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Article 43-1
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Where any issuer sells its own call (put) warrants, public announcement shall be made on the date of the sale. The public announcement shall include the issuance terms of the call (put) warrant, numbers issued, issuing price, location of sale, period of sale, projected listing date, date of premium payment, issuance date of call (put) warrant, credit rating information of the issuer or guarantor, the required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants, and other particulars required to be disclosed to protect the public and the investor.
Upon the approval of the TWSE for listing of call (put) warrants by an Issuing Company, and the approval of the Competent Authority of the Agreement for Listing, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing, upon the notice of the TWSE, such Issuing Company shall provide the prospectus to the TWSE for its distribution to securities firms. Further, 2 days prior to the listing of such securities, the Listing Company shall enter information related to the listing into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE.
The public announcement referred to in the preceding paragraph shall include the following particulars:
1. Reference number of Listing Agreement approval
2. Date of issuance and period of validity.
3. Detailed information on the underlying index, underlying securities, or basket of underlying securities.
4. Type of call (put) warrants, volume, and total issuance price.
5. Terms of issuance (including issuance price, strike price or strike index, exercise period; ; issuance of capped call or put warrants or callable bear or bull contracts shall be explained using prominent lettering).
6. A description of the calculation of the issue price, including the price of the underlying securities or the underlying index, strike price or strike index, term, interest rate, volatility and other reference factors used in the calculation, and a table of comparison with the warrants with the same listed securities as underlying securities in the past year shall be provided. However, in the case of issuance of callable bull contracts or callable bear contracts, the issuance price shall be calculated in compliance with Article 10, paragraph 1, subparagraph 5, item 5 of the TWSE Rules Governing Review of Call (Put) Warrant Listings.
7. Detailed information on guarantor, contents of the guaranty agreement or collateral.
8. The required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants
9. Procedures for exercising the option, and procedures for canceling exercised call (put) warrants.
10. Planned strategy on offsetting risks.
11. Stipulations regarding the adjustment of the call (put) warrant strike price and related matters when the Issuing Company of the underlying securities distributes dividends or bonuses, increases or decreases capital, or undergoes a stock split, merger or consolidation, or conducts other related matters; when a SITE distributes dividends on an underlying exchange-traded fund or conducts other related matters; or when an offshore fund institution distributes dividends on an underlying offshore exchange traded fund or conducts other related matters. If an issuer does not adopt the TWSE reference adjustment formula, it shall explain the matter in the public offering prospectus using prominent lettering. If the underlying is a foreign security, the issuer shall itself determine the formula for adjustment.
12. Methods for handling the matter in the event of any merger or consolidation, placement of stock under an altered trading method, halting of trading, suspension of trading, or delisting of the stock of the Issuing Company of the underlying securities; the delisting of an underlying exchange-traded fund due to the dissolution, bankruptcy, or voidance of approval of the securities investment trust enterprise; or the beneficial certificates of an underlying offshore exchange traded fund are delisted by the TWSE after approval by the Competent Authority; or the index provider announces suspension of the compilation of the index.
13. The procedures for listing of the call (put) warrants, and for handling when the stock exchange delists, suspends trading of, or halts trading of, the warrants.
14. Provision specifying that upon the expiration of the period of validity, for call (put) warrants with domestic securities or a domestic index as the underlying, there is exercise value if the simple arithmetic mean trade price of the underlying securities during the 60 minutes before market close or the simple arithmetic mean value of the underlying index during the 30 minutes before market close is higher (or lower) than the strike price or strike index of the call (put) warrant; if there is no trade price for the underlying securities during the60 minutes before market close, then the calculation shall be based on the most recent trade price. If the circumstance under Article 58-3, paragraph 5 exists, the calculation shall also incorporate the trade price or index from during the postponement period. For call (put) warrants with foreign securities or a foreign index as the underlying, there is exercise value if the most recent closing price of the underlying securities or the most recent closing value of the underlying index is higher (or lower) than the strike price or strike index of the call (put) warrant. If the terms of exercise require cash settlement, then it shall be deemed that the call (put) warrant has been exercised and has given notice to that effect.
15. Provisions specifying that the issuer may not independently exchange the contracted call (put) warrant with another call (put) warrant or securities which has a longer period of validity.
16. Procedures for delivery when the holder exercises the option.
17. Provisions specifying that where the exercise of the option referred to in the preceding subparagraph is required to be done in cash, the cash settlement amount shall be calculated on the basis of the closing price of the underlying securities or the closing index of the underlying index on the exercise date. If the exercise date is the expiration date of the warrants, the cash settlement amount shall be calculated on the basis of the simple arithmetic mean price trade price of the underlying securities during the 60 minutes prior to market close, or the simple arithmetic mean value of the underlying index during the 30 minutes prior to market close; if there is no trade price for underlying securities during the 60 minutes prior to market close, then the calculation shall be based on the most recent trade price. If the circumstance under Article 58-3, paragraph 5 exists, the calculation shall also incorporate the trade price or index from during the postponement period. However, when the underlying is a foreign security or foreign index, the exercise shall be handled in accordance with the TWSE Guidelines for the Exercise of Call (Put) Warrants.
