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Title	Taipei Exchange Rules Governing the Registration and Trading of Spot Gold CH
Date	2023.11.03 ( AMENDMENT )

Article Content

Chapter I General Principles

Article 1	These Rules are adopted to facilitate the trading of spot gold by securities market investors and to provide more diverse options for asset allocation.
Article 2	Unless otherwise provided by law or regulation, all registration and trading of spot gold on the Taipei Exchange (TPEx) shall be governed by these Rules.
Article 3	For the purposes of these Rules, "spot gold" means gold that banks apply to register in accordance with these Rules, with a minimum acceptable fineness of 999.9 parts per thousand fine gold and deliverable in physical form. For the purposes of these Rules, a "Taiwan tael" weighs 37.5 grams; a "Taiwan mace" weighs 3.75 grams. For the purposes of these Rules, "market maker" means a bank that applies with the TPEx for registration and trading of spot gold or a securities firm that begins to participate in market making after trading of the spot gold has commenced. For the purposes of these Rules, the "Gold Trading Platform" means a trading system utilizing the TPEx's Emerging Stock Computerized Price Negotiation and Click System, that enables market makers, securities dealers, and securities brokers to submit trade information online through a computer connection from their places of business, and enables market makers to carry out price negotiation and click-and-trade operations. For the purposes of these Rules, "spot gold custodian" means a bank authorized by Taiwan Depository & Clearing Corporation (TDCC) to hold spot gold in custody.

Chapter 2 Opening, Management, and Cancellation of Participant Accounts

Article 4	A bank that is approved by the competent authority and conducts gold trading and custody business, and has the capability to cover market-making long and short positions in the International Gold Market, may apply to the TPEx for registration and trading by submitting a Spot Gold Registration and Trading Application (Attachment 1) and relevant documents. The applicant shall hold 2,000 or more Taiwan taels of the spot gold for which it is applying for registration and trading, and shall serve as a market maker for the spot gold, and furthermore shall obtain authorization from TDCC to serve as a spot gold custodian.
Article 5	After the TPEx has accepted a spot gold registration and trading application case for consideration, and has examined the application documents and found that the requirements for registration and trading are met, it shall within 3 business days from receipt of the documents, issue an approval letter and announce to the market the date that trading of the spot gold will commence, and disclose overview information on the spot gold on the TPEx website for at least 5 business days. The overview information mentioned in the preceding paragraph shall include the spot gold code, name, market maker, spot gold custodian, bank where the allocated account is opened, and rules for spot gold conversion and withdrawal. Once the TPEx has approved a spot gold registration and trading application case, the applicant shall sign a Spot Gold Registration and Trading Contract (Attachment 2). The TPEx will compile and report these contracts to the competent authority for recordation on a monthly basis.
Article 6	If the application documents submitted by the applicant are incomplete, the TPEx may specify the omissions and request the applicant to furnish the relevant documents within a specified time limit. If the applicant furnishes the documents within the time limit specified by the TPEx, the TPEx will re-review the application following the procedure in Article 5. If the applicant fails to furnish the documents within the time limit or the TPEx finds upon review of the application case that the requirements for registration and trading are not met, the TPEx shall deny approval for registration.

Chapter III Admission and Withdrawal of Market Makers

Article 7

Once 6 months have elapsed after trading of spot gold has commenced, an Emerging Stock recommending securities firm with spot gold market-making capability may apply to the TPEx for admission as a spot gold market maker by submitting an Application for Admission as a Spot Gold Market Maker (Attachment 3) and relevant documents, and shall hold 500 or more Taiwan taels of the spot gold.
The standards for determination of spot gold market-making capability referred to in the preceding paragraph shall be separately prescribed by the TPEx.

Article 8

A securities firm that, after trading of spot gold has commenced, applies for admission as a market maker in accordance with the preceding article may not withdraw as a market maker within 6 months from the date it receives approval from the TPEx.
When a securities firm admitted as a market maker wishes to withdraw, it shall apply to the TPEx, and will lose its market maker status only from the date the TPEx grants approval for its withdrawal.

