| Article 1 |
These Organizational Rules are promulgated pursuant to Article 38, applied mutatis mutandis under Article 55, of the Futures Trading Act, Article 26 of the Rules Governing Futures Clearing Houses, and Article 36 of the Articles of Incorporation of the Taiwan Futures Exchange Corporation (hereinafter, "this Corporation").
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| Article 2 |
The Clearing Committee (hereinafter, the "Committee") is charged with the following duties:
- (deleted)
- (deleted)
- May recommend adjustment of the scope of position limits to the Board of Directors [of this Corporation], depending on the financial and operational condition of the clearing members.
- Review information relating to the finances and operations of clearing members, and may make recommendations based on the review findings.
- Make recommendations on the following matters:
- Applications for clearing membership.
- Applications for consigned clearing and settlement by clearing members on behalf of futures commission merchants and futures trading assistants.
Increase of payments to the clearing and settlement fund pursuant to paragraph 2 of Article - 108 of this Corporation's Operating Rules.
- Appropriation sharing ratios for the amounts of applied clearing and settlement funds of non-defaulting clearing members pursuant to Article 109 of this Corporation's Operating Rules.
- The deposits to be made to the clearing and settlement fund by clearing members, in the method and in the amount prescribed by this corporation, after carrying out clearing and settlement operations, pursuant to Sub-subparagraphs 2 of Subparagraphs 3 of Paragraphs 1 of Articles 4, 5, and 6 of this Corporation's Criteria for Clearing Membership.
- Other operating rules relating to clearing business.
- Review the utilization of clearing margins and may recommend adjustment of clearing margins to the Board of Directors [of this Corporation] based upon evaluation of overall market risk status.
- Review the deposit, custody, and utilization of clearing and settlement funds:
- Itemized receipts and expenditures of clearing and settlement funds and status of utilization.
- Appropriation, indemnification, and compensation of clearing and settlement funds in cases of default.
- (deleted)
- Matters relating to the refund of clearing and settlement funds.
- Semi-annual settlement and distribution to clearing members of interest accrued on clearing and settlement funds after deduction of necessary expenses and taxes.
- (deleted)
- (deleted)
- Recommend settlement prices for liquidation of futures trading contracts when emergency situations occur in the futures trading market that are likely to severely affect the liquidity of futures trading.
- Other consultation, liaison, and coordination matters with respect to clearing business.
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| Article 3 |
The Committee shall comprise nine members, nominated by the following procedures and appointed following ratification by the Board of Directors of this Corporation:
- Six representatives of clearing members that trade on this Corporation's Exchange and six alternates shall be nominated after their election by and from among a pool of representatives to which every clearing member shall appoint one of its personnel.
- Two experts/scholars representing the public interest and one of the personnel of this Corporation, to be proposed by the president and nominated by the chairman of the Board of Directors.
The representatives nominated after election pursuant to subparagraph 1 of the preceding paragraph shall not be replaced by other appointees.
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| Article 3-1 |
The company to which a clearing member representative belongs shall not have undergone any of the following events within the past one year:
- Been the subject of a disposition imposed by the Competent Authority pursuant to Article 66, subparagraphs 2 to 4 of the Securities and Exchange Act or Article 100, paragraph 1, subparagraphs 2 to 4 of the Futures Trading Act.
- Been suspended or restricted from trading by the Stock Exchange or Over-the-Counter Securities Exchange pursuant to their rules.
- Had its clearing and settlement operations suspended or terminated by this Corporation pursuant to its rules, or have in any way been unable to sustain conformity with clearing membership standards.
A clearing member representative shall not have received a disposition from the competent authority pursuant to the Securities and Exchange Act or the Futures Trading Act or have undergone any event specified in any subparagraph of paragraph 1 of Article 28 of the Futures Trading Act, and furthermore shall possess one of the following qualifications:
- Have at least five years of work experience in administrative regulatory work in the futures, securities, or finance field(s) and have held a position at the recommended-appointment rank or higher or an equivalent position;
- Have at least five years of work experience in futures, securities, or financial institution(s), and have held the position of manager or higher.
- Have at least three years of work experience in futures, securities, or financial institution(s), and have held the position of vice president (assistant general manager) or higher.
