds from its principals or delivery of securities or funds to its principals referred to in paragraph 1 of this Article by book-entry through the central securities depository accounts opened by its principals or through the accounts opened by its principals with financial institutions designated by the securities broker, except under any of the following circumstances:
1.Where a securities investment trust fund, insurance enterprise, offshore overseas Chinese or foreign national, or an overseas Chinese or foreign national who has converted foreign corporate bonds held by him into stock or has converted foreign depositary receipts held by him into the underlying securities maintains an account at the custodian institution (custodian bank), the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account.
2. Fund collection or payment operations of centralized segregated trust asset accounts under the management of a trust enterprise that has the status of a central depository participant may be carried out by means of transfer (remittance).
3. Where a depositary institution of foreign depositary receipts has been engaged by its principal to redeem the foreign depositary receipts and sell the stock, it may receive the proceeds thereof by way of account transfer (or remittance) through the account maintained at the custodian bank.
4. Where a principal places engages a securities investment consulting enterprise or a securities investment trust enterprise to conduct discretionary securities trading, the principal may open and maintain an account at the custodian institution, and the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account. When processing trade settlement, it is prohibited to transfer payment funds or securities between separate discretionary investment accounts of the same principal.
Securities received by a securities broker in connection with the brokerage trades shall be handled in accordance with the Rules for Custody of Securities and the Rules for Management of Transitionally Deposited Securities as approved by the Competent Authority.
The Rules for Management of Transitionally Deposited Securities referred to in the preceding paragraph shall be separately drawn up by this Corporation and implemented after approval by the Competent Authority. |
| Article 84 | (deleted) |
| Article 85 | A securities broker shall not accept any discretionary order to decide the type, volume, price or purchase or sale of securities on behalf of its principal.
A securities broker shall not purchase or resell for its own profit any securities it has accepted an order to trade, or guarantee to share profits with its principals, or accept trading orders by installment payments.
When recommending its principals or on website to buy or sell securities, a securities broker shall comply with the "Regulations Governing Securities Brokers' Practice on Recommending Principals to Buy and Sell Securities" as stipulated by this Corporation.
The website provided by securities brokers shall show, in a conspicuous manner, the risk disclosure statement and the alternative to be adopted in case of inability to execute electronic transmission, and the most up-to-date information shall be transmitted. The securities brokers shall carefully select hyperlink websites, and shall be responsible for the supervision and administration of their associates' use of electronic mail, group electronic mail, bulletin board system, website, etc. in activities associated with business operations. |
| Article 86 | A securities broker shall keep all matters in which it is engaged by the principal in confidence and shall not disclose them to others; provided that the above shall not be applicable if this Corporation makes enquiries of the securities broker. |
| Article 87 | A securities broker that has made a mistake when executing a trade shall report the out-trade and/or correct the account number in accordance with this Corporation's Directions for the Handling of Out-Trades and Correction of Account Numbers by Securities Brokers.
A securities broker shall open a segregated error account in its own name, and shall assign it with an account number and fill its company profit seeking enterprise uniform invoice number therein, and said segregated error account shall be treated in the same manner as the account of its principals. All trades transacted through the said segregated error account shall be deemed as ordinary trades, for which securities transaction tax shall be paid. Gains and losses resulted from the said segregated error account shall be handled in accordance with the Principles Governing the Preparation of Financial Reports by Securities Firms. |
| Article 88 | Where a principal places an order to trade listed securities of a specified category whose volume is too large and it is believed that handling such trade as an ordinary trade would affect the normal market, the securities broker may in accordance with Article 74 report to this Corporation and consult with it about changing the method for execution of the order to price negotiation, auction, tender, or other methods. |
| Article 89 | A securities broker and its branch offices shall not engage in the following activities:
1. Offset purchase orders against sales orders for the same securities in whole or in part in private off-market trading.
2. Engage in matched-order trading with another securities firm or firms outside the Exchange.
3. Trade securities not listed by this Corporation, without the approval of the Competent Authority. |
| Article 90 | A securities broker may not violate brokerage contract when conducting brokerage trading. In the event that a securities broker breaches the brokerage contract, the principal may report the matter to this Corporation.
Any claim by the principal against the clearing and settlement fund deposited with this Corporation by a securities broker that arises out of breach of contract by the securities broker in brokered market trades shall have the second highest priority after that of this Corporation.
The principal may request this Corporation for payment from the clearing and settlement fund deposited with this Corporation by its contracted securities broker only if it has obtained the consent of the securities broker or a final adjudication of execution or of an arbitral award. |
| Article 91 | Where the principal fails to fulfill its settlement obligations on time, the principal is in default. In such an event, the securities broker shall, in accordance with this Corporation’s Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals, report the default to this Corporation on or before 6:00 p.m. of the date of default by the principal, and shall simultaneously notify the principal, and immediately carry out settlement procedures on behalf of its principal.
