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Amended Article

Title:

Taiwan Stock Exchange Corporation Rules Governing Trading of Beneficial Certificates  CH

Amended Date: 2021.10.08 (Articles 4-1, 10, 10-2 amended,English version coming soon)
Current English version amended on 2021.04.29 
Categories: Securities Exchange Market > Trading > Beneficial Certificates
Article 14     If on a same day the amount of component securities portfolio of the underlying index of a securities investment trust ETF with domestic component securities purchased by a securities firm for its own account or on behalf of a single account, or the total amount of the aforementioned purchased securities plus that securities firm's original holdings and borrowings thereof and the amount of securities it purchased or acquired through in-kind redemption on the preceding day, meets the requirements for in-kind creation of that ETF beneficial certificate, and on that same day it sells the same quantity of that beneficial certificate; or if on a same day the amount of beneficial certificates of a securities investment trust ETF with domestic component securities that a securities firm purchases for its own account or on behalf of a single account, or the total amount of the aforementioned purchased certificates plus that securities firm's original holdings and borrowings thereof and beneficial certificates it purchased or acquired through in-kind creation on the preceding day, meets the requirements for in-kind redemption of the component securities portfolio of the underlying index of that ETF, and on that same day it sells the same quantity of those component securities portfolio of the underlying index of the ETF; then that securities firm's settlement, and subsequent related matters, shall be conducted according to the following provisions:
  1. On the transaction date, the securities firm, via computer link, shall report to the TWSE and submit an application to postpone settlement.
  2. If the securities firm reports the sale of beneficial certificates, or component securities portfolio of the underlying index, of a securities investment trust ETF with domestic component securities, and applies for postponing settlement pursuant to the preceding subparagraph, after the TWSE has reviewed and approved the application it shall prepare a statement and transmit an electronic file thereof to the central securities depository to conduct the relevant operations accordingly. The provisions of Article 109 of the TWSE Operating Rules do not apply to the aforementioned operations.
  3. After the securities firm has completed settlement on the second business day after the transaction date for the component securities portfolio of the underlying index, or beneficial certificates, of a securities investment trust ETF with domestic component securities that it has purchased, and for any price payable for other purchases, the component portfolio securities or beneficial certificates receivable by it shall be transferred to serve as collateral for the postponed settlement, and the TWSE will notify the central securities depository to thereupon apply to the SITE for the in-kind creation of that beneficial certificate, or in-kind redemption of the component securities portfolio of the underlying index of the fund to unwind the position.
  4. If the component securities portfolio of the underlying index of a securities investment trust ETF with domestic component securities listed for trading on the GreTai Securities Market (GTSM) includes exchange-listed securities, after the TWSE receives notification from the GTSM regarding the portion of listed securities sold by the securities firm, the TWSE shall prepare a statement for that portion and transmit an electronic file thereof to the central securities depository pursuant to subparagraph 2.
    When a securities firm conducts creation of leveraged or inverse securities investment trust ETF beneficial certificates in which the component securities of the underlying index are all domestic securities, for its own account or on behalf of its customers, after confirmation has been given by the securities investment trust enterprise, the beneficial certificates may be sold from the date of creation. When the component securities of the underlying index contain one or more foreign securities, after confirmation has been given by the securities investment trust enterprise, the beneficial certificates may be sold from the business day preceding the day when they are registered with the central securities depository.
    When a securities firm conducts creation of ETF securities investment trust beneficial certificates for its own account or on behalf of its customers, and their component securities of the underlying index are all domestic securities, except under the circumstances set out in paragraph 1, after confirmation has been given by the securities investment trust enterprise, the beneficial certificates may be sold on the business day following the creation. If their component securities of the underlying index contain one or more foreign securities, after confirmation has been given by the securities investment trust enterprise, the beneficial certificates may be sold on the business day before they are registered with the central securities depository.
    When a securities firm carries out creation of ETF beneficial certificates for an offshore exchange-traded fund for its own account or on behalf of its customers, those ETF beneficial certificates may, subject to confirmation of the participating securities firm, be sold on the second business day after the creation.
    When a securities firm conducts creation of original and leveraged and inverse ETF futures trust fund beneficial certificates for its own account or on behalf of its customers and their component securities of the underlying index are all domestic securities, after confirmation has been given by the futures trust enterprise, the beneficial certificates may be sold on the business day following the creation. If their component securities of the underlying index contain one or more foreign securities, after confirmation has been given by the futures trust enterprise, the beneficial certificates may be sold on the business day before they are registered with the central securities depository.
    When ETF securities investment trust fund beneficial certificates, ETF futures trust fund beneficial certificates, leveraged and reverse ETF securities investment trust fund beneficial certificates, leveraged and reverse ETF futures trust fund beneficial certificates, and offshore ETF beneficial certificates are listed as alerted securities subject to advance collection of funds and securities, the positions for which the securities firm conducts creation for its own account (including liquidity providers) or on behalf of its customers shall not be sold after they are registered with the central securities depository in the same manner as how advance collection of funds and securities is handled for that underlying index.
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Article 19     The beneficial certificates in Article 2, subparagraph 2, item 1 and their underlying ETF beneficial certificates may be swapped with each other at the ratio of one trading unit to one trading unit.
    If a principal applies to a securities broker for swapping, the TWSE will seek confirmation from a central securities depository that the amount sought in the application is less than or equal to the balance available in the custodial book-entry account and, upon such confirmation, advise the securities firm in response of the success of the swap application.
    The swap time is between 8:30 A.M. and 4:25 P.M.
    No swap application is allowed in respect of the beneficial certificates in paragraph 1 if they are used for purchasing and borrowing positions by way of margin purchase.
    The beneficial certificates in Article 2, subparagraph 2, item 1 and their additional ETF beneficial certificates shall, during the split and reverse split period, stop swapping from two business days before the lock-up date to until the end of the lock-up period.
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