| Article 48 |
Within 2 days of the occurrence or of the effectiveness of the following events, a TWSE listed company or TIB listed company shall report to the TWSE:
- Where any of the conditions specified in Articles 49, 49-2 and 50, or Articles 49-4 and 50-9, of these Operating Rules occurs to a TWSE listed company or a TIB listed company, as applicable.
- Amendment of its articles of incorporation, or increase/decrease of capitalization.
- Issuance of preferred classes of shares, or the issuance, maturity or redemption of corporate bonds, or the conversion of convertible bonds into shares in accordance with its terms.
- Addition or reduction or substitution in value of the security for the bond.
- The reaching of a resolution referred to in Article 185 of the Company Act, the purchase of shares referred to in Article 186 of the Company Act, or the negotiation and determination of the purchase price of shares referred to in Article 187 of the Company Act.
- Any action of the promoters or directors that under the Company Act carries liability for damages.
- Any resolutions of the regular or special meeting of shareholders which have been revoked by a court in accordance with the law.
- Where reports are made to the Competent Authority pursuant to Article 25, and Article 36, paragraph 2 of the Securities and Exchange Act.
- Any judicial decision on the reported loss of, and deprivation of rights for listed securities, or the attachment or provisional attachment thereof, or its holder is adjudicated to be bankrupt.
A TWSE primary listed company or a TIB primary listed company in the following circumtsances shall notify the TWSE within 2 days of occurrence of the event or the day when the event takes legal effect:
- Where any of the conditions specified in Articles 49-1, 49-3 and paragraph 1, subparagraph 2 of Article 50-3, or Articles 49-4 and 50-9, of these Operating Rules occurs to a TWSE primary listed company or a TIB primary listed company, as applicable.
- Amendment of its articles of incorporation, or increase/decrease of capitalization.
- Issuance of preferred classes of shares, or the issuance, maturity or redemption of corporate bonds, or the conversion of convertible bonds into shares in accordance with its terms.
- Addition or reduction or substitution in value of the security for the bond.
- Where a resolution consistent with the requirements under Article 185 of the ROC Company Act is made at a shareholders meeting convened according to the articles of incorporation, or dissenting shareholders at the above shareholders meeting request the company to purchase shares, or the company negotiates share price with dissenting shareholders.
- Any action of the promoters or directors that under the Company Act carries liability for damages.
- Any resolutions of the regular or special meeting of shareholders which have been revoked by a court in accordance with the law.
- Where reports are made to the Competent Authority pursuant to Article 25, and Article 36, paragraph 2 of the Securities and Exchange Act.
- Any judicial decision on the reported loss of, and deprivation of rights for listed securities, or the attachment or provisional attachment thereof, or its holder is adjudicated to be bankrupt.
A SITE or an FTE to which any of the following conditions applies shall report to the TWSE:
- Any changes in the specimen certificate of a beneficial certificate.
- Any events specified in Article 63 or Article 78 of the Regulations Governing Securities Investment Trust Funds, or Article 73 or Article 82 of the Regulations Governing Futures Trust Funds.
- Any events specified in Article 3, Article 4, Article 5, or Article 24 of the Rules Governing Securities Investment Trust Enterprises or Article 8, Article 9, Article 10, or Article 38 of the Regulations Governing Futures Trust Enterprises.
Upon receiving any notice made pursuant to the preceding three paragraphs, or where it learns such information from other sources, in order to provide reference material to the public, the TWSE shall, in addition to processing the matter in accordance with regulations or reporting to the Competent Authority for its disposal, publicly announce the matter or notify the TWSE listed company, TIB listed company, TWSE primary listed company or TIB primary listed company in writing to report it on the Internet information reporting system designated by the TWSE.
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| Article 49 |
If any of the following circumstances applies to a listed company, the TWSE may place its listed securities under an altered trading method:
- The latest individual financial report, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report.
- A shareholders meeting has not been held within 6 months after the end of the fiscal year.
- The attesting CPA for the most recent financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act issues an audit report or review report indicating substantial uncertainty about the ability to continue as a going concern, or the attesting CPA issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply if it is otherwise permitted by the laws and regulations of the competent authority, or in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA has fully disclosed in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned non-major subsidiary is a subsidiary of a financial holding company, its interim financial report shall also be audited or reviewed by a CPA in accordance with applicable laws and regulations.
- Violation of relevant bylaws or rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
- Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
- A petition for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
- Half or more of the directors have changed, such that any of the following circumstances exists, and it fails to make improvement within a specified time period ordered by the TWSE:
- The shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing.
- The newly appointed directors, supervisors, or president meet any of the conditions under Article 9, paragraph 1, subparagraph 8 of the TWSE Rules Governing the Review of Securities Listings.
- The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
- Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
- After a demerger, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, paragraph 1, subparagraph 2 or Article 5, subparagraph 1, respectively, of the Rules Governing the Review of Securities Listings.
- The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as a result of share conversion, sale and assignment, transfer of business, demerger, or change of company name, this shall not apply within 1 year from the date of listing for trading.
- Failure to abide by an undertaking to purchase the shares held by other shareholders of a TWSE listed (or Taipei Exchange listed) subsidiary in which it has shareholding of more than 70 percent.
- Any of the following circumstances occurs in the handling of shareholder services:
- The company has not engaged a shareholder services agent, and has not obtained the Taiwan Depository and Clearing Corporation's review and agreement to handle shareholder services.
- The Taiwan Depository and Clearing Corporation has audited and discovered a material irregularity in shareholder services, and the company has failed to correct the irregularity within the deadline set by the TWSE for corrections.