When the principal is an offshore overseas Chinese or foreign national, and a report of delayed settlement has been filed in accordance with Article 82, paragraph 2, the securities broker shall notify the principal or the custodian institution, and immediately carry out settlement procedures on the principal's behalf; if settlement is not completed in accordance with the provisions of that article and it is not an out-trade, the principal is in default. At 6 p.m. on the third business day after the trade date, the securities broker shall report the default to this Corporation, and simultaneously notify the principal.
In the event that securities delivered by the principal for settlement are found to be forged (altered) when they are forwarded to the issuing institution (or its office for handling registration and transfer of securities) for verification during or after completion of the process of book-entry and settlement, the principal is likewise in default. The securities broker shall forthwith report by letter to this Corporation, and send a copy thereof to the principal. In case the principal is not the owner of such securities, the information regarding the owner of the securities shall also be reported by letter to this Corporation.
Where the event of default of the principal referred to in the preceding paragraph falls within any of the following circumstances, the securities broker shall forthwith submit evidentiary documents and report by letter for cancellation of the event of default:
1.Where securities delivered by a principal for settlement are not owned by the principal itself and have been found to be forged (altered) after they were forwarded for verification by the securities broker or the central securities depository during the process of book-entry and settlement, and the principal has provided securities free of defect within one (1) week after the securities broker completed the default correction procedures with this Corporation.
2.Where securities delivered by a customer for settlement are not owned by the principal itself and have been found to be forged (altered) upon being forwarded for verification by the central securities depository after completion of the process of book-entry and settlement, the principal has provided securities free of defect within one (1) week after the date on which the securities broker notified the principal following its receipt of the notice from the central securities depository.
A securities broker which receives securities or consideration as a result of settlement on behalf of its principal in accordance with paragraph 1 or paragraph 2 of this Article shall engage another other securities broker to dispose of it on the Exchange beginning from the first business day after the principal's default. Thereafter, the securities broker shall forthwith report to this Corporation and notify its principal in accordance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals. However, those securities which belong to the same account and are of the same type and same volume may be offset against each other.
Where the event of default of a principal has been reported to this Corporation by the securities broker pursuant to paragraph 3 of this Article, the securities broker shall, on the business day immediately following the reporting date, buy back the securities in question from the Exchange. However, if the default can be cancelled after a given period pursuant to paragraph 4 of this Article, the securities broker may buy back the securities in question on the business day immediately following the expiry of the aforesaid given period.
Where the aggregate number of [shares represented by] the share certificates of securities received by a securities broker handling settlement on behalf of a principal under paragraph 1 and paragraph 2 during the period of a single default reaches 5 percent or more of the number of shares of the underlying securities already issued, and furthermore reaches or exceeds the average daily volume of the underlying securities during the 20 trading days prior to reporting of the default, the securities broker may adopt either of the following measures to handle the default:
1. If handling of the default cannot be completed through reverse transactions during the three consecutive business days from the day next following the date of confirmation of the default by the principal, the securities broker, by reaching a mutual agreement with the principal or by notice to the principal, may, depending on market conditions, in accordance with the content of the agreement or the notice, complete handling of the default through reverse transactions within 180 days, and report the agreement or notice to this Corporation via letter for recordation.
2. The securities broker may reach an agreement with the principal setting a price(s) to serve as the basis for calculating profit/loss, and submit the written agreement reached between the parties to this Corporation via letter for recordation.
Based on the report of a securities broker referred to in paragraph 1, paragraph 2, or paragraph 3 of this Article, this Corporation will forthwith notify each securities broker, which shall act in accordance with paragraph 3 of Article 76 hereof.
In the event that the principal suffers losses or there is any other dispute arising out of the notification sent by this Corporation to each securities broker based on the report by a securities broker, the securities broker reporting the default shall be fully responsible therefor. |
| Article 91-1 | Except under the circumstance prescribed in paragraph 2 below, if settlement is not completed on time for a discretionary investment account, the securities broker shall handle the matter in accordance with the provisions governing default by an ordinary principal.
If settlement is not completed on time for a discretionary investment account because of non-performance by the authorized discretionary trader of obligations arising from trading exceeding the discretionary trader's authorization, such event shall be handled as follows:
1. The securities broker shall carry out settlement on behalf of the principal and notify the principal. Not later than 6:00 p.m. of the date on which the settlement is confirmed, the securities broker shall prepare written report on relevant facts with seals of both the company and its responsible person fixed thereon, together with photocopy of the notification of unauthorized trading issued by the custodian institution, and related trade vouchers and brokerage contract (including documents submitted for account opening), and fax the aforesaid to this Corporation and notify this Corporation by telephone before forwarding original copy of the said documents to this Corporation for reporting to the Competent Authority.
2. In connection with the discretionary investment account, the securities broker shall immediately suspend acceptance of trading orders for securities. Other accounts in the name of the same principal shall not be affected by restrictions under paragraph 3 of Article 76.
3. In connection with the securities or consideration received by a securities broker through settlement on behalf of the principal, the securities broker shall engage another securities broker to dispose of it on the Securities Exchange Market of this Corporation starting on the next business day after the required reporting has been made, provided that the securities in the same account, and of the same type and quantity may be offset against each other.
