| Article 1 |
These Rules are specially prescribed to maintain orderly trading of Taiwan Stock Exchange NonFinance NonElectronics Sub-Index Futures Contracts ("the Contracts") at the Taiwan Futures Exchange Corporation ("TAIFEX"), so as to ensure secure and fair trading of the Contracts.
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| Article 2 |
Futures commission merchants that engage in trading of the Contracts shall observe these Rules in addition to the Futures Trading Act and applicable laws and regulations. Matters on which these Rules are silent shall be handled in accordance with the bylaws and rules, public announcements, and circulars of the TAIFEX.
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| Article 3 |
The Contracts are abbreviated as "NonFinance NonElectronics Futures" with the ticker symbol "XIF".
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| Article 4 |
The underlying index of the Contracts is the Taiwan Stock Exchange NonFinance NonElectronics Sub-Index (the "underlying index"). The calculation formula, component stocks, base period, adjustments thereto, and other relevant matters of the underlying index shall be as determined by the Taiwan Stock Exchange Corporation (TWSE).
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| Article 5 |
Each contract is valued at NT$100 multiplied by the NonFinance NonElectronics Sub-Index Futures Index.
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| Article 6 |
The minimum unit of price fluctuation (tick) in trading orders for the Contracts is 1 index point. Each tick has a value of NT$100.
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| Article 7 |
Prior to closing of the last trading day, a futures trader may settle rights and obligations under the Contracts by selling or buying back on the TAIFEX centralized exchange market part or all of the volume originally bought or sold.
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| Article 8 |
The trading days of the Contracts are the business days of the TWSE. The trading hours are 8:45 am to 1:45 pm. On the last trading day of the month in which the contracts reach expiration, the trading hours are 8:45 am to 1:30 pm. However, if the TAIFEX has made other provisions, those provisions shall govern.
When for any reason the TWSE announces a halt of trading prior to market opening of the Contracts, or when other factors influence trading of the Contracts, trading of the Contracts may be halted; when the TWSE announces a halt of trading during trading hours of the Contracts, trading of the Contracts will continue. As necessary, however, the TAIFEX may announce a halt of trading based on the current situation, and report the halt to the competent authority for recordation on the next business day.
When the TWSE changes its trading hours, or when other factors influence trading of the Contracts, or in response to a suggestion by a futures industry association or the National Federation of Futures Industry Associations, the TAIFEX may change the trading days and trading hours for the Contracts after reporting to the competent authority for approval.
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| Article 9 |
Delivery months for the Contracts shall be the spot month and the next two calendar months, and the next three quarter months of the March, June, September, and December cycle, for a total of six periods, listed and traded concurrently. The last trading day for contracts of any delivery month shall be the third Wednesday of the month in which the contracts reach expiration; trading of contracts in the expiration month shall cease at close of market on the last trading day, and the last trading day shall be the final settlement day for the contracts in the expiration month.
If the last trading day referred to in the preceding paragraph falls on a holiday, or if trading cannot proceed on that day due to a force majeure event, or if the TAIFEX has made other provisions, the next business day shall be the last trading day.
The next business day following the last trading day of a contract in the expiration month shall be the initial trading date for contracts of the new delivery month.
The TAIFEX may change the delivery months, initial trading days, final trading days, and final settlement days referred to in the preceding three paragraphs when it deems necessary after reporting to and receiving approval from the competent authority.
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| Article 10 |
Except as otherwise provided, trading orders for the Contracts are automatically matched by computer. Matching is carried out by call auction at the opening of market, and then by continuous matching during market hours.
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| Article 11 |
All open positions of traders are marked-to-market daily after market close based on the daily settlement price published by the TAIFEX.
The daily settlement price referred to in the preceding paragraph shall be set in accordance with the following provisions:
- It shall be the volume-weighted average price of all trades during the last minute before market close.
- If there is no trade price for the Contracts during the last minute before market close, the average of the highest unexecuted bid and lowest unexecuted ask quoted as of market close shall be taken as the settlement price for the current day.
- When there is no quoted bid price, the lowest quoted ask price shall be taken as the settlement price for the current day; when there is no quoted ask price, then the highest quoted bid price shall be taken as the settlement price for the current day.
- When there is no quoted bid nor ask price for a distant-month contract, then the price difference between the settlement price of the nearest-month contract and the settlement price of the distant-month contract on the previous business day shall be taken as the basis of calculation, whereby the sum of the current day's settlement price of the nearest-month contract plus the above price difference will be taken as the settlement price of the distant-month contract for the current day.
- If a settlement price for the current day cannot be determined by any of the methods in the preceding four subparagraphs, or if the settlement price yielded is obviously unreasonable, the settlement price shall be set by the TAIFEX.
