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Article 4
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When accepting an application for an approval letter for accreditation as a qualified underlying index of ETNs, the TWSE will not have its responsible staff to proceed review the application form and enclosed documents until the securities firm has paid the examination fee of NT$100,000 to the TWSE. Below is the information about thekey issues for review, review procedure, index qualification acceptance meeting, and deadline to complete the review.
- Check documents submitted against the list of enclosures to the application form to see if all listed documents have been provided, and complete the "Inspection list to application form for accreditation as a qualified underlying index of ETNs" (Schedule 1). If it is found not all documents are submitted, specify a certain period of time for submitting the missing documents. If the applicant fails to provide the requested documents, the TWSE may reject its application and notify the competent authority of the rejection.
- Key issues to be examined during reviews:
- If the underlying index meets the conditions specified in Article 2 of the Regulations Governing the Issuance of Exchange Traded Notes by Securities Firms (the "Issuance Regulations").
- If the securities firm meets the requirements under Article 4, paragraph 2 of the Review Rules.
- If the index compiler meets the qualification requirements under Article 5 of the Review Rules.
- If components of indexes meet the required qualifications under Article 6 of the Review Rules.
- If components of indexes lack liquidity, whether the explanation is justifiable.
- Is the index licensing agreement is complete.
- If the securities firm has prepared its explanation in consistent with the Explanation to accreditation as a qualified underlying index of ETNs (Schedule 2).
- Others.
- Review procedure: The responsible staff shall verify the application documents to ensure the matters and contents stated in them are in order, complete the "inspection list to application form for acceptance of qualifications of underlying indexes of ETNs" (Schedule 3), and request in writing to hold an index qualification review meeting. If it is found the matters or contents are not complete, rectification within a prescribed time limit shall be requested. If no rectification is made within the time limit or the rectification made still fails to conform to requirements, the application is rejected and the competent authority is notified of the rejection.
- Index qualification review meeting: Prior to the meeting, the responsible staff shall prepare a proposal and write down the review opinion, and, within 12 business days of its acceptance of the application for accreditation as a qualified underlying index, complete the holding of the meeting. In a special circumstance, however, where a securities firm needs to provide an additional explanation or submit other documents, or in other material circumstances etc., the period for holding the meeting or review period may be extended, subject to approval.
If the request for an approval letter of qualifications of underlying indexes in the preceding paragraph is approved as resolved at an index qualification accreditation meeting, the TWSE will issue an approval letter and the competent authority will be notified of the approval. If the request is rejected upon resolution, the application will be dismissed and the competent authority will be notified of the dismissal.
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