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Article 5
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A securities firm issuing ETNs shall allocate on a monthly basis a performance bond that accounts for a certain percentage of the total outstanding balance of the ETNs.
The total amount of ETNs issued by the securities firm may not exceed 50 percent of its net worth as shown on its most recent CPA audited and attested financial report. However, the same does not apply to a reopening of ETNs for which the securities firm has allocated a supplementary amount of performance bond.
The securities firm shall allocate a supplementary amount of performance bond if during the term of the ETNs its net worth fails to meet the requirement of paragraph 1, subparagraph 2 of the preceding article or its regulatory capital adequacy ratio fails to meet the requirement of paragraph 1, subparagraph 3 of the preceding article.
The performance bonds referred to in the preceding 3 paragraphs shall be deposited with the TPEx. The rules governing the allocation ratio, deposit, custody, payment, and refund of such performance bonds, and any amendments thereto, shall be drafted by the TPEx in conjunction with the TWSE and submitted to the competent authority for ratification.
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