| Title： |
Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities(2020.08.05) |
| Date： |
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Article 8
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TWSE-listed ordinary shares satisfying the criteria below will be announced by the TWSE as eligible for margin purchases and short sales:
- The shares have been listed for at least six months.
- The net asset value per share at least reaches the par value, as specified in the latest financial report as at the date of review. Where the shares are of a primary TWSE-listed company with no par value or the net asset value per share is not NT$10, the financial reports published and filed in the last fiscal year show no accumulated losses.
- None of the following applies:
- Excessively intense share price volatility.
- Excessively concentrated equity ownership.
- Excessively irregular trade volume.
With the exception of TPEx-listed managed stocks and stocks registered on the Emerging Stock Board, all TPEx listed common stock shares satisfying the criteria below will be announced by the TPEx as eligible for margin purchase and short sale.
- The shares have been listed on the TPEx for at least six months.
- The net asset value per share at least reaches the par value, as specified in the latest financial report as at the date of review. Where the shares are of a primary TWSE-listed company with no par value or the net asset value per share is not NT$10, the financial reports published and filed in the last fiscal year show no accumulated losses.
- The company has been incorporated and registered for at least three years. If the issuer is a transferee company of a demerger from a TWSE or TPEx listed company, the time of incorporation may be calculated from the time of establishment of the demerged division as shown in the financial data of the demerged parent company. If the issuer is an investment holding company or financial holding company, the time of incorporation may be calculated from the time of incorporation of its operating entity.
- The company has a paid-up capital of NT$300 million or more, or a net worth of NT$600 million or more if it is a primary TPEx listed company whose shares have no par value or a par value other than NT$10 per share.
- Profitability of the company:
- Having had no accumulated losses, and had net operating income and profit before tax totaling 3% or more of paid-up capital on a standalone or consolidated basis, in the latest financial year, provided the above provision on net operating income and profit before tax may be waived if the paid-in capital reaches NT$600 million or more.
- It is a primary TPEx listed company whose shares have no par value or a par value other than NT$10 per share, had net operating income and profit before tax totaling 3% or more of shareholders' equity on a standalone or consolidated basis.
- None of the circumstances described in subparagraph 3 of the preceding paragraph applies.
For purposes of these Rules, the term "net worth" means equity attributable to owners of the parent as stated in the balance sheet.
The financial data mentioned in paragraph 2 are as specified in the latest published financial reports as having been audited and certified, or reviewed, by the CPA.
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Article 14
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The share price volatility of TWSE or TPEx listed securities is deemed excessively intense as in Article 8, paragraph 1, subparagraph 3, item 1 under any of the following circumstances:
- The average of the daily price limit (absolute value) of the securities during the sampling period prescribed in Article 12 reaches at least the average of the daily price limit (absolute value) of the samples specified in the preceding article for the same period plus two standard deviations and exceeds 150% of the average of the daily price limit (absolute value) of the securities of the same industry in the same market.
- The ratio of the difference between the highest and lowest prices to the average price during the sampling period prescribed in Article 12 reaches at least the average of the ratio of the difference between the highest and lowest prices to the average price of the samples specified in the preceding article for the same period plus two standard deviations and exceeds 150% of the ratio of the difference between the highest and lowest prices to the average price of the securities of the same industry in the same market.
- Any of the following occurs in respect of the percentage premium or discount during the sampling period prescribed in Article 12 as calculated by the closing price of Taiwan depositary receipts and that of the exchange market of the country of the shares represented by such receipts:
- The percentage premium of Taiwan depositary receipts on the business day immediately preceding the date of public notice of the Market Observation Post System exceeds 50%, and the closing price of Taiwan depositary receipts of the same day must be the highest of the closing prices for the last six business days (inclusive of the sixth business day), or higher than the opening reference price in the absence of a closing price for the last five business days (excluding the fifth business day).
- The percentage premium of Taiwan depositary receipts on the business day immediately preceding the date of public notice of the Market Observation Post System exceeds 50%, and the closing price of Taiwan depositary receipts of the same day must be the lowest of the closing prices for the last six business days (inclusive of the sixth business day), or lower than the opening reference price in the absence of a closing price for the last five business days (excluding the fifth business day).
- If the proviso of item (1), subparagraph 5, paragraph 2, Article 8 applies to the TPEx-listed securities, where the TPEx has announced disposition measures in respect of the securities in accordance with Article 6 of the TPEx Operation Directions for Announcement or Notice of Attention to Trading Information and Dispositions in the past six months.
- Other circumstances where the share price volatility may be deemed excessively intense.
Any price change that is not attributed to a trade (such as ex-right, ex-dividend etc.) is disregarded during the period the standard in subparagraphs 1 and 3 of the preceding paragraph is being calculated or when the closing price standard is being compared over the last six business days (including the sixth business day) as mentioned in subparagraph 3 of the preceding paragraph, in respect of TWSE or TPEx listed securities.
For the comparison in subparagraphs 1 and 2 of paragraph 1 of this article, securities of the same industry in a different market (listed or OTC) may be compared if there are no securities of the same industry in the same market. The comparison requirement does not apply if there are no securities of the same industry in a different market or the TWSE or TPEx listed securities do not fall in any industry.
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Article 15
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The trade volume of TWSE or TPEx listed securities is deemed excessively irregular as in Article 8, paragraph 1, subparagraph 3, item 3 under any of the following circumstances:
- The turnover of the securities in the sampling period specified in Article 12 is at least 10 times the average turnover of the samples for the same period as mentioned in Article 13.
- The turnover rate of the securities in the sampling period specified in Article 12 is lower than 10% of the average turnover rate of the samples for the same period as mentioned in Article 13, and the trading volume in said period is less than 3,000 share certificates or 3,000 units.
- If the proviso of item (1), subparagraph 5, paragraph 2, Article 8 applies to the TPEx-listed securities, their turnover rate in the sampling period specified in Article 12 reaches twice or more of the average turnover rate of securities of the same industry in the TPEx market in the same period; paragraph 3 of the preceding article will apply mutatis mutandis if there are no securities of the same industry in the TPEx market.
- Other circumstances where the trade volume may be deemed excessively irregular.
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