- Where explanations given in a press conference concerning material information fail to clarify points in question, and the TWSE deems it necessary to protect the rights and interests of investors.
- The number of TWSE listed common shares does not reach 25 percent of the total number of the company's issued common shares, and any of the circumstances in the following items exists:.
- The share capital of TWSE listed common shares does not reach NT$600 million.
- The number of TWSE listed common shares does not reach 30 million shares.
- The requirements of Article 50, paragraph 2, subparagraph 13 cannot be met within 6 months after trading is suspended pursuant to Article 50, paragraph 1, subparagraph 14.
- A venture capital company fails to rectify within the prescribed time limit when its current financial reports show any of the following:
- The number of shares it invests and holds in any public company exceeds 30 percent of the total issued voting shares of said company.
- The total investment it holds in any invested company exceeds 20 percent of the total assets shown in the venture capital company's most updated financial reports.
- Its total investment fails to reach 60 percent of its total assets.
- It engages in any business other than those stipulated in the Rules Governing Guidance to Venture Capital Enterprises.
- The board of directors resolves to refer a dissolution proposal to a shareholders' meeting for resolution.
- Upon other necessary reasons as determined by the TWSE.
If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may resume trading of the company's securities by the normal trading method:
- Where the change of trading method was imposed pursuant to subparagraph 1 of the preceding paragraph, the financial reports for the most recent two periods registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report; in the event of a capital reduction, the operations for exchange of securities upon capital reduction are additionally completed.
- Where the change of trading method was imposed pursuant to subparagraph 2 of the preceding paragraph, and the shareholders meeting has been held.
- Where the change of trading method was imposed pursuant to subparagraph 3 of the preceding paragraph, and due to supplementation or correction, the circumstances specified in that subparagraph no longer exist.
- Where the change of trading method was imposed pursuant to subparagraph 4 of the preceding paragraph, and disclosure proceeding is commenced in compliance with the notice.
- After the trading method was changed pursuant to subparagraph 5 of the preceding paragraph, the preliminary injunction order was canceled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
- After the trading method was changed pursuant to subparagraph 6 of the preceding paragraph, the petition for re-organization was withdrawn or was conclusively dismissed by court pursuant to Article 283-1, subparagraph 1 or Article 285-1, paragraph 3, subparagraph 1 ; provided that the execution period of the altered trading method shall not be less than 3 months where the petition for re-organization was withdrawn.
- After the trading method was changed pursuant to subparagraph 7 of the preceding paragraph, supplementation or correction was made.
- After the trading method was changed pursuant to subparagraph 8 of the preceding paragraph, the company has repaid the debt or reached a settlement agreement with the creditors.
- Within 3 months of the trading day next following the date the trading method was changed pursuant to subparagraph 9 of the preceding paragraph, the listed company has completed any of the remedial procedures enumerated herein below, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by the TWSE. The form shall be signed and certified by a CPA and a lawyer and submitted to the TWSE along with the other relevant documents and materials for approval and recordation:
- Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
- Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
- Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
- Where correction or improvement has been made by the listed company within 3 months of the trading day next following the date the trading method of the securities was changed pursuant to subparagraph 10 of the preceding paragraph.
- Where correction or improvement has been made within 3 months after the change of trading method of the securities pursuant to subparagraph 11 or subparagraph 12 of the preceding paragraph.
- Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 13 of the preceding paragraph.
- Where the points in question have been clarified after the trading method was changed pursuant to subparagraph 14 of the preceding paragraph, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least 3 months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
- Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 15 of the preceding paragraph, and the single-quarter net profit before tax attributable to owners of the parent for each of the most recent consecutive two quarters is positive.
- Within two years after the securities have been placed under the altered trading method due to the circumstances in subparagraph 16 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 3 percent or more of the share capital stated in the financial reports for the most recent period, and the requirements of Article 50, paragraph 2, subparagraph 13, items B to F are met.
- After the trading method was changed pursuant to subparagraph 17 of the preceding paragraph, correction or improvement is made.
- After the trading method was changed pursuant to subparagraph 18 of the preceding paragraph, the dissolution proposal is revoked by the board of directors, or the shareholders' meeting fails to pass a resolution for the proposal.
- After the trading method was changed pursuant to subparagraph 19 of the preceding paragraph, correction or improvement is made upon the request of the TWSE.
Where the TWSE changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where the TWSE restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within 1 month of such action, the TWSE shall report such action to the Competent Authority for recordation.
The net worth referred to in Chapter IV and IV-1 means the equity attributable to owners of the parent as stated in the balance sheet prepared in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry.
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| Article 50 |
If any of the following circumstances applies to a listed company, the TWSE shall, in accordance with Article 147 of the Securities and Exchange Act, suspend the trading of such securities and report to the Competent Authority for recordation, or the listed company may apply for delisting pursuant to Article 50-1, paragraph 5:
- Failure to produce and file and publicly announce financial reports or financial forecasts by the deadlines provided in laws and regulations.
- Where any condition specified in Article 282 of the Company Act exists, and a court has prohibited the transfer of its shares pursuant to Article 287, paragraph 1, subparagraph 5 of the Company Act.
- Any document or information that has been submitted is suspected to be untrue, and upon the request of the TWSE to explain the matter, no explanation is provided within the prescribed time period.
- The securities transfer institution established at the location of the TWSE is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of the TWSE to correct the situation within a time period, no correction is made.