4. Upon completion of the process prescribed in preceding subparagraph 3, the securities broker shall prepare written report on how the process has been handled, with the seals of both the company and its responsible person fixed thereon, together with photocopy of related trade vouchers, and forward the said documents to this Corporation for reporting to the Competent Authority.
This Corporation shall promptly relay information reported per subparagraph 1 of paragraph 2 above to all securities brokers. |
| Article 92 | A securities broker accepting an order to trade securities shall immediately deliver to the principal the securities bought or the proceeds of the securities sold after it is transacted and settled and, in case it is not transacted, shall forthwith return to the principal the securities or funds received; provided that if the principal entrusts a securities broker for sale and delivers the securities for settlement, the securities broker may, depending upon the credit status of the principal, withhold the proceeds derived from the sale of such securities, before the forehand of the securities sold has been deleted by the listed company.
A securities broker delivering the securities or funds referred to in the preceding paragraph shall request the principal to sign and seal on relevant vouchers so as to complete the procedures. A power of attorney shall be required in the event that the principal appoints another person to sign and seal on its behalf. |
| Article 93 | Before the principal settles the debt arising out of the brokerage trade, a securities broker may retain the property received from the principal and the sum payable to the principal in connection with the brokerage trade.
A securities broker shall prepare and send to each of its principals a monthly reconciliation statement; provided that the above shall not apply to case where there has not been any trade in that particular month and the principal does not request in writing for the statement.
The format and particulars to be specified in the statement referred to in the preceding paragraph shall be in accordance with the regulations prescribed by the Competent Authority. |
| Article 94 | After a brokerage trade has been executed, the securities broker may collect a processing fee from the principal. The fee schedule shall be formulated by this Corporation and approved by the Competent Authority.
A securities broker may establish its fee (or discount) schedule for securities trading to the extent not exceeding the ceiling of a certain percentage of the approved trading amount of its customers, and shall report to this Corporation for record before implementing such fee (or discount) schedule. Subsequent amendment to the fee (discount) schedule shall be effected in the same manner. With respect to the fee (or discount) schedule established by a securities broker, the securities broker may collect the processing fees based on a specified fee rate and make settlement based on a certain period of time (monthly, weekly, etc.) Any amount refundable or deductible shall be transferred to the settlement account of the customers and specified in the monthly statement delivered to the customers and monthly accounting summary submitted to this Corporation. A securities broker shall not pay all or a part of the processing fees received by it to introducing persons related to the trading as their remuneration.
A securities broker shall not pay, in whole or in part, any processing fee receivable by it to any introducing person related to the trading as their remuneration; provided, this restriction shall not apply where it is paid under a contract to a foreign financial institution that is registered and permitted by the competent authority of the local country to operate securities business.
The term “local country” in the preceding paragraph shall be separately defined by this Corporation. |
| Article 95 | (deleted) |
CHAPTER VII TRADING BY SECURITIES DEALERS
|
| Article 96 | A securities dealer shall not directly or indirectly accept orders from others to trade securities on the Exchange. |
| Article 97 | A securities may subscribe stock or corporate bonds of a company. With the exception of such subscriptions, any proprietary trading of listed securities by a securities dealer shall be done on the Exchange only. Unless otherwise approved by the Competent Authority, a securities dealer shall not place orders with securities brokers to trade on its behalf. |
| Article 98 | (deleted) |
| Article 99 | A securities dealer shall process the trading of securities as the following:
1. It shall not quote the up-limit (down-limit) of the daily trading limit as the purchase (sale) price.
2. Purchase (sale) prices quoted before the market is open shall not exceed 50 percent of the prescribed daily price-fluctuation limits based on the closing price (in case of ex rights or ex dividend, the projected ex rights price or ex dividend price on the date set for ex rights or ex dividend) of the previous trading day.
For newly listed common stocks during the period when no price fluctuation limit is imposed, and for securities trades required for hedging in the issuance of call (put) warrants or in derivatives trading, and for beneficiary certificates for subscription or redemption of exchange-traded funds, all of these are free of the price restrictions in the preceding paragraph insofar as a separate segregated account may be established for the trading orders.
Where this Corporation discovers that the trading of securities by a securities dealer is sufficient to affect the normal market, this Corporation may report to the Competent Authority seeking its approval for limiting the trading volume of all or a part of the securities to be bought or sold by the securities dealer. |
| Article 100 | (deleted) |
CHAPTER VIII CLEARING AND SETTLEMENT
|
| Article 101 | The trading of securities transacted on the Exchange shall be cleared and centrally settled by the Clearing Division.
This Corporation shall appoint the central securities depository to handle the receipt and delivery of securities in connection with the central settlement of securities trading referred to in the preceding paragraph.
The clearing and settlement of securities transacted by the branch offices of a securities firm shall be consolidated by the head office and handled in accordance with the preceding two paragraphs. |
| Article 102 | A securities firm shall complete the clearing and settlement matters in accordance with the Operation Rules and relevant regulations.