Chapter IV Trading Principles

Section 1 General Provisions

Article 9	Spot gold may be traded through brokerage or dealership and is traded by means of price negotiation. At least one of the two parties to a trade must be a market maker of the spot gold that is being traded. The term "brokerage" in the preceding paragraph means a securities broker accepting an order from a customer and entering the customer's trading order information into the Gold Trading Platform according to a prescribed format, and conducting the trade with a market maker through negotiated trading. The term "dealership" in paragraph 1 means negotiated trading engaged in by a market maker or securities dealer using the Gold Trading Platform.
Article 10	When a securities broker receives a customer order to trade spot gold, if an assessment of the customer's credit status finds that the order exceeds its investment capacity, the broker may collect the price for a purchase in advance or earmark spot gold that is to be sold.
Article 11	Trading of spot gold shall be conducted on a cash/spot basis.
Article 12	A market maker conducting negotiated trading of spot gold shall adopt an internal control system and internal audit system, and implement them rigorously. The internal control system under the preceding paragraph, and any amendments thereto, shall be reported to the TPEx. When a market maker simultaneously serves as a spot gold custodian, its personnel responsible respectively for trading, settlement, and custody operations may not concurrently serve in more than one of those capacities, and the market maker shall rigorously perform risk assessment and supervision.
Article 13	In the case of a securities firm that has already signed with the TPEx a Contract for Trading of Securities on the TPEx by a Securities Firm, if the securities firm uses the Gold Trading Platform to engage in gold market making, dealership, or brokerage business, it will be deemed to have agreed and entered with the TPEx into a Contract for Trading of Spot Gold by a Securities Firm, and deemed to agree that these Rules, TPEx announcements, provisions of amended rules and bylaws of the TPEx relating to trading of spot gold, and provisions of the Contract for Trading of Securities on the TPEx by a Securities Firm that do not conflict with trading of spot gold, all constitute an integral part of the Contract for Trading of Spot Gold by a Securities Firm. Market makers and securities firms operating spot gold negotiated trading business shall abide by the principle of good faith.
Article 14	The trading hours for spot gold shall be 9 a.m. to 3 p.m. However, when the TPEx deems it necessary, it may apply to the competent authority to change the trading hours.
Article 15	The only parties that may make price quotes through the Gold Trading Platform are the market makers for the respective spot gold products. Price quotes made by a market maker through the Gold Trading Platform in accordance with these Rules are without exception firm quotes. The term "firm quote" in the preceding paragraph means a price quote for which the market maker is required to execute the trade with the counterparty buyer (or seller) at the market maker's quoted sell (or buy) price and in the quoted quantity.
Article 16	When a trade is executed between a firm quote made by a market maker referred to in the preceding article and a trading order that meets the quoted price, the price of the firm quote shall be the trade price. If a market maker for its own account clicks on a trading order not meeting the quoted price, the price clicked by the market maker shall be the trade price.
Article 17	After a market maker makes a trading quote or clicks on the "trade" link on the Gold Trading Platform, or a securities broker enters a customer's trading order information, the TPEx will disclose the following information to the public through its information transmission system: The highest buy and lowest sell quote and quantities quoted by the market maker, and its name and contact phone number. The trade price and quantity of the latest trade of the current session, the cumulative trading volume, and the weighted average trading price. The TPEx's information transmission system provides an additional real-time search function for the trade price quote information of all market makers and their names and contact telephone numbers.
Article 18	After the close of daily trading hours, the TPEx shall prepare and disclose a statement displaying the names, trading volumes that day, and highest, lowest, final, and weighted average trading prices of spot gold.
Article 19	Where an error occurs in a buy or sell price quote or the execution of a trade on the Gold Trading Platform by a market maker, or in a trading order by a securities dealer, or in the execution of a trading order for spot gold by a securities broker, and the trade has been executed as a negotiated trade through the Gold Trading Platform in accordance with these Rules, the party concerned may, upon consent of the other party after the trade is executed, report to the TPEx for correction of the error or cancellation of the trade ("account change") by 3:30 p.m. of the same day. However, if a securities firm is unable to complete delivery, on the second business day after the trade date, of spot gold that it sells for its own account or for the account of a customer, it may, upon consent of the other party, report cancellation of the trade to the TPEx by 10 a.m. on the second business day after the trade date. An account change under the preceding paragraph shall be applied for in writing in the format prescribed by the TPEx.

