| Article 1 |
These Directions are adopted pursuant to Articles 3, 4, and 5 of the Taipei Exchange (TPEx) Regulations Governing Implementation of the Market Surveillance System for Securities Traded on the TPEx.
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| Article 2 |
When the TPEx discovers any of the following circumstances during daily trading hours through its analysis of securities trading on the automated trade matching system or electronic bond trading system, it will take measures pursuant to the provisions of Article 3 herein:
- If on a given day, on trading volume of 2,000 trading units or more, the intraday transaction price amplitude exceeds 9 percent, and differs from the TPEx Capitalization Weighted Stock Index amplitude by 5 percent or more.
- If, on trading volume of 2,000 trading units or more, the percentage of increase or decrease in the transaction price during trading hours on a given day exceeds 6 percent, while also exceeding the percentage of increase or decrease in the TPEx Capitalization Weighted Stock Index by 4 percent or more.
- If, on trading volume of 2,000 trading units or more, the turnover rate during trading hours on a given day exceeds 10 percent, provided that this shall not apply to convertible corporate bonds, exchangeable corporate bonds, corporate bonds with non-detachable warrants, preferred shares with non-detachable warrants, bond conversion entitlement certificates, certificates of payment for shares, call (put) warrants, stock warrants, exchange-traded fund beneficial certificates, and exchange-traded notes.
- If, on trading volume of 2,000 trading units or more, the turnover rate during trading hours on a given day exceeds 10 percent, provided that this shall not apply to convertible corporate bonds, exchangeable corporate bonds, corporate bonds with non-detachable warrants, preferred shares with non-detachable warrants, bond conversion entitlement certificates, certificates of payment of shares, call (put) warrants, and stock warrants.
- If trading information is announced or disposition measures adopted pursuant to these Directions.
- If market rumors, media reporting, or the TPEx computer analysis finds irregularities, and approval is granted pursuant to a report of the incident.
- Other circumstances designated by the competent authority.
The provisions regarding the Capitalization Weighted Stock Index and trading volume in subparagraphs 1, 2, and 3 of the preceding paragraph shall not apply, and the turnover rate therein shall be reduced by half, in the case of the stock of an issuer with paid-in capital of less than NT$80 million.
The standards set out in the subparagraphs of paragraph 1 shall not apply to government bonds, ordinary corporate bonds, or foreign straight corporate bonds.
If underlying securities or underlying indices are included as factors used in the formula for calculating the price fluctuation limits of a security, calculate the difference using its intraday price amplitude, and percentage of price increase or decrease, and the amplitude and percentage of price increase or decrease of the underlying securities or index on a given day (or for an investment basket, obtain the average value of the price amplitude or percentage of price increase or decrease of the basket's underlying securities or underlying indices), provided that if its underlying securities are exchange-listed the difference need not be compared.
With the exception of managed stocks, the provisions of paragraph 1, subparagraph 1, paragraph 2, and paragraph 3 regarding "trading volume of 2,000 trading units or more" shall not apply, in cases of the initial TPEx listing of a stock, during trading on the first 5 successive business days counting inclusively from the date on which the TPEx trading of the stock begins.
If the trading unit of a security is less than 1,000 units (shares, beneficial interest units, or depositary receipt units), the numerical standard of trading units for its trading (order) volume shall be adjusted according to the following formula:
Post-adjustment numerical standard of trading units for its trading (order) volume ＝ Pre-adjustment numerical standard of trading units for its trading (order) volume × (1,000 ÷ the number of the security's trading units).
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| Article 3 |
To maintain market order and to ensure security of settlement for securities trades, when the TPEx analysis discovers any of the following circumstances in intraday trading at a securities firm involving the securities listed in the preceding article, it will issue written notice to the directors of the internal auditing and operations departments of such securities firm promptly after market closing, copying the notice to the general manager of the given securities firm's head office, or, in the case of a foreign securities firm which has established a branch office in the ROC, the manager of its branch office:
- Where the difference between an investor's purchase/sale orders for the given security with the given securities firm exceeds NT$200 million and also exceeds 0.125 times the net worth of the given securities firm, and where the volume it purchased (or sold) on consignment accounts for 20 percent or more of the total monetary volume of consigned purchases (or sales) of the given security.
