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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 (TSEC) 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 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 TSEC 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 TSEC 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: On the final business day of the fifth month following the close of each business year for an exchange-listed company, and on the final business day of the third month following the close of each half business year, the TSEC shall review the company's published and filed annual or half-year financial report 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 certified consolidated annual financial report for the most recent period or the CPA-audited and certified half-year consolidated financial report for the most recent period, the TSEC 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 TSEC 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 TSEC shall publicly announce suspension of margin purchase and short sale transactions in those securities.
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