| Title： |
Operating Rules of the Taiwan Stock Exchange Corporation(2018.12.24) |
| Date： |
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Article 58
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The validity of trading orders relating to the automated computer trading system shall be limited to the day on which the order is placed.
Unless otherwise provided, trading orders for the automated computer trading system may be keyed-in 30 minutes prior to the opening of the market trading by the participating securities brokers or dealers. Such orders shall include the code of the securities firm, serial number of the brokerage order ticket (or serial number of the proprietary trading order), type of order ticket (margin purchase, short sale, securities lending, central depositary, self-custody), account number of the principal (or of the dealer), code of the securities, type of trade (normal, block, odd-lot), price (limit order or market order), volume, sale/purchase, and period of validity (valid on the current day, canceled if not immediately satisfied, or canceled if not all order is immediately satisfied). Upon acceptance by the computer of the TWSE, a trade confirmation slip shall be printed. When a matching trade is made, an execution report will be printed on the printer of the participating securities firms. The items printed on the trading order confirmation slip or the execution report may be adjusted by the TWSE depending on actual need.
The serial number of the brokerage order ticket to be keyed-in by the participating securities brokers as referred to in the preceding paragraph shall be sequentially assigned in the order that the orders were received. The serial number of proprietary trading orders by securities dealers shall be sequentially numbered in the order that the orders were placed.
The price of the trading orders shall be within the daily price fluctuation limit placed in accordance with paragraphs 1 and 2 of Article 63.
Thirty minutes before market opening (i.e. the commencement of trading hours) and a certain period of time before market closing (i.e. the close of trading hours), the TWSE shall disclose on a real-time basis the computed execution prices and volumes, and the computed prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. In addition, the TWSE shall disclose, on a real-time basis during trading hours, the executed trade prices and volumes, and the prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. As to the prices and volumes of other trading orders, however, the TWSE may make appropriate disclosures based on market needs.
Application of securities firms for changes to the trading orders that are valid on the current day, except in the following circumstances, shall be accomplished by first canceling the original trading order, and then placing new trading orders.
- Reduction of the volume in the order; or
- Change of the price of a limit order, in which case the time of the order shall be the time of entry of the updated order, unless otherwise provided by the TWSE.
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Article 58-3
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The competitive auction for trading orders shall be divided into call auction and continuous trading. The first matching in the current session shall be done by call auction, and subsequent matching shall be done by continuous trading until a period of time before market closing, during which all the trading quotes shall be accumulated and matched by call auction.
Trade prices of call auction shall be determined based on the following principles:
- 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.
- Where there are buy and sell orders with prices equal to the determined price, at least one side shall be all satisfied.
- 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.
Trade prices of continuous trading shall be determined by each buy order or sell order that is entered based on the following principles:
- When the price of a buy order entered is higher than or equal to the minimum price of a sell order previously entered, orders shall be satisfied from the lowest to the highest price of sell order, in that order, until orders are all satisfied or until the price of the buy order currently entered is lower than the price of the unsatisfied sell order.
- When the price of a sell order entered is lower than or equal to the maximum price of a buy order previously entered, orders shall be satisfied from the highest to the lowest price of buy order, in that order, until orders are all satisfied or until the price of the sell order currently entered is higher than the price of the unsatisfied buy order.
The aforesaid auction reference price at market opening of the current trading session shall be determined by the following principles:
- Use the closing price for the preceding day.
- Where there is no closing price for the preceding day, the auction reference price shall be determined by the following principles:
- 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.
- 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.
- When neither of the above circumstances applies, use the auction reference price at the opening of market of the preceding business day.
- 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, 67-1, or 67-2, 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 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. Where unexecuted, the closing price shall be the last traded price during the current session.
Except securities that are 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 the bylaws or rules of the TWSE, or securities for which the opening auction reference price is lower than a certain price, 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 any execution price as test-calculated prior to each matching fluctuates beyond 3.5% of the reference price:
- If a trading order entered is a limit order and is valid for the current day, except that an order whose execution price as test-calculated is within the price range and shall be satisfied immediately, the TWSE shall at the same time postpone the matching of the security for two minutes, and continue to accept entries, cancellations, and changes of trading orders for that security. Matching will then proceed by call auction at the conclusion of the postponement period.