- Have at least two years of work experience in futures, securities, or financial institution(s), and have held the position of president (general manager) or higher.
- Have at least two years of work experience in a futures institution(s), and have held the position of futures institution manager or higher or an equivalent position.
- Have graduated from a domestic or foreign institution at the junior college or higher level or have an equivalent degree, and, as supported by factual evidence, possess professional know-how related to futures and be capable of soundly and effectively operating futures business.
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| Article 3-2 |
The experts/scholars representing the public interest appointed by this Corporation refer to impartial citizens with expertise in any of the fields of accounting and auditing, finance, business administration, law, securities, or futures. Such persons shall possess one of the following qualifications:
- Be a scholar in a domestic educational institution at the level of junior college or higher, and hold the position of associate professor or higher.
- Have had at least three years of work experience in futures, securities, or financial institution(s), and have held the position of vice president (assistant general manager) or higher.
- Have had at least two years of work experience in futures, securities, or financial institution(s), and have held the position of president (general manager) or higher.
- Be a certified public accountant or lawyer who has practiced in a domestic joint firm for at least five years.
- Be a professional with special expertise, as supported by factual evidence, in matters such as futures, securities, or finance market trends.
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| Article 4 |
Committee members serve terms of one year. However, this restriction shall not apply if a change in the term has been approved by the Board of Directors and reported to the competent authority for recordation.
Committee members may be reappointed twice to consecutive terms. The number of reappointed representatives shall not exceed one-half of the number of Committee members referred to in each subparagraph of paragraph 1 of Article 3; provided, this restriction shall not apply to the representative of this Corporation.
When there is a vacancy in the Committee, the vacant Committee member seat shall be succeeded to by an originally elected alternate. If there are no originally elected alternates or insufficient alternates, then a successor shall be separately elected. The method of election shall be as set forth in Article 3. The filling of a vacant Committee member seat shall not contravene the provisions of the preceding paragraph; the term of the succeeding member shall be the remainder of the predecessor's term.
Upon conclusion of a Committee member's term, he or she shall continue to perform his or her duties until the succeeding Committee member has taken up duty.
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| Article 5 |
The Committee shall have one convenor, to be elected by and from among the Committee members.
The convenor shall serve a term of the same length as the Committee members, and shall not serve a consecutive term.
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| Article 6 |
The Committee shall meet once each month, and shall be convened by the convenor; provided, the convenor may convene the Committee as necessary at any time.
When the convenor or a Committee member is unable to exercise his/her duties for some reason, he/she may designate one of the Committee members to do so on his/her behalf; such designation shall be made in writing.
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| Article 7 |
Resolutions of the Committee shall be adopted by a majority of the members present at a meeting attended by at least half of the members.
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| Article 8 |
Resolutions adopted by the Committee shall be recorded in the minutes of the meeting and affixed with the signature or seal of the chairman of the meeting, and shall be distributed to all Committee members and the Board of Directors [of this Corporation] within 15 days of the close of the meeting.The minutes of the meeting shall record the date (year, month, day) and place of the meeting, the name of the chairman, and the names of the members present, and shall give a summary of the essential points of the proceedings and state the results.
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| Article 9 |
In the exercise of resolutions under subparagraph 1, subparagraph 2, and item 4 of subparagraph 7, of paragraph 1 of Article 2, or any other resolutions, in which he or she has an interest, a Committee member shall recuse him/herself and shall refrain from exercising his/her duties.
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| Article 10 |
Committee members shall maintain an impartial and objective viewpoint and a disinterested and independent spirit in the exercise of their duties. Except in making inquiries conducted in accordance with laws and regulations, they shall not externally disclose any information learned in the course of exercising their duties.
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| Article 11 |
This Corporation shall immediately report to the Board of Directors for discharge from duty any Committee member to whom any of the following events applies during such member's term.
- Inability to maintain qualification in conformity with Article 3-1 or violation of Article 9 or Article 10.
- Demands, agrees to accept, or accepts a bribe or improper benefit in connection with actions relating to the duties of the Committee.
- Other event factually sufficient to deem the member incompetent.
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| Article 12 |
These Organizational Rules shall be implemented after passage by the Board of Directors [of this Corporation] and ratification by the Competent Authority; the same shall apply to any amendments hereto.
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