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When any of the conditions of Article 4, paragraph 1, subparagraphs 1 through 7 and subparagraph 11, or Article 5, paragraph 1, subparagraphs 1 through 3 and subparagraph 7 of the Margin Purchase and Short Sale Eligibility Standards exists with respect to TWSE listed securities eligible for margin purchase and short sale transactions, then from the second business day following public announcement, the Taiwan Stock Exchange Corporation (TWSE) will suspend margin purchase and short sale transactions in accordance with the following principles (unless a TWSE listed financial institution has been duly appointed as receiver by the competent authority in charge of the relevant industry, in which case margin purchase and short sale transactions shall be suspended from the day following receipt from the competent authority of a notice of receivership, or unless such transactions are suspended by a resolution of the TWSE Surveillance Operations Oversight Committee in accordance with the principle set out in subparagraph 7 below):
(I) When the trading method for TWSE listed shares or Taiwan depositary receipts has been changed to require full delivery, or their trading has been suspended, or the shares or beneficial certificates have been delisted: When it is announced that the trading method for shares or Taiwan depositary receipts has been changed by the TWSE to require full delivery, or that trading has been suspended, or the securities delisted, then suspension of margin purchase and short sale transactions in those securities shall be simultaneously announced, provided that this requirement does not apply to delistings due to merger.
(II) When a securities investment trust enterprise has failed to punctually file and publish a securities trust investment fund's financial report, or the circumstances under Article 96, paragraph 1 of the Securities Investment Trust and Consulting Act exist with respect to the securities investment trust enterprise that manages a securities investment trust fund: The TWSE shall publicly announce suspension of margin purchase and short sale transactions in the fund's beneficial certificates.
(III) When net worth per share for a TWSE listed stock is below par value, provided that for shares issued by a TWSE primary listed company with no par value or a par value other than NT$10 per share, it is when an accumulated deficit has been posted in the financial report:
1. On the fifth business day of the fifth month following the close of each business year, the TWSE shall review the company's publicly disclosed and filed annual financial report for the most recent period, audited and attested by a CPA, and its CPA Reviewed and publicly disclosed and filed Q1 financial report for the most recent period (the Q1 financial report of a TWSE primary listed company need not be reviewed by a CPA), and, if net worth per share is below par value, it shall publicly announce suspension of margin purchase and short sale transactions in that company's shares. However, with respect to the shares issued by a TWSE primary listed company with no par value or a par value other than NT$10 per share, suspension of margin purchase and short sale transactions shall be announced if an accumulated deficit has been posted both in the annual financial report and the Q1 financial report.
2. On the final business day of the third month following the close of each half business year, the TWSE shall review the company's publicly disclosed and filed, CPA audited and attested semi-annual financial report for the most recent period (the semi-annual financial report of a TWSE primary listed company may be CPA reviewed, and need not be audited and attested), and, if net worth per share is below par value, shall publicly announce suspension of margin purchase and short sale transactions in that company's shares. However, with respect to the shares issued by a TWSE primary listed company with no par value or a par value other than NT$10 per share, suspension of margin purchase and short sale transactions shall be announced if an accumulated deficit has been posted in the semi-annual financial report.
(IV) Where the issuer of foreign securities evidenced by Taiwan depositary receipts has posted an accumulated deficit: If the issuer has posted an accumulated deficit in either the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested semi-annual consolidated financial report for the most recent period, the TWSE shall announce suspension of margin purchase and short sale transactions in those depositary receipts on the final business day of the third month following the deadline for public announcement and reporting to the competent authority, securities exchange, or securities market as required by the laws and regulations of the foreign issuer's home country or the jurisdiction where it is listed.
(V) Taiwan depositary receipts number less than 60 million TWSE listed units following redemption.
(VI) Where there has been a major default on TWSE listed shares or Taiwan depositary receipts, and the balance of long margin positions or short interest meets or exceeds a prescribed ratio: When the aggregate dollar amount of transaction failures reported in a single day is NT$200 million or more and the balance of long margin positions or short interest on that day meets or exceeds 15 percent of listed shares or units, the TWSE shall publicly announce suspension of margin purchase and short sale transactions in those shares or Taiwan depositary receipts.