- Where the difference between orders accepted by a securities firm for purchase/sale of the given security exceeds NT$300 million and also exceeds 0.25 times the net worth of the given securities firm, and where the volume it accepted in consignments for purchases (or sales) accounts for 40 percent or more of the total monetary volume of all consignments for purchases (or sales) of the given security.
- Where the difference between an investor's confirmed purchases/sales of the given security through the given securities firm exceeds NT$50 million and also exceeds 0.05 times the net worth of the given securities firm, and where the volume of its confirmed purchases or sales accounts for 10 percent or more of the total monetary volume of confirmed trades in the given security.
- Where the difference between confirmed purchases/sales of the given security by a securities firm exceeds NT$100 million, and also exceeds 0.12 times the net worth of the given securities firm, and where the volume of the confirmed purchases or sales thereby accounts for 20 percent or more of the total monetary volume of all confirmed trades in the given security.
- Where the total amount of consigned trading orders accepted by a securities firm for the given security exceeds NT$400 million and also exceeds 0.1 times the net worth of the given securities firm, and where the total monetary amount of consigned trading orders accepted by such securities firm accounts for more than 40 percent of the total monetary amount of all consigned trading orders for the given security.
- Where the total dollar amount of confirmed trades of the given security through a securities firm exceeds NT$150 million and also exceeds 0.1 times the net worth of the given securities firm, and where the total monetary amount of confirmed trades through such securities firm accounts for 20 percent or more of the total monetary amount of all confirmed trades in the given security.
The provisions regarding monetary amounts of trading orders shall be reduced by half in the case of the stock of an issuer with paid-in capital of less than NT$80 million.
When any circumstance under subparagraph 1, 2, or 5 of paragraph 1 applies to a securities firm, the TPEx may give the persons referred to in paragraph 1 an initial notification by telephone at the time of the consignment or execution of a trading order.
In cases of the initial TPEx listing of a stock, where any one of the following circumstances applies, then with the exception of managed stocks, the provisions of paragraph 1 and paragraph 3 regarding notification of the securities firm shall apply mutatis mutandis during trading on the first 5 successive business days counting inclusively from the date on which the TPEx trading of the stock begins:
- Where one of the following circumstances applies to the prices of an investor's purchase/sale orders for the given security with the given securities firm, and the cumulative volume of those orders reaches 600 trading units or more (or the cumulative value of the orders reaches NT$30 million or more):
- Prior to market opening, purchase orders are placed at a price higher than that day's opening reference price by 27 percent or more, or sell orders are placed at a price lower than that day's opening reference price by 27 percent or more.
- After market opening, purchase orders are placed at a price higher than the posted price for orders currently being transacted by 27 percent or more, or sell orders are placed at a price lower than the posted price for orders currently being transacted by 27 percent or more.
- Where one of the following circumstances applies to the prices of orders accepted by a securities firm for purchase/sale of the given security, and the cumulative volume of those orders reaches 3,000 trading units or more or the cumulative value of those orders reaches either NT$100 million or 0.25 or more of the given securities firm's net worth:
- Prior to market opening, purchase orders are placed at a price higher than that day's opening reference price by 27 percent or more, or sell orders are placed at a price lower than that day's opening reference price by 27 percent or more.
- After market opening, purchase orders are placed at a price higher than the posted price for orders currently being transacted by 27 percent or more, or sell orders are placed at a price lower than the posted price for orders currently being transacted by 27 percent or more.
When trading of the securities listed in the preceding article in a securities firm's omnibus trading account reaches a threshold amount given in paragraph 1 or 3, the TPEx may notify an officer of the securities firm to take note in order to ensure the security of the securities settlement.
If the trading unit of a security comprises less than 1,000 units (shares, beneficial interest units, or depositary receipt units), the numerical standard of trading units for its trading (order) volume shall be subject mutatis mutandis to the provisions of Article 2, paragraph 6.
