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Operating Rules of the Taiwan Stock Exchange Corporation(2005.05.03) |
| Date： |
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Article 82
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In the case of trading consignment of normal settlements, a securities broker shall collect from its principal the payment for securities bought or the securities sold at the time of acceptance of the consignment or before noon of the first business day following the date of transaction. In case its principal is an offshore overseas Chinese or foreign national, the deadline for settlement may be extended to 6 p.m. of the first business day after the trade date.
When the principal is an offshore overseas Chinese or foreign national, and when during the confirmation process there are discrepancies between holidays in different time zones, interruptions in telecommunications, natural disasters, or other occurrences of force majeure, or the custodian institution fails to receive the settlement instructions or the settlement instructions and the trade report are inconsistent, and where such occurrences are verifiable, then after the filing of a report of delayed settlement with the Taiwan Stock Exchange Corporation by the securities broker, the deadline for settlement of the price payable on the securities sold or after mutual offsetting of the prices of securities purchases or sales may be extended to 6 p.m. of the third business day after the trade date.
In the case of margin trade consignments, a securities broker shall collect from its principal the legally required margin for margin purchases or margin for short sales before noon of the first business day following the date of transaction.
Where this Corporation has taken any disciplinary measure against a specific securities in accordance with the "Regulations for Implementation of Stock Market Monitoring System" and other relevant operation rules, a securities broker shall, on the date of its acceptance of the consignment, collect in advance from its principals the funds or securities, or the margin for margin purchases, or the margin for short sales.
Where a securities broker believes that there are any defect on the rights of the securities delivered by its principal for sale or there is legal dispute or other doubtful matter, it may decline to sell such securities; provided that the above shall not be applicable where its principal has provided adequate collateral as approved by the securities broker.
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Article 91
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Where the principal fails to fulfill its obligations to settle transactions on time, it shall be deemed a breach of contract. In such an event, the securities broker shall, in accordance with this Corporation’s Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals, report such breach to this Corporation on or before 6:00 p.m. of the date on which its principal breaches the agreement, and shall simultaneously notify the principal, and forthwith settle the transaction in question on behalf of its principal.
When the principal is an offshore overseas Chinese or foreign national, and a report of delayed settlement has been filed in accordance with Article 82, paragraph 2, the securities broker shall notify the principal or the custodian institution, and immediately carry out settlement procedures on the principal's behalf; if settlement is not completed in accordance with the provisions of that article and it is not an out-trade, the principal is in default. At 6 p.m. on the third business day after the trade date, the securities broker shall report the default to this Corporation, and simultaneously notify the principal.
In the event that the listed securities delivered by the principal for settlement are found to be forged (altered) when they are forwarded to the issuing institution (or its office for handling registration and transfer of securities) for verification during or after completion of the process of book-entry and settlement, it shall also constitute a breach of agreement. The securities broker shall forthwith report by letter to this Corporation, and send a copy thereof to the principal. In case the principal is not the owner of such listed securities, the information regarding the owner of such listed securities shall also be reported by letter to this Corporation.
Where the event of default of the principal referred to in the preceding Paragraph falls within any of the following circumstances, the securities broker shall forthwith submit evidentiary documents and report by letter for cancellation of the event of default:
1.Where the listed securities delivered by a principal for settlement of transaction are not self-owned and have been found to be forged (altered) after they were forwarded for verification by the securities broker or the securities central depositary enterprise during the process of book-entry and settlement, and the principal has provided listed securities free of defect within one (1) week after the securities broker completed the default correction procedures with this Corporation.
2.Where the listed securities delivered by a customer for settlement of transaction are not self-owned and have been found to be forged (altered) upon being forwarded for verification by the securities central depositary enterprise after completion of the process of book-entry and settlement, the principal has provided listed securities free of defect within one (1) week after the date on which the securities broker notified the principal following its receipt of the notice from the listed securities central depositary enterprise.
A securities broker which receives listed securities or payments as a result of settlement of transaction on behalf of its principal in accordance with Paragraph 1 or Paragraph 2 of this Article shall consign other securities brokers to dispose or purchase securities on the Exchange beginning from the first business day after the principal's breach of contract. Thereafter, the securities broker shall forthwith report to this Corporation and notify its principal in accordance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals. However, those listed securities which belong to the same account and are of the same type and same volume may be offset with each other.