The associated persons of a securities firm in charge of the clearing and settlement shall carry the registration pass provided by this Corporation while handling centralized clearing and settlement at the Clearing Division of this Corporation or at the central securities depository. |
| Article 103 | The trading of securities on the Exchange that is transacted on the same business day shall be deemed as one clearing period.
The portion of the transacted securities referred to in the immediately preceding paragraph that are to be centrally deposited and settled through book-entry shall be handled in accordance with the relevant provisions of the operation rules of the central securities depository.
The portion of the securities referred to in the first paragraph of this Article that are transacted through margin purchases or short sales shall be handled by securities firms in accordance with the relevant provisions of the Operation Rules for Securities Firms Dealing with Margin Purchases and Short Sales of Securities and the Operation Rules for Securities Finance Enterprises Dealing with Margin Loans and Short Stocks.
The clearing data in respect of margin purchases or short sales referred to in the immediately preceding paragraph that shall be compared with that of the securities finance enterprises shall be transmitted along with other clearing data to the computer system of the central securities depository after ascertaining that there is no error at comparison, and consolidated report shall be prepared and transmitted to the computer system of this Corporation. The deadline for completion of the transmission shall not be later than 9:00 p.m. |
| Article 104 | When handling central settlement, this Corporation shall calculate the net amount after offsetting the amounts receivable and payable. Securities firms and securities finance enterprises shall complete settlement procedures in accordance with the securities traded and the prices as specified in the settlement report.
Securities firms and securities finance enterprises shall complete settlement procedures for money and securities payable to this Corporation in the following manner:
1.Money payable for settlement shall be remitted, by 10:00 a.m. of the second business day following the trade date, into the bank account designated by this Corporation. Where the remittance cannot be made in a financial institution, with the approval of this Corporation, a check drawn on the Bank of Taiwan or cash may be deposited into the bank account designated by this Corporation.
2. Securities deliverable shall be delivered to the central securities depository by book-entry transfer by 6:00 p.m. of the first business day following the trade date.
After the securities firms and securities finance enterprises have completed the procedures for transferring deliverable securities, the central securities depository shall notify this Corporation.
This Corporation shall complete settlement procedures for money and securities receivable by securities firms and securities finance enterprises in the following manner:
1. For money receivable for settlement, after 10 a.m. on the second business day following the trade date, this Corporation shall notify the designated bank to carry out book-entry account transfer..
2. For securities receivable for settlement, after the procedures in subparagraph 1 of paragraph 2 of this Article have been performed and this Corporation has checked and verified that the remittance is correct, this Corporation shall notify the central securities depository to carry out book-entry account transfer. |
| Article 105 | (deleted) |
| Article 106 | Unless otherwise acting pursuant to Article 70 or Article 71, or with the consent of the securities firm representing the purchaser, the face value of the securities provided for settlement by a securities firm representing the seller shall be one trading unit or multiples thereof. |
| Article 107 | Where a securities firm representing the purchaser believes that there is any legal or other irregularities on the securities provided for settlement by the securities firm representing the seller, it may decline to accept such securities. However, the above shall not be applicable where the securities firm representing the seller has provided adequate sum as collateral with the approval of this Corporation.
A securities firm representing the seller that provides collateral shall take corrective actions before the closing of the market on the first business day following the date of settlement. The first securities firm which sells the defective securities after the defect was discovered shall be held liable therefor. In case there is any doubt or dispute on who shall be held liable, this Corporation will call up a meeting to be attended by the responsible persons of securities firms concerned, representatives of the Securities Dealers Association, and officials of the Competent Authority to review and resolve the dispute.
In the event that the securities firm liable for taking corrective action fails to take corrective actions within the prescribed time frame, this Corporation may designate other securities firm to take corrective actions on its behalf. All payments, value equivalent of rights and benefits, commissions and taxes incurred therefrom shall be paid from the clearing and settlement fund, and the defaulting securities firm shall make up the deficit in full within one week after being notified to do so. Failure to make up the deficit within the said time frame shall be handled in accordance with the relevant regulations.
The securities firm that is held liable shall act on its own accord to obtain recovery from the principal that had engaged it to sell the defective securities. |
| Article 108 | The form "Application for Transfer" shall be attached to the securities provided for effecting settlement by the securities firm representing the seller. Further, the securities firm representing the seller shall endorse the reverse side of the securities by dating the next business date following the trade date, and shall be responsible for the transfer of the rights attached thereto.
The securities firm representing the purchaser may refuse to accept the securities if the securities firm representing the seller has failed to act in accordance with the preceding paragraph. Delay in settlement resulting therefrom shall be deemed as default of its settlement obligations.
The securities firm representing the purchaser shall have the obligations to handle on behalf of its principal the transfer of the securities it has been engaged to purchase; provided that the above shall not be applicable where its principal explicitly indicates that it will handle the registration of transfer by itself.
