| Title： |
Operational Rules Governing Day Trades of Securities(2013.10.29) |
| Date： |
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Article 1
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For the purposes of these Rules, a day trade of securities shall mean a normal settlement trade, in which the principal and the securities firm agree, with respect to a TWSE (or GTSM) listed security designated by the competent authority, to execute a buy order in cash and then sell spot securities of the same type, through the same brokerage account on the same day, and in which equal quantities of the security are mutually offset, and the settlement of funds is then conducted based on the price difference following the offset of the buy and sell trades.
If a TWSE (or GTSM) listed security that is eligible for day trading has been publicly announced by the TWSE or the GTSM under relevant bylaws or rules as being placed under an altered trading method or under dispositive measures, the security may not be an object of a day trade.
Day trades of securities are limited to trades made in normal trading before market close, and trades in which the buy order is executed in normal trading before market close and the sell order is executed in after-market fixed-price trading.
These Rules do not apply to odd-lot trades, block trades, trades conducted under Article 74 of the TWSE Operating Rules, and trades conducted through over-the-counter price negotiation under Article 32-1, and trades under Article 39, of the GreTai Securities Market Rules Governing Securities Trading on the GTSM.
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Article 2
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A principal applying to conduct day trades of securities shall have opened a brokerage account for three full months, and shall have had at least 10 trading orders executed within the most recent one year, provided that this rule does not apply to those that have opened a margin account or to professional institutional investors.
A principal shall first sign a general authorization agreement with the securities broker, stipulating the matters specified in Article 1, paragraph 1, and, unless a professional institutional investor, shall sign a risk disclosure statement before the securities broker may accept the principal's orders for day trades.
If a principal has signed a general authorization agreement, and on the day of a trade does not wish to offset the trade in day trading, the principal shall, before market close, make a statement to the securities broker. The securities broker shall confirm the statement and keep a record.
The risk disclosure statement and general authorization agreement under the preceding paragraphs shall be publicly announced by the TWSE.
Professional institutional investors under paragraphs 1 and 2 shall mean domestic and foreign banks, insurance companies, bills finance companies, securities firms, fund management companies, government investment institutions, government funds, pension funds, mutual funds, unit trusts, securities investment trust enterprises, securities investment consulting enterprises, trust enterprises, futures commission merchants, futures service enterprises, and other institutions approved by the competent authority.
A securities broker shall input into the computer systems designated by the TWSE and the GTSM the list of names of principals that may conduct day trades. If there is any change, an adjustment shall be made immediately.
A principal may not use an omnibus trading account to engage in day trades of securities. Trades conducted after trade allocation of an omnibus trading account, and trades for which the account number is corrected after trade allocation, may not be offset as day trades.
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Article 3
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The monetary amount of a principal's purchases in day trades shall be included in the calculation toward the single-day trading limit. After a limit amount has been offset, it may not be put to revolving use on the same day.
If the securities broker, pursuant to relevant regulations, does not establish a single-day trading limit for the principal, and the principal engages in day trades, it shall separately establish a limit for day trades. The total sum of sell orders for day trades may not exceed the day trade limit. The monetary amount of buy orders and the monetary amount of canceled sell orders need not be included in the calculation toward the day trade limit. After a limit amount has been offset, it may not be put to revolving use on the same day.
The monetary amount of day-trading sell orders by a principal under the preceding paragraph during after-market fixed-price trading shall be included in the calculation toward the day trade limit, but the monetary amount of unexecuted day-trading sell orders during normal trading hours is not included in the calculation toward the daily limit.
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Article 4
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The securities broker may collect funds in advance from the principal in full or in a certain percentage as the circumstances merit.
The Operational Directions for Advance Collection of Funds and Securities by Securities Brokers in Brokerage Trading shall apply mutatis mutandis to the operations for the advance collection of funds under the preceding paragraph.
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Article 5
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The securities broker shall, after market close every day, assess whether to increase or decrease a principal's single-day trading limit or day trade limit, based on the principal's profit and loss following day trading.
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Article 6
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If the principal's cumulative loss from day trades of the preceding month reaches half of the single-day trading limit or the day trade limit, the securities broker shall suspend day trading by the principal. With the exception of professional institutional investors, the securities broker shall re-evaluate the principal's single-day trading limit or day trade limit after the principal has submitted proof of adequate financial capability.
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Article 7
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The securities firm shall, by 6 p.m. on the trade date, input the types of securities and amounts traded in day trades through the brokerage account into the computer system designated by the TWSE or GTSM. If the securities firm fails to input the amount of a day trade, it shall be deemed not to be a day trade. The input data may not be adjusted after 10 a.m. on the second business day following the trade date.
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Article 8
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Matters not provided for herein shall be governed mutatis mutandis by the relevant regulations of the TWSE and GTSM.
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Article 9
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These Rules and any amendments hereto are drafted by the TWSE in consultation with the GTSM, and shall be announced and implemented after submission to and approval by the competent authority.
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