| Article 1 |
These Rules are adopted to increase liquidity in the market for TPEx listed stocks and to provide a basis for compliance for market makers and liquidity providers when engaging in market making business.
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| Article 2 |
The term "market maker" in these Rules means a securities dealer that applies to the Taipei Exchange (TPEx) to provide, during a designated time period, trading quotes for selected TPEx listed stocks. A market maker's selected TPEx listed stocks shall include a certain number of specified TPEx listed stocks.
The term "liquidity provider" in these Rules means a securities dealer that applies to the TPEx to provide, during a designated time period, liquidity for specified TPEx listed stocks selected by it.
The term "selected" TPEx listed stocks in these Rules means the TPEx listed stocks that a market maker or a liquidity provider selects to provide trading quotes or liquidity for by the means designated by the TPEx.
The term "specified" TPEx listed stocks in these Rules means TPEx listed stocks that the TPEx picks through screening based on various indicators relating to issuance and trading, and that the TPEx does not deem otherwise unsuitable for inclusion.
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| Article 3 |
A market maker shall use a segregated account (securities firm account no. 555555-5) to provide trading quotes. A liquidity provider shall use a segregated account (securities firm account no. 555555-6) to participate in trading as a liquidity provider.
Market makers and liquidity providers may use the segregated accounts under the preceding paragraph to engage in hedging.
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| Article 4 |
A market maker, during the period from 5 minutes after the TPEx trading market opens until the market closes, shall provide trading quotes for selected TPEx listed stocks in accordance with the following operational rules:
- The prices quoted by a market maker shall include its bid (buy) and ask (sell) prices, and the time in force may not be immediate-or-cancel or fill-or-kill.
- The bid-ask spread of the quotes provided may not exceed 3 percent. The formula for calculation thereof is: (bid-ask spread) = [(ask price) - (bid price)] / (ask price).
- Each bid or ask quote may not be less than 5 trading units or the total amount of the quote shall be NT$200,000 or more.
- The provision of quotes on any given day shall be maintained for a time reaching not less than 50 percent of the period from 5 minutes after the TPEx trading market opens until the market closes. The calculation of this requirement may be excluded when a selected listed stock falls under any of the following circumstances:
- A period when matching of the stock is postponed under Article 35, paragraph 4 or Article 35-11, paragraph 1 of the TPEx Rules Governing Securities Trading on the TPEx.
- A period when the disclosed price is the limit-up or limit-down price.
- A period when the disclosed best buy price or sell price is the market price.
- Other times when, as agreed to by the TPEx, price quotes are not required to be made.
- During any given month the number of days on which quotes are effectively provided in compliance with the preceding four subparagraphs shall reach at least 80 percent of the number of days on which quote provision is required in that month. The "number of days on which quote provision is required" means the number of trading days of the selected TPEx listed stock in that month minus the following:
- A period when the selected TPEx listed stock is under disposition measures.
- A period when the selected TPEx listed stock is under the periodic trading method.
- Other times when, as agreed to by the TPEx, price quotes are not required to be made.
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| Article 5 |
With respect to trading of the same security on the same day in normal trading, after-hours fixed-price trading, block trading, and odd-lot trading, market makers and liquidity providers may perform clearing and settlement based on the balance after offsetting (netting) of the receivable and deliverable/payable amounts of and for that security.
If the balance after offsetting (netting) the receivable and deliverable amounts of a security under the preceding paragraph exceeds the balance of that security in the segregated account, the market maker or liquidity provider shall, no later than the second business day after the trade date, apply to borrow securities to cover the shortfall and carry out clearing and settlement, in accordance with Article 86-1 of the TPEx Rules Governing Securities Trading on the TPEx.
If the market maker or liquidity provider applies to borrow the securities and carries out clearing and settlement in accordance with Article 86-1 of the TPEx Rules Governing Securities Trading on the TPEx, it may be exempted from related sanctions.
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| Article 6 |
The conditions and discount standards for business service fee discounts for market makers and liquidity providers shall be separately prescribed by the TPEx.
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| Article 7 |
These Rules, and any amendments hereto, will be publicly announced and implemented following submission to and recordation by the competent authority.
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