Where defects on right to securities occur before settlement, the securities firm representing the purchaser shall exercise the right of recourse against the securities firm that had provided the said securities. |
| Article 109 | If the securities firm representing the seller is unable to perform settlement obligations because the securities submitted for settlement fall under any of the circumstances listed below, it may apply to borrow securities pursuant to this Corporation's Securities Lending and Borrowing Regulations
1. The securities are damaged and incomplete or illegible.
2. The securities are not certified by an entity authorized for certification of securities.
3. The securities are issued by the same listed company but contain different rights.
4. The face value does not conform to the trading unit.
5. The securities are not accompanied by the form "Application for Transfer."
6. The chop of the transferor is not affixed, or the chop is illegible on the securities or on the form "Application for Transfer".
7. The chop of transferor as affixed on the securities is not identical with that affixed on the form "Application for Transfer."
8. the listed company has not affixed its chop for registration of transfer.
If the securities firm representing the seller is unable to perform settlement obligations because of default by the seller, out-trade, or other legitimate reason, it likewise may apply to borrow securities. If the securities firm representing the seller fails to redeliver securities after borrowing them to perform settlement obligations, this Corporation will continue the borrowing on its behalf.
If the amount of securities borrowed is insufficient, this Corporation will fill out and forward a "Securities Delivery Voucher" to the central securities depository for the portion falling short for safekeeping on behalf of the securities firm representing the purchaser. The securities firm representing the seller shall, within the committed time limit, deliver the securities in exchange for the return of the aforesaid "Securities Delivery Voucher" and the refund of the collateral.
When the securities firm representing the seller applies to borrow securities or to continue borrowing of securities, it shall by means of electronic account transfer within the time limit provided by this Corporation's Securities Lending and Borrowing Regulations, pay the collateral for the securities borrowing or the amount of any shortfall in the collateral for continued securities borrowing. After the close of banking hours, it may be paid over the counter at this Corporation by a check payable at sight issued by a bank designated by this Corporation or in cash (for an amount not more than NT$100,000).
The collateral or shortfall in the collateral for securities borrowing referred to in the preceding paragraph may be offset by a bank guarantee or a pledged central book-entry bond. Where the offset is made by a central book-entry bond, the offset value will be 90 percent of the face value of the bond.
If the securities firm representing the seller fails to deposit securities borrowing collateral funds or provide offsetting collateral within the time limit provided in this Corporation's Securities Lending and Borrowing Regulations, or to make up a shortfall in the amount of collateral, or its check for the collateral funds cannot be cashed, it is in default of its settlement obligations; this Corporation may tentatively retain a portion of the proceeds and securities equivalent in value to the settlement price payable for that settlement period.
Lending auctions, negotiated lending, and tender offers carried out to cover stock loan shortfalls of securities finance enterprises shall be conducted in compliance with this Corporation’s Securities Lending and Borrowing Regulations.
The Securities Lending and Borrowing Regulations will be separately adopted by this Corporation and submitted to the Competent Authority for approval and shall take effect after they are publicly announced. |
| Article 110 | Where a securities firm fails to correct, within the prescribed time frame for settlement, errors on the monetary sum or securities presented by the securities firm for settlement that have been discovered by and notified to the securities firm by the Clearing Division or central securities depository, it shall be deemed as a default of its settlement obligations. |
| Article 111 | Securities firms and securities finance enterprises that fail to handle the settlement within the time frame specified in subparagraph 1 or subparagraph 2, paragraph 2 of Article 104 shall be deemed as a breach of their obligations for settlement; provided that the above shall not be applicable to those who violate subparagraph 2, paragraph 2 of Article 104, but complete the settlement before midnight, nor to those who violate subparagraph 1, paragraph 2 of Article 104 hereof, but complete the settlement within the business hours of banks on that particular day. |
| Article 112 | A securities broker shall not refuse to perform its obligations for settlement on grounds of the following matters:
1. Default by the principal.
2. Delayed settlement by the principal.
3. Failure by the authorized discretionary trader for a discretionary investment account to perform on time obligations arising from a trade exceeding the scope of the discretionary trader's authorization.
4. A shortfall in refinancing for a margin purchase or short sale. |
| Article 113 | Securities firms and securities finance enterprises may not default on their settlement obligations.
Where any securities firm violates the preceding paragraph, in addition to this Corporation designating another securities firm to effect delivery on its behalf in accordance with Article 153 of the Securities and Exchange Act, this Corporation shall also retain the sum and securities receivable; provided that in respect of the sum and securities that have been actually paid and delivered, the defaulting securities firm may engage the designated securities firm to collect the retained sum and securities equivalent thereto before making computation of the offsetting in accordance with paragraph 3 hereof.
The designated securities firm shall compute and offset the sum and securities that have not been paid and delivered at the respective due date by the defaulting securities firm against the retained sum and securities. The balance thereof shall, after being verified with this Corporation to be correct and beginning from the following business date, be cleared off through purchases or sales on the Exchange on behalf of the defaulting securities firm. In case it is unable to clear off through purchases or sales, this Corporation may notify the designated securities firm to clear it through auction, price negotiation, tender, or other trading methods; provided, however, that, in case auction or tender approach is adopted, it may be exempted from the restrictions on volume applied for, pricing, period of public announcement, and transacted volume as specified in relevant regulations.
