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Procedures for reporting default
Where default results in a negative net balance in a principal’s segregated margin account and the principal fails to appropriately handle the matter within three banking days following notification by the FCM, or when a principal fail to perform clearing and settlement obligations of a futures trading contract, the FCM shall report to this Corporation in accordance with the following provisions, and simultaneously notify the principal:
(1) Computer transmission:
(i) Time of entry:
(a) FCMs shall enter the default information into this Corporation's computer system beginning from 2 p.m. and no later than 5 p.m. on the day of the default.
(b) Information entered by an FCM in accordance with the time frame provided shall be posted by this Corporation on its public announcement information system the afternoon of the following business day.
(ii) Information to be entered:
FCMs shall enter the default information item by item as indicated on the display on this Corporation's computer interface page.
(iii) Telephone/facsimile
When computer transmission is not possible due to occasional malfunctions in the computer transmission lines, FCMs shall immediately notify this Corporation by telephone and produce a written version of the required information and, after affixing the signature/seals of the company and its responsible person, deliver it to this Corporation via telephone facsimile machine. This Corporation shall then proceed to enter the information based upon the content of the facsimile.
(2) Default report via letter:
Where the same individual principal amasses a default amount of NT$800,000 or greater within the same reporting day, or a principal fails to perform clearing and settlement obligations, the FCM shall, in addition to reporting to this Corporation in accordance with the preceding paragraph, file a report letter with this Corporation for verification in accordance with the following provisions, by the next business day:
(i) Content of the report letter:
a. Full name of the principal
b. Account number
c. Identification card number
d. Address
e. Facts of the default
(ii) Copies of the following documentation shall be attached:
a. Identification card (front and back)
b. Consignment contract
c. Trade confirmation statement
d. Margin call notification documents or clearing and settlement notification documents
e. Consignment slip for FCM to liquidate futures trading contract, transaction slip or evidentiary documentation of clearing and settlement.Procedures for reporting default
Where default results in a negative net balance in a principal’s segregated margin account and the principal fails to appropriately handle the matter within three banking days following notification by the FCM, or when a principal fail to perform clearing and settlement obligations of a futures trading contract, the FCM shall report to this Corporation in accordance with the following provisions, and simultaneously notify the principal:
(1) Computer transmission:
(i) Time of entry:
(a) FCMs shall enter the default information into this Corporation's computer system beginning from 2 p.m. and no later than 5 p.m. on the day of the default.
(b) Information entered by an FCM in accordance with the time frame provided shall be posted by this Corporation on its public announcement information system the afternoon of the following business day.
(ii) Information to be entered:
FCMs shall enter the default information item by item as indicated on the display on this Corporation's computer interface page.
(iii) Telephone/facsimile
When computer transmission is not possible due to occasional malfunctions in the computer transmission lines, FCMs shall immediately notify this Corporation by telephone and produce a written version of the required information and, after affixing the signature/seals of the company and its responsible person, deliver it to this Corporation via telephone facsimile machine. This Corporation shall then proceed to enter the information based upon the content of the facsimile.
(2) Default report via letter:
Where the same individual principal amasses a default amount of NT$800,000 or greater within the same reporting day, or a principal fails to perform clearing and settlement obligations, the FCM shall, in addition to reporting to this Corporation in accordance with the preceding paragraph, file a report letter with this Corporation for verification in accordance with the following provisions, by the next business day:
(i) Content of the report letter:
a. Full name of the principal
b. Account number
c. Identification card number
d. Address
e. Facts of the default
(ii) Copies of the following documentation shall be attached:
a. Identification card (front and back)
b. Consignment contract
c. Trade confirmation statement
d. Margin call notification documents or clearing and settlement notification documents
e. Consignment slip for FCM to liquidate futures trading contract, transaction slip or evidentiary documentation of clearing and settlement. |
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Procedures for notification of default
Following receipt of a default report from an FCM, this Corporation shall, based on the content of the report, inform the Taipei Association of Futures Commission Merchants, the Taipei Association of Securities Dealers, the Kaohsiung Association of Securities Dealers, and all FCMs. The FCMs shall handle the matter in accordance with the provisions of Article 25 of the Rules Governing Futures Commission Merchants. The FCM reporting the default shall be responsible for all instances in which the rights of the principal have been impaired or other disputes. |
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Procedures for voidance of default
Where any of the following circumstances is present in a case of default by a principal, the FCM shall be responsible for investigating and verifying such circumstances, and shall submit a report letter to this Corporation to void the default, with specific evidentiary documents attached:
(a) Where negligent banking operations rendered the principal unable to conduct clearing and settlement at the appointed time.
