| Article 1 |
These Rules are adopted pursuant to Article 39-7 of the Taipei Exchange Rules Governing Securities Trading on the TPEx (hereinafter, the "Trading Rules").
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| Article 2 |
All trading of exchange-traded fund beneficial certificates shall be governed by these Rules. Details not covered in these Rules shall be governed by the relevant provisions of other TPEx rules and bylaws.
For the purposes of these Rules, "ETF beneficial certificates" shall mean the following beneficial certificates issued for an exchange-traded fund (ETF) offered by a securities investment trust enterprise pursuant to the Regulations Governing Securities Investment Trust Funds or by a futures trust enterprise pursuant to the Regulations Governing Futures Trust Funds:
- Beneficial certificates issued for securities ETFs offered by securities investment trust enterprises ("securities ETFs") ("securities ETF beneficial certificates"):
- "Securities ETF with domestic component securities": means an ETF in which the component securities of its underlying index are all domestic securities.
- "Securities ETF with foreign component securities": means an ETF in which the component securities of its underlying index include one or more foreign securities.
- "Leveraged or inverse securities ETF": means an ETF that tracks, simulates, or replicates a multiple of the performance of an index ("leveraged ETF") or an inverse multiple of the performance of an index ("inverse ETF").
- Beneficial certificates issued for futures ETFs offered by futures trust enterprises ("futures ETFs") ("futures ETF beneficial certificates"). If such an ETF tracks, simulates, or replicates a multiple of the performance of an index ("leveraged futures ETF") or an inverse multiple of the performance of an index ("inverse futures ETF"), it is called a "leveraged or inverse futures ETF".
- Beneficial certificates denominated in an additional currency for a fund offered by a securities investment trust enterprise pursuant to item B of subparagraph 1 of which the component securities of its underlying index are all foreign securities ("additional-currency ETF beneficial certificates").
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| Article 3 |
All ETF beneficial certificates traded on the TPEx shall be settled by book-entry transfer handled by the centralized securities depository enterprise. Principals may not request withdrawal of physical ETF beneficial certificates.
For trading in the following beneficial certificates, a securities firm may accept an order from a principal only after the principal has signed a risk disclosure statement:
- Futures ETF (including leveraged or inverse futures ETF) beneficial certificates;
- Leveraged or inverse securities ETF beneficial certificates;
- Non-investment grade bond securities ETF beneficial certificates;
- Additional-currency ETF beneficial certificates;
- Beneficial certificates for which the TPEx deems necessary.
The following are exempted from signing risk disclosure statements: professional institutional investors; privately placed securities investment trust funds managed by securities investment trust enterprises; futures trust funds offered by futures trust enterprises to persons with prescribed qualifications; discretionary investment accounts managed by securities investment trust enterprises, by securities investment consulting enterprises, or by securities brokers concurrently operating securities investment consulting enterprises; and discretionary investment accounts managed by managed futures enterprises.
The matters that must be set out in the risk disclosure statement referred to in paragraph 2 will be separately prescribed by the TPEx.
"Professional institutional investors" referred to in paragraph 3 means professional institutional investors as defined in the Regulations Governing Offshore Structured Products.
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| Article 3-1 |
When trading in leveraged or inverse securities ETF beneficial certificates or leveraged or inverse futures ETF beneficial certificates for the first time, a principal is required to meet at least one of the following conditions:
- The principal has opened a margin account.
- The principal has had at least 10 trading orders for call (put) warrants executed within the most recent one year.
- The principal has had at least 10 trading orders for futures trading contracts listed on the Taiwan Futures Exchange executed within the most recent one year.
- The principle has a record of executed purchase of leveraged or inverse securities ETF beneficial certificates or leveraged or inverse futures ETF beneficial certificates.
The principal may apply to a securities firm by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its expression of intent.
Paragraph 1 does not apply to the following: professional investors that conform to Article 3 of the Regulations Governing Offshore Structured Products; privately placed securities investment trust funds managed by securities investment trust enterprises; futures trust funds offered by futures trust enterprises to persons with prescribed qualifications; discretionary investment accounts managed by securities investment trust enterprises, by securities investment consulting enterprises, or by securities brokers concurrently operating securities investment consulting enterprises; and discretionary investment accounts managed by managed futures enterprises.