- If a trading order entered is a limit order which will be canceled if not immediately satisfied in one trade, is a market order and is valid for the current day which will be canceled if not immediately satisfied in one trade, except that an order whose execution price as test-calculated is within the price range and shall be satisfied immediately, the remaining unsatisfied volume of the trading order entered is canceled.
- If a trading order entered is a limit order which will be canceled if not all order is immediately satisfied, or is a market order which will be canceled if not all order is immediately satisfied, the trading order entered is all canceled.
The reference price in the preceding subparagraph shall be determined by the following principles:
- Within five minutes after the first matching for the current session, the reference price is the price of the first matched trade. In the absence of a trade price in the first matching, the opening auction price shall be the reference price.
- After the first five minutes of the first matching for the current session, prior to each matching, a weighted average price is calculated based on the price and volume of all trades for the five-minute period immediately before the entry time of the order. In the absence of a trade price in the five minutes, the most recent trade price shall be used. In the absence of a most recent trade price, however, the opening auction price shall be the reference price.
- After the first matching for the current session, in the event of a postponement of matching of a security in the first subparagraph, within the five minutes after the conclusion of the postponement period, the trade price of the call auction during the session is the reference price. In the absence of a trade price during the session, however, the reference price shall be calculated in accordance with the preceding subparagraph.
If, during the 1 minute prior to market opening or market close for a security, any given computed execution price fluctuates beyond 3.5 percent from the previous computed execution price (if there is no previous computed execution price available 30 minutes before market opening, the fluctuation shall be based on the auction reference price at market opening; if there is no previous calculated execution price available a period of time before market closing, the fluctuation shall be based on the most recent trade price; if there is no most recent trade price available, the fluctuation shall be based on the auction reference price at market opening), the first matched trade for the current session, or the matching at market close, for that security is postponed. For a security for which the first matched trade for the current session is postponed, matching and execution for the security will proceed sequentially after 2 minutes of postponement. For a security for which the matching at market close 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 the bylaws or rules 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 58-7
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The "period of time" in Article 58-3 and the preceding two articles shall be prescribed by the TWSE and publicly announced for implementation after approval and recordation by the Competent Authority.
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Article 58-8
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A trading order can either be a limit order or market order:
- A limit order is an order for which a principal has set a certain price where the order is satisfied at or below the price in the case of a buy order, or at or above the price in the case of a sell order.
- When giving a market order, a principal does not set a certain price and this order may be satisfied within the permitted price range of the security on the day. However, newly listed common stocks during the period when no price fluctuation limit is imposed, securities subject to no fluctuation limit, securities for which extended matching intervals have been implemented under the bylaws or rules of the TWSE, or those otherwise identified by the TWSE shall not be traded as market order.
Prior to matching a trade, a market order shall have its reference price converted based on the following principles, with the converted price as its order price:
- For a buy order, the converted reference price shall be the most recent trade price of the security (or opening auction reference price in the absence of a most recent trade price), maximum limit buy order, or maximum limit sell order, whichever is higher. If the converted reference price is the same as the maximum limit buy order, it shall be matched before a limit order where price priority under Article 58-2 applies.
- For a sell order, the converted reference price shall be the most recent trade price of the security (or opening auction reference price in the absence of a most recent trade price), minimum limit buy order, or minimum limit sell order, whichever is lower. If the converted reference price is the same as the minimum limit sell order, it shall be matched before a limit order where price priority under Article 58-2 applies.
In terms of period of validity of a trading order, the order is either valid on the current day, canceled if not immediately satisfied in one trade, or canceled if not all trade is immediately satisfied in one trade:
- "Valid on the current day" describes an order that is valid during the current session if not all order is satisfied in one trade and the remaining unsatisfied volume is not withdrawn.
- "Canceled if not immediately satisfied in one trade" describes that when a trading order is entered, if not all order is satisfied in one trade, the remaining unsatisfied volume will be canceled.
- "Canceled if not all order is immediately satisfied in one trade" describes that when a trading order is entered, if not all order is satisfied in one trade, all the order shall be canceled.
