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Operating Rules of the Taiwan Stock Exchange Corporation(2011.01.12) |
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Article 58-3
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The competitive auction for trading orders shall without exception be conducted by call auction. Trade prices shall be determined based on the following principles:
1. Satisfying the maximum trade volume such that buy orders with prices higher than the determined price and sell orders with prices lower than the determined price shall be all satisfied.
2. Where there are buy and sell orders with prices equal to the determined price, at least one side shall be all satisfied.
3. Where two or more prices conform to the principles set forth in the preceding two subparagraphs, the price closest to the most recent traded price in the current session shall be used. If there is not yet any traded price in the current session, the price closest to the auction reference price at market opening of the current session.
The aforesaid auction reference price at market opening of the current trading session shall be determined by the following principles:
1. Use the closing price for the preceding day.
2. Where there is no closing price for the preceding day, the auction reference price shall be determined by the following principles:
(1) If, on the preceding day, the highest buy order price at the close of market was higher than the auction reference price at the opening of market, use the highest buy order price.
(2) If, on the preceding day, the lowest sell order price at the close of market was lower than the auction reference price at the opening of market, use the lowest sell order price.
(3) When neither of the above circumstances applies, use the auction reference price at the opening of market of the preceding business day.
3. In the case of an initial listing, price adjustment due to ex-rights or ex-dividend trading, or resumption of suspended trading, use the price arrived at by processing, pursuant to Article 62 herein, the reference price as set in accordance with Article 59, 59-1, 67, or 67-1, or other rules.
The opening price of a security is the price of the first matched trade for the current session. Trading orders entered prior to market opening (i.e. the commencement of trading hours) that are unexecuted shall continue to be matched in the order as originally randomly assigned by the computer. The closing price shall be the price of trades matched upon accumulation of all trading orders over a period of time prior to market closing (i.e. the close of trading hours). Where unexecuted, the closing price shall be the last traded price during the current session.
During the period from the first matched trade of a security during the current session until the period of time prior to market closing, if the execution price as test-calculated prior to each matching fluctuates beyond a certain range from the previous traded price, the TWSE shall immediately postpone matching of that security for a certain period of time, and continue to accept entries, cancellations, and changes of trading orders for that security. Matching will then proceed sequentially at the conclusion of the postponement period. However, this restriction shall not apply to newly listed common stocks during the period when no price fluctuation limit is imposed, or securities for which extended matching intervals have been implemented under rules or regulations of the TWSE, or securities for which the opening auction reference price is lower than a certain price.
The "period of time," "certain range," and "certain price" in the preceding two paragraphs shall be prescribed by the TWSE and publicly announced for implementation after approval and recordation by the Competent Authority.
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Article 59
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When determining the daily price fluctuation limits for competitive auction trading of an initial listing of securities, unless otherwise provided by law, reference price shall be made to the public offering price before the listing date. Where the securities in the initial listing are already traded on the GTSM, reference shall be made to the closing price on the last trading day before the cessation of its GTSM trading.
The daily price fluctuation limits for an initial listing of common shares converted into a newly established company under Article 53-11 to Article 53-13 or Article 53-31 shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the common shares of the listed company whose converted common shares are anticipated to account for the greatest proportion of the anticipated issued common shares of the newly established company) by (the number of shares required for exchange of one new share). The daily price fluctuation limits for securities other than common shares shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the TWSE listed security or GTSM listed security anticipated to account for the highest proportion of those converted into the security) by (the number of shares [or trading units] required for exchange of one share [or one trading unit] of the new security).
Where there is no closing price for the last trading day of any TWSE listed security used for the calculation of a reference price under the preceding paragraph, the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein shall be used. Where there is no closing price for the last trading day of the GTSM listed security used for the calculation of reference price referred to in paragraph 1 or 2, the basis price for the opening of trading on the next day, determined in accordance with the provisions of the GreTai Securities Market Rules Governing Securities Trading on the GTSM, shall be used.
The daily price fluctuation limits on initial listings of new capital stock, certificates evidencing right to subscribe to new shares, and certificate evidencing payment shall be determined with reference to the closing price of the old shares on the previou business day minus the value difference on rights; provided where the difference on rights cannot be determined, the price fluctuation limit shall be determined with reference to the closing price of the old shares on the previous business day. Where there is no closing price for the old shares on the previous business day, the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein shall be used.
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Article 59-1
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Where trading of the TWSE listed securities of a TWSE listed company has been suspended under the provisions of Article 50, the price fluctuation limit of such securities on the first day of resumed trading shall be determined with reference to the closing price of the last trading day prior to the suspension of trading. Where there is no closing price for the last trading day, the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein shall be used.
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Article 63
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The daily price fluctuation limits of securities, unless otherwise approved by the Competent Authority, shall be 7 percent above and below the auction reference price at market opening of the current trading session for stocks, and 5 percent above and below the auction reference price at market opening of the current trading session for bonds; provided, however, that if the price fluctuation limit is less than the minimum tick size, the minimum tick size shall be the price fluctuation limit, and the price may not fall lower than the minimum tick size.