When a principal has engaged in irregular trading for the purpose of meeting a condition under paragraph 1, the securities firm shall evaluate whether the principal has substantive experience in trading the beneficial certificates referred to in paragraph 1; when necessary it may refuse to accept trading orders from the principal.
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| Article 3-2 |
When trading in leveraged or inverse futures ETF beneficial certificates for the first time, a principal shall complete a Leveraged or Inverse Futures ETF Beneficial Certificates Checklist, which the principal shall thoroughly read and sign, and only when the principal has done so may the securities firm may accept an order from the principal. The principal furthermore may do so by correspondence, email, fax, or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its expression of intent.
The format of the Leveraged or Inverse Futures ETF Beneficial Certificates Checklist under the preceding article shall be separately prescribed by the TPEx.
Paragraph 1 does not apply to the following: professional investors that conform to Article 3 of the Regulations Governing Offshore Structured Products; privately placed securities investment trust funds managed by securities investment trust enterprises; futures trust funds offered by futures trust enterprises to persons with prescribed qualifications; discretionary investment accounts managed by securities investment trust enterprises, by securities investment consulting enterprises, or by securities brokers concurrently operating securities investment consulting enterprises; and discretionary investment accounts managed by managed futures enterprises.
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| Article 4 |
ETF beneficial certificates are traded by the following methods:
- Through the automated trade matching system, the block trading system, the reverse auction system, the after-market fixed-price trading system, and the odd-lot trading system, in proprietary trading or brokerage trading.
- In negotiated trades at the securities firm's place of business, which, in the case of ETFs with domestic or foreign bond components, includes outright transactions and repurchase and reverse repurchase (RP/RS) transactions. However, additional-currency ETF beneficial certificates may not be used to engage in RP/RS transactions.
The provisions of the TPEx Trading Rules regarding TPEx listed stocks shall apply mutatis mutandis to the trading hours, trade matching methods, and the limits on the total monetary amounts that may be quoted in proprietary trading and brokerage trading orders, of ETF beneficial certificates.
With respect to RP/RS transactions of beneficial certificates of ETFs with domestic or foreign bond components, the provisions regarding RP/RS bond transactions in the TPEx Trading Rules and in the TPEx Rules Governing Bond Repurchase and Reverse Repurchase Transactions on Over-the-Counter Markets shall apply mutatis mutandis to the entering of contracts, trading times, calculation of interest, trading periods, delivery and settlement, buy and sell quotes, balance restrictions on RP/RS transactions, remittance of funds, related party transactions, and netting to offset outright purchases/sales against RP/RS transactions.
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| Article 4-1 |
For the component securities of the underlying index of securities ETFs with foreign component securities, the beneficial certificates and additional-currency ETF beneficial certificates may continue to be traded on the TPEx when the market on which the foreign securities circulate is closed.
For a leveraged or inverse securities ETF of which the component securities of the underlying index include one or more foreign securities, the beneficial certificates may continue to be traded on the TPEx when the market on which the foreign securities circulate or the exchange market of the object of the investment is closed.
For a futures ETF, the beneficial certificates may continue to be traded on the TPEx when the foreign futures market on which a futures contract that is a component of the underlying index is traded is closed.
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| Article 5 |
The quantity of ETF beneficial certificates that may be quoted for trading shall be one trading unit or an integer multiple thereof, where one trading unit equals 1,000 beneficial units. The trading unit of additional-currency ETF beneficial certificates may be determined by the securities investment trust enterprise. Transactions that amount to less than one trade unit are subject mutatis mutandis to the TPEx Rules Governing Odd Lot Trading.
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| Article 6 |
The trading price asked or offered shall be calculated per beneficial unit. The currency that such prices are quoted in shall be the same currency in which the securities investment trust enterprise or futures trust enterprise applied to the TPEx for TPEx trading.