- The financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act was not produced pursuant to relevant laws and regulations and generally accepted accounting principles, such violations were serious and corrections or rewrites were not made within the specified time period; or the CPA attesting the publicly announced and registered financial report issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse conclusion or disclaimer of conclusion in the review report. Where, in a publicly announced and registered financial forecast of the listed company reviewed by a CPA, the attesting CPA issues an adverse opinion or disclaimer of opinion in the review report.
- Violation of relevant bylaws or rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
- Where a listed company has breached an undertaking it gave when applying for listing.
- Where a listed company, going public in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, critically delays its construction schedule or materially violates provisions prescribed in the concession contract.
- Violation of Article 49, paragraph 1, subparagraph 8, and failure to satisfy paragraph 2, subparagraph 8 of the same Article within 3 months.
- Violation of Article 49, paragraph 1, subparagraph 9, and failure to carry out, within 3 months of the trading day next following the date the trading method was changed, remedial procedures as provided in paragraph 2, subparagraph 9 of the same Article and to submit relevant documentary proof.
- Loss of controlling interest, as defined in Article 4, subparagraph 1 of the Financial Holding Company Act, in a subsidiary, where a competent authority has ordered it to make corrections within a certain period.
- Violation of Article 49, paragraph 1, subparagraph 10, 11, 12, 13 or 17 and inability to achieve compliance with paragraph 2, subparagraph 10, 11, 12 or 16 of the same article within 3 months from the business day next following the date of change of trading method.
- Violation of Article 49, paragraph 1, subparagraph 15, and inability to achieve compliance with paragraph 2, subparagraph 14 of the same article within 3 years from the business day next following the date of change of trading method.
- Change in managerial control, and a material change in the scope of business within a certain period of time before or after the change in managerial control, except in the event of a merger, private placement or public tender offer of a TWSE listed company and a TWSE (or Taipei Exchange) listed company or a TWSE (or Taipei Exchange) primary listed company according to the Business Mergers and Acquisitions Act or other laws and regulations.
- Where the requirements of Article 49, paragraph 2, subparagraph 15 cannot be met within two years after the securities have been placed under the altered trading method due to the circumstances in Article 49, paragraph 1, subparagraph 16.
- The TWSE has placed the listed securities of the listed company under an altered trading method in view of an audit report or review report issued by a CPA indicating substantial uncertainty about the ability to continue as a going concern as mentioned in Article 49, paragraph 1, subparagraph 3, and the listed company fails to conform to paragraph 2, subparagraph 3 of the same article within three years from the business day following said alteration.
- The TWSE has imposed the periodic call auction trading method for the listed securities of the listed company pursuant to Article 49-2, paragraph 1, subparagraph 4, and the listed company fails to conform to paragraph 2, subparagraph 4 of the same article within three years from the business day following said imposition.
- Other events deemed necessary to suspend the trading in securities.
Where trading of the listed securities of a listed company has been suspended because of a circumstance in a subparagraph of the preceding paragraph, upon satisfying the below conditions, and being free of any other of the above circumstances, the TWSE may in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
- Where the suspension of trading was ordered pursuant to subparagraph 1 of the preceding paragraph, and a supplementary financial report or financial forecast is duly announced and filed, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49, paragraph 1, subparagraph 3. If the financial forecast has not yet been duly announced on a make-up basis in the current fiscal year, the already announced and filed financial report for the same fiscal year may be used as a substitute.
- Where the suspension of trading was ordered pursuant to subparagraph 2 of the preceding paragraph, and the ban on transfer ordered by court has expired or the order has been revoked or reversed by court, and reorganization has not been ordered by the court, or a dismissal of application for reorganization has not been rendered pursuant to Article 285-1, paragraph 3, subparagraph 2 of the Company Act.
- Where the suspension of trading was ordered pursuant to subparagraph 3 of the preceding paragraph, and corrections have been made in accordance with regulations or explanations have in fact been provided upon the request of the TWSE.
- Where the suspension of trading was ordered pursuant to subparagraph 4 of the preceding paragraph, and substantive improvements have in fact been made in accordance with regulations.
- Where the suspension of trading was ordered pursuant to subparagraph 5 of the preceding paragraph, and due to supplementation or correction the circumstance specified by that subparagraph no longer exists, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49, paragraph 1, subparagraph 3.
- Where the suspension of trading was ordered pursuant to subparagraph 6 of the preceding paragraph, and corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
- Where the suspension of trading was ordered pursuant to subparagraph 7 of the preceding paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
- Where the suspension of trading was ordered pursuant to subparagraph 8 of the preceding paragraph, and substantive corrections or improvements have in fact been made pursuant to relevant laws and regulations.
- Where the suspension of trading was ordered pursuant to subparagraph 9 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant regulations.
- Where the suspension of trading was ordered pursuant to subparagraph 10 of the preceding paragraph, and remedial procedures as set forth in subparagraph 9 of paragraph 2 of the preceding article have been carried out within 6 months of the trading day next following the date of suspension of trading, and the listed company has produced relevant documentary proof that it has carried out the remediation.
- Where the suspension of trading was ordered pursuant to subparagraph 11 of the preceding paragraph, and corrections have been made by the deadline set by the competent authority for the target industry.
- Where the suspension of trading was ordered pursuant to subparagraph 12 or 13 of the preceding paragraph, and corrections or improvements have been made within 6 months of the trading day next following the date of suspension of trading.
- Where within 6 months after trading is suspended pursuant to subparagraph 14 of the preceding paragraph, the underwriter's evaluation report has been provided and the following circumstance are met:
- The sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 2 percent or more of the share capital stated in the financial report for the most recent period.