(b) Where an FCM through negligence erroneously reported the principal as in default.
(c) Following confirmation though arbitral award, final and unappealable court judgment or any other public document having the same validity as a final and unappealable judgment that the principal has committed no default.
(d) Other circumstances sufficient to prove that the principal is not responsible for the default.
This Corporation will not process a report letter filed by an FCM to void a default where the FCM has failed to thoroughly investigate and verify the circumstances of default under the preceding paragraph or has failed to attach specific evidentiary documents, or where formal examination of the documentation and reasons submitted by the FCM fails to clearly absolve the principal of responsibility. The FCM that reported the default shall be wholly liable in the event of any resultant injury to rights or interests of the principal or any other disputes.
In the event an FCM filing for the voidance of a default contains any falsified, this Corporation may handle the matter under Article 130 of this Corporation’s Operating Rules.
Where an FCM erroneously reports a principal as in default, the FCM shall act on its own to discipline the negligent employee.
Where an FCM has filed a report letter for voidance in a case of principal default and has received the approval of this Corporation, the voidance of the case shall promptly be closed and filed for reference. Where all FCMs had been notified of the facts of a reported default prior to the filing of a report for voidance, this Corporation shall post the details of the voidance on its public announcement information system on the afternoon of the following day.Procedures for voidance of default
Where any of the following circumstances is present in a case of default by a principal, the FCM shall be responsible for investigating and verifying such circumstances, and shall submit a report letter to this Corporation to void the default, with specific evidentiary documents attached:
(a) Where negligent banking operations rendered the principal unable to conduct clearing and settlement at the appointed time.
(b) Where an FCM through negligence erroneously reported the principal as in default.
(c) Following confirmation though arbitral award, final and unappealable court judgment or any other public document having the same validity as a final and unappealable judgment that the principal has committed no default.
(d) Other circumstances sufficient to prove that the principal is not responsible for the default.
This Corporation will not process a report letter filed by an FCM to void a default where the FCM has failed to thoroughly investigate and verify the circumstances of default under the preceding paragraph or has failed to attach specific evidentiary documents, or where formal examination of the documentation and reasons submitted by the FCM fails to clearly absolve the principal of responsibility. The FCM that reported the default shall be wholly liable in the event of any resultant injury to rights or interests of the principal or any other disputes.
In the event an FCM filing for the voidance of a default contains any falsified, this Corporation may handle the matter under Article 130 of this Corporation’s Operating Rules.
Where an FCM erroneously reports a principal as in default, the FCM shall act on its own to discipline the negligent employee.
Where an FCM has filed a report letter for voidance in a case of principal default and has received the approval of this Corporation, the voidance of the case shall promptly be closed and filed for reference. Where all FCMs had been notified of the facts of a reported default prior to the filing of a report for voidance, this Corporation shall post the details of the voidance on its public announcement information system on the afternoon of the following day. |
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Procedures for case closure notification:
Following this Corporation's notification of all FCMs of a case of default by a principal, if three years have elapsed and all disputes over accounts receivable and accounts payable have been settled, the FCM shall file a report letter to this Corporation; this Corporation shall then notify all FCMs of the content of the report. |
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