The tick size for ETF beneficial certificate trade prices is NT$0.01 if the market price per beneficial unit is below NT$50, and NT$0.05 if the market price per beneficial unit is NT$50 or above.
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| Article 7 |
The daily gain and loss limits on ETF beneficial certificates after they are listed on the TPEx shall be subject mutatis mutandis to the relevant regulations that apply to TPEx listed stocks. However, no gain or loss limits are imposed on the following beneficial certificates:
- Beneficial certificates of securities ETFs with foreign component securities, and additional-currency ETF beneficial certificates thereof.
- Beneficial certificates of futures ETFs that track foreign futures indices.
For a leveraged or inverse securities ETF of which the component securities of the underlying index are all domestic securities, the daily price fluctuation limit for the beneficial certificates shall be 10 percent multiplied by the multiple of the fund. No price fluctuation limit is imposed on the beneficial certificates if the component securities of the underlying index include one or more foreign securities.
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| Article 8 |
For ETF beneficial certificates that are initially listed on the TPEx, the reference price and the standard for calculation of the price fluctuation limit on the date of commencement of TPEx trading shall be determined in accordance with the following provisions, respectively, on the business day prior to the date of TPEx listing:
- For a securities investment trust fund offered by a securities investment trust enterprise, it is the net asset value per beneficial unit for the most recent business day obtainable by calculation in accordance with Article 72 of the Regulations Governing Securities Investment Trust Funds.
- For a futures trust fund offered by a futures trust enterprise, it is the net asset value per beneficial unit for the most recent business day obtainable by calculation in accordance with Article 76 of the Regulations Governing Futures Trust Funds.
- For additional-currency ETF beneficial certificates, it is calculated by the ratio of the trading unit thereof to the original ETF beneficial certificate trading unit and the net asset value per beneficial unit for the most recent business day as converted at the exchange rate.
The base price for the start of trading on the date of commencement of TPEx trading of beneficial certificates as referred to in the preceding paragraph is the price arrived at based on the standard set out in the preceding paragraph, after treatment in accordance with Article 6, paragraph 2.
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| Article 9 |
The method for calculation of the reference price for every subsequent day the ETF beneficial certificates are traded on the TPEx shall be governed mutandis mutatis by the relevant provisions of the TPEx Trading Rules regarding TPEx listed stock.
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| Article 10 |
For any trade of beneficial certificates of ETFs for which the settlement is performed on or after the date of a book closure due to a distribution of income by the securities investment trust enterprise in accordance with Article 77 of the Regulations Governing Securities Investment Trust Funds or by the futures trust enterprise in accordance with Article 78 of the Regulations Governing Futures Trust Funds, the trade shall be an ex-dividend trade. The method for calculation of the reference price on the ex-dividend date shall be governed mutatis mutandis by the relevant provisions of the TPEx Trading Rules regarding TPEx listed stock.
The base price for the start of trading on the commencement date of ex-dividend trading shall be the price arrived at based on the reference price after treatment in accordance with Article 6, paragraph 2.
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| Article 10-1 |
In the event of split or reverse split of ETF beneficial certificates, the reference price on the commencement date of TPEx trading of the post-split or post-reverse split beneficial certificates shall be calculated on the basis of the closing price of the beneficial certificates on the last trading day prior to the split or reverse split divided by the ratio of the number of beneficial units after the split or reverse split to the original number of beneficial units.
If no closing price is available for the beneficial certificates on the last trading day prior to the split or reverse split, the calculation shall be based on the price determined by the principles set out in Article 57, paragraph 1 of the TPEx Trading Rules.
The base price for the start of trading on the commencement date of TPEx trading of beneficial certificates referred to in paragraph 1 shall be the price arrived at on the basis set out in the preceding two paragraphs after treatment in accordance with Article 6, paragraph 2.
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| Article 11 |
The handling of settlement, out-trades, and default on settlement of ETF beneficial certificates shall subject mutatis mutandis to the provisions of the TPEx Trading Rules regarding TPEx listed stock.
Separate settlement spreadsheets shall be prepared for additional-currency ETF beneficial certificates. The currency used for their settlement shall be the same as their TPEx trading currency.
