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Article 4
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At the close of trading each day, the TWSE will analyze the trading of exchange-listed securities (excluding exchange-traded fund beneficial certificates and securities which they underlie, foreign bonds, government bonds, and straight corporate bonds). Upon discovery of any of the following circumstances, the TWSE 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, long/short ratio, and premium/discount percentage):
- An irregularity in the cumulative percentage of increase or decrease in the closing price during the most recent period.
- 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.
- 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.
- 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.
- 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.
- 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.
- A significantly high cumulative turnover rate for the most recent period.
- An irregular price-to-earnings rate or price-to-book ratio, or an usually high intraday turnover, combined with any of the following three circumstances: 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.
- An irregularity in the cumulative percentage of increase or decrease in the closing price and a significant increase in the long/short ratio during the most recent period.
- An irregularity in the percentage of premium or discount calculated from the closing price of Taiwan Depository Receipts and the closing price, on the exchange market of their home country, of the shares they represent.
- Other trading irregularities as determined by resolution of the Surveillance Operations Oversight Committee.
If there is no closing price for a security on a given day to serve as the basis for calculation of any irregularity listed under the preceding paragraph, the price determined pursuant to Article 58-3, paragraph 2, subparagraph 2 of the TWSE Operating Rules shall be used instead.
When calculating the price fluctuation limit of a security, if the formula includes factors such as the given underlying security or underlying index, the provisions of Article 2, paragraph 2 shall apply mutatis mutandis to the calculation of the cumulative percentage of increase or decrease in the price within a certain period.
When the trading volume of a security is below 1,000 units, the provisions of Article 2, paragraph 4 shall apply mutatis mutandis to the numerical standards for the unit of the trading (or order) volume. Numerical standards for the irregularities listed under each of the subparagraphs of paragraph 1, and any exceptions to those conditions, shall be separately adopted by the TWSE.
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Article 6
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Where the TWSE has announced trading information for a particular security pursuant to Article 4, paragraph 1, subparagraphs 1-10 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 TWSE will announce that the security will be subject to disposition measures.
Where measures under paragraph 1 have been announced for a particular security for the first time within the most recent 30 business days, the TWSE will simultaneously adopt the following measures within 5 business days of the next business day after the condition occurs:
- Conducting trade matching for the securities with manually controlled trade matching terminals (matching approximately every five minutes, or for securities placed under altered trading methods, every ten minutes; for securities under altered trading methods for which periodic call auction is also used, approximately every 45 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 50 trading units or multiple trades with an aggregate total of 150 trading units or more, they shall collect from the investor the full amount 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, the buy-side price or sell-side securities shall also be collected in full, 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 the measures under paragraph 1 have been announced two or more times (inclusive) for a particular security within the most recent 30 business days, the TWSE will simultaneously adopt the following measures within 10 business days of the next business day after the occurrence:
- Conducting trade matching for the securities with manually controlled trade matching terminals (matching approximately every 20 minutes; for securities under altered trading methods, approximately every 25 minutes; for securities under altered trading methods for which periodic call auction is also used, approximately every 60 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 10 trading units or multiple trades of 30 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 and the placement of orders to sell securities in the default accounts.
When measures are announced for a particular security pursuant to paragraph 2 or 3 herein and reasons for announcement include circumstances under Article 4, paragraph 1, subparagraph 8, or during the period of disposition the TWSE further announces trading information pursuant to the aforementioned subparagraph 8 and analysis shows irregularities, or when the TWSE deems that there is a securities trading irregularity with the likelihood of a significant impact on the security of settlements in the market, or under other circumstances when it is necessary to maintain order in the markets or the security of settlements, then after reporting to the Surveillance Operations Oversight Committee for a resolution, it may adopt the following disposition measures:
- The measures under paragraphs 2 and 3, provided that these may be adjusted when necessary, as follows:
- The time at which trade matching of the security is done using manually controlled trade matching terminals.
- Whether, when the investor places the order for the security involved in the irregular trading, there is advance collection of all or a specific proportion of the buy-side price, sell-side securities, margin for margin purchase, or margin for short sale.
- The effective period of the measures.
- 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; when necessary, the amounts of reported daily sales or purchases of the given security at the head offices and branch offices of securities firms may be adjusted based on the current trading in that security, its market value, or the capitalization of the issuing company. Provided, this shall not apply at the time of liquidation of margin trades and the placement of orders to sell securities in the default accounts.
- Notifying all securities firms to make an additional submission to the Clearing and Settlement Fund when trading the security involved in irregular trading.
- Temporarily suspending margin purchases and short sales of the given security, provided that this shall not apply for already concluded trades.
- Suspending trading of the given security for a specific period after reporting to and receiving approval from the competent authority.
- Other measures.
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 prescribe the amounts of reported daily purchases or sales of the given security by securities firms and the period of disposition.
When disposition measures are adopted with respect to trading in a given security by resolution of the Surveillance Operations Oversight Committee or the special management committee of the Joint Responsibility System Clearing and Settlement Fund, the number of days on which trading information is announced prior to implementation of the measures or during the effective period of the disposition need not be included in the basis of calculation under paragraph 1.
If during a period of any measure under paragraphs 2 to 4 an order is placed for trading of the given securities under an omnibus trading account of a securities broker, the provisions for that measure shall apply, and the securities firm shall collect all or a specific proportion of the buy-side price or sell-side securities from any representative (mandatary) for any principal thereunder that reaches the threshold. When the trading volume of a security is below 1,000 units, the provisions of Article 2, paragraph 4 shall apply mutatis mutandis to the numerical standards for the unit of the trading (or order) volume.
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