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| Article 4 |
After the close of daily trading hours, the TPEx will promptly analyze securities trading on the automated trade matching system and electronic bond trading system. Upon discovery of any of the following circumstances, the TPEx will announce related trading information (such as the degree of price fluctuation, trading volume, turnover rate, degree of concentration, price-to-earnings ratio, price-to-book ratio, long/short ratio, premium/discount percentage, sales of borrowed securities, and day trading percentage):
- An irregularity in the cumulative percentage of increase or decrease in the last transaction price during the most recent period.
- An irregularity in the percentage of increase or decrease in the last transaction price between the initial and final business days of the most recent period.
- An irregularity in the cumulative percentage of increase or decrease in the last transaction price during the most recent period, combined with an unusually large increase in the intraday trading volume relative to the daily average in the most recent period.
- An irregularity in the cumulative percentage of increase or decrease in the last transaction price during the most recent period, combined with an unusually high intraday turnover rate.
- An irregularity in the cumulative percentage of increase or decrease in the last transaction price during the most recent period, combined with an unusually high percentage of confirmed purchases or sales of the given security at a securities firm on a given day over the total intraday trading volume for the given security.
- An unusually high price-to-earnings ratio, price-to-book ratio, or intraday turnover rate, combined with any of the following three circumstances: a high price-to-book ratio of stock in relation to other stocks of the same industry; the monetary amount of confirmed purchases or sales through a given securities firm on a given day accounts for an unusually high proportion of the total monetary amount of all confirmed trading orders for the given security on that day; the monetary amount of confirmed trading orders for the account of a single investor on a given day accounts for an unusually high proportion of the total monetary amount of all confirmed orders for the given security on that day.
- An irregularity in the cumulative percentage of increase or decrease in the last transaction price during the most recent period, combined with a significant increase in the short to long margin ratio for the preceding period.
- An irregularity with respect to the premium/discount percentage calculated from the final transaction price of Taiwan depositary receipts or the final transaction price of the stocks the depositary receipts represent on the exchange market of their home country.
- A significant increase in the daily trading volume for a given day or several recent days relative to the daily average trading volume for the most recent period.
- A significantly high cumulative turnover rate for the most recent period.
- An irregularity in the difference between the final transaction prices of the initial and final business days of the most recent period.
- A significantly high ratio of the cumulative volume of sales of borrowed securities to the total trading volume for the most recent period.
- A significantly high ratio of the day trading volume to the total trading volume for the most recent period.
- Other trading irregularities as determined by resolution of the Surveillance Operations Oversight Committee.
If there is no last transaction price for a security on a given day for use in calculating the irregularity standards under the preceding paragraph, the reference price determined pursuant to Article 57 of the TPEx Rules Governing Securities Trading on the TPEx shall be used instead.
The provisions of paragraph 1 regarding securities on the market as a whole, same-industry securities, and trading volume shall not apply to the stock of an issuer with paid-in capital of less than NT$80 million.
Government bonds, ordinary corporate bonds, and foreign straight corporate bonds are not subject to the standards set forth in the subparagraphs of paragraph 1.
If underlying securities or underlying indices are included as factors used in the formula for calculating the price fluctuation limits of a security, the provisions of Article 2, paragraph 4 apply mutatis mutandis to the calculation of the difference in the cumulative percentage of increase or decrease over a period of time.
If the trading unit of a security comprises less than 1,000 units (shares, beneficial interest units, or depositary receipt units), the provisions of Article 2, paragraph 6 apply mutatis mutandis to the numerical standard of trading units for its trading (order) volume.
The TPEx shall separately adopt detailed numerical standards for the irregularities listed under each of the subparagraphs of paragraph 1, and for any exceptions to those conditions.
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| Article 5 |
Given the occurrence of any of the circumstances of the preceding article in securities trading, the TPEx will announce the name of the security and related trading information through the following channels:
- The information will be announced on the TPEx information transmission system, with the wording "watchlisted security" preceding the name of the security.
- The information will be provided for investor inquiry through the Internet and investor service hotline.
- Securities firms will be requested to post the information at their places of business.
- The information will be published in mass media and newspapers.
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| Article 6 |
If any of the following circumstances occurs in the trading of securities, the TPEx shall immediately announce disposition measures with respect to the securities:
- The TPEx announces trading information for a particular security pursuant to Article 4, paragraph 1, subparagraph 1 hereof for 3 consecutive business days.