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| Article 12 |
A securities firm shall sign a participant agreement with the securities investment trust enterprise before it may conduct procedures for creation or redemption of securities ETF beneficial certificates for its own account or on behalf of its customers.
A securities firm shall sign a participant agreement with the futures trust enterprise before it may conduct procedures for creation or redemption of futures ETF beneficial certificates for its own account or on behalf of its customers.
A securities firm shall report to the TPEx any creation or redemption operations of ETF beneficial certificates for its own account or on behalf of its customers. The directions for such reporting will be separately prescribed by the TPEx.
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| Article 12-1 |
A securities firm that signs a relevant agreement under paragraph 1 or paragraph 2 of the preceding article with a securities investment trust enterprise or futures trust enterprise is referred to as a participating securities firm. A participating securities firm shall meet the following conditions and shall be issued written permission after passing review by the TPEx:
- The regulatory capital adequacy ratio of the securities firm has remained over 150% for the last 6 months; provided, the above does not apply to a Taiwan branch of a foreign securities firm whose head office in the home country has calculated its own capital adequacy ratio according to the local laws and regulations, with the operating risk of the Taiwan branch included in the calculation, and the criteria are met, and the Financial Supervisory Commission has granted exemption from the capital adequacy ratio requirements that are applicable to Taiwan securities firms. For a financial institution that concurrently engages in securities business, the regulatory capital adequacy ratio for the last 6 months shall comply with the provisions of Article 44 of the Banking Act with respect to capital adequacy ratio. For a futures commission merchant that concurrently engages in securities dealing business, the monthly simple arithmetic mean of the percentage of adjusted net capital to the total amount of customer margins required for the open positions of futures traders shall have exceeded 40% for the last 6 months.
- A long-term credit rating of a specific level or higher from a credit rating agency shall be obtained: Taiwan Ratings Corporation twBB- or above, Moody's Investors Service, Inc. Ba3 or above, Standard & Poor's Ratings Services BB- or above, Fitch Ratings Ltd. BB- or above, or Fitch Australia Pty Ltd, Taiwan Branch BB-(twn) or above. In the case of a securities firm concurrently operated by a financial institution, the credit rating of the financial institution may apply. In the case of a Taiwan branch of a foreign securities firm, the credit rating of the group's holding company may apply.
Within 1 year after a securities firm has obtained the written permission from the TPEx to become a participating securities firm, it shall enter into a participation agreement with the securities investment trust enterprise or futures trust enterprise issuing the ETF beneficial certificates.
A securities firm that already acts as a participating securities firm with the TPEx's permission, or that has obtained the permission but has not yet signed the agreement, shall cease acting as a participating securities firm if it has failed to meet any requirement of paragraph 1, subparagraph 1 for 2 consecutive months, and may not be reinstated until it has for 3 consecutive months fulfilled the requirement governing the regulatory capital adequacy ratio or the percentage of adjusted net capital to the total amount of customer margins required for the open positions of futures traders, and has obtained the approval of the TPEx.
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| Article 13 |
If on a same day the amount of the component stock portfolio of the underlying index of a securities ETF with domestic component securities purchased by a securities firm for its own account or on behalf of a single account, or the total amount of the aforementioned purchased stock plus that securities firm's original holdings and borrowings thereof and the amount of portfolio stock it purchased or acquired through in-kind redemption on the preceding day, meets the requirements for in-kind creation of that ETF beneficial certificate, and on that same day it sells the same quantity of that beneficial certificate; or if on a same day the amount of beneficial certificates of a securities ETF with domestic component securities that a securities firm purchases for its own account or on behalf of a single account, or the total amount of the aforementioned purchased certificates plus that securities firm's original holdings and borrowings thereof and beneficial certificates it purchased or acquired through in-kind creation on the preceding day, meets the requirements for in-kind redemption of the component stock portfolio of the underlying index of that ETF, and on that same day it sells the same quantity of the component stock portfolio of the underlying index of that ETF; then that securities firm's settlement, and subsequent related matters, shall be conducted according to the following provisions:
- Transactions must be reported to the TPEx on the transaction date via a computer connection. If there are any requirements for postponed settlement, the application shall be submitted concurrently.
