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Article 4
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If any of the following conditions obtain with respect to shares or Taiwan depositary receipts eligible for margin purchase and short sale, a securities exchange or OTC market may publicly announce suspension of margin purchase and short sale transactions in such shares, or adjust the margin purchase leverage limit or short sale margin requirement within the scope prescribed by the competent authority and report same to the competent authority for recordation:
- The trading method for the shares or Taiwan depositary receipts has been changed to require full delivery (in the case of those listed on either an exchange or OTC market), or to require pre-paid settlement (in the case of those listed on an OTC market).
- Trading has been suspended (in the case of exchange-listed shares and Taiwan depositary receipts, and OTC-listed shares).
- Delisting has taken place (in the case of exchange-listed shares and Taiwan depositary receipts, and OTC-listed shares).
- The net worth per share of a stock listed on the exchange or OTC market is below par value; or, in the case of shares with no par value or a par value other than NT$10 per share issued by a company with a primary listing on the exchange or OTC market, the issuer has posted an accumulated deficit.
- In either the CPA-audited and certified consolidated financial report for the most recent fiscal year or the CPA-reviewed half-year consolidated financial report (either report shall have been prepared in compliance with the laws and regulations of the issuer's home country), the issuer of foreign securities evidenced by Taiwan depositary receipts has posted an accumulated deficit.
- Taiwan depositary receipts number less than 60 million exchange-listed units following a redemption.
- There has been a major default on exchange-listed shares or Taiwan depositary receipts, or on OTC-listed shares, and the balance of margin purchases or short sales meets or exceeds a prescribed ratio.
- Share price is too volatile.
- Equity ownership is overly concentrated.
- Trading volume is excessively abnormal.
- There is another situation that makes it unadvisable to continue margin purchase and short sale transactions.
Where margin purchase and short sale transactions are suspended or the margin purchase leverage limit or short sale margin requirement is adjusted in accordance with the provisions of the preceding paragraph, if the reason for suspension or adjustment no longer exists, the stock exchange or OTC market shall publicly announce reinstatement and report same to the competent authority for recordation.
The specific standards and procedures required in the preceding two paragraphs shall be prescribed separately by securities exchanges and OTC markets and reported to the competent authority for approval.
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Article 5
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If any of the following conditions obtain with respect to beneficial certificates eligible for margin purchase and short sale, a securities exchange or OTC market may publicly announce suspension of margin purchase and short sale transactions in such certificates, or adjust the margin purchase leverage limit or short sale margin requirement within the scope prescribed by the competent authority, and report same to the competent authority for recordation:
- Delisting has taken place.
- Financial reports have not been punctually filed and publicly announced in accordance with requirements.
- A situation set out in Article 96, paragraph 1 of the Securities Investment Trust and Consulting Act exists with respect to the securities investment trust enterprise managing the securities investment trust fund, or a situation set out in Article 38, paragraph 1 of the Regulations Governing Futures Trust Enterprises exists with respect to the futures trust enterprise managing the exchange-traded futures trust fund.
- The price is too volatile.
- Beneficial ownership is overly concentrated.
- Trading volume is excessively abnormal.
- There is another situation that makes it unadvisable to continue margin purchase and short sale transactions.
Where margin purchase and short sale transactions are suspended or the margin purchase leverage limit or short sale margin requirement is adjusted in accordance with the provisions of the preceding paragraph, if the reason for suspension or adjustment no longer exists, the stock exchange or OTC market shall publicly announce reinstatement and report same to the competent authority for recordation.
The specific standards and procedures required in the preceding two paragraphs shall be prescribed separately by securities exchanges and OTC markets and reported to the competent authority for approval.
The provisions of subparagraphs 4 to 6 of paragraph 1 do not apply to exchange-traded fund beneficial certificates, and exchange-traded futures trust fund beneficial certificates. The provisions of subparagraphs 3 to 6 of paragraph 1 do not apply to offshore exchange-traded fund beneficial certificates.
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