The base price for handling the clearing off in auction, price negotiation, tender or other trading methods referred to in the preceding paragraph shall be determined by this Corporation based on the closing price for the most recent business day plus or minus ten percent.
The defaulting securities firm shall not raise any objection in respect of the base price determined pursuant to the preceding paragraph.
The difference on pricing and all expenses incurred from handling the clearing off pursuant to paragraph 3 hereof shall be borne by the defaulting securities firm.
In the event that securities finance enterprises violate their obligations for settlement, this Corporation shall report to the Competent Authority for actions on a case by case basis. |
| Article 113-1 | Where default by any principal causes a securities firm to default on its obligations for settlement and the securities firm has reported such to this Corporation, this Corporation may notify other securities firms to temporarily suspend delivery to the defaulting principal of securities receivable by it for settlement, and that the securities owned by the defaulting principal and placed in custody with the central securities depository shall not be withdrawn or delivered. After the money and securities of the defaulting securities firm or the defaulting principal have been balanced, this Corporation shall notify other securities firms to proceed with settlement, and remove the said restriction on securities withdrawal or delivery.
The preceding paragraph shall apply to any principal whose connection with the defaulting principal has been verified by this Corporation on evidence from defaulting securities firm(s) and consultation with the securities firm(s) to which this Corporation has intended to notify the suspension of settlement.
Upon receiving court order of attachment execution to suspend settlement for the defaulting principal, a securities firm shall immediately notify this Corporation. |
| Article 114 | In the event that there is any sum payable by a defaulting securities firm, this Corporation shall forthwith offset said sum against its clearing and settlement funds and other interests. In the case of any deficit after offsetting, this Corporation shall seek indemnification from the defaulting securities firm. |
| Article 115 | (deleted) |
| Article 116 | In the event of war, natural disasters or the occurrence of other events of force majeure that causes this Corporation or the central securities depository to be unable, or with obvious difficulties, to process the clearing and central settlement, this Corporation may first decide to suspend clearing and the central settlement and then formulate the method for handling such event, which shall be submitted to the Competent Authority for its approval and to take effect after its approval. |
| Article 117 | (deleted) |
CHAPTER IX CLEARING AND SETTLEMENT FUNDS AND HANDLING CHARGES
|
| Article 118 | Securities firms shall deposit clearing and settlement fund with this Corporation in accordance with the regulations prescribed by the Competent Authority. The deposit into such fund shall be limited to cash only, and the method for management of such fund shall be separately prescribed. |
| Article 119 | A securities firm that terminate the market usage contract shall settle its trades on the Exchange of this Corporation, and shall further clear all accounts before applying with this Corporation for refund of the clearing and settlement fund. |
| Article 120 | The fee schedule of handling fees to be collected by this Corporation from the securities firms representing the purchaser and seller shall be formulated jointly by this Corporation and the Securities Dealers Association, and shall take effect after it is reported to and approved by the Competent Authority.
Where this Corporation is engaged by a securities firm to handle any matters on its behalf in accordance with paragraph 2 of Article 5, the handling fee payable by such securities firm to this Corporation shall be formulated jointly by this Corporation and the Securities Dealers Association, and shall take effect after it is submitted to and approved by the Competent Authority. |
| Article 121 | This Corporation shall calculate the handling fees payable before the end of each month based on the trading volume engaged in by each securities firm for the then current month and the fee schedule referred to in the immediately preceding Article, and shall issue and forward an invoice to each securities firm. The securities firms shall make full payment before the tenth day of the following month. |
CHAPTER X ARBITRATION
|
| Article 122 | Any dispute between a securities firm and its principal arising out of trading of securities may be settled by arbitration if the parties have so agreed. This shall apply to other disputes arising out of the brokerage contract.
