| Title： |
Taiwan Stock Exchange Corporation Procedures To Be Taken in Connection with Margin Purchase or Short Sale in the Event of the Suspension or Halting of Trading(2011.01.26) |
| Date： |
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1
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During the suspension or halting of trading , margin purchase or short sale may be redeemed by cash payment or delivery of spot securities.
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2
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The term of margin purchase or short sale may be extended for the period of suspension or halting of trading of the securities, and the collection and payment of interest during the extension may be determined by the securities finance company or securities firm.
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3
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There is no need to replace the securities whose trading is suspended or halted if they are additional collateral securities, and the collateral maintenance ratio of the securities shall be calculated based on the closing price on the business day immediately prior to the halting or suspension of trading. Article 58-3, paragraph 2, subparagraphs 2 and 3 of the Operating Rules of the Taiwan Stock Exchange Corporation ("TWSE") shall apply if there is no closing price.
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4
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During the suspension or halting of trading of the securities, the securities firm may borrow from the securities finance company in the case of inventory shortage if necessary. The securities finance company may purchase securities by tender offer according to Chapter 3 of the TWSE Rules Governing Purchase of Listed Securities by Reverse Auction in the event of inadequate sources of securities.
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5
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In the event that the short seller fails to return the securities for satisfaction of the loan by the sixth business day prior to the book closure date according to Article 35 of the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities or Operating Rules for Margin Purchases and Short Sales of Securities Finance Companies, thus causing the securities firm or securities finance company to proceed with disposition from the next business day, the securities firm or securities finance company may purchase the securities by tender offer according to Chapter 4 of the TWSE Rules Governing Purchase of Listed Securities by Reverse Auction during any suspension or halting of trading of the securities. When two or more tender offer purchases are conducted, the dollar amounts of the purchases that are allocable to the short sellers shall be calculated by weighted average method.
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6
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In the case of a purchase by tender offer, the margin buyer may appoint its securities firm or securities finance company to participate in the competitive bidding to sell. In the event that the securities firm or securities finance company is entitled to dispose of the securities, it may also participate in the competitive bidding to sell in its own name.
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