18. Provisions specifying that where the issuer has failed to satisfy its obligation by tendering the underlying securities or the cash differential, the procedures for handling the securities kept in a central securities depository as guaranty for performance.
19. Date of public announcement.
20. Address at which the public may review the prospectus.
21. Printing the following disclaimer (standard format): "The Taiwan Stock Exchange Corporation shall not be responsible for the contents of this public announcement, and expresses no opinion on its accuracy or completeness, and it is expressly stated that it shall not assume any liabilities arising out of all or a part of the contents of this public announcement or be liable for damages resulting from reliance on such contents."
22. Date of listing for call (put) warrant.
23. Other items required by the TWSE.
The approval for listing shall be revoked in case the issuer of the call (put) warrant fails to determine the date of listing with the TWSE within the business days from the date of approval of the Listing Agreement by the competent authority in charge.
Before the listing of call (put) warrants by an issuer, if it is discovered that, before or subsequent to the effectiveness of the Agreement for Listing, valid facts show that any of the circumstances enumerated in Articles 8 or 9 of the Rules Governing Examination of the Listing of Warrants has occurred, the TWSE may suspend the listing of the call (put) warrants, and conduct an investigation, and report to the Competent Authority. In the event the issuer refuses the investigation of the TWSE or refuses to supply the necessary information, or it is confirmed that it is inappropriate for listing, the TWSE may, upon approval of the Competent Authority, revoke its Agreement for Listing or delist the warrants. In the event it is shown that there are no inappropriate circumstances for listing, the TWSE may, upon report to and recordation with the Competent Authority, notify the company to resume the listing process.
Within 20 days prior to the expiration of the call (put) warrant, the issuer shall enter the following particulars into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE; however, in the case of issuance of capped call or put warrants or callable bull or bear contracts issued under the conditions of Article 10, paragraph 1, subparagraph 5, item 6 of the TWSE Rules Governing Review of Call (Put) Warrant Listings, public announcement of the following matters shall be made on the business day following the date that is deemed the last day of trading under the aforesaid Rules, without regard to the above-stated restriction.
1. Date of expiration of call (put) warrant, last day of trading, and date of delisting.
2. Strike price and exercise ratio.
3. Method of settlement when the holder exercises the right.
4. Process for requesting fulfillment of contract.
5. Other information required by the TWSE.
Listed call (put) warrants shall be assigned by the TWSE a code number, and an abbreviated name for uniform usage.
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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 the current matching for a 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.
If, at one minute prior to market close for a security, any given execution price as test-calculated fluctuates beyond 3.5 percent from the previous execution price as test-calculated (if there is no execution price as test-calculated, the calculation shall be based on the most recent trade price; if there is no most recent trade price, the calculation shall be based on the auction reference price at market opening), the matching at market close for that security is postponed. Entries, cancellations, and changes of trading orders for that security will continue to be accepted from 1:31 p.m. to 1:33 p.m., and matching and execution will then proceed sequentially at 1:33 p.m. However, this restriction shall not apply to securities for which extended matching intervals have been implemented under rules or regulations of the TWSE, securities for which the opening auction reference price is lower than NT$1, call (put) warrants, or company warrants.
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Article 75-4
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Each headquarters and branch of a securities firm may open two omnibus trading accounts in its own name, for purposes of accepting securities trading orders from domestic and foreign (including overseas Chinese and foreign nationals) principals respectively; provided that a mainland China area principal may not use an omnibus trading account.
A principal may use an omnibus trading account only after opening a securities trading account; the omnibus trading account may be used to participate in TWSE ordinary trading (i.e., the trading time as specified under Article 3 of the TWSE Operating Rules), after-market fixed-price trading, odd-lot trading, and block trades that are settled on the second business day following the trade date. It may also, after carrying out a securities borrowing transaction through a securities firm under the TWSE Securities Lending and Borrowing Rules, [use the borrowed securities] to trade through the omnibus trading account. A principal that is allowed by regulations to engage in margin trading may engage in margin trading through the omnibus trading account.
If a principal has authorized a trader to conduct trades and handle allocation of trade prices and volumes, it shall provide a power of attorney and specify the allocation of trade price and volume and relevant authorized matters. However, where a same authorized trader is authorized by offshore overseas Chinese or foreign nationals, domestic funds, or units of a same group, the power of attorney may be waived, and the authorized trader shall provide a statement specifying the principals' ID numbers or uniform invoice numbers, names, and other relevant information. The TWSE may, in accordance with operational needs, require securities firms to provide certifying documents relating to the aforesaid authorizations.
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