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With the exceptions of TWSE listed stocks or Taiwan Depositary Receipts placed under an altered trading method or suspended from trading under subparagraph 1 below or securities for which margin purchase and short sale transactions are halted by a resolution of the TWSE Surveillance Operations Oversight Committee under subparagraph 7 below, when any of the conditions of Article 4, paragraph 1, subparagraphs 1 through 7 and subparagraph 11, or Article 5, paragraph 1, subparagraphs 1 through 3 and subparagraph 7 of the Margin Purchase and Short Sale Eligibility Standards exists with respect to TWSE listed securities eligible for margin purchase and short sale transactions, the Taiwan Stock Exchange Corporation (TWSE) will halt margin purchase and short sale transactions, from the first business day following the date of public announcement, in accordance with the following principles:
- When TWSE listed shares or Taiwan depositary receipts have been placed under an altered trading method, their trading has been suspended, or beneficial certificates have been delisted: When the TWSE announces an altered trading method or a suspension of trading for a stock or a Taiwan Depositary Receipt, it will simultaneously announce the halting of margin purchase and short sale transactions in those securities, effective from the date on which the cause of the halting takes effect. When the TWSE announces the delisting of a stock, Taiwan Depositary Receipt, or beneficial certificate, it will simultaneously announce the halting of margin purchase and short sale transactions in those securities; this provision will not apply, however, to securities that are delisted because the issuer undergoes a merger, consolidation, or acquisition or a share conversion.
- When a securities investment trust enterprise has failed to punctually file and publish a securities trust investment fund's financial report; or the circumstances under Article 96, paragraph 1 of the Securities Investment Trust and Consulting Act exist with respect to the securities investment trust enterprise that manages a securities investment trust fund; or a futures trust enterprise has failed to punctually file and publish a futures trust fund's financial report in accordance with regulations; or the circumstances under Article 38, paragraph 1 of the Regulations Governing Futures Trust Enterprises exist with respect to the futures trust enterprise that manages a futures ETF: The TWSE will publicly announce the halting of margin purchase and short sale transactions in the fund's beneficial certificates.
- When net worth per share for a TWSE listed stock is below par value, or, in the case of shares issued by a TWSE primary listed company with no par value or a par value other than NT$10 per share, when an accumulated deficit has been posted in the financial report: The TWSE, on the fifth business day following the final date for public announcement and filing of the annual, first quarter, second quarter, and third quarter financial reports of each fiscal year, will review the company's financial report for the most recent period publicly announced and filed in accordance with regulations. If net worth per share is below par value, it will publicly announce the halting of margin purchase and short sale transactions in that company's shares. For shares issued by a TWSE primary listed company with no par value or a par value other than NT$10 per share, however, the halting of margin purchase and short sale transactions will be announced if an accumulated deficit is shown in the financial report.
- When the issuer of foreign securities evidenced by Taiwan depositary receipts has posted an accumulated deficit: If the issuer has posted an accumulated deficit in either the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-reviewed semi-annual consolidated financial report for the most recent period, the TWSE shall announce the halting of margin purchase and short sale transactions in those depositary receipts on the final business day of the third month following the deadline for public announcement and reporting to the competent authority, securities exchange, or securities market as required by the laws and regulations of the foreign issuer's home country or the jurisdiction where it is listed.
- When the number of TWSE listed units of a Taiwan Depositary Receipt after redemption is less than 60 million: the TWSE will immediately, on the following business day, announce the halting of margin purchase and short sale transactions for the given Taiwan Depositary Receipt.
- Where there has been a major default on TWSE listed shares or Taiwan depositary receipts, and the balance of long margin positions or short interest meets or exceeds a prescribed ratio: When the aggregate dollar amount of transaction failures reported in a single day is NT$200 million or more and the balance of long margin positions or short interest on that day meets or exceeds 15 percent of listed shares or units, the TWSE will immediately, on the following business day, publicly announce the halting of margin purchase and short sale transactions in those shares or Taiwan Depositary Receipts.
- When there are other circumstances that make it unadvisable to continue margin purchase and short sale transactions: as determined by a resolution of the TWSE Surveillance Operations Oversight Committee, or in the event of another circumstance that makes such transactions unadvisable, the TWSE shall publicly announce the halting of margin purchase and short sale transactions in those securities.
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