|
2
|
Standards for Calculating if a Call (Put) Warrant whose Performance Method is "Cash Settlement" Possesses Exercise Value and Guidelines for the Calculations are as follows:
- The Standards for Calculating if a Call (Put) Warrant whose Performance Method is "Cash Settlement" Possesses Exercise Value are as follows:
- Call warrants
In the case of index warrants, they possess exercise value if the result of the following calculation is greater than zero: (Settlement Index - Strike Point) × Corresponding Amount per Index Point × Number of Units of Warrants × Exercise Ratio - (Settlement Index - Strike Point) × Corresponding Amount per Index Point × Number of Units of Warrants × Exercise Ratio × Securities Transaction Tax Rate.
In the case of futures warrants, they possess exercise value if the result of the following calculation is greater than zero: (Settlement Price - Strike Point) x Corresponding Amount per Index Point x Number of Units of Warrants × Exercise Ratio － (Settlement Price - Strike Point) x Corresponding Amount per Index Point X Number of Units of Warrants × Securities Transaction Tax Rate.
In the case of other call warrants, they possess exercise value if the result of the following calculation is greater than zero: (Settlement Price - Exercise Price) x Number of Underlying Instruments - (Settlement Price - Exercise Price) x Number of Underlying Instruments × Securities Transaction Tax Rate.
- Put warrants
In the case of index warrants, they possess exercise value if the result of the following calculation is greater than zero: (Strike Point - Settlement Index) × Corresponding Amount per Index Point × Number of Units of Warrants × Exercise Ratio - (Strike Point - Settlement Index) × Corresponding Amount per Index Point × Number of Units of Warrants × Exercise Ratio × Securities Transaction Tax Rate.
In the case of futures warrants, they possess exercise value if the result of the following calculation is greater than zero: (Strike Point - Settlement Price) x Corresponding Amount per Index Point x Number of Units of Warrants x Exercise Ratio - (Strike Point - Settlement Price) x Corresponding Amount per Index Point x Number of Units of Warrants x Securities Transaction Tax Rate.
In the case of other call warrants, they possess exercise value if the result of the following calculation is greater than zero: (Exercise Price - Settlement Price) x Number of Underlying Instruments - (Exercise Price - Settlement Price) x Number of Underlying Instruments × Securities Transaction Tax Rate.
- The guidelines for calculation of the exercise value above are as follows:
- The exercise processing fee collected by a securities firm is not deducted from the basis for exercise value calculation. Therefore, when the amount receivable by the holder as a result of exercise, after subtraction of the transaction tax, is less than the exercise processing fee calculated pursuant to Article 14 of the TWSE Rules Governing Trading of Call (Put) Warrants, the exercise processing fee collected by the securities firm may not be higher than the amount receivable by the holder as a result of exercise.
- The Taiwan Depository & Clearing Corporation ("TDCC"), after accepting a securities firm's application requesting to exercise a call (put) warrant for which the performance method is "cash settlement", will review and approve the application in accordance with the standards for calculating exercise value. When the call (put) warrant for which the securities firm requests exercise has no exercise value according to the calculation formulas above, the TDCC will reverse it.
|