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Article 7
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Auction principals shall choose from one of the following methods as the basis of the cut-off price, and shall notify the TWSE to make an announcement pursuant to Article 2, paragraph 3:
- Where bidding securities firms enter bids that are higher than the announced auction base price, the cut-off price shall be the lowest bid at which all of the auctioned shares can be sold. The entire volume of all bids higher than the cut-off price shall be transacted at the cut-off price. If the volume of bids at the cut-off price cannot be satisfied in full, the bids shall be satisfied according to the ratio of the bid volumes until no whole lot remains. If there is a remainder, it shall be allotted in the order of a computer-generated random sequence, with only one lot allotted to each consignment. However, when the volume of bids above the auction base price falls short of the auctioned volume, all bids above the auction base price shall be transacted at the lowest bid above the auction base price.
- Where bidding securities firms enter bids that are equal to or greater than the announced auction base price, their bids shall be transacted pursuant to Article 9 if the bid volumes are less than the volume announced by the TWSE.
- Where bidding securities firms enter bids that are higher than the announced auction base price, the entire volume of all bids higher than the base price shall be transacted at the base price when the volume is within that announced by the TWSE. When the total volume of bids above the base price exceeds the volume announced by the TWSE, the bids shall be satisfied according to the ratio of the bid volumes until no whole lot remains. If there is a remainder, it shall be allotted in the order of a computer-generated random sequence, with only one lot allotted to each consignment.
Where an auction principal is an entity releasing state-owned shares and special circumstances exist which prohibit the auction principal from using the methods described in the preceding paragraph, the auction principal may submit a proposal for an alternative auction method to the TWSE and which must receive approval before the announcement of any relevant changes made.
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