- Where the TPEx has announced trading information for a particular security pursuant to Article 4, paragraph 1, subparagraphs 1 to 8 for a period of 5 consecutive business days, or for any 6 business days within the most recent 10 business day period, or for any 12 business days within the most recent 30 business day period.
If disposition measures under the preceding paragraph have been announced for a particular security for the first time within the most recent 30 business days, the TPEx will simultaneously adopt the following measures within 10 business days counting inclusively from the next business day after the occurrence:
- Conducting trade matching for the securities with manually controlled trade matching terminals (matching once approximately every 5 minutes; but for securities placed under an altered trading method, matching once approximately every 10 minutes; for securities under the periodic trading method, matching once approximately every 45 minutes; and for managed stocks, matching once approximately every 60 minutes).
- Notifying securities brokers that when an investor's daily volume of consigned trades for the security during the given period consists of a single trade of 10 trading units or more or multiple trades with an aggregate total of 30 trading units or more, they shall collect from the investor the full amount of the buy-side price or sell-side securities for trading orders already placed by the investor that day, and, in the case of margin trading, the full amount of margin for margin purchase or for short sale. For further trading orders in excess of the aforementioned amounts on the same day, they shall collect upon placement of order the full amount of the buy-side price or sell-side securities, and, in the case of margin trading, the full amount of margin for margin purchase or for short sale. However, this shall not apply to liquidation of margin trades or to orders to trade the security through a default account, a call (put) warrant liquidity provider account, or a call (put) warrant hedging account. In the case of the stock of an issuer with paid-in capital of less than NT$80 million, the TPEx will notify securities brokers that when an investor carries out daily trades for the security during the given period, they shall collect in full from the investor the buy-side price or sell-side securities for consigned orders already placed by the investor that day.
When disposition measures under the preceding paragraph have been announced for a particular security within the most recent 30 business days, then upon a second announcement of disposition measures pursuant to the same standards on a given day, the TPEx will simultaneously adopt the following measures within 10 business days counting inclusively from the next business day after the occurrence:
- Conducting trade matching for the securities with manually controlled trade matching terminals (matching once approximately every 20 minutes; but for securities placed under an altered trading method, matching once approximately every 25 minutes; for securities under the periodic trading method, matching once approximately every 60 minutes; and for managed stocks, matching once approximately every 90 minutes).
- Notifying securities brokers that for all trading orders placed for the security by all investors on any given day during the given period, they shall collect in full from the investors the buy-side price or sell-side securities for trading orders already placed by the investors that day, and, in the case of margin trading, the full amount of margin for margin purchase or for short sale. However, this shall not apply to liquidation of margin trades or to orders to trade the security through a default account, a call (put) warrant liquidity provider account, or a call (put) warrant hedging account. In the case of the stock of an issuer with a paid-in capital of less than NT$80 million, the TPEx will notify securities brokers that when an investor carries out daily trades for the security during the given period, they shall collect in full from the investor the buy-side price or sell-side securities for orders already placed by the investor that day.
Where trading information has been announced for a particular security by the TPEx for three consecutive business days pursuant to Article 4, paragraph 1, subparagraph 1, or for five consecutive business days pursuant to Article 4, paragraph 1, subparagraphs 1 to 8, and disposition is to be announced pursuant to paragraph 2 or 3 herein, if attention to trading information has been announced pursuant to Article 4, paragraph 1, subparagraph 13 during the period that is calculated as the basis for the disposition measures to be announced, the effective period of the disposition measures for that security is adjusted to 12 business days from the next business day.
When disposition measures are announced for a particular security pursuant to paragraph 2 or 3 herein and reasons for announcement include circumstances under Article 4, paragraph 1, subparagraph 6, or the TPEx further announces trading information pursuant to the aforementioned subparagraph 6 during the period of the disposition measures, or when a notice of attention to trading information is announced pursuant to Article 4, paragraph 1, subparagraph 9, 10, 11, 12, or 13 and analysis shows that there is an irregularity, or when the TPEx deems that there is a securities trading irregularity with the likelihood of a significant impact on the security of payments and settlements in the market, or otherwise as the TPEx deems necessary, after reporting to the Surveillance Operations Oversight Committee for deliberation and resolution, it may adopt the following disposition measures and prescribe the effective period of the disposition measures:
- The disposition measures under paragraphs 2 or 3 of this Article, which may be adjusted when necessary based on the following considerations:
- The time at which trade matching is done using manually controlled trade matching terminals.