Section 2 Account Opening

Article 20

    In the case of a customer that has already signed with a securities firm an Account Opening Contract for Trading of Securities on the TPEx, the customer may place orders with the securities broker for trading of spot gold only after the customer has signed a Spot Gold Risk Disclosure Statement.
    The securities firm shall appoint an associated person to explain to the customer the potential risks of trading spot gold, and after delivering the risk disclosure statement to the customer, the associated person responsible for such explanations and the customer shall each sign the Statement and keep a copy of it.
    The format and main contents of the Risk Disclosure Statement referred to in paragraph 1 shall be prescribed by the TPEx.

Article 21

For a customer trading spot gold through the Gold Trading Platform for the first time, in addition to following the procedures in the preceding article, a centralized securities depository account and a book-entry fund transfer account shall be opened, and settlement shall without exception be conducted through book-entry transfer.

Section 3 Price Quotation Unit, Minimum Trading Unit, and Price Limits

Article 22	The price quotation unit for spot gold is 1 Taiwan mace and the trading unit is 1 Taiwan tael. The quantity of a trading order shall be 1 trading unit or an integer multiple thereof. The minimum price unit for a trading order pursuant to the preceding paragraph shall be NT$0.1.
Article 23	There is no daily price limit on the trading of spot gold.

Section 4 Provisions Applicable Mutatis Mutandis

Article 24

The following provisions of the TPEx Trading Rules shall apply mutatis mutandis to the trading of spot gold by market makers and securities firms: the provisions of Chapter IV, Section I, Article 33 regarding understanding the customer; the provisions of Article 39-1 regarding information and facilities; and the provisions of Chapter IV, Section II, Articles 41 and 42 regarding trading hours.

