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The assessment criteria set forth in Article 4, Paragraph 1, Subparagraphs 8 through 10 of Standards Governing Eligibility of Securities for Margin Purchase and Short Sale are as follows:
- Timeframe of assessment:
- Price and trade volume: Assessed on a daily basis. Price and volume changes for the 30 business days preceding the assessment date (referred to as The Timeframe) are taken into consideration.
- Share ownership: Based on the ownership diversity report produced after the annual general meeting of a GTSM listed company.
- Sampled range:
Apart from managed stocks listed on the GTSM and stocks registered on the Emerging Stock Market, all listed ordinary shares satisfying the criteria below are eligible for margin purchase and short sale over the GTSM.
- Assessment standards:
- Any one of the following is considered extreme price volatility. Where there are no other securities of the same industry listed on the GTSM, comparisons can be made to other equivalents listed on TWSE. If there are neither comparable securities listed on TWSE, the assessment standard shall be deemed inapplicable to the company under assessment:
- The daily price movement (in absolute terms) averaged over The Timeframe exceeds the daily movement of the sampled securities in the corresponding period by more than two standard deviations, and exceeds the daily movement of other securities in the same industry by more than 150%.
- The spread-to-average ratio (the difference between the high and the low over The Timeframe, divided by the average price) of the security exceeds the spread-to-average ratio of the sampled securities in the corresponding period by more than two standard deviations, and exceeds the spread-to-average ratio of other securities in the same industry by more than 150%.
- Any one of the following is an abnormal change in trade volume:
- The security experiences a turnover rate that is more than 10 times the average turnover rate of sampled securities over The Timeframe.
- The security experiences a turnover rate that is less than 10% of the average turnover rate of sampled securities over The Timeframe, with trade volumes accumulating to less than 1,000 trade units.
- Any one of the following is a concentration of share ownership:
- Less than 1,000 registered shareholders.
- The number of shareholders holding 1,000 to 50,000 shares is less than 500.
- The aggregate shareholding interest held by the company's directors, supervisors, managers, and major shareholders (those with more than 10% interest) account for 75% of listed shares if the company has 50 million or fewer shares circulating in the GTSM; or 80% for companies with more than 50 million up to 500 million outstanding shares; or 85% for companies with more than 500 million outstanding shares.
- GTSM listed companies that do not submit ownership diversity reports to the GTSM within 20 days after their annual general meetings shall be treated equally as being concentrated in share ownership.
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