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Amended Article

Title：

Taiwan Stock Exchange Corporation Operation Guidelines Governing Liquidity Providers of Beneficial Certificates  CH

Amended Date： 2024.02.23 (Articles 2, 2-1 amended,English version coming soon)
Current English version amended on 2021.04.29 
Categories： Securities Exchange Market > Trading > Beneficial Certificates
Article Content Content Search Article No. Search Legal Basis Amended Article Legislative History Chinese
6     The liquidity contract shall at least prescribe the following matters with respect to the responsibilities and obligations of a liquidity provider (the standards below shall apply to the period from commencement of trading to a certain period of time prior to close of trading):
  1. The calculation formula for the best bid/ask spread of the ETF beneficial certificates as disclosed in the TWSE centralized securities exchange market is as follows:
    (the best bid/ask spread) = [(lowest unexecuted ask quote) - (highest unexecuted bid quote)]/( lowest unexecuted ask quote)
  2. The minimum valid quote time by a liquidity provider for the ETF beneficial certificates. The valid quote time means the circumstance where a buy or sell order in which the price is within a specified range above the previous lowest unexecuted ask quote, within a specified range below the previous highest unexecuted bid quote, or within a specified range above and below the execution price. Minimum requirements shall be set for valid quote time and numbers of bid and ask quotes as calculated.
  3. The minimum amount of buy/sell quotes that a liquidity provider shall make during a suspension of matching when there occurs a circumstance specified in paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules with respect to the ETF beneficial certificates beneficial certificates during the trading session.
  4. The disclosure of market trading prices is limited only by the duration of time of bid or ask prices except when the price of the ETF beneficial certificates goes limit-up or limit-down or when the disclosed best buy price or sell price is the market price; however, the aforesaid calculation of time may exclude the matching postponement period when matching time must be postponed due to a circumstance specified in paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules.
  5. Agreement that the TWSE provide to the SITE, the futures trust enterprise, or the general agent for offshore funds all the buy/sell quotes and itemized statements of trading of the ETF beneficial certificates done through the liquidity provider's segregated ETF account.
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6-1     If any of the following circumstances in the disclosure of market trading prices has existed in respect of any ETF beneficial certificates for 3 consecutive months, the TWSE will notify the SITE or futures trust enterprise issuing the ETF beneficial certificates to take corrective measures within 2 months commencing from the following month after the notification is made. The TWSE will issue a warning letter if the SITE or futures trust enterprise fails to take corrective measures within the time limit, and continued failure to take corrective measures within 2 months from the following month shall be deemed a breach of the listing contract, and the TWSE will impose a breach penalty in the amount of NT$30,000 on the SITE or futures trust enterprise, with further investigation conducted once every 3 months and consecutive penalties imposed until such time as correction is made.
    With respect to the beneficial certificates of domestic component securities ETFs, beneficial certificates of leveraged or inverse ETFs where the underlying index component securities are all domestic securities, and the beneficial certificates of the underlying ETFs of such ETFs, each of the following circumstances may not occur more than twice per month in the disclosure of market trading prices from commencement of trading to close of trading (including the disclosed trading prices as calculated within a certain period of time before close of trading):
  1. With the exception of the disclosure of limit-up or limit-down prices or market prices, in the disclosure of market trading prices, only either a posted bid price or a posted ask price is available, and the circumstance has continued for more than 3 minutes.
  2. The best bid-ask spread is higher than 1 percent, and the circumstance has continued for more than 10 minutes.
  3. When the TWSE encounters any circumstance under paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules and has to postpone matching for a period of time, such postponement may exclude the calculation of the number of times set out above.
  4. When they are listed as alerted securities, the calculation of the number of times set out above may be excluded.
    With respect to the beneficial certificates of a foreign component securities ETF and beneficial certificates of an underlying ETF of such ETF, beneficial certificates of a futures ETF, beneficial certificates of a leveraged or inverse ETF where the underlying index component securities include one ore more foreign securities and beneficial certificates of an underlying ETF of such ETF, each of the following circumstances may not occur more than six times in total per month in the disclosure of market trading prices from commencement of trading to close of trading (including the disclosed trading prices as calculated within a certain period of time before close of trading:
  1. With the exception of the disclosure of limit-up or limit-down prices or market prices, in the disclosure of market trading prices, only either a posted bid price or a posted ask price is available, and the circumstance has continued for more than 10 minutes.
  2. The best bid-ask spread is higher than 3 percent, and the circumstance has continued for more than 10 minutes.
  3. When the TWSE encounters any circumstance under paragraphs 6 and 8 of Article 58-3 of the TWSE Operating Rules and has to postpone the matching for a period of time, such postponement may be excluded from the counting of the number of occurrences set forth above.
  4. In the case of the underlying index component securities of a foreign component securities ETF, if the foreign securities market is closed on a given day, the disclosure of market trading prices of the beneficial certificates of such ETF and the beneficial certificates of its underlying EFT for that given day shall be excluded from the counting of the number of occurrences set forth above.
  5. In the case of the underlying index component of a futures ETF, if the exchange market of the foreign futures contracts concerned is closed on a given day, the disclosure of market trading prices for that given day shall be excluded from the counting of the number of occurrences set forth above.
  6. In the case of the underlying index component securities of a leveraged or inverse ETF, if the foreign securities market is closed on a given day, the disclosure of market trading prices of the beneficial certificates of such ETF and the beneficial certificates of its underlying EFT for that given day shall be excluded from the counting of the number of occurrences set forth above.
  7. When they are listed as alerted securities, the calculation of the number of times set out above may be excluded.
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