- If the securities firm reports the sale of beneficial certificates of the securities ETF or of the component stock portfolio of the underlying index of that ETF and reports and applies to postpone settlement pursuant to the preceding subparagraph, after the TPEx has reviewed and approved the application it shall prepare a statement and an electronic file and transmit them to the centralized securities depository enterprise to conduct the relevant operations accordingly. Article 86-1 of the TPEx Trading Rules does not apply to the above operations.
- After the securities firm has completed, on the second business day after the transaction date, the settlement of the price payable for the component stock portfolio of the underlying index, or beneficial certificates, of the securities ETF with domestic component securities that it has purchased, and for any price payable for other purchases, the component stock portfolio or beneficial certificates receivable by it shall be transferred to serve as collateral for the postponed settlement, and the TPEx will notify the centralized securities depository enterprise to thereupon apply to the securities investment trust enterprise for the in-kind creation of that beneficial certificate, or in-kind redemption of the component stock portfolio of the underlying index of that ETF, to unwind the position.
- If the component securities portfolio of the underlying index of a securities ETF with domestic component securities listed for trading on the Taiwan Stock Exchange (TWSE) includes any TPEx listed stocks, upon receiving notification from the TWSE of any sales thereof involving the TPEx listed stocks, the TPEx will prepare the statements and electronic files described in subparagraph 2 and transmit them to the centralized securities depository enterprise.
When a securities firm, for its own account or on behalf of its customers, conducts creation of beneficial certificates of a securities ETF with domestic component securities, of which the component securities of the underlying index are stocks, after confirmation by the securities investment trust enterprise, the beneficial certificates may be sold on the day of creation; in the case of creation of beneficial certificates of a securities ETF with foreign component securities, of which the component securities of the underlying index are stocks, after confirmation by the securities investment trust enterprise, the beneficial certificates may be sold on the business day preceding the day of their book-entry delivery by the centralized securities depository enterprise.
When a securities firm, for its own account or on behalf of its customers, conducts creation of beneficial certificates of a securities ETF composed of domestic or foreign bond components, after confirmation by the securities investment trust enterprise, the beneficial certificates may be sold from the business day next following the date of creation. However, a securities firm that conducts in-kind creation for its own account or on behalf of its customers of beneficial certificates of a securities ETF composed of domestic or foreign bond components and on the creation date delivers the component bond portfolio of the underlying index of that securities ETF to the securities investment trust enterprise, may sell an equivalent number of beneficial certificates on the creation date once the delivery has been confirmed by the securities investment trust enterprise.
When a securities firm, for its own account or on behalf of its customers, conducts creation of beneficial certificates of a leveraged or inverse securities ETF of which the component securities of the underlying index are all domestic securities, after confirmation by the securities investment trust enterprise, the beneficial certificates may be sold from the date of creation. If the component securities of the underlying index include one or more foreign securities, after confirmation by the securities investment trust enterprise, the beneficial certificates may be sold from the business day preceding the date of book-entry delivery by the centralized securities depository enterprise.
When a securities firm conducts creation of original or leveraged or inverse futures ETF beneficial certificates for its own account or on behalf of its customers, after confirmation by the futures trust enterprise, the beneficial certificates may be sold from the business day preceding the day of their book-entry delivery by the centralized securities depository enterprise.
When securities ETF beneficial certificates, futures ETF beneficial certificates, leveraged or inverse securities ETF beneficial certificates, or leveraged or inverse futures ETF beneficial certificates are placed under dispositive measures which require the advance collection of funds and securities, the positions for which the securities firm conducts creation for its own account (including as a liquidity provider) or on behalf of its customers may be sold only after registration has been carried out with the centralized securities depository enterprise as required in accordance with the dispositive measures for the advance collection of funds and securities for that underlying.
Article 70-1 of the TPEx Trading Rules does not apply to securities dealers engaging in trading activities listed in paragraphs 1 and 3.