A trading order that is a market order, or with period of validity that is canceled if not immediately satisfied in one trade or canceled if not all order is immediately satisfied in one trade may only be entered during the period allowed for continuous trading under Article 58-3. During the period for call auction, the TWSE withdraws trading orders previously entered as market orders that are valid on the current day.
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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 Taipei Exchange, reference shall be made to the closing price on the last trading day before the cessation of its Taipei Exchange trading.
When a company limited by shares or a foreign company converts its shares to another newly established company or another already TWSE listed or TWSE primary listed existing company under Chapter IV-1, the daily price fluctuation limits for an initial listing of common shares of such newly established company 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 TWSE or Taipei Exchange listed company or TWSE or Taipei Exchange primary 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 of the newly established company or the already TWSE listed or TWSE primary listed existing company 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 Taipei Exchange 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 4, subparagraph 2 herein shall be used. Where there is no closing price for the last trading day of the Taipei Exchange 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 Taipei Exchange, 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 previous 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 4, 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 or halted, unless otherwise provided, the price fluctuation limit of such securities on the first day of resumption of the suspended or halted trading shall be calculated based on the closing price of the last trading day. If there is no closing price for the last trading day, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein.
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Article 66
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(Deleted)
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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 compensation.
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:
- Where a listed company uses retained earnings or capital reserve to increase capitalization, the calculation of 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.
- Where a listed company uses cash capital to issue new stocks, the calculation of daily price fluctuation limit for the ex-rights date shall be handled by one of the following methods:
- 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.
- 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.
- 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:
- 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.
- 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.
- 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 4, 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:
- 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 number of issued shares to the original number of issued shares.
- 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 number of issued shares to the original number of issued shares.
- For a demerger accompanied by capital reduction:
- 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 Taipei Exchange 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 Taipei Exchange listed shares, and then divided by the ratio of the post-reduction number of issued shares to the original number of issued shares.
- If the stock of the transferee company of the demerger is stock of a company that is neither TWSE listed nor Taipei Exchange 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:
- 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.
- 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 4, subparagraph 2 herein.
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Article 67-2
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For a TWSE listed company carrying out procedures for the issuance of new replacement shares due to a change of par value, the price fluctuation limits of the stock on the commencement date of trading on the TWSE after the change of par value shall be calculated based on the closing price on the last trading day before the issuance of the new replacement shares divided by the ratio of the number of issued shares after the change of par value to the original number of issued shares.
In the event there was no closing price on the last trading day before the issuance of the new replacement shares, the calculation shall be based on the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2.
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Article 79
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A securities firm may accept authorization from a juristic person, other institutions or specific natural persons to decide on its behalf the price and time of placement of an order within the range of the price limits specified by such juristic person, institution or natural person; when placing quotes for trades, the securities broker shall consider the market conditions and the supply-demand relationship, and take care not to damage the formation of fair prices in the market and the sound development of the market, and the securities broker shall retain the customer authorization record in accordance with regulations.
"Specified natural person" in the preceding paragraph means a natural person who simultaneously meets all of the following conditions:
- Provides proof of financial capacity of NT$50 million or more.
- Possesses adequate professional knowledge or trading experience with respect to financial products.
- Issues a signed statement specifying that a registered qualified associated person of the securities firm has explained in detail to him/her the rights, obligations, and risks requiring attention in connection with discretionary orders, and confirming that he/she has been fully advised of and understood the same and agrees to sign as a specified natural person.
"Possesses adequate professional knowledge or trading experience with respect to financial products" in subparagraph 2 of the preceding paragraph means that the person meets one of the following conditions:
- The person has in the past held a position at a securities, futures, financial, or insurance institution, or has other academic qualifications or work experience sufficient to prove possession of professional knowledge of securities.
- The person simultaneously meets all of the following conditions:
- At least six months have elapsed since the person opened the account.
- The person provides proof of the number of his/her trades on the securities market for the most recent year having reached 20; the same shall apply in the case where 1 year has not elapsed since the person opened the account.
- The person has never had any record of default in securities trading.
Securities brokers may accept an order specifying the term of validity.
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