Where the event of default of a principal has been reported to this Corporation by the securities broker pursuant to Paragraph 3 of this Article, the securities broker shall, on the business day immediately following the reporting date, buy back the securities in question from the Exchange. However, if the default can be cancelled after a given period pursuant to Paragraph 4 of this Article, the securities broker may buy back the securities in question on the business day immediately following the expiry of the aforesaid given period.
Where the aggregate number of [shares represented by] the share certificates of securities received by a securities broker handling settlement on behalf of a principal under Paragraph 1 and Paragraph 2 during the period of a single breach reaches 5 percent or more of the number of shares of the underlying securities already issued, and furthermore reaches or exceeds the average daily volume of the underlying securities during the 20 trading days prior to reporting of the breach, the securities broker may adopt either of the following measures to handle the breach:
1. If handling of the breach cannot be completed through reverse transactions during the three consecutive business days from the day next following the date of confirmation of the breach by the principal, the securities broker, by reaching a mutual agreement with the principal or by notice to the principal, may, depending on market conditions, in accordance with the content of the agreement or the notice, complete handling of the breach through reverse transactions within 180 days, and report the agreement or notice to this Corporation via letter for recordation.
2. The securities broker may reach an agreement with the principal setting a price(s) to serve as the basis for calculating profit/loss, and submit the written agreement reached between the parties to this Corporation via letter for recordation.
Based on the report of a securities broker referred to in Paragraph 1, Paragraph 2, or Paragraph 3 of this Article, this Corporation will forthwith notify each securities broker, which shall act in accordance with Paragraph 3 of Article 76 hereof.
In the event that the principal suffers losses or there is any other dispute arising out of the notification sent by this Corporation to each securities broker based on the report by a securities broker, the securities broker reporting the breach of agreement shall be fully responsible therefor.
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Article 112
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A securities broker shall not refuse to perform its obligations for settlement on grounds of the following matters:
1. Default by the principal.
2. Delayed settlement by the principal.
3. The consignee of a principal of the account for discretionary investment consignment fails to duly perform obligations arising from unauthorized transaction.
4. There is deficiency on processing of refinancing of funds or securities.
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Article 135
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Where any securities firm violates Article 13, Article 16, Paragraph 2 of Article 21, Article 23, Paragraph 1 or 5 of Article 25, Paragraph 3 of Article 28-1, Paragraph 1 of Article 29, Article 33, Article 40, Article 68, Subparagraph 1, 4, 6 or 7 of Paragraph 1 or Paragraph 2 of Article 75, Paragraph 1 of Article 75-1, Paragraph 1 of Article 75-2, Article 76, Paragraph 2, or 3 of Article 80, Article 80-1, Paragraph 4 of Article 82, Paragraph 3 of Article 85, Article 87, Paragraph 2 of Article 93 or Article 95 hereof, this Corporation may notify it to make correction or improvement within a prescribed time frame (amended on December 22, 2000).
Where any securities firm violates the Articles of Incorporation of this Corporation, Operation Rules, Guidelines for Consignment Agreement, or other regulations measures, announcements or circular letters, unless otherwise provided, this Corporation may notify it to make correction or improvement within a prescribed time frame.
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Article 136
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Where any securities firm violates Paragraph 3 of Article 25, Article 26, Paragraph 2 or Paragraph 3 of Article 58, Subparagraph 5 of Paragraph 1 and Paragraph 3 of Article 75, Paragraph 2 of Article 75-1, Paragraph 2 of Article 75-2, Article 77-4, Paragraph 5 of Article 80, Article 81, Paragraph 1, 2, or 3 of Article 82, Article 82-1, Paragraph 2 of Article 83, Paragraph 1, 2, 3, 5, or 6 of Article 91, Paragraph 2 of Article 91-1, Paragraph 2 of Article 92, Paragraph 2 or 3 of Article 94, Paragraph 2 of Article 108, Paragraph 3 of Article 109, Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, this Corporation may warn them and notify it to make correction or improvement within a prescribed time limit.
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