- The share capital of TWSE listed common shares is NT$300 million or more, and the number of TWSE listed common shares is 30 million shares or more.
- The CPA's project audit report for the internal control system is provided, with an unqualified opinion.
- The company is free of the conditions set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 12 of the Rules Governing the Review of Securities Listings.
- The requirements of Article 4, paragraph 1, subparagraphs 4 and 5 of the Rules Governing the Review of Securities Listings are met.
- The company's directors, supervisors, and greater than 10 percent shareholders have placed all of their common shares in the company into centralized custody (in the case of shares obtained through public offering and issuance) or have provided written undertakings that they will not transfer shares (in the case of shares obtained through private placement ) and that during the period of the undertaking not to transfer shares, they shall place in centralized custody any of those shares that are approved for retrospective public issuance. They may withdraw or transfer the shares only after the requirements of this subparagraph have been met and one year has passed from the day that the normal trading method has reinstated by the TWSE for the company's securities.
- Within 6 months after trading is suspended pursuant to subparagraph 15 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent in the publicly announced and filed financial reports for the most recent four periods accounts reaches 3 percent or more of the share capital stated in the financial report for the most recent period, and the requirements of items B to F of the preceding subparagraph are met.
- Where suspension of trading was ordered pursuant to subparagraph 16 or 17 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant provisions.
- Where suspension of trading was ordered pursuant to subparagraph 18 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant bylaws, rules, and regulations.
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| Article 51 |
(deleted)
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| Article 52 |
Unless otherwise provided, 40 days prior to the delisting of securities by the TWSE, the TWSE shall publicly announce the delisting and inform the Taipei Exchange and the listed company that the securities may be applied for as managed stocks. However, the TWSE may shorten the time period for public announcement for delisting of the securities of a TWSE secondary listed company in special circumstances.
The TWSE shall announce the delisting of securities in accordance with Article 50-2, Article 50-6, Article 50-7, Article 50-8, paragraph 1, subparagraph 1 of Article 50 or Chapter IV-1, 5 days prior to such event.
After a listed company, SITE, or FTE is notified by the TWSE of the delisting of its securities, it shall make a public announcement of the matter within 2 days from the date on which it receives such notification, provided that it may be exempted from the aforesaid requirement concerning public announcement date, where for reason of maturity of the bond issue period or other exceptional circumstance, and subject to approval of the Competent Authority.
The preceding paragraph shall apply mutatis mutandis when a trustee institution is notified by the TWSE of the delisting of its beneficial securities; when a special purpose company is notified by the TWSE of the delisting of its asset-backed securities; when a real estate securitization trustee institution is notified by the TWSE of the delisting of its REIT or REAT beneficial securities; when an issuer of ETNs is notified by the TWSE of the delisting of its ETNs; when the master agent of an offshore fund institution is notified by the TWSE of the delisting of its offshore ETF beneficial certificates; when a foreign issuer and its depository institution are notified by the TWSE of the delisting of their Taiwan Depositary Receipts; when a secondary listed company is notified by the TWSE of the delisting of its shares; and when an issuer is notified by the TWSE of the delisting of its call (put) warrants.
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| Article 53 |
In accordance with regulations or upon valid reasons, the TWSE may inform a listed company to provide information related to the listed securities within a limited time.
Any financial or business reports or information filed by a listed company may be publicly announced or displayed, in original or abstract form, by the TWSE for viewing by the public.
The listed company shall be responsible for any false or untrue statements made in the preceding reports or information.
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| Article 54 |
The trading of securities on the Exchange, unless specified by other laws and regulations, shall be made on a cash to physical delivery settlement basis.
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| Article 55 |
The trading of securities on the Exchange shall be conducted by automated computer trading. Where it is deemed necessary by the TWSE, other trading method may be employed.
The regulations governing the trading of bonds, beneficial certificates, depositary receipts, call (put) warrants, convertible bonds, certificates carrying rights to convert bonds into shares, corporate bonds, securities with warrants, foreign stocks, and ETNs shall be separately prescribed by the TWSE.
If beneficial securities or asset-backed securities issued under the Financial Asset Securitization Act, or REAT beneficial securities issued under the Real Estate Securitization Act, are debt-type securities, the method of trading of such securities listed on the TWSE's market shall be subject, mutatis mutandis, to the regulations governing trading of corporate bonds under the preceding paragraph.
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| Article 56 |
Unless otherwise permitted by the proviso of Article 150 of the Securities and Exchange Act, securities publicly announced for listing or trading by the TWSE shall be traded on the Exchange.
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| Article 57 |
The trading of securities over the Exchange shall be divided into the following three categories:
- Normal settlement.
- Trade date settlement.
- Designated date settlement.
The settlement of normal settlement trades shall take place 2 business days after the trade date.
The settlement of trade date settlement trades shall be effected by written agreement of both parties, and settlement shall take place on the trade date.
The rules regarding the settlement of designated date settlement trades shall be prescribed by the TWSE and reported to and approved by the Competent Authority before implementation.
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| Article 58 |
The validity of trading orders relating to the automated computer trading system shall be limited to the day on which the order is placed.
Unless otherwise provided, trading orders for the automated computer trading system may be keyed-in 30 minutes prior to the opening of the market trading by the participating securities brokers or dealers. Such orders shall include the code of the securities firm, serial number of the brokerage order ticket (or serial number of the proprietary trading order), type of order ticket (margin purchase, short sale, securities lending, central depositary, self-custody), account number of the principal (or of the dealer), code of the securities, type of trade (normal, block, odd-lot), price (limit order or market order), volume, sale/purchase, and period of validity (valid on the current day, canceled if not immediately satisfied, or canceled if not all order is immediately satisfied). Upon acceptance by the computer of the TWSE, a trade confirmation slip shall be printed. When a matching trade is made, an execution report will be printed on the printer of the participating securities firms. The items printed on the trading order confirmation slip or the execution report may be adjusted by the TWSE depending on actual need.