Chapter V Trading Entities

Section 1 Market Makers

Article 25	When a market maker trades spot gold for which it is a market maker, it shall do so through its segregated market maker account (666666-7 under its proprietary account). A market maker shall authorize TDCC to transmit to the TPEx on a daily basis an itemized statement of the book-entry balance of the segregated account referred to in the preceding paragraph.
Article 26	A market maker shall abide by the following provisions in trading spot gold: Within 3 business days from the day that a spot gold product is approved by the TPEx for registration and trading, report to the TPEx the quantity of the spot gold held by the market maker. However, in the case of a securities firm that is admitted as a market maker after the date that trading of the spot gold commences, it shall report the information to the TPEx at the time of applying to the TPEx to become a market maker for the spot gold. Prior to the commencement of trading hours each business day, enter buy and sell quotes through the Gold Trading Platform for at least 10 Taiwan taels of the spot gold for which it is a market maker; furthermore, the spread between its buy and sell quotes shall not exceed 5 percent of the sell quote. Assume the obligation to continuously quote for the spot gold for which it is a market maker, through the Gold Trading Platform during the trading hours of each business day; furthermore, the spread between its buy and sell quotes shall not exceed 5 percent of the sell quote. Respond immediately to price inquiries from customers or other securities firms. Assume the obligation to buy or sell the spot gold when a trading order price meets its price quoted for the spot gold. A trading order not meeting the price quoted may be executed through a click-and-trade transaction only when both sides of the two-way quote validly exist, provided that price trade-through is prohibited, and the clicked trading order price shall be deemed to be the changed quoted price. Assume the obligation to buy or sell the spot gold for which it is a market maker, when a certain reasonable spread exists between buy and sell orders. The term "continuously quote" as used in subparagraph 3 of the preceding paragraph means that a market maker shall continuously provide buy and sell quotes during trading hours through the Gold Trading Platform for 10 Taiwan taels or more of the spot gold for which it is a market maker to meet its buying and selling obligations. If a previous quote is canceled or is executed in full through click-and-trade transactions, the market maker shall enter a new quote into the Gold Trading Platform within 3 minutes. The "obligation to buy or sell when a trading order price meets its price quoted" in paragraph 1, subparagraph 5 means that when the trading order price input into the Gold Trading Platform by a buyer (or seller) of the spot gold for which the market maker is a market maker meets the market maker's quoted selling price (or higher), or quoted buying price (or lower), the market maker shall have the obligation to execute the trade. The TPEx Gold Trading Platform will assist in the automatic execution of the trade. If a trading order price meets the prices quoted by two or more market makers, in the automatic execution of the trade, the price priority principle shall apply to the prices quoted by the market makers; if the prices are the same, the time priority principle shall apply. When a market maker, pursuant to paragraph 1, subparagraph 6, clicks and trades a trading order not meeting the price quoted, if at the time of the click-and-trade the sell (or buy) quote price is lower (or higher) than the sell (or buy) price clicked, the trade shall be executed in full, and price trade-through shall be prohibited. The clicked sell (or buy) order price may not be higher (or lower) than the sell (or buy) quote price, and the clicked trading order price shall be deemed to be the changed quoted price. If the quantity for execution in a click-and-trade transaction is lower than 10 Taiwan taels, the TPEx Gold Trading Platform will disclose the remaining volume; the buy or sell quote corresponding to the changed quoted price shall remain at the original price and quantity and continuously be disclosed. The "obligation to buy or sell when a certain reasonable spread exists between buy and sell orders" in paragraph 1, subparagraph 7 means that when the trading order price input into the Gold Trading Platform by a buyer or seller for the spot gold for which the market maker is a market maker meets the trading order spread ratio set by that market maker, the market maker shall execute click-and-trade transactions for those buy and sell orders within the scope of the corresponding executable volume.
Article 27	A market maker shall enter its quote prices through the Gold Trading Platform. The market maker's price quotes referred to in the preceding paragraph shall be valid for the current session only. When entering quotes, the market maker shall enter the market maker code, spot gold name, price, quantity, type of trade, and other relevant information into the Gold Trading Platform in the prescribed format. Once the system has accepted the information, it will report it back in sequence through the transmission system in confirmation. The same shall apply to any changes thereto.
Article 28	After a market maker executes a negotiated trade using the Gold Trading Platform, the system will promptly report the trade information back in sequence in confirmation.
Article 29	A market maker conducting negotiated trading of spot gold may not charge a trade counterparty any handling fee.

Section 2 Securities Dealers

Article 30

    A securities dealer trading spot gold for its own account shall enter the information such as its securities firm code and the name, price, and quantity of the spot gold it intends to buy or sell into the Gold Trading Platform in the prescribed format and conduct the trade through negotiated trading with the market makers for the respective spot gold product.
    Once accepted by the Gold Trading Platform, the quote information in the preceding paragraph will promptly be reported back in sequence through the transmission system in confirmation. The same shall apply to any changes thereto.
    A trading quote entered by a securities dealer is valid only in the session in which the quote is entered.

Article 31

When securities dealer trade spot gold for their own accounts, after the market makers for the respective spot gold products have clicked and executed the negotiated trades through the Gold Trading Platform, the system will promptly report back the trade information in sequence.

