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Article 28-1
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Where the total of brokerage or dealer trading orders placed by a securities firm in a single day exceeds twenty times its net funds available for use, the TWSE may suspend the placing of additional trading orders.
Where the net worth of a securities firm is less than its paid-in capital but more than 50 percent thereof, the multiple referred to in the preceding paragraph may be adjusted to ten times. Where the net worth is less than 50 percent of the paid-in capital, the multiple may be adjusted to five times. Where the net worth is less than 50 percent of the paid-in capital for 3 consecutive months, the multiple may be adjusted to two times. If a securities firm uses a capital reduction to raise the ratio of its net worth to its paid-in capital, it must meet and maintain for 3 months the required conditions for the multiple that it wishes reinstated for its brokerage trading before that multiple may be adjusted pursuant to the preceding provisions.
If the regulatory capital adequacy ratio of a securities firm meets the requirements of Article 65 of the Regulations Governing Securities Firms, the multiple referred to in the preceding paragraph may be adjusted to 15 times. If the regulatory capital adequacy ratio of the securities firm falls into the circumstances specified in Article 66 of the Regulations Governing Securities Firms, further downward adjustment may be made. The adjustment standards shall be separately prescribed by the TWSE.
If the monthly statements filed by a securities firm show that the cause for an adjustment under paragraph 2 or paragraph 3 to some degree ceases to exist, successive adjustments to the multiple may be made according to the degree to which the cause ceases to exist.
The method of calculation of the net funds available for use referred to in paragraph 1 shall be prescribed by the TWSE.
If for 3 consecutive months, the financial ratio as shown in the monthly accounting summaries of a securities firm fails to satisfy the requirements of Article 13 or Article 16 of the Regulations Governing Securities Firms, and the Competent Authority issues the first notice of improvement to be made within a time period, but no improvement is made, the TWSE may adjust the multiple referred to in paragraph 1 to fifteen times; upon the second notice of the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to ten times; for each additional notice by the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to half the previous multiple as the total limit on trading for customers' account and its own account. After the above adjustments, the highest allowable amount shall not exceed four times the net worth. Once improvement is made, the original multiple shall be restored.
In the event any securities firm falls within any of the categories under Article 3 of the Rules for Assistance to and Examination of Securities Firm of the TWSE, or subsequent to assistance, improvements cannot be made, the TWSE may lower the multiple referred to in paragraph 1. Where improvement has been made, the original multiple shall be restored.
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Article 141
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Where a securities firm commits any of the following acts, the TWSE may restrict or suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises or terminate the market usage contract:
- violation of Article 30 by making false statements or reports to the TWSE that result in damages to the TWSE or others.
- violation of Article 83, paragraph 1 by producing false records and vouchers.
- violation of Article 89 by offsetting outside the Exchange or transacting outside the Exchange or transacting securities that are not listed by the TWSE without the approval of the Competent Authority.
- violation of Article 75, subparagraph 5 or having any event set forth in Article 90, paragraph 1 or Article 94, paragraph 2 that seriously damages the rights and interests of the principal, which has been verified by the TWSE.
- violation of Article 83, paragraph 5 of, Article 96, or Article 97.
- a disposition under Article 142, paragraph 1, subparagraph 4, where corrections have not been made after 3 months.
- any events set forth in Article 3 of the Regulations Governing Special Inspection of and Guidance to Securities Firms as prescribed by the TWSE, and has not been able to improve after being subject to guidance for several times.
- failure to present relevant account books or certificates within a specified time limit, after being subject to a disposition under Article 142, paragraph 1, subparagraph 1.
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Article 142
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Where a securities firm commits any of the following acts, the TWSE may temporarily halt trading, in whole or in part, of its dealing or brokerage business or its business premises and report to the Competent Authority:
- violation of Article 25, paragraph 2 by evading or refusing the inspection or the inquires of personnel sent by the TWSE.
- violation of the settlement obligation specified in Article 113, paragraph 1.
- its net worth is less than one-half of its paid-in capital referred to in Article 28-1, paragraph 2 for 6 consecutive months.
- regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after 3 months.
- violation of the provisions of these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
The TWSE may resume its trading status if the cause of the circumstance under subparagraph 1, 3, 4, or 5 of the preceding paragraph ceases to exist.
Where trading by any securities firm halted by the TWSE in accordance with paragraph 1, subparagraph 2, the number of days for which its trading is halted may be used to offset against the number of days for which its trading shall be suspended pursuant to Article 140, paragraph 1.
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