The serial number of the brokerage order ticket to be keyed-in by the participating securities brokers as referred to in the preceding paragraph shall be sequentially assigned in the order that the orders were received. The serial number of proprietary trading orders by securities dealers shall be sequentially numbered in the order that the orders were placed.
The price of the trading orders shall be within the daily price fluctuation limit placed in accordance with paragraphs 1 and 2 of Article 63.
Thirty minutes before market opening (i.e. the commencement of trading hours) and a certain period of time before market closing (i.e. the close of trading hours), the TWSE shall disclose on a real-time basis the computed execution prices and volumes, and the computed prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. In addition, the TWSE shall disclose, on a real-time basis during trading hours, the executed trade prices and volumes, and the prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. As to the prices and volumes of other trading orders, however, the TWSE may make appropriate disclosures based on market needs.
Application of securities firms for changes to the trading orders that are valid on the current day, except in the following circumstances, shall be accomplished by first canceling the original trading order, and then placing new trading orders.
- Reduction of the volume in the order; or
- Change of the price of a limit order, in which case the time of the order shall be the time of entry of the updated order, unless otherwise provided by the TWSE.
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| Article 59 |
When determining the daily price fluctuation limits for competitive auction trading of an initial listing of securities, unless otherwise provided by law, reference price shall be made to the public offering price before the listing date. Where the securities in the initial listing are already traded on the Taipei Exchange, reference shall be made to the closing price on the last trading day before the cessation of its Taipei Exchange trading. Competitive auction trading of the common stocks of a TIB listed company or a TIB primary listed company that is relisted as TWSE listed company or TWSE primary listed company, as applicable, shall refer to the price of public sale prior to relisting as the basis of price fluctuation limits.
When a company limited by shares or a foreign company converts its shares to another newly established company or another already TWSE listed or TWSE primary listed existing company under Chapter IV-1, the daily price fluctuation limits for an initial listing of common shares of such newly established company shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the common shares of the TWSE or Taipei Exchange listed company or TWSE or Taipei Exchange primary listed company whose converted common shares are anticipated to account for the greatest proportion of the anticipated issued common shares of the newly established company) by (the number of shares required for exchange of one new share); the daily price fluctuation limits for securities other than common shares of the newly established company or the already TWSE listed or TWSE primary listed existing company shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the TWSE listed security or Taipei Exchange listed security anticipated to account for the highest proportion of those converted into the security) by (the number of shares [or trading units] required for exchange of one share [or one trading unit] of the new security).
Where there is no closing price for the last trading day of any TWSE listed security used for the calculation of a reference price under the preceding paragraph, the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein shall be used. Where there is no closing price for the last trading day of the Taipei Exchange listed security used for the calculation of reference price referred to in paragraph 1 or 2, the basis price for the opening of trading on the next day, determined in accordance with the provisions of the GreTai Securities Market Rules Governing Securities Trading on the Taipei Exchange, shall be used.
The daily price fluctuation limits on initial listings of new capital stock, certificates evidencing right to subscribe to new shares, and certificate evidencing payment shall be determined with reference to the closing price of the old shares on the previous business day minus the value difference on rights; provided where the difference on rights cannot be determined, the price fluctuation limit shall be determined with reference to the closing price of the old shares on the previous business day. Where there is no closing price for the old shares on the previous business day, the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein shall be used.
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| Article 60 |
The trading orders shall be given in a single trading unit or multiples thereof. The trading unit of stocks shall be 1,000 shares. The trading unit of government bonds and corporate bonds shall be bonds with par value of 100,000 dollars.
Where a portion of the principal of government bonds and corporate bonds has been paid, the trading unit shall be calculated based on its remaining principal.
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| Article 61 |
The price of trading orders for stocks shall be based on one share of stock. The price of trading orders for government bonds and corporate bonds shall be based on bonds with a par value of 100 dollars.
The trading of bonds shall be interest-free trades, except where the trading order specifies interest or the regulations specifies otherwise.
The calculation of the interest specified in the preceding paragraph shall be based on the actual number of days between the interest-bearing commencement date and the trade date.
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| Article 62 |
The fluctuation unit (tick) of the prices of trading orders shall be determined as follows:
- Where the market price of a stock is less than 10 dollars per share, the tick shall be 1 cent, or 5 cents if the price is from 10 dollars to less than 50 dollars, or 10 cents if the price is from 50 dollars to less than 100 dollars, or 50 cents if the price is from 100 dollars to less than 500 dollars, or 1 dollar if the price is from 500 dollars to less than 100 dollars, or 5 dollars if the price is 1,000 dollars or more.
- The tick for government bonds and corporate bonds shall be five cents. The tick for convertible bonds shall be 5 cents if the price is less than 150 dollars, or 1 dollar if the price is from 150 dollars to less than 1,000 dollars, or 5 dollars if the price is 1,000 dollars or more.
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| Article 63 |
The daily price fluctuation limits of securities, unless otherwise approved by the Competent Authority, shall be 10 percent above and below the auction reference price at market opening of the current trading session for stocks, and 5 percent above and below the auction reference price at market opening of the current trading session for bonds; provided, however, that if the price fluctuation limit is less than the minimum tick size, the minimum tick size shall be the price fluctuation limit, and the price may not fall lower than the minimum tick size.
