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Operating Rules of the Taiwan Stock Exchange Corporation(2008.09.03) |
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Article 50-4
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When the underlying securities represented by listed call (put) warrants undergo a change in trading method, are suspended from listing, or are delisted, the TWSE, pursuant to the handling procedures listed in Articles 49, 49-2, 50, and 50-1, may change the trading method of the warrants and file a report with the Competent Authority for recordation within one month, or after reporting to and obtaining the approval of the Competent Authority may suspend the trading of the warrants or delist them, or may first publicly announce suspension of their trading and subsequently file a report with the Competent Authority for recordation.
If any of the circumstances of Article 50 or Article 50-1 applies to an issuer of call (put) warrants, the TWSE shall file a report with and obtain the approval of the Competent Authority for the suspension of trading or for the delisting of the warrants, or first make a public announcement of the suspension of trading of the warrants and subsequently file a report with the Competent Authority for recordation.
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Article 75-5
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When a securities firm accepts orders to trade securities through an omnibus trading account, it shall make trading quotes corresponding to the orders placed by the principals or the authorized traders thereof, and shall note the name or symbol of the principal or the authorized trader on the order ticket or the trading order record.
The securities firm shall transmit the itemized allocations of trade price and volume as instructed by the authorized trader, and the itemized orders of the principals and authorized traders thereof, to the TWSE by 6 p.m. on the trade date.
Operational directions related to omnibus trading accounts will be prescribed by the TWSE.
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Article 79-1
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When accepting sell orders for normal settlement in brokerage trading, a securities broker shall confirm that the volume of securities in the orders do not exceed the aggregate total of the principal's custodial book-entry account balance and deposited spot securities, provided that this rule does not apply in any of the circumstances listed below:
1. Settlement is handled by a custodian institution on behalf of the securities broker.
2. Brokerage orders to sell securities short.
3. Brokerage orders to sell securities to settle a margin purchase.
4. Brokerage orders to sell securities that had been deposited as collateral for a margin trade that has already been liquidated.
5. Brokerage orders to sell collateral that had been provided for borrowing of funds or for settlement financing.
6. Brokerage orders to sell collateral that is eligible to be withdrawn in securities borrowing and lending.
7. Brokerage orders to sell securities in special accounts set up for the handling of events of default.
8. Brokerage orders to sell securities lent on the previous business day pursuant to Chapter 3 of the TWSE Securities Borrowing and Lending Rules.
9. Brokerage orders to sell securities lent pursuant to the TWSE Securities Borrowing and Lending Rules, where the securities borrower has been notified to return the securities by the sale settlement date.
10. Brokerage orders to sell securities the borrowing of which has been confirmed but that have not yet been remitted in.
11. Brokerage orders to sell securities under pledge that are being disposed by the pledge.
12. Brokerage orders to sell securities for which applications for exercise of call warrants were made on the previous business day, and for which the issuer has confirmed that the exercise will be implemented by means of delivery of the securities.
13. Brokerage orders to sell ETF beneficial interest certificates or baskets of stocks evidenced by beneficial interest certificates, Pursuant to Article 12 of the TWSE Rules Governing Trading of Beneficial Interest Certificates.
14. Brokerage orders to sell securities bought on the previous business day.
15. Other exempted circumstances as announced by the TWSE.
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Article 82
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After accepting a brokerage trading order for normal settlement, a securities broker, following execution of the trade, shall collect the price payable for the securities bought, or collect the securities sold, pursuant to Article 12 of the TWSE Rules Governing Brokerage Contracts of Securities Brokers.
A securities broker filing a report of delayed settlement for an offshore overseas Chinese or foreign national with the TWSE shall do so in compliance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals, and shall notify the principal or the custodian institution pursuant to the agreement.
In the case of brokerage orders for margin trades, the securities broker shall collect from its principal the margin for the margin purchase or the margin for the short sale, as the case may be, pursuant to Article 12 of the TWSE Rules Governing Brokerage Contracts of Securities Brokers.
Where the TWSE 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 it accepts the order, 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 82-1
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Where a securities broker accepts an order to sell registered securities that have never been transferred and its principal is not the owner of the securities, it shall handle the settlement in accordance with the Guidelines for Reporting by Securities Brokers of Sale of Securities Not Owned by the Principal as stipulated by the TWSE.