Section 3 Securities Brokers

Article 32	When a securities broker trades spot gold for a customer, the customer shall set the price limit, and place its order with the securities broker to make the quote on the customer's behalf. After receiving a customer order to trade spot gold, the securities broker shall promptly enter the information such as the customer's account and the name, price, and quantity of the spot gold in the buy or sell order into the Gold Trading Platform in the prescribed format, and conduct the trade through negotiated trading with the market makers for the respective spot gold product. Once accepted by the Gold Trading Platform, the customer order information in the preceding paragraph will promptly be reported back in sequence through the transmission system in confirmation. The same shall apply to any changes thereto. A trading quote entered by a securities broker is valid only in the session in which the quote is entered.
Article 33	When securities brokers trade spot gold for their customers, after the market makers for the respective spot gold products have clicked and executed the negotiated trades through the Gold Trading Platform, the system will promptly report the trading information back in sequence, and the securities broker shall report the trading information back to the customer in confirmation.
Article 34	A securities broker receiving a customer order to trade spot gold shall collect a handling fee from the customer after the trade has been executed. The standard rate (or discounts) of the handling fee referred to in the preceding paragraph shall be stipulated between the securities broker and its customer.

Section 4 Provisions Applicable Mutatis Mutandis

Article 35

The following provisions of the TPEx Trading Rules shall apply mutatis mutandis to the trading of spot gold: the provisions of Chapter III, Articles 18 to 30 regarding securities firms trading on the TPEx; the provisions of Article 36, paragraph 2 regarding changes to the content of trading quotes; the provisions of Chapter V, Article 62 (except the provisions of paragraph 2, subparagraph 3 regarding price and time in force), Article 62-2, Article 63, and Articles 66 to 68 regarding securities firms trading for the accounts of customers; and the provisions of Chapter VI, Article 70 and Articles 74 to 78 regarding propriety trading by securities firms.

Chapter VI Settlement

Article 36	A securities firm conducting negotiated trading of spot gold through the Gold Trading Platform shall complete settlement of the spot gold trades together with the settlement of Emerging Stock trades in accordance with the rules of TDCC. However, for trades executed through a market maker account, or by a securities broker through its error account, for which the settlement is to be conducted on the second business day after the trade date, the settlement may be conducted on the basis of the net balance after offsetting buy and sell trades in accordance with the rules of TDCC. After netting of buy and sell trades made through a market maker account as referred to in the preceding paragraph, if the quantity of spot gold is insufficient for settlement, the market maker shall make up the shortfall in accordance with TDCC rules.
Article 37	A market maker or securities firm that will conduct spot gold trading shall enter into a contract with TDCC for the settlement of such trades, and shall comply with all relevant rules of the TDCC.
Article 38	The provisions of Chapter II, Section III of the TPEx Rules Governing the Trading of Emerging Stocks on the TPEx regarding settlement, such as the timing of settlement and the handling of default, shall apply mutatis mutandis to the trading of spot gold.

Chapter VII Custody and Withdrawal

Article 39	A spot gold custodian shall keep spot gold placed in its custody in a segregated account. A segregated account referred to in the preceding paragraph shall be an allocated account at a bank that that is both a market-making member of the London Bullion Market Association (LBMA) and a clearing member of the London Precious Metals Clearing Ltd (LPMCL). All securities firms that the TPEx agrees to admit as spot gold market makers shall, in accordance with the relevant rules of the TDCC or the spot gold custodian, deposit the spot gold that they hold to meet market making needs into the allocated account, for uniform custody by the spot gold custodian.
Article 40	With respect to the custody and withdrawal of spot gold, any matter not provided for in these Rules shall be handled in accordance with the relevant rules of the TDCC and the provisions of the spot gold custodian regarding conversion and withdrawal. The provisions regarding conversion and withdrawal referred to in the preceding paragraph shall, at the time of the application for registration of spot gold, be reported to the TPEx, and furthermore shall be disclosed on the website of the spot gold custodian; the same shall be done when there are any amendments to those provisions. The spot gold custodian shall fully disclose any fees related to the conversion and withdrawal of spot gold.
Article 41	Physical gold delivered by the spot gold custodian to investors shall be limited to gold that complies with the fineness requirement in Article 3, paragraph 1, and that has anti-counterfeit mechanisms and a written guarantee.

