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These Operation Directions are adopted pursuant to Article 36, paragraph 4 of the Taiwan Futures Exchange (TAIFEX) Operating Rules.
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A futures commission merchant that wishes to enable Kill Switch functionality shall comply with the following provisions, and 5 business days before the authority to use Kill Switch will become effective, shall fill out an application (see Appendix), with the relevant documentation attached, and apply to and obtain approval from the TAIFEX before it may use Kill Switch:
- These Operation Directions apply only to futures dealers or to dedicated sessions of individual principals.
- A futures commission merchant may use Kill Switch only when the futures commission merchant itself or its principal encounters a system anomaly or a program error.
- A futures commission merchant shall use the designated session or futures commission merchant code when using Kill Switch.
- A futures commission merchant shall input any Kill Switch command into the TAIFEX computer trading system by electronic message or the Internet.
A futures commission merchant shall adopt operations for the management of Kill Switch and include them in its internal control and internal auditing operations.
Appendix
Futures Commission Merchant Application to Enable Kill Switch
┌──────────────────────────────────┐
│To: Taiwan Futures Exchange Corporation │
│Subject: This application to enable Kill Switch is hereby submitted │
│ pursuant to Point 2 of the Taiwan Futures Exchange │
│ Corporation Operation Directions for the Use of Kill Switch│
│ by Futures Commission Merchants; the application documents │
│ listed below are attached. Please proceed accordingly. │
├─────────┬────────────────────────┤
│Company name │ │
├─────────┼────────────────────────┤
│Futures commission│ │
│merchant code │ │
│ (7 digits) │ │
├─────────┼───────┬───────┬────────┤
│Application date │Date: │Effective date│Date: │
├─────────┼───────┼───────┼────────┤
│Name of contact │ │Contact │ │
│person │ │person's job │ │
│ │ │title │ │
├─────────┼───────┼───────┼────────┤
│Contact person's │ │Contact │ │
│telephone no. │ │person's email│ │
├──────┬──┴───────┴──┬────┴────────┤
│ │□ Application for │□ Application for │
│ │ authority to use Kill │ authority to use Kill │
│ │ Switch (by session). │ Switch (by futures │
│ │ Please attach the │ commission merchant │
│ │ following documents: │ code).Please attach the│
│ │ 1. Statement │ following document: │
│ │ 2. Session information │ Statement │
│ │ │ │
│ │ │ │
│Attachments ├─────────────┼─────────────┤
│ │□ Cancellation of │□ Cancellation of │
│ │ authority to use Kill │ authority to use Kill │
│ │ Switch (by session). │ Switch (by futures │
│ │ Please attach the │ commission merchant │
│ │ following documents: │ code) │
│ │ Session information │ │
│ │ │ │
│ │ │ │
│ │ │ │
├──────┴─────────────┴─────────────┤
│Futures Commission Merchant: Co., Ltd.│
│Representative: (signature/seal)│
└──────────────────────────────────┘
Note 1: In accordance with Point 2 of the Taiwan Futures Exchange Corporation Operation Directions for the Use of Kill Switch by Futures Commission Merchants, the futures commission merchant must submit the application to the TAIFEX 5 business days before the time that its authority for the use of Kill Switch will become effective.
Note 2: Please affix the company seal and seal of the responsible person.
Futures Commission Merchant Statement Regarding the Use of Kill Switch
_____________________ Co., Ltd., states as follows:
This company fully understands the possible risks associated with executing a Kill Switch command (including, without limitation, the possibility that due to abnormalities in communications systems, it may not be possible to input the Kill Switch command into the TAIFEX trading system, with the result that the TAIFEX will not execute this company's Kill Switch command).
After this company's transmission of a Kill Switch command reaches the TAIFEX trading system, and the TAIFEX executes the aforesaid Kill Switch command, deleting the trading orders and/or trading quotes of this company that exist in the TAIFEX trading system at that time, this company believes that the TAIFEX will have made every effort to execute the aforesaid Kill Switch command, and to have cancelled every order and/or quote that should have been cancelled in accordance with this company's command. Nevertheless, it is still possible that part or all of the orders and/or quotes that should have been cancelled in accordance with this company's command cannot be successfully cancelled, or that the outcome of the TAIFEX trading system's execution of this company's Kill Switch command may in other respects not fully conform to the expectations of this company.
This company hereby states that if any of the above circumstances occurs, the TAIFEX will bear no liability for damages or any other liability.
Submitted to:
Taiwan Futures Exchange Corporation
Company name: (company seal)
Responsible person: (signature/seal)
Date: _______________________
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After the TAIFEX computer trading system accepts a Kill Switch command, it will cease to accept new trading quotes, alteration of trading quotes, or cancellation of trading quotes via the designated session or futures commission merchant code, and any trading quotes made via the designated session or futures commission merchant code that have not yet been executed will also be cancelled, provided that there will be no cancellation of unexecuted trading quotes for any futures contract falling within a period during which TAIFEX rules prohibit the cancellation of trading quotes.
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When a futures commission merchant has confirmed that the reason for the Kill Switch command has been eliminated, it shall enter a resume trading command into the TAIFEX computer trading system, and only then may it resume the placement of new trading quotes, alteration of trading quotes, and cancellation of trading quotes using its designated session or futures commission merchant code.
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Within 5 business days after using Kill Switch, the futures commission merchant shall submit a written report of the reason to the TAIFEX.
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If a futures commission merchant violates these Operation Directions or other laws or regulations relating to Kill Switch, the TAIFEX may proceed in accordance with Article 126 of the Operating Rules of the Taiwan Futures Exchange Corporation and additionally may, according to the seriousness of the violation, take the measures listed below, and may notify the futures commission merchant to make corrections or improvements within a prescribed time limit:
- Suspend, limit, or prohibit the use of Kill Switch by some or all of the futures commission merchant's principals.
- Revoke the futures commission merchant's authority for Kill Switch and prohibit it from applying for resumption of authorization for a period of 1 year.
- Suspend trading by the futures commission merchant pursuant to Article 128 of the Operating Rules of the Taiwan Futures Exchange Corporation.
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These Operation Directions, and any subsequent amendments hereto, will be publicly announced and implemented following recordation by the competent authority.
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