(VII) Where there are other circumstance that make it unadvisable to continue margin purchase and short sale transactions: as determined by a resolution of the TWSE Surveillance Operations Oversight Committee, or in the event of another circumstance that makes such transactions unadvisable, the TWSE shall publicly announce suspension of margin purchase and short sale transactions in those securities. |
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When margin purchase and short sale transactions in TWSE listed securities eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of the preceding article, then in addition to those for which the period of the disposition of suspension of margin purchase and short sale transactions by a resolution of the TWSE Surveillance Operations Oversight Committee has concluded, such transactions may be reinstated from the second business day following public announcement if the following conditions are met:
(I) When the circumstances under subparagraph 1, 2, or 7 of the preceding point exist: When the reason for suspension is extinguished, the TWSE will publicly announce reinstatement of margin purchase and short sale transactions in those securities.
(II) Under the circumstances of subparagraph 3 of the preceding point, when a review according to any of the items below shows that net worth per share has returned to par value or higher, the TWSE shall publicly announce reinstatement of margin purchase and short sale transactions in those shares. However, with respect to the shares issued by a TWSE primary listed company at no par value or at par value of other than NT$10 per share, announcement of reinstatement shall be made when no accumulated deficit has been posted in the financial report:
1. On the fifth business day of the fourth month following the close of each business year, the TWSE shall review the company's publicly disclosed and filed annual financial report audited and attested by the CPA for the most recent period.
2. On the fifth business day of the fifth month following the close of each business year, the TWSE shall review the company's CPA-reviewed and publicly disclosed and filed Q1 financial report for the most recent period (the Q1 financial report of a TWSE primary listed company need not be reviewed by a CPA).
3. On the fifth business day of the third month following the close of each half business year, the TWSE shall review the publicly disclosed and filed semi-annual financial report audited and attested by the CPA for the most recent period (the semi-annual financial report of a TWSE primary listed company may be reviewed by a CPA, and need not be audited and attested).
4. If any law or regulation prescribes otherwise regarding the filing period for the financial reports referred to in the preceding three items, the TWSE shall review the financial reports on the fifth business day following the expiration of each given filing period.
(III) Where the conditions under subparagraph 4 of the preceding point exist: If the issuer has not posted an accumulated deficit in either the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested semi-annual consolidated financial report for the most recent period, the TWSE shall announce reinstatement of margin purchase and short sale transactions in those depositary receipts on the final business day of the third month following the deadline for public announcement and reporting to the competent authority, securities exchange, or securities market as required by the laws and regulations of the foreign issuer's home country or the jurisdiction where it is listed.
(IV) Where the conditions under subparagraph 5 of the preceding point exist: The number of Taiwan depositary receipts has returned to 60 million or more TWSE listed units.
(V) Where the conditions under subparagraph 6 of the preceding point exist: When the aggregate dollar amount of transaction failures reported in a single day has been less than NT$10 million for each of the previous 6 business days and the figures for both long margin positions and open interest on the last of those 6 business days are below 15 percent of listed shares or units, the TWSE shall publicly announce reinstatement of margin purchase and short sale transactions in those securities.
Where margin purchase and short sale transactions in TWSE listed securities eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of subparagraph 3 under the preceding point, the issuer may apply for reinstatement of margin purchase and short sale transactions by submitting the publicly disclosed and filed annual or semi-annual financial report audited and attested by the CPA, or the publicly disclosed and filed quarterly financial report reviewed by the CPA for the most recent period. The TWSE shall then make disclosure on the Market Information System (MIS) website and conduct a review 5 days afterward. Where it is found upon review that net worth per share has returned to par value or higher, margin purchase and short sale transactions in those securities shall be reinstated on the fifth business day following public announcement. However, a TWSE primary listed company may apply for reinstatement of margin purchase and short sale transactions by submitting the publicly disclosed and filed annual or semi-annual financial report audited and attested by the CPA (the semi-annual financial report may be reviewed, other than audited and attested, by the CPA), or the publicly disclosed and filed quarterly financial report audited and attested by the CPA for the most recent period; when the shares are issued with no par value or a par value other than NT$10 per share, announcement of reinstatement shall be made when the TWSE finds upon review that no accumulated deficit has been posted.
Where margin purchase and short sale transactions in Taiwan depositary receipts eligible for margin purchase and short sale transactions have been suspended pursuant to the provisions of subparagraph 4 of the preceding point, the issuer may apply for reinstatement of margin purchase and short sale transactions by submitting the CPA-audited and attested consolidated annual financial report for the most recent period or the CPA-audited and attested semi-annual consolidated financial report for the most recent period. The TWSE shall then make disclosure on the Market Information System (MIS) website and conduct a review 5 days afterward. Where it is found upon review that there is no accumulated deficit, margin purchase and short sale transactions in those securities shall be reinstated on the fifth business day following public announcement. |
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