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Procedures for reporting out-trades and account number corrections:
Securities brokers shall report out-trades and account number corrections in accordance with the following rules:
- Reporting through computer:
- Period for entering information:
Securities brokers shall enter information relating to an out-trade or account number correction into the computer of the TSEC no later than 10 a.m. of the second business day following the trade date. However, where the securities broker is on record as having already made a settlement postponement report, entry shall be completed by 6 p.m. on the third business day from the trade date.
- Handling of breakdowns:
When accidental breakdowns prevent transmission of information over the computer transmission lines, the securities broker shall first report the breakdown to the TSEC by telephone, and re-enter the information after elimination of the problem. - When the occurrence of a natural disaster results in an announcement of cancellation of work for government offices or schools by county or city governments, reporting by computer transmission by securities brokers within the affected area shall be undertaken in accordance with the provisions for handling of settlement matters due in the Taiwan Stock Exchange Corporation Measures for Responding to Natural Disasters.
- Reporting mechanism: where out-trades of a single type of securities by a securities broker reach NT$100 million or more, if the broker handles the out-trades by repurchase or resale, the broker shall notify the TSEC Trading Department by 2 p.m. on the date of handling; if the broker does not handle the out-trades by repurchase or resale, the broker shall notify the TSEC Trading Department at the time of reporting.
- When the electronic reporting of out-trades or account number corrections by a securities broker for the same investor on the same trade date reaches a total amount of NT$50 million or more, or total shares (in beneficiary units) of 1 million shares or more, the TSEC may, depending on the circumstance, require the broker to submit relevant documentation within a prescribed time period.
- The securities broker shall internally prepare an itemized ledger showing corrections to account numbers for hierarchical review, and shall retain a copy for their files.
- The securities broker shall open a special error account at its place of business for the repurchasing and re-selling of stock connected with handling of out-trades. Trades made through that error account may not be changed to appear as trades through an investor's account, nor may trades through an investor's account be changed to appear as trades through the error account.
- Where an out-trade occurs in securities trading by a securities broker through an omnibus account, the report of the out-trade may not be based on the omnibus account. The report of the out-trade shall be based on the post-allocation securities trading account of the individual principal. However, this rule does not apply to account number corrections.
- Where an out-trade or account number correction occurs in trading conducted by auction or on-market tender offer, the securities broker shall produce an "Out-Trade Handling Report - Occurrence" or an "Investor Account Number Correction Report," and shall attach a copy of the order form, order confirmation, and execution report for that particular trade, and a written explanation of the reasons for the occurrence stamped with the seal of the company, the company's responsible person, and the person handling the matter, and submit them to the trading department of the TSEC for approval, after which, the TSEC shall input them into the computer system on behalf of the broker; if the error is attributable to alteration of the account number by the investor, an "Application for Account Number Correction" showing the account numbers before and after correction, and agreed upon between both parties, shall also be submitted. For an on-market tender offer transaction that is executed and settled on the same day, the submission must be made no later than 6 p.m. on the next business day.
- A securities broker may, upon application by an investor, report an out-trade for the price difference caused by erroneous execution of a brokerage order, but the provisions relating to repurchase or resale shall not apply.
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