The agreement for arbitration referred to in the preceding paragraph may be specified in the brokerage contract between a securities firm and its principal, and shall be treated as an arbitration agreement referred to in the Arbitration Act. |
| Article 123 | A securities firm and its principal that proceed with arbitration in accordance with their agreements may apply with an arbitration institute for arbitration proceedings to be conducted by an arbitration court. |
| Article 124 | In the event that the parties in dispute fail to observe the provisions of this Chapter by applying for arbitration and instead directly institute legal action in court, the other party may petition the court for dismissal of the lawsuit in accordance with Article 167 of the Securities and Exchange Act. |
| Article 125 | (deleted) |
| Article 126 | (deleted) |
| Article 127 | (deleted) |
| Article 128 | (deleted) |
| Article 129 | (deleted) |
| Article 130 | (deleted) |
| Article 131 | (deleted) |
| Article 132 | (deleted) |
| Article 132-1 | Any dispute arising out of trading of securities between securities firms shall be settled by arbitration; provided that this Corporation may request the Securities Dealers Association to mediate the dispute before proceeding with the arbitration. |
| Article 132-2 | Any securities firm which is the party to the arbitration referred to in this Chapter shall notify this Corporation when arbitration is proceeding, and shall submit copies of the relevant documents to this Corporation. |
| Article 132-3 | The arbitration referred to in this Chapter, its procedures, the selection of arbitrators, and other proceedings shall be conducted in accordance with the Securities and Exchange Act and the Arbitration Act. |
| Article 132-4 | Where the parties in dispute which proceed with the arbitration require this Corporation to provide relevant information, they shall apply to an arbitration court for such materials from this Corporation. |
| Article 133 | Any dispute between securities firms and this Corporation arising out of the market usage contract shall be settled by arbitration, and the provisions of this Chapter shall apply mutatis mutandis. |
| Article 134 | (deleted) |
CHAPTER XI PENALITIES FOR VIOLATIONS
|
| Article 135 | Where any securities firm violates Article 13, Article 16, paragraph 2 of Article 21, Article 23, paragraph 1 or 5 of Article 25, paragraph 3 of Article 28-1, paragraph 1 of Article 29, Article 33, Article 40, Article 68, subparagraph 1, 4, 6 or 7 of paragraph 1 or paragraph 2 of Article 75, paragraph 1 of Article 75-1, paragraph 1 of Article 75-2, Article 76, paragraph 2, or 3 of Article 80, Article 80-1, paragraph 4 of Article 82, paragraph 3 of Article 85, Article 87, paragraph 2 of Article 93 or Article 95 hereof, this Corporation may notify it to make correction or improvement within a prescribed time frame (amended on December 22, 2000).
Where any securities firm violates this Corporation's Articles of Incorporation, Operating Rules, Rules Governing Brokerage Contracts, or other bylaws, rules, regulations, announcements or circular letters, unless otherwise provided, this Corporation may notify it to make correction or improvement within a prescribed time frame. |
| Article 136 | Where any securities firm violates paragraph 3 of Article 25, Article 26, paragraph 2 or paragraph 3 of Article 58, subparagraph 5 of paragraph 1 and paragraph 3 of Article 75, paragraph 2 of Article 75-1, paragraph 2 of Article 75-2, Article 77-4, paragraph 5 of Article 80, Article 81, paragraph 1, 2, or 3 of Article 82, Article 82-1, paragraph 2 of Article 83, paragraph 1, 2, 3, 5, or 6 of Article 91, paragraph 2 of Article 91-1, paragraph 2 of Article 92, paragraph 2 or 3 of Article 94, paragraph 2 of Article 108, paragraph 3 of Article 109, Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, this Corporation may warn them and notify it to make correction or improvement within a prescribed time limit. |
| Article 137 | Where any securities firm fails to transmit the itemized allocations of trade price and volume and the itemized orders placed by authorized traders as required under Article 75-5, this Corporation may impose a fine of thirty thousand New Taiwan Dollars if the delay is one hour or less, or an additional fine of ten thousand New Taiwan Dollars for each additional hour's delay.
Where any securities firm fails to key-in within the prescribed time period the clearing data in respect of margin purchases or short sales in accordance with Article 103, this Corporation shall impose a fine of thirty thousand New Taiwan Dollars if the delay is one hour or less, or an additional fine of ten thousand New Taiwan Dollars for each additional hour's delay.
Where any securities firm violates subparagraph 1 or subparagraph 2 of Article 104, this Corporation shall impose a fine of thirty thousand New Taiwan Dollars if the delay is one hour or less and the number of securities certificates in shortage is five thousand or less or the monetary sum which settlement has been delayed is fifty million New Taiwan Dollars or less, or a fine of forty thousand New Taiwan Dollars if it is more than five thousand in shortage or the sum is more than fifty million New Taiwan Dollars, or an additional fine of ten thousand New Taiwan Dollars for each additional hour's delay. However, the responsibility in the delay may be exempted if the securities firms can prove that the reasons for delay in settling moneys and securities are not attributable to them.
Securities firms shall pay the fine referred to in the preceding two paragraphs to the Finance Division of this Corporation within two days after receiving notification of this Corporation. |
| Article 138 | Where any securities firm commits any of the following acts, this Corporation may impose a penalty in an amount not more than three hundred thousand New Taiwan Dollars:
1. violation of paragraph 4 of Article 25, paragraph 2 of Article 28, paragraph 2 of Article 28-1, Article 37, Article 75, subparagraph 9, Article 77, paragraph 1 of Article 80 or Article 86.
2. failure to make correction or improvement within the time limit designated in accordance with Article 136.
3. failure to pay the fine within the time limit specified in paragraph 3 of Article 137.
4. having been warned twice in accordance with Article 136 within the most recent half year.
Where a securities firm violates the provision referred to in any subparagraph of the preceding paragraph for the second time within the most recent half year, this Corporation may impose a penalty in an amount of five hundred thousand New Taiwan Dollars.
Where any securities firm commits the offense specified in subparagraph 2 of paragraph 1, this Corporation shall send a second notice setting forth a time limit for its correction or improvement. |
| Article 139 | Where any securities firm commits any of the following acts, this Corporation may suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises for a period of not more than three months:
1. failure to make correction within the time limit designated by this Corporation in accordance with Article 24.