For newly TWSE listed common stocks other than those converted from Taipei Exchange listed stocks to TWSE listed stocks, there will be no price fluctuation limit imposed for the 5 trading days beginning from the listing date, and the minimum price shall be one cent.
Paragraph 1 shall apply mutatis mutandis to price fluctuation limits for trading of the common stocks of a TIB listed company or a TIB primary listed company; provided in the case where its stocks are relisted as TWSE stocks, there are no price fluctuation limits for the first 5 trading days from the first listing day, during which period the lowest price shall be 1 cent.
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| Article 64 |
(deleted)
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| Article 65 |
(deleted)
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| Article 66 |
(Deleted)
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| Article 67 |
In the trading of stocks, where a listed company has set a date for suspension of changes to the shareholders register (i.e. a book closure date) based on the record date for distributing dividends, bonuses or other interests pursuant to paragraph 2 of Article 165 of the Company Act, all settlements conducted after the book closure date shall be ex-dividend and ex-rights; provided that the provisions of this Article shall not apply to a capital increase out of employee compensation.
The daily price fluctuation limit after the distribution of dividends shall be based on the closing price of the previous day minus the amount of dividends and bonuses that have been distributed.
The daily price fluctuation limit for the ex-rights date shall be calculated based on the following:
- Where a listed company uses retained earnings or capital surplus to increase capitalization, the calculation of daily price fluctuation limit for the ex-rights date shall be based on the closing price of the previous day minus the value of the distributed stock dividends.
- Where a listed company uses cash capital to issue new stocks, the calculation of daily price fluctuation limit for the ex-rights date shall be handled by one of the following methods:
- In case under cash capitalization the issue price of the newly issued stock is lower than the closing price on the day immediately preceding the ex-rights date, the daily price fluctuation limit for the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
- In case under cash capitalization the issue price of the newly issued stock is higher than the closing price on the day preceding the ex-rights date, the daily price fluctuation limit on the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date for the purpose of calculating the maximum low.
- Where a listed company simultaneously uses retained earnings or capital surplus to increase capitalization, and also uses cash capital to issue new stocks, the daily price fluctuation limit shall be calculated as follows:
- In case under cash capitalization the issue price of the newly issued stock is lower than the closing price of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital surplus, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus and value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
- In case under cash capitalization the issue price of the newly issued stock is higher than the closing value of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital surplus, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus and the value of the newly issued cash capitalization stock for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus for the purpose of calculating the maximum low.
- In case any of the procedures in the above subparagraphs cannot be suitably used, the daily price fluctuation limit for the ex-rights date shall be determined by the TWSE in view of the current circumstances.
The value of the rights referred to in the preceding paragraph shall be determined by the TWSE.
Where there is no preceding day's closing price on the commencement date of ex-dividend or ex-rights trading, the closing price used as the basis for the calculations referred to in paragraphs 2 and 3 shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein.
The matters relating to ex-dividend and ex-rights in connection with securities eligible for margin purchase and short sale shall be handled in accordance with the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales.
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| Article 68 |
Upon matching a trading order, the associated person of a securities broker shall in reference to the information contained in the execution report inform the principal of this fact and prepare the relevant vouchers.
The principal may solicit information from a securities broker in regard to the securities for which it has placed brokerage trading orders. The securities broker shall provide the information.
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| Article 69 |
Securities firms shall observe good faith commercial practices and institute fair trades. Where it learns of any illegal trading or fraudulent trades by other securities firm, it shall have the responsibility of informing on these acts.
In handling the above informed matter, the TWSE may act in accordance with the provisions of Article 38.
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| Article 70 |
A trade shall be considered to be an odd-lot trade if the volume of stocks traded is less than one trading unit. The methods for trading in such stocks shall be separately drafted by the TWSE and reported to and approved by the Competent Authority before its implementation.
The TWSE may appoint designated securities dealers to concurrently operate the business of trading in odd-lot shares, and publicly announce such decision. The same procedure shall be applicable with amendments to the same.
A securities dealer may not refuse the appointment referred to in the preceding paragraph.
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| Article 71 |
A trade shall be a treated as a block trade if any of the below-listed circumstances is present in a single buy order or sell order:
- Block trade of a single security: refers to a single buy order or sell order for at least 500 trading units of a single listed security.
- Block trade of a basket of stocks: refers to a single buy order or sell order for at least five listed stocks with a total value of at least NT$15 million.
If the conditions specified in subparagraph 1 of the preceding paragraph are not met but the total value of the single buy or sell order is at least NT$15 million, the trade may be treated as a block trade of a single security.
Regulations regarding block trades shall be separately adopted by the TWSE and implemented after being filed with the Competent Authority for final approval.
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| Article 72 |
(deleted)
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| Article 73 |
The provisions of related regulations on listed shares shall apply mutatis mutandis to trades in certificates carrying right to subscribe to new stocks or certificates evidencing payment of stocks.
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| Article 73-1 |
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| Article 74 |
Where listed securities meet any of the following conditions, the trading method for such securities may be exempted from the provisions of this Chapter, and the securities may be traded via negotiation, auction, reverse auction, or other methods:
- Initial offering of bonds and their wholesale trade.
- Wholesale trade of stocks before their listing.
- Special circumstances in the trading of securities not warranting the application of usual regulations.
- Securities trades to which are attached the condition of meeting specified trading volumes, that have been reported to and approved by the TWSE may be conducted after registration.
The method of trading in the above transactions shall be reported to and approved by the Competent Authority before its implementation.