For newly TWSE listed common stocks other than those converted from GTSM listed stocks to TWSE listed stocks, there will be no price fluctuation limit imposed for the 5 trading days beginning from the listing date, and the minimum price shall be one cent.
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Article 67
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In the trading of stocks, where a listed company has set a date for suspension of changes to the shareholders register (i.e. a book closure date) based on the record date for distributing dividends, bonuses or other interests pursuant to paragraph 2 of Article 165 of the Company Act, all settlements conducted after the book closure date shall be ex-dividend and ex-rights; provided that the provisions of this Article shall not apply to a capital increase out of employee bonuses.
The daily price fluctuation limit after the distribution of dividends shall be based on the closing price of the previous day minus the amount of dividends and bonuses that have been distributed.
The daily price fluctuation limit for the ex-rights date shall be calculated based on the following:
1.Where a listed company uses retained earnings or capital reserve to increase capitalization, the daily price fluctuation limit for the ex-rights date shall be based on the closing price of the previous day minus the value of the distributed stock dividends.
2.Where a listed company uses cash capital to issue new stocks, the daily price fluctuation limit for the ex-rights date shall be as follows:
(1) In case under cash capitalization the issue price of the newly issued stock is lower than the closing price on the day immediately preceding the ex-rights date, the daily price fluctuation limit for the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
(2) In case under cash capitalization the issue price of the newly issued stock is higher than the closing price on the day preceding the ex-rights date, the daily price fluctuation limit on the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date for the purpose of calculating the maximum low.
3.Where a listed company simultaneously uses retained earnings or capital reserve to increase capitalization, and also uses cash capital to issue new stocks, the daily price fluctuation limit shall be calculated as follows:
(1) In case under cash capitalization the issue price of the newly issued stock is lower than the closing price of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital reserve, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital reserve for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital reserve and value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
(2) In case under cash capitalization the issue price of the newly issued stock is higher than the closing value of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital reserve, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital reserve and the value of the newly issued cash capitalization stock for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital reserve for the purpose of calculating the maximum low.
4.In case any of the procedures in the above subparagraphs cannot be suitably used, the daily price fluctuation limit for the ex-rights date shall be determined by the TWSE in view of the current circumstances.
The value of the rights referred to in the preceding paragraph shall be determined by the TWSE.
Where there is no preceding day's closing price on the commencement date of ex-dividend or ex-rights trading, the closing price used as the basis for the calculations referred to in paragraphs 2 and 3 shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein.
The matters relating to ex-dividend and ex-rights in connection with securities eligible for margin purchase and short sale shall be handled in accordance with the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales.
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Article 67-1
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Where a listed company carries out procedures for capital reduction and issuance of new replacement shares, the daily price limits on its stock for the date on which the stock begins to list after the capital reduction shall be calculated based on the following methods according to the circumstances of the capital reduction:
1. For a capital reduction for purposes of making up losses, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares divided by the ratio of the post-reduction capital amount to the original capital amount.
2. For a capital reduction by cash refund of capital stock, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares minus the cash amount refunded per share, and then divided by the ratio of the post-reduction capital amount to the original capital amount.
3. For a demerger accompanied by capital reduction:
(1) If the stock of the transferee company of the demerger, on the date that its listed trading begins after the capital reduction, is stock of a TWSE listed or GTSM listed company, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares minus the value calculated by the auction reference price at market opening on the date of commencement of listed trading of the TWSE listed shares of the transferee company of the demerger obtained per share after the capital reduction, or the value calculated by the basis price for the opening of trading of the GTSM listed shares, and then divided by the ratio of the post-reduction capital amount to the original capital amount.
(2) If the stock of the transferee company of the demerger is stock of a company that is neither TWSE listed nor GTSM listed, the calculation shall be done by the method below, and the higher figure shall be the basis for calculation of the upper price limit and the lower figure shall be the basis for calculation of the lower price limit, and the price arrived at by processing, pursuant to Article 62 herein, the average of the two figures shall be taken as the auction reference price at market opening:
i. The reference price calculated by first calculating the market capitalization by multiplying the closing price of the last trading day prior to the issuance of the new replacement shares by the original number of issued shares, then calculating the market capitalization after the capital reduction by the ratio of the company's net worth after the capital reduction to the company's original net worth, and then further dividing it by the number of issued shares after the capital reduction.
ii. The reference price calculated by the closing price of the last trading day prior to the issuance of the new replacement shares minus the net worth of the shares of the transferee company of the demerger obtained in replacement per share, and then divided by the ratio of the post-reduction capital amount to the original capital amount.
Where there is no closing price for the last trading day prior to the issuance of new replacement shares referred to in the preceding paragraph, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 2, subparagraph 2 herein.
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