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| Article 13-1 |
During the period of the operations for a split or reverse split of ETF beneficial certificates, the creation and redemption thereof shall be suspended from two business days before the book closure date until the end of the book closure period.
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| Article 14 |
A securities investment trust enterprise or futures trust enterprise that issues ETFs shall appoint a liquidity provider to provide liquidity when the beneficial certificates are traded through the automated trade matching system. The relevant operational directions shall be separately adopted by the TPEx.
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| Article 15 |
Commissions or transaction charges that are collectible by securities brokers from investors, and, except as otherwise provided in paragraph 2, business service fees that are collectible by the TPEx from the respective securities firms, after the execution of an ETF beneficial certificate trade, shall be governed mutatis mutandis by the fee schedule provided for TPEx listed stocks.
Business service fees for RP/RS transactions of beneficial certificates of ETFs with domestic or foreign bond components shall be governed mutatis mutandis by Point 2, subparagraph 2 of the TPEx Standards Governing the Collection of Business Service Fees and Facility Use Fees for TPEx Trading by Securities Firms regarding the fee schedule for bond transactions.
After the execution of trades of ETF beneficial certificates, the commissions or transaction charges that are collectible by securities brokers from investors and the business service fees that are collectible by the TPEx from securities firms shall be collected in the currency of the TPEx trading of the beneficial certificates.
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| Article 16 |
With respect to futures ETF beneficial certificates, if the average net asset value per unit of the fund for the most recent 10 business days has reached a cumulative decline of 65% or more from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, margin purchase and short sale transactions shall be halted, and securities borrowing and lending and day trading shall be suspended.
With respect to futures ETF beneficial certificates, from the implementation date of the measures under the preceding paragraph, if for 30 consecutive business days the daily net asset value per unit of the fund has not reached a cumulative decline of 65% from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, margin purchase and short sale transactions, securities borrowing and lending, and day trading shall be resumed.
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| Article 17 |
With respect to futures ETF beneficial certificates, if the average net asset value per unit of the fund for the most recent 10 business days has reached a cumulative decline of 75% or more from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, securities brokers, when engaging in brokerage trading of the beneficial certificates or of call put warrants that they underly, shall collect the securities and funds in advance and in full.
The operation method for the advance collection of funds and securities under the preceding paragraph shall be subject mutatis mutandis to the Operation Directions for the Advance Collection of Funds and Securities by Securities Brokers in Brokerage Trading.
With respect to futures ETF beneficial certificates, from the implementation date of advance collection of funds and securities under the preceding paragraph, if for 30 consecutive business days the daily net asset value per unit of the fund has not reached a cumulative decline of 75% from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, the requirement that securities brokers engaging in brokerage trading of the beneficial certificates or of call put warrants that they underly collect the securities and funds in advance and in full shall be cancelled.
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| Article 18 |
With respect to futures ETF beneficial certificates, if the average net asset value per unit of the fund for the most recent 10 business days has reached a cumulative decline of 85% or more from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, in trading of the beneficial certificates or of call put warrants that they underly, with the exception of a call (put) warrant liquidity provider account or hedge account or a futures ETF beneficial certificate liquidity provider account, other investors may only make sales and may not place purchase orders.
With respect to futures ETF beneficial certificates, from the implementation date of the measures under the preceding paragraph, if the daily net asset value per unit of the fund for 30 consecutive business days has not reached a cumulative decline of 85% from the initial net asset value per unit of the fund, then from the next business day following the public announcement by the TPEx, investors may resume placing purchase orders for the beneficial certificates or for call put warrants that they underly.
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| Article 19 |
A principal who wishes to trade additional-currency ETF beneficial certificates may not do so until after it has opened a foreign currency deposit account with a foreign exchange bank designated by the securities broker.
A principal trading additional-currency ETF beneficial certificates for the first time, or applying for conversion under Article 22 for the first time, shall sign a Statement of Consent (see attachment) consenting for the securities broker to provide the foreign currency deposit account number under the preceding paragraph to the centralized securities depository enterprise, and for its further provision to the securities investment trust enterprise to handle the distribution of dividends and other operations relating to payments of funds.