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| Article 75 |
Securities brokers conducting brokerage trading of securities shall comply with the following provisions:
- When accepting an account opening for processing, a securities broker shall first enter into a brokerage contract with the principal, recognizing these Operating Rules, the TWSE Regulations Governing Brokerage Contracts of Securities Brokers (hereinafter, the "Regulations Governing Brokerage Contracts"), public announcements, circular letters, and the regulations of the Taiwan Securities Association as integral parts of the contract, and specify the date of account opening and the following matters:
- For a principal that is a natural person: name, gender, age, occupation, address, telephone number, and National Identity Card number; if there is an agent, the agent's name and National Identity Card number.
- For a principal that is a juristic person: the juristic person's name, address, government uniform invoice number, phone number, representative, and authorized person.
- For a principal that is a person of no legal capacity or limited legal capacity, or who has been declared by a court to be placed under assistance, his/her statutory agent, guardian, or assistant shall sign/seal the brokerage contract and indicate the kinship relationship. All business vouchers for brokerage trading of securities, subscription of securities, and settlement matters shall be signed/sealed by the statutory agent, guardian, or assistant.
- For a principal that is a juristic person, such juristic person and its representative shall sign/seal the brokerage contract, and a power of attorney shall be provided. All business vouchers for brokerage trading of securities and settlement matters shall be signed/sealed by the authorized person.
- A director, supervisor, or employee of a securities firm may not open an account, engage in the brokerage trading of securities, purchase securities, or handle settlement-related matters on behalf of any other person, unless he/she is the statutory agent or guardian of the principal.
- When the principal or his/her/its statutory agent or authorized person signs the brokerage contract, a seal specimen card or signature card of the principal or the principal's statutory agent or authorized person shall be kept, and that same seal or signature shall be used for any orders placed in person for brokerage trading or subscription of securities and for the procedures for carrying out settlement, provided when the principal cancels an authorization, he/she/it may do so by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent; where the Taiwan agent and custodial institution of an offshore overseas Chinese or foreign national are the same person, the agent account-opening and settlement seal of the custodian institution may be taken as the specimen seal.
- When a principal or his/her/its statutory agent authorizes an agent to engage in brokerage trading, purchase securities or process settlement-related matters, a power of attorney shall be issued, and the seal specimen or signature card of such agent shall be kept for handling, provided when the principal cancels his/her/its authorization, he/she/it may do so according to the proviso in the preceding subparagraph.
- Where settlement of the principal's payment and securities is to be made by the book entry method, and where a letter of consent is signed, signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, information relevant to the brokerage trade shall be given to the principal and a confirmation record shall be kept on file. Where, pursuant to law or regulation, the principal may effect receipt or payment of the purchase price by account transfer (or remittance), signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the brokerage trade to the principal and the custodian institution to be the agent for trade settlement, and shall keep a confirmation record on file.
- A securities broker may not use computer-set groups in handling securities trading orders. The order ticket and trading order record shall record information pursuant to Articles 4 and 12 of the Regulations Governing Information to be Published in Order Tickets, Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving Orders to Buy or Sell Securities of the Competent Authority, and be prepared in accordance with the following provisions:
- Trading through non-electronic media:
- For trading orders placed in person: the principal or its agent or authorized person that places trading orders for securities in person shall fill out an order ticket and affix their signature/seal thereto.
- For trading orders placed via telephone, in writing, by telegraph, or by another method approved by the TWSE: if the principal, or its agent or authorized person places an order for trading of securities by one of the above methods, the associated person handling the order at the securities broker that accepts the order shall fill out the order ticket by hand or electronic means; with the exception of orders placed by telephone, the letter, telegram, or relevant documents shall be attached to the back of the order ticket.
Where the securities broker fills out the order ticket by electronic means, if delegation of responsibility for the execution of the trading order can be implemented and the employee handling that trading order confirmed, order tickets need not be printed out individually, provided that they shall be stored using a non-revisable, non-erasable electronic medium.
- Trading through electronic media:
Means that a principal uses voice mail, the Internet, dedicated line, closed private network, or other electronic means approved by the TWSE to place a trading order, which the securities broker shall handle in accordance with the following provisions:
- Where a trading order is placed through an electronic medium, the securities broker need not prepare or fill out an order ticket on the client's behalf.
- If a trading order is placed via the Internet, the internet protocol (IP) address and electronic signature thereof shall be recorded. If a trading order is placed via voice mail, through coordination with the telecommunications institution the caller-end number display function shall be enabled, and the number of the incoming call recorded.
- When a securities broker accepts a trading order through non-electronic media, and uses electronic media to fill out the order ticket, or accepts a trading order through electronic media, it shall print trading order records in chronological order, and after close of market, have them signed/sealed by the brokerage personnel handling the order. However, if the storage operations of the trading order record meet the following requirements, the trading order record need not be printed out and signed:
- A non-revisable, non-erasable electronic storage medium is used, and preparation of trading order records is completed on the day the trade is executed.
- Comprehensive indexing and management procedures are set up.
- Management responsibility is assigned to designated personnel, and electronic data files can be converted into print format at any time.
- The brokerage trading of securities, order confirmation, and execution report between a securities broker and a principal shall be conducted in accordance with the following provisions:
- Trading through non-electronic media:
The execution report may be given by electronic mail, telephone, facsimile, text message, voice message, or the Internet.
