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2. Where any of the conditions set out in Article 4, paragraph 1, subparagraphs 1 through 7, or subparagraph 11, or Article 5, paragraph 1, subparagraphs 1 through 3, or subparagraph 7 of the Margin Purchase and Short Sale Eligibility Standards obtains with respect to exchange-listed securities eligible for margin purchase and short sale transactions, this corporation (TWSE) shall, from the second business day next following public announcement, suspend margin purchase and short sale transactions in accordance with the following principles (unless an exchange-listed financial institution has been duly appointed as receiver by the competent authority in charge of the relevant industry, in which case margin purchase and short sale transactions shall be suspended from the day next following receipt from the competent authority of a notice of receivership):
(1) Where the trading method for exchange-listed shares or Taiwan depositary receipts has been changed to require full delivery, trading has been suspended, or the securities have been delisted, or beneficial interest certificates have been delisted: When it is announced that the trading method for shares or Taiwan depositary receipts has been changed by the TWSE to require full delivery, or that trading has been suspended, or the securities delisted, then margin purchase and short sale transactions in those securities shall be simultaneously announced; provided, this requirement does not apply to delistings due to merger.
(2) Where a securities investment trust enterprise has failed to punctually file and publish a securities trust investment fund's financial report, or a situation contemplated under Article 96, paragraph 1 of the Securities Investment Trust and Consulting Act obtains with respect to the securities investment trust enterprise that manages a securities investment trust fund: The TWSE shall publicly announce suspension of margin purchase and short sale transactions in the fund's beneficial interest certificates.
(3) Where net worth per share for exchange-listed shares is below par value:
(i) On the final business day of the fifth month following the close of each business year, the TWSE shall review the company's published and filed annual report audited and attested by the CPA for the most recent period, and published and filed Q1 financial report reviewed by the CPA for the most recent period, and, if net worth per share is below par value, shall publicly announce suspension of margin purchase and short sale transactions in that company's shares.
(ii) On the final business day of the third month following the close of each half business year, the TWSE shall review the company's published and filed half-year financial report reviewed and attested by the CPA for the most recent period, and, if net worth per share is below par value, shall publicly announce suspension of margin purchase and short sale transactions in that company's shares.
(4) Where the issuer of foreign securities evidenced by Taiwan depositary receipts has posted an accumulated deficit: If the issuer has posted an accumulated deficit in either the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested half-year consolidated financial report for the most recent period, the TWSE shall announce suspension of margin purchase and short sale transactions in those depositary receipts on the final business day of the third month following the deadline for public announcement and reporting to the competent authority, securities exchange, or securities market as required by the laws and regulations of the foreign issuer's home country or the jurisdiction where it is listed.
(5) Taiwan depositary receipts number less than 60 million exchange-listed units following redemption.
(6) Where there has been a major default on exchange-listed shares or Taiwan depositary receipts, and the balance of long margin positions or short interest meets or exceeds a prescribed ratio: When the aggregate dollar amount of transaction failures reported in a single day is NT$200 million or more and the balance of long margin positions or short interest on that day meets or exceeds 15 percent of listed shares or units, the TWSE shall publicly announce suspension of margin purchase and short sale transactions in those shares or Taiwan depositary receipts.
(7) Where there is another situation that makes it unadvisable to continue margin purchase and short sale transactions, the TWSE shall publicly announce suspension of margin purchase and short sale transactions in those securities.
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3. Where margin purchase and short sale transactions in exchange-listed securities eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of the preceding paragraph, such transactions may be reinstated from the second business day next following public announcement if the following conditions are met:
(1) Where the circumstances contemplated under subparagraph 1, 2, or 7 of the preceding point exist: When the reason for suspension is extinguished, the TWSE shall publicly announce reinstatement of margin purchase and short sale transactions in those securities.
(2) Where the conditions contemplated under subparagraph 3 of the preceding point exist:
(i) On the final business day of the fifth month following the close of each business year, the TWSE shall review the company's published and filed annual report audited and attested by the CPA for the most recent period, and the published and filed Q1 financial report reviewed by the CPA for the most recent period, and if net worth per share has returned to par value it shall publicly announce reinstatement of margin purchase and short sale transactions in those securities.
(ii) On the final business day of the third month following the close of each half business year, the TWSE shall review the published and filed half-year financial report audited and attested by the CPA for the most recent period.
(iii) If any law or regulation prescribes otherwise regarding the filing period for the financial reports referred to in the preceding two items, the TWSE shall review the financial reports on the fifth business day following the expiration of each given filing period.
(3) Where the conditions contemplated under subparagraph 4 of the preceding point exist: If the issuer has not posted an accumulated deficit in either the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested half-year consolidated financial report for the most recent period, the TWSE shall announce reinstatement of margin purchase and short sale transactions in those depositary receipts on the final business day of the third month following the deadline for public announcement and reporting to the competent authority, securities exchange, or securities market as required by the laws and regulations of the foreign issuer's home country or the jurisdiction where it is listed.
(4) Where the conditions contemplated under subparagraph 5 of the preceding point exist: The number of Taiwan depositary receipts has returned to 60 million or more exchange-listed units.
(5) Where the conditions contemplated under subparagraph 6 of the preceding point exist: When the aggregate dollar amount of transaction failures reported in a single day has been less than NT$10 million for each of the previous six business days and the figures for both long margin positions and open interest on the last of those six business days are below 15 percent of listed shares or units, the TWSE shall publicly announce reinstatement of margin purchase and short sale transactions in those securities.
Where margin purchase and short sale transactions in exchange-listed securities eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of subparagraph 3 under the preceding point, the issuer may apply for reinstatement of margin purchase and short sale transactions by submitting the published and filed annual or half-year financial report audited and attested by the CPA, or the published and filed quarterly financial report reviewed by the CPA for the most recent period. The TWSE shall then make disclosure on the Market Information System website and conduct a review five days afterward. Where it is found upon review that net worth per share has returned to par value or higher, margin purchase and short sale transactions in those securities shall be reinstated on the fifth business day next following public announcement.
Where margin purchase and short sale transactions in Taiwan depositary receipts eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of subparagraph 4 of the preceding point, the issuer may apply for reinstatement of margin purchase and short sale transactions by submitting the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested half-year consolidated financial report for the most recent period. The TWSE shall then make disclosure on the Market Information System (MIS) website and conduct a review five days afterward. Where it is found upon review that there is no accumulated deficit, margin purchase and short sale transactions in those securities shall be reinstated on the fifth business day next following public announcement.
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