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| Article 20 |
Additional-currency ETF beneficial certificates are not eligible for margin purchases and short sales, day trades, money lending and borrowing transactions in connection with securities business, money lending and borrowing transactions for indefinite purposes, financing of securities settlement, securities secured lending, or securities lending and borrowing transactions, nor may they be used as collateral.
The securities lending and borrowing transactions in the preceding paragraph do not include applications for securities borrowing under Article 86-1 of the TPEx Trading Rules.
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| Article 21 |
The total reported monetary amount of trading orders entered by a securities firm for additional-currency ETF beneficial certificates on behalf of principals or for its own account in a single day is governed by Article 35 of the TPEx Trading Rules.
The reported monetary amount of additional-currency ETF beneficial certificates is included in the total reported trading amount in the preceding paragraph after conversion at the exchange rate posted on the preceding day by the bank designated by the TPEx.
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| Article 22 |
ETF beneficial certificates and their corresponding additional-currency ETF beneficial certificates may be converted into each other. Principals applying to a securities firm for conversion must do so in integer multiples of the trading units.
For conversions under the preceding paragraph, the quantity of beneficial units obtained by a principal per conversion shall be calculated as follows:
- For conversion of ETF beneficial certificates into additional-currency ETF beneficial certificates: the net asset value per trading unit of the ETF beneficial certificates multiplied by the number of trading units to be converted and then, after conversion at the exchange rate, divided by the net asset value per beneficial unit of the additional-currency ETF beneficial certificates.
- For conversion of additional-currency ETF beneficial certificates into ETF beneficial certificates: the net asset value per trading unit of the additional-currency ETF beneficial certificates multiplied by the number of trading units to be converted and then, after conversion at the exchange rate, divided by the net asset value per beneficial unit of the ETF beneficial certificates.
"Net asset value" in the preceding paragraph means the net asset value of those ETF beneficial certificates and additional-currency ETF beneficial certificates on the business day before the principal applies for conversion.
Any amount of less than one beneficial unit obtained by the principal in a conversion will be returned to the principal in NT dollar cash by the securities investment trust enterprise.
A principal applying to a securities broker for conversion shall provide an NT dollar deposit account and sign a Statement of Consent (see attachment) consenting for the securities broker, on the day of each successful application for conversion by the principal, to provide the account number to the TWSE for further provision to the securities investment trust enterprise to handle the return of NT dollar cash under the preceding paragraph and other operations relating to payments of funds.
The conversion time is between 9 a.m. and 4:25 p.m.
ETF beneficial certificate positions established through margin purchase or borrowing may not be the subjects of applications for conversion into additional-currency ETF beneficial certificates.
During split and reverse split periods, conversion of ETF beneficial certificates and additional-currency ETF beneficial certificates shall be suspended from 2 business days before the book closure date until the end of the book closure period.
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| Article 22-1 |
The amount of conversions between ETF beneficial certificates and additional-currency ETF beneficial certificates may not exceed what is set out in any of the subparagraphs below:
- The aggregate conversion amount by each principle on each business day for conversions of ETF beneficial certificates into additional-currency ETF beneficial certificates, or of additional-currency ETF beneficial certificates into ETF beneficial certificates, shall respectively be limited to NT$500,000. However, this restriction does not apply to liquidity providers of the additional-currency ETF beneficial certificates.
- The aggregate conversion amount on each business day of each securities investment trust enterprise's issued ETF beneficial certificates into additional-currency ETF beneficial certificates, or additional-currency ETF beneficial certificates into ETF beneficial certificates, shall respectively be limited to US$3 million.
When a principle applies to a securities broker for conversion, the TPEx will seek confirmation from the centralized securities depository enterprise that the amount sought in the application is less than or equal to the balance available in the custodial book-entry account and, upon such confirmation, the TPEx will notify the securities investment trust enterprise and the securities broker of the success of the conversion application.
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| Article 23 |
These Rules, and any amendments hereto, shall enter into force after submission to and approval by the Competent Authority.
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