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| Article 12 |
The daily price limit of the Contracts shall be the settlement price of the preceding trading day plus or minus 10 percent.
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| Article 13 |
The final settlement price of the Contracts shall be set based on the simple arithmetic mean price of the underlying index during the 30 minutes before the close of market trading hours on the final settlement day as provided by the TWSE. If the TWSE postpones market closing or matching, the TAIFEX may extend the aforementioned 30-minute sampling time.
The calculation method under the preceding paragraph shall be separately prescribed by the TAIFEX.
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| Article 14 |
The Contracts shall be settled in cash, with the futures trader delivering or receiving the net amount of the price difference in cash on the final settlement day based on the final settlement price.
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| Article 15 |
Before accepting an order to buy or sell the Contracts, a futures commission merchant shall collect in advance from the principal a sufficient trading margin based on the total quantity ordered, and from the day of the transaction until the expiration of the settlement period shall mark to market on a daily basis the equity in the position held by each principal based on the daily settlement price and incorporate it in the calculation of the principal's margin account balance.
If the balance in the principal's margin account falls below the maintenance margin level, the futures commission merchant shall immediately notify the principal to deposit in cash the difference between the margin account balance and the required trading margin for all open positions within a prescribed time period. If the principal fails to deposit the margin within the prescribed time limit, the futures commission merchant may proceed to liquidate the principal's positions.
The trading margin and the maintenance margin referred to in the preceding two paragraphs shall not be lower than the initial margin and maintenance margin requirements announced by the TAIFEX.
The initial margin and maintenance margin announced by the TAIFEX shall be based on the clearing margin calculated according to the TAIFEX Standards and Methods for Receipt of Clearing Margins plus a percentage prescribed by the TAIFEX.
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| Article 16 |
The combined total volume of open positions held at any time by a futures trader in the Contracts on either the long or short side of the market may not exceed the limit standards publicly announced by the TAIFEX.
Every three months or as occasioned by market conditions, the TAIFEX will announce the applicable limit standards under the preceding paragraph, for the bracket levels given below, based on the higher of the daily average trading volume or the open volume of the Contracts for that period, with the benchmark set at 5 percent thereof for natural persons and 10 percent thereof for institutional investors. However, the lowest position limit shall be 1,000 contracts for natural persons, and 3,000 contracts for institutional investors:
- When the benchmark is 1,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 200 Contracts.
- When the benchmark is 2,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 500 Contracts.
- When the benchmark is 5,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 1,000 Contracts.
- When the benchmark is 10,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 2,000 Contracts.
The aggregate total of a futures proprietary merchant's open positions in the Contracts shall be limited to three times the institutional investor limit as given in paragraph 2. The TAIFEX, however, may adjust this limit for market makers of the Contracts as it deems necessary in view of market conditions.
When the TAIFEX examines the applicable position limit bracket levels, if the increase or decrease in the daily average trading volume or open volume for the period, as compared to that at the time of the previous adjustment, does not exceed 2.5 percent, no adjustment shall be made even if the bracket level for adjustment has been reached.
Any raising of the position limit will take effect from the TAIFEX announcement date. Any lowering of the position limit will take effect from the expiration of the next-nearest month contract that is already listed on the announcement date. The TAFIEX, however, may adjust this according to circumstances.
When the position limit is lowered under the preceding paragraph, a position held by a trader before the effective date that surpasses the lowered limit standard may be held until the expiration date of the Contracts, provided that no new position may be added until the lowered limit standard has been complied with.
Aggregate open positions in the Contracts held in omnibus accounts are not subject to the limits in paragraph 2, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
Institutions may apply to the TAIFEX for a position limit increase for hedging purposes.
In addition to conforming to the provisions of this article, the limits on open positions in the Contract held by futures traders shall also conform to the TAIFEX Rules Governing Surveillance of Market Positions.
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| Article 17 |
Except as otherwise provided, an FCM engaging in proprietary or brokerage trading of the Contracts shall be subject to a limit of 100 contracts on the quantity of each trading quote.
The TAIFEX may adjust the limit on the quantity of trading quotes set out in the preceding paragraph in view of market trading conditions.
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| Article 18 |
Where any circumstance exists requiring suspension of trading or de-listing of the Contracts as enumerated in Article 31 of the TAIFEX Operating Rules, the TAIFEX shall make a public announcement 30 days before the implementation date.
All open positions shall be liquidated by the announced implementation date of suspension of trading or de-listing. Any positions still open on the implementation date will be settled at the settlement price for the trading day immediately preceding the implementation date.
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| Article 19 |
These Rules, and any amendments hereto, will be publicly announced and implemented after approval by the competent authority.
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