Chapter VIII Suspension and Termination of Trading

Article 42	Under any of the following circumstances, the TPEx may suspend the trading of spot gold: An unforeseen event affecting the normal trading of spot gold. Any other circumstance under which the TPEx considers it necessary. When trading of spot gold is to be suspended under the preceding paragraph, the TPEx shall announce that trading of the spot gold will be suspended from the next business day following the announcement date.
Article 43	When trading of spot gold is suspended under the preceding article, the TPEx may, when the cause of the suspension is extinguished, announce that trading of the spot gold will resume from the next business day following the announcement date.
Article 44	Under any of the following circumstances, the TPEx may terminate the trading of spot gold: The trading of the spot gold has been suspended under Article 42 of these Rules for more than 3 months, and the cause of the suspension has not yet been extinguished. The bank that registered the spot gold for trading applies to resign as a market maker. The bank that registered the spot gold for trading applies for termination of trading of the spot gold. Any other circumstance under which the TPEx considers it necessary. Where trading of spot gold is to be terminated under the preceding paragraph, the trading will be terminated from the 15th day following the day that the TPEx announces the termination of trading. A market maker under subparagraph 2 of the preceding paragraph will lose its status as a market maker from the date of termination of the trading.
Article 45	Where trading of spot gold is terminated under the preceding article, the investor still may carry out conversion to and withdrawal of physical gold. However, the spot gold custodian may, at the request of the investor, return the investment to the investor in cash based on the fair market value at the time.

Chapter IX Penalties

Article 46	If a market maker or securities firm violates Article 10, 12, 13, 19 to 21, 26, 30, 32, or 33, the TPEx may notify it to make corrections or improvements within a specified time limit.
Article 47	Under any of the following circumstances, the TPEx may issue a warning to a market maker or securities firm and notify it to make corrections or improvements within a specified time limit: Violation of Article 15, 26, 27, 29, 34, 36, or 38. Failure to make corrections or improvements within the time limit set under the preceding article.
Article 48	Under any of the following circumstances, the TPEx may impose a penalty of not less than NT$50,000 and not more than NT$200,000 on a market maker or securities firm, and may impose successive penalties until corrections or improvements are made; depending on the circumstances of the violation, it may also refuse to accept the entity's application to serve as a market maker by spot gold: Violation of Article 9, 11, 26, or 37. Failure to make corrections or improvements within the time limit set under Article 47. Where the TPEx has given warnings pursuant to Article 47 two or more times within the past half year. If within the past half year there is any repeat occurrence by a market maker or securities firm of a violation under any subparagraph of the preceding paragraph, the TPEx may impose a penalty of NT$400,000.
Article 49	Under any of the following circumstances on the part of a market maker or securities firm, the TPEx may dispose the matter by applying, mutatis mutandis, Article 96 of the TPEx Trading Rules: A penalty under Article 48 has been imposed on it three times or more within the past half year. It has failed to pay a breach penalty under Article 48.
Article 50	Dispositions made by the TPEx pursuant to this Chapter shall take effect from the time the notice is served to the market maker or securities firm.

Chapter X Supplementary Provisions

Article 51	Market makers and securities firms trading spot gold shall pay business service fees. The rates for such fees shall be subject mutatis mutandis to the provisions of the TPEx Standards Governing the Collection of Business Service Fees and Facility Use Fees for TPEx Trading by Securities Firms regarding negotiated trading of Emerging Stocks.
Article 52	These Rules, and any amendments hereto, shall be promulgated for enforcement after ratification by the competent authority. The attachments to these Rules, and any amendments thereto, shall be enforced upon ratification by the president of the TPEx.