The provisions of the preceding paragraph shall apply mutatis mutandis where a securities broker accepts an order to sell registered securities that have been transferred and for which transfer registration procedures have been carried out with the issuing company, and that meets any of the following conditions:
1. Securities of a defaulting investor after the case is closed and withdrawal has been effected.
2. Securities acquired through an inheritance or gift.
3. Securities acquired through underwriting before November 1997.
4. Collateral in the form of spot securities that a securities finance company or securities firm operating its own margin purchase and short sale operations has required an investor to deposit to offset a decline in the securities price to below the maintenance ratio.
5. Securities that a bank has required a customer to pledge in the form of spot securities.
6. Securities obtained through a final and unappealable court judgment.
7. Other conditions reported to and approved by the TWSE.
When accepting a brokerage order to sell securities pursuant to this article, the securities broker shall confirm that the quantity of securities in the order does not exceed the quantity of spot securities deposited by the principal.
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Article 91
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Where the principal fails to fulfill its settlement obligations on time, the principal is in default. In such an event, the securities broker shall report the default in accordance with the TWSE Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals , and shall simultaneously notify the 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, if settlement is not completed in accordance with provisions and it is not an out-trade, the principal is in default. The securities broker shall handle the matter pursuant to the provisions in the preceding paragraph.
In the event that 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, the principal is likewise in default. The securities broker shall forthwith report by letter to the TWSE, and send a copy thereof to the principal. In case the principal is not the owner of such securities, the information regarding the owner of the securities shall also be reported by letter to the TWSE.
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 securities delivered by a principal for settlement are not owned by the principal itself and have been found to be forged (altered) after they were forwarded for verification by the securities broker or the central securities depository during the process of book-entry and settlement, and the principal has provided securities free of defect within one (1) week after the securities broker completed the default correction procedures with the TWSE.
2.Where securities delivered by a customer for settlement are not owned by the principal itself and have been found to be forged (altered) upon being forwarded for verification by the central securities depository after completion of the process of book-entry and settlement, the principal has provided 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 central securities depository.
A securities broker which receives securities or consideration in accordance with paragraph 1 or paragraph 2 of this Article shall engage another securities broker to dispose of it on the Exchange no later than the first business day after the principal's default. Thereafter, the securities broker shall forthwith report to the TWSE and notify its principal in accordance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals. However, those securities which belong to the same account and are of the same type and same volume may be offset against each other.
Where the event of default of a principal has been reported to the TWSE by the securities broker pursuant to paragraph 3 of this Article, the securities broker shall, no later than 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 under paragraph 1 and paragraph 2 during the period of a single default 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 default, the securities broker may adopt either of the following measures to handle the default:
1. If handling of the default cannot be completed through reverse transactions during the three consecutive business days from the day next following the date of confirmation of the default 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 default through reverse transactions within 180 days, and report the agreement or notice to the TWSE 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 the TWSE 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, the TWSE 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 the TWSE to each securities broker based on the report by a securities broker, the securities broker reporting the default shall be fully responsible therefor.
If a securities broker, for a reason not attributable to the broker, is unable in a timely manner to take measures pursuant to paragraphs 5, 6, or 7, it shall prepare a handling record and keep it on file for inspection along with related documentary evidence.
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Article 104
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The TWSE shall handle centralized settlement of trading conducted on the Exchange in accordance with the principle of delivery versus payment.
A securities firm shall bear the obligation to the TWSE to perform the settlement of trades that the securities firm conducts on the Exchange. The TWSE shall bear the obligation of counter-prestation settlement for trades employing multilateral net settlement.
When handling trades employing multilateral net settlement, the TWSE shall carry out settlement with securities firms and securities finance enterprises after offsetting the amounts of securities and funds receivable and payable/deliverable.
A securities firm or a securities finance enterprise shall perform in advance its obligation to deliver securities deliverable or funds payable. The TWSE may, until that obligation has been performed, retain the funds and securities receivable by the securities firm or securities finance enterprise.
Securities firms and securities finance enterprises shall complete settlement procedures with the TWSE for the prices and securities payable and receivable for securities trades within the following time limits:
1. Securities deliverable to the TWSE shall be delivered by 10 a.m. of the second business day following the trade date.
2. Prices payable to the TWSE shall be paid by 11 a.m. of the second business day following the trade date.
3. Securities receivable from the TWSE shall be received after 11 a.m. of the second business day following the trade date.
4. Prices receivable from the TWSE shall be received after 11 a.m. of the second business day following the trade date.
After completing the operations for the transfer of securities deliverable by the securities firms and securities finance enterprises, the central securities depository shall promptly notify the TWSE of the results.
