Taiwan Stock Exchange - Rules & Regulations Directory
Taiwan Stock Exchange Corporation Regulations Governing Trading of Call (Put) Warrants(2007.04.11)
When a principal wishes to exercise a warrant right, it shall submit an application via its securities firm to the TSE. After the TSE accepts the application, it will request that the issuer honor the warrant. [In such cases], or where, upon expiration of a call (put) warrant that is to be settled in cash, the TSE has calculated and deemed that there is exercise value in the warrant and has notified the securities firm to exercise the warrant on behalf of the principal, fees shall be collected according to the provisions of the preceding article. Irrespective of whether the warrant will be exercised by delivery of shares or cash settlement, the following formula shall apply: Strike price of the call (put) warrant x Number of underlying shares.
When an issuer of call (put) warrants, or a risk management institution, buys back any warrant of the issuer on the centralized securities exchange market, it shall deliver such warrants in full to the centralized custody account which it previously notified the TSE of in writing. The TSE will not act on the issuer's behalf to request the honoring of warrants held in such an account.
The term "exercise value" in paragraph 1 means that there is a positive difference between the strike price of the underlying stocks of a call (put) warrant and the settlement price of the call (put) warrant at its expiration date, as calculated under Article 10, subparagraph 6, item 15 of the Taiwan Stock Exchange Corporation Criteria Governing Review of Call (Put) Warrant Listings.