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Article NO. Content


Taiwan Stock Exchange Corporation Operation Directions Governing Liquidity Providers of Exchange Traded Notes  CH

Amended Date: 2018.12.24 
Categories: Securities Exchange Market > Trading > Other Securities
3     A liquidity provider engaged by an issuer shall meet the following qualifications, after reviewing of which the TWSE will issue an approval letter:
  1. Qualifying as a securities firm that conducts proprietary securities trading business.
  2. A securities firm whose adequacy ratio of equity capital has constantly been above 150% for the last 6 months, except that for a securities firm concurrently operated by a financial institution, stipulations regarding capital adequacy ratio prescribed in Article 44 of the Banking Act shall apply. However, the above does not apply to a Taiwan branch of a foreign securities firm whose home-country head office takes into account the operation risk of the Taiwan branch when calculating the equity capital adequacy ratio as required by the local laws, and has met relevant standard and granted by the Financial Supervisory Commission an exemption from regulations on equity capital applicable to domestic securities firms.
  3. A long-term credit rating of a certain level or higher from a credit rating agency shall be obtained: Taiwan Ratings Corporation rating as twBBB- or above, Moody's Investors Service, Inc. rating as Baa3 or above, Standard & Poor's Ratings Services rating as BBB- or above, Fitch Ratings Ltd. rating as BBB- or above, or Fitch Australia Pty Ltd, Taiwan Branch rating as BBB- (twn) or above. For a financial institution acting concurrently as a securities firm, the credit rating of the financial institution may apply. For a Taiwan branch of a foreign securities firm, the credit rating of the holding company of the group may apply.
    A securities firm can only become a liquidity provider after entering into a related agreement with an issuer of ETNs within three months of receiving the approval letter from the TWSE.
    A securities firm which acts as a liquidity provider after approved by the TWSE or which has obtained the approval but not yet signed any agreement shall desist from acting as a liquidity provider if its equity capital adequacy ratio has fallen below 150% for two consecutive months, and shall not reinstate the business unless it has met the requirements governing the equity capital adequacy ratio for 3 consecutive months and has reported to and approved by the TWSE.