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Article 106
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(deleted)
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Article 107
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(deleted)
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Article 108
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(deleted)
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Article 109
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If the balance of the securities on deposit in the custodial book-entry account of the securities firm representing the seller is insufficient for the performance of settlement obligations, the securities firm representing the seller may apply to borrow securities for settlement pursuant to the TWSE Securities Borrowing and Lending Rules, and shall by 11 a.m. pay the cash collateral required for securities borrowing. If the securities firm representing the seller does not apply to borrow securities by 10 a.m. of the second business day following the trade date, and has not completed securities settlement, the TWSE shall by 11 a.m. borrow securities on its behalf.
If the amount of securities borrowed is insufficient, the TWSE will fill out and forward a "Securities Delivery Voucher" to the central securities depository for the portion falling short for safekeeping on behalf of the securities firm representing the purchaser. The borrowing securities firm shall, by 10 a.m. of the following business day, deliver the securities in exchange for the return of the aforesaid "Securities Delivery Voucher" and the refund of the cash collateral required for securities borrowing.
If the borrowing securities firm fails to deliver the cash collateral required for securities borrowing or to provide offsetting collateral by 11 a.m. of the borrowing date, the TWSE may tentatively retain a portion of the proceeds and/or securities equivalent in value to the settlement price payable for that settlement period.
Lending auctions, negotiated lending, and tender offers carried out to cover shortfalls experienced by securities finance enterprises in securities required for short sales shall be conducted in compliance with the TWSE Securities Lending and Borrowing Rules.
The Securities Lending and Borrowing Rules will be separately adopted by the TWSE and submitted to the Competent Authority for approval and shall take effect after they are publicly announced.
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Article 110
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(deleted)
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Article 111
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If a securities firm or a securities finance enterprise fails to carry out settlement within the time frame specified in Article 104, paragraph 5, subparagraph 1 or 2, the TWSE shall impose a delay fine pursuant to Article 137. A securities firm that fails to pay cash collateral required for securities borrowing shall be deemed to have not completed the delivery obligation of the securities deliverable.
If a securities firm or a securities finance enterprise fails to pay a price payable or to pay cash collateral required for securities borrowing (including any collateral shortfall the borrower is required to cover for renewal of securities borrowing) by the end of banking hours, it is a breach of settlement obligations.
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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, Article 79-1, 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, the TWSE may notify it to make correction or improvement within a prescribed time frame (amended on December 22, 2000).
Where any securities firm violates the TWSE's Articles of Incorporation, Operating Rules, Rules Governing Brokerage Contracts, or other bylaws, rules, regulations, announcements or circular letters, unless otherwise provided, the TWSE 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, or Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, the TWSE may warn them and notify it to make correction or improvement within a prescribed time limit.
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Article 137
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Where any securities firm fails to transmit the itemized allocations of trade price and volume and the itemized orders placed by authorized traders as required under Article 75-5, the TWSE may impose a fine of thirty thousand New Taiwan Dollars if the delay is one hour or less, or an additional fine of ten thousand New Taiwan Dollars for each additional hour's delay.
Where any securities firm fails to key-in within the prescribed time period the clearing data in respect of margin purchases or short sales in accordance with Article 103, the TWSE shall impose a fine of thirty thousand New Taiwan Dollars if the delay is one hour or less, or an additional fine of ten thousand New Taiwan Dollars for each additional hour's delay.
Where any securities firm violates subparagraphs 1 or 2 of paragraph 5 Article 104, the TWSE shall impose a delay fine in accordance with the following criteria, provided that this rule shall not apply where the securities firm can provide evidence proving the delayed delivery of securities or proceeds is not attributable to any intent or negligence of the securities firm:
1. Where the delay is one hour or less, a fine of thirty thousand New Taiwan Dollars is imposed if the volume of shortfall in securities is 5,000 lots or less, or if the settlement price in the delayed payment is fifty million New Taiwan Dollars or less; a fine of forty thousand New Taiwan Dollars is imposed if the volume of shortfall is over 5000 lots, or the settlement price is over fifty million New Taiwan Dollars.
2.Where the delay is over one hour, an additional fine of ten thousand New Taiwan Dollars is imposed for each additional hour's delay.
Securities firms shall pay fines referred to in the preceding three paragraphs to the Finance Division of the TWSE within two days after receiving notification of the TWSE.
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