- Whether, when the investor placed the order for the security involved in the irregular trading, there was advance collection of all or a specific proportion of the buy-side price, sell-side securities, margin, or short margin.
- The effective period of the disposition measures.
- Amounts of reported intraday sales or purchases of the given security may not exceed NT$40 million by the head office of any securities firm or NT$10 million by a branch office of any securities firm, provided that this shall not apply to liquidation of margin trades or to orders to trade the security through a default account, a call (put) warrant liquidity provider account, or a call (put) warrant hedging account; the amounts of intraday trading reports of sales or purchases of the stock of an issuer with paid-in capital of less than NT$80 million shall be reduced by half, and when necessary, the amounts of reported daily sales or purchases of the given security at the head offices and branch offices of securities firms may be adjusted based on the current trading in that security, its market value, or the capitalization of the issuing company.
- When notifying securities firms of irregular trading in a security that is being traded abnormally, notify the securities firms to make additional deposits to the clearing and settlement fund.
- Temporarily suspend margin purchase and short sale transactions in the given security. However, this shall not apply to liquidation of margin trades.
- After reporting and obtaining the permission of the competent authority, suspend the trading of the given security for a certain period of time.
- Any other necessary disposition measures.
Disposition measures under subparagraph 2 of the preceding paragraph may also be adopted pursuant to a resolution of the management committee of the TPEx Joint Responsibility System Clearing and Settlement Fund, which may also prescribe the period of the disposition measures.
When disposition measures are adopted with respect to trading in a given security by resolution of the Surveillance Operations Oversight Committee or the management committee of the TPEx Joint Responsibility System Clearing and Settlement Fund, the number of days on which trading information is announced prior to implementation of the measures or during the effective period of the disposition measures need not be counted in the calculation under paragraph 1 of this Article of the period that is the basis for the announcement of disposition measures.
If any disposition measure is announced with respect to a security pursuant to these Directions, the issuer may file a request for reconsideration addressing the reasons for the disposition on securities trading irregularity, and attach specific financial and business information for the most recent period. After the request for reconsideration has been submitted to the Surveillance Operations Oversight Committee for discussion and resolution, the Committee may terminate or adjust the disposition measures.
When there is a trading order for a given security through a securities broker's omnibus trading account during any period of disposition measures, the disposition measures under those paragraphs apply, and the securities firm shall collect from each representative (or mandatary) the full amount of the buy-side price or sell-side securities, or a specific percentage thereof, for any principal whose transaction reaches one of the thresholds set out in those paragraphs.
When disposition measures have been announced for the underlying securities of a convertible (or exchangeable) corporate bond by the TPEx or the Taiwan Stock Exchange Corporation, the TPEx may concurrently adopt disposition measures with respect to the convertible (or exchangeable) corporate bond.
If the trading unit of a security comprises less than 1000 units (shares, beneficial interest units, or depositary receipt units), the provisions of Article 2, paragraph 6 apply mutatis mutandis to the numerical standard of trading units for its trading (order) volume.
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| Article 7 |
When the TPEx adopts disposition measures pursuant to the previous Article, the content of the measures will be announced through the following channels:
- The information will be announced on the TPEx information transmission system, with the wording "security under disposition measures" preceding the name of the security.
- The information will be provided for investor inquiry through the investor service line and the Internet.
- Securities firms will be requested by letter to post the information at their places of business.
- The information will be provided to the media for dissemination by broadcast and for publication.
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| Article 8 |
The TPEx has installed surveillance cameras and telephone recording systems in the working areas where online real-time information is provided; personnel executing their duties pursuant to these Directions shall abide by the provisions of the Rules for Management of Personnel Surveillance, with full video and telephone recordings of their activities. Video and telephone recordings shall be retained for a period of at least 3 months.
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| Article 9 |
These Directions, and any amendment hereto, shall be announced and implemented on a prescribed date after review and recordation by the competent authority.
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