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At the close of trading each day, the TSEC will analyze trading in securities, including stocks, beneficiary certificates, convertible corporate bonds, corporate bonds with warrants, preferred stocks with warrants, depositary receipts, and call (put) warrants. Upon discovery of any of the following circumstances, the TSEC will announce related trading information (such as the degree of upward or downward movement in prices, trading volume, turnover rate, degree of concentration, price-to-earnings ratio, price to book ratio, or long/short ratio):
(1) An irregularity in the cumulative percentage of increase or decrease in the closing price during the most recent period.
(2) An irregularity in the percentage of increase or decrease in the closing price between the initial and final business days of the most recent period.
(3) An irregularity in the cumulative percentage of increase or decrease in the closing price during the most recent period, combined with an unusually large increase in the intraday volume of trade relative to the daily average in the most recent period.
(4) An irregularity in the cumulative percentage of increase or decrease in the closing price during the most recent period, combined with an unusually high intraday turnover rate.
(5) An irregularity in the cumulative percentage of increase or decrease in the closing price during the most recent period, combined with intraday consigned trading of the given security at a securities firm in which confirmed purchases or sales account for an unusually high percentage of the intraday volume of trade in the given security.
(6) A significant increase in the daily volume of trading for a given day or several recent days relative to the daily average volume of trade for the most recent period.
(7) A significantly high cumulative turnover rate for the most recent period.
(8) An irregular price-to-earnings rate or price-to-book ratio, combined with any two of the following four circumstances: an unusually high intraday turnover; a relatively high price-to-book ratio for stocks of the given industry; an intraday value for confirmed purchases or sales of the given security at any single securities firm that accounts for an unusually high proportion of the total intraday value of confirmed trades in the given security; or an intraday value for confirmed purchases or sales of the given security by any single investor that accounts for an unusually high proportion of the total intraday value of confirmed trades in the given security.
(9) A significant increase in the long/short ratio during the preceding period.
(10) Other trading irregularities as determined by resolution of the Surveillance Operations Oversight Committee.
The cumulative percentage of increase or decrease in the closing price during the recent period for call (put) warrants, corporate bonds with warrants, and preferred stock with warrants is calculated by means of the following formula:
The cumulative percentage of increase or decrease in the closing price during the given period = the monetary value of the increase or decrease in the daily closing price of the call (put) warrant, corporate bond with warrant, or preferred stock with warrant during the given period ÷[the reference bid price at market opening for the given underlying security on a given day during the given period (or for call (put) warrants on baskets of securities, the largest security included) × the exercise ratio for the given day] × 100%, and expressed as the difference between this figure and the cumulative percentage of increase or decrease in the closing price for the underlying security during the same period (or for call (put) warrants on baskets of securities, the average value of the cumulative increases or decreases in closing price for the securities in the basket)
Numerical standards for the irregularities listed under each of the subparagraphs of paragraph 1, and any exceptions to those conditions, are subject to adjustment at any time by the TSEC in view of market conditions, with adjustments to be implemented upon review and recordation by the competent authority.
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Where the TSEC has announced trading information for a particular security pursuant to Article 4, paragraph 1, subparagraphs 1-9 for a period of five consecutive business days, or for any six business days with the most recent 10-day period, or for any 12 business days within the most recent 30-day period, the TSEC will simultaneously adopt the following measures within 5 business days of the next business day after the condition occurs:
(1) Conducting trade matching for the securities with manually controlled trade matching terminals (matching approximately every five minutes, or for full-cash delivery stocks, every ten minutes).
(2) Notifying securities brokers that when an investor's daily volume of trading orders for the security during the given period consists of a single trade of 100 trading units or multiple trades with an aggregate total of 300 trading units or more, they shall collect from the investor a minimum of 50 percent of the buy-side price or sell-side securities for trades already consigned that day; for margin trading, they shall collect in full the margin for the purchase or the short sale. For further trading orders in excess of the aforementioned amounts on the same day, 50 percent of the buy-side price or sell-side securities shall also be collected, and for margin trading, the margins shall also be collected in full, provided that this shall not apply at the time of liquidiation of margin trades.
When measures under the preceding paragraph have been announced for a particular security within the most recent 30 business days, then upon a second announcement of measures pursuant to the same standards, the TSEC will simultaneously adopt the following measures within 5 business days of the next business day after the occurrence:
(1) Conducting trade matching for the securities with manually controlled trade matching terminals (matching approximately every ten minutes).
Notifying securities brokers that when an investor's daily volume of trading orders for the security during the given period consists of a single trade of at least 50 trading units or multiple trades of 150 trading units or more, they shall collect from the investor in full the buy-side price or sell-side securities for trades already consigned that day; for margin trading, they shall collect in full the margin for the purchase or the short sale. For further trading orders in excess of the abovementioned amounts on the same day, 50 percent of the buy-side price or sell-side securities shall also be collected, and for margin trading, the margins shall also be collected in full, provided that this shall not apply at the time of liquidation of margin trades.
When measures are announced for a particular security pursuant to paragraphs 1 and 2 herein and reasons for announcement include the circumstances under Point 4, paragraph 1, subparagraph 8, or when the TSEC further announces trading information pursuant to the aforementioned subparagraph 8 during the period of disposition, the circumstances surrounding the irregularity shall be reported to the Surveillance Operations Oversight Committee for their deliberation. When a trading irregularity involving a particular security is deemed to have a significant impact on the security of settlement in the market, the following measures may be adopted by a resolution of the Surveillance Operations Oversight Committee. The period of disposition, the subject of the disposition, and the applicable numerical standards shall also be subject to a resolution of the Surveillance Operations Oversight Committee.
(1) The measures under paragraphs 1 and 2 of this Point.
(2) Amounts of reported daily sales or purchases of the given security may not exceed NT$60 million by the head office of any securities firm or NT$10 million by a branch office of any securities firm, provided that this shall not apply at the time of liquidation of margin trades or for trades made under the TSEC's Regulations Governing Block Trades of Securities.
(3) Other measures adopted by resolution of the Surveillance Operations Oversight Committee.
Measures for disposition under subparagraph 2 of the preceding paragraph may also be adopted pursuant to a resolution of the special management committee of the Joint Responsibility System Clearing and Settlement Fund, which may also prescribe the period of disposition.
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