2. having been imposed the penalty in accordance with Article 138 for three times or more within the most recent half year.
3. failure to pay the penalty in accordance with Article 138.
4. failure to make correction or improvement within the time limit prescribed in accordance with paragraph 3 of Article 138. |
| Article 140 | Where any securities firm violates paragraph 1 or paragraph 3 of Article 28, paragraph 2 of Article 85, or Article 113, this Corporation may suspend its trading for a period of not less than three months but not more than six months.
Where any securities firm has been suspended from trading two times in any one year for violation of the provisions of Article 113, or has failed to meet the deadline for payment prescribed in accordance with Article 114, this Corporation may terminate its market usage contract. |
| Article 141 | Where any securities firm commits any of the following acts, this Corporation may restrict or terminate the trading, in whole or in part, of its dealing or brokerage business or at its business premises or terminate the market usage contract:
1. violation of Article 30 by making false statements or reports to this Corporation that result in damages to this Corporation or others.
2. violation of paragraph 1 of Article 83 by producing false records and vouchers.
3. violation of Article 89 by offsetting outside the Exchange or transacting outside the Exchange or transacting securities that are not listed by this Corporation without the approval of the Competent Authority.
4. violation of subparagraph 5 of Article 75 or having any event set forth in paragraph 1 of Article 90 or paragraph 2 of Article 94 that seriously damages the rights and interests of the principal, which has been verified by this Corporation.
5. violation of paragraph 5 of Article 83, Article 96, Article 97.
6. a disposition under subparagraph 4 of paragraph 1 of Article 142, where corrections have not been made after three months.
7. any events set forth in Article 3 of the "Regulations Governing Special Inspection of and Guidance to Securities Firms" as prescribed by this Corporation, and has not been able to improve after being subject to guidance for several times. |
| Article 142 | Where any securities firm commits any of the following acts, this Corporation may temporarily suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises and report to the Competent Authority:
1. violation of paragraph 2 of Article 25 by evading or refusing the inspection or the inquires of personnel sent by this Corporation.
2. violation of the settlement obligation specified in paragraph 1 of Article 113.
3. its net worth is less than one-half of its paid-in capital referred to in paragraph 2 of Article 28-1 for six consecutive months.
4. regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after three months.
5. violation of the provisions of the Articles of Incorporation of this Corporation, these Rules, the Rules Governing Brokerage Contracts, or other rules, regulations, public announcements, and circular letters of this Corporation to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
This Corporation may resume its trading status where the actions set forth in subparagraphs 1, 3, 4, or 5 of the preceding paragraph have terminated.
Where any securities firm is suspended by this Corporation from trading in accordance with subparagraph 2 of paragraph 1, the number of days on which it is suspended from trading may be used to offset against the number of days during which trading shall be ceased pursuant to paragraph 1 of Article 141. |
| Article 143 | Where it is discovered by this Corporation that any securities firm is suspected to have violated paragraph 2 of Article 5, Article 27, Article 78, paragraph 1 of Article 85, or other relevant provisions of the Securities and Exchange Act, the matter shall be reported to the Competent Authority for its disposition.
Where any securities firm or securities underwriter is suspected to have violated the provisions of paragraph 2 of Article 5, the matter shall be dealt with by this Corporation in accordance with relevant regulations and shall be reported to the Competent Authority for its recordation.
This Corporation shall, pursuant to the resolutions adopted by the Special Management Committee formed in accordance with the Regulations for Management of Clearing and Settlement Fund under Joint Responsibility System, reduce the trading volume of securities by a securities firm for its own account or on the account of its principals, or restrict or suspend its trading, and shall report the matter to the Competent Authority.
This Corporation may, on the grounds of a disposition by the GreTai Securities Market to suspend or terminate trading by a securities firm, render an appropriate disposition with respect to the same securities firm, and submit it for recordation by the Competent Authority and post-approval by this Corporation's board of directors. |
| Article 144 | Where any employee of a securities firm violates the Articles of Incorporation of this Corporation, these Rules, the Rules Governing Brokerage Contracts, or other rules and regulations, public announcements, and circular letters of this Corporation, this Corporation may, depending upon the severity of the violation, notify the securities firm to give warning to its employee, or to suspend him from executing business activities for one to six months. |
| Article 145 | Except for termination of the market usage contract which shall require the resolution of the meeting of the Board of Directors of this Corporation and the approval of the Competent Authority, any dispositions taken in accordance with Articles 138, 139, 140 and 141 shall be executed in accordance with the resolution adopted by the Board of Directors of this Corporation, and shall be reported to the Competent Authority for its recordation within one month after completion of the execution thereof.
Any disposition taken in accordance with Article 136 shall be reported to the Board of the Directors of this Corporation and the Competent Authority for its recordation. |
| Article 145-1 | Any disposition taken pursuant to this Chapter shall be effective upon delivering the notice to the securities firms concerned. |
CHAPTER XII SUPPLEMENTAL PROVISIONS |
| Article 146 | These Rules shall come into effect after it is reported to and approved by the Competent Authority and publicly announced. |