- Trading through electronic media:
The transmission of the brokerage order for purchase/sale of securities, order confirmation, execution report, and other electronic documents between a securities broker and the principal who uses an electronic trading method other than voice mail shall carry the electronic signature issued by the institution providing vouchers for identification and confirmation; however, this restriction shall not apply in the following circumstances:
- Order confirmation and execution report are conducted by telephone, facsimile, text message, voice menu system, or the Internet.
- The conditions for exemption are met under the Operational Guidelines for the Implementation of Direct Market Access by Futures Brokers.
- The order ticket referred to in subparagraph 8 shall be numbered in the order it is received. Its format and particulars to be recorded shall be as prescribed by the Competent Authority. When there is any dispute in connection with a trade, the order ticket shall be kept until the dispute is resolved. When there is no dispute, order tickets shall be kept in accordance with the following provisions:
- For unexecuted trades: destroy after one week; however, if an order ticket is filled out by hand, it shall be stamped "Unexecuted".
- For executed trades: if there is no dispute, keep for 5 years together with other business vouchers.
- If, after an order from a principal to trade within 30 minutes prior to the commencement of market trading hours or within a certain period of time prior to the close of market trading hours as accepted by a securities broker is reported to the TWSE, there occurs a massive revocation or amendment to the report, the TWSE may request the securities broker to collect in advance from its principal, upon accepting the trading order, the funds or securities, margin for margin purchases, or margin for short sales.
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| Article 76 |
Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
- Persons without legal capacity or with limited legal capacity, who do not have the agency or authorization of their legal guardian.
- Personnel or employees of the Securities and Futures Bureau (SFB) of the Competent Authority who fail to submit a letter of consent from the SFB.
- Personnel of the TWSE who fail to submit a letter of consent from the TWSE.
- Persons declared bankrupt and whose rights have not been reinstated.
- Persons declared by a court to be placed under guardianship where such declaration has not been voided; provided, this restriction shall not apply when a guardian disposes of securities for purposes of the interest of the ward.
- Persons declared by a court to be placed under assistance where such declaration has not been voided; provided, this restriction shall not apply if the person under assistance has obtained the consent of the assistant or permission from a court.
- Juristic persons opening accounts that cannot supply proof that there is authorization to open the account.
- Securities dealers which have not been approved by the Competent Authority.
- A principal who has engaged a director, supervisor, or employee of a securities firm to open an account with such securities firm as an agent or representative of the principal.
- The principal is applying or applied to convert an account it originally opened as a discretionary investment account to a brokerage account for the principal's own trading use.
Insiders of securities firms opening accounts for brokered securities trading shall comply with the Rules Governing Insiders of Securities Firms Opening Accounts at Their Securities Firms for Brokered Securities Trading prescribed by the TWSE.
Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
- Any person that has breached a contract relating to securities trading, where the TWSE or the GreTai Securities Market have notified all securities brokers of this fact, where the case has not been closed and less than 5 years have elapsed. However, this provision does not apply to brokerage trades that are made for purposes of offsetting margin purchases or short sales that were already executed for the same principal on the same day, and are of the same type and same quantity of securities, nor does it apply to opposite offsetting trades made on the same day in brokerage day trading in accordance with the Operational Rules Governing Day Trades of Securities.
- Any person that, in connection with a violation of the Securities and Exchange Act or forging (or altering) TWSE listed or Taipei Exchange listed securities, has been indicted in a public prosecution and the case is still pending, or has been adjudicated criminally guilty by a final and unappealable court judgment within the last 5 years.
- Any person that has breached a futures contract where the case has not been closed and less than 5 years have elapsed, or that has violated future trading laws or regulations and has been adjudicated criminally guilty by a final and unappealable judgment of a judicial authority within the past 5 years.
Upon conclusion of a case of breach of a brokerage contract by a principal, the securities broker shall promptly report such conclusion to the TWSE; the TWSE will in turn inform all other securities brokers.
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| Article 77 |
When a securities broker processes account opening for overseas Chinese or foreign nationals for the purpose of brokered sale of securities, the securities broker shall obey relevant laws and regulations and comply with the following provisions:
- If special-case approval is granted by the Investment Commission of the Ministry of Economic Affairs, Science-Based Industrial Park Administration, or the Export Processing Zone Administration, a photocopy of the approval to sell document and power of attorney for the filing and payment of tax required by the tax collection authority must be retained, provided no such power of attorney is required if no tax agent is required. That account may only accept sell orders, and only for the type and amount of securities as originally approved in the investment plan. If, prior to the 19 November 1997 amendments to the Act Governing Investment by Foreign Nationals and the Act Governing Investment in Taiwan by Overseas Chinese, special-case approval to hold unlisted stocks has not been granted by the Investment Commission of the Ministry of Economic Affairs, the Science-Based Industrial Park Administration, or the Export Processing Zone Administration, and such stocks are subsequently approved for listing, the original investment information (such as trading vouchers, wire transfer receipts, and tax payment receipts) shall be submitted , and a special application shall be made by letter to the TWSE for its approval for account opening, before brokerage orders to sell such stocks may be accepted.
- In regard to securities obtained due to gift, succession, or pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235-1; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act or prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, and the resulting shares alloted, subscribed for or assigned, a copy of the identification or company registration certificate (or document of equivalent validity), the power of attorney for filing tax returns required by the tax collection authority, and the following documents shall be submitted for account opening. That account may only accept sell orders, and trading shall be limited to the sale of the aforesaid securities. No such power of attorney is required if no tax agent is required.
- Where the securities and the said entitlements are obtained through gift, transfer procedure shall be completed and the certificate of payment of gift tax or other certification issued by the tax collection authority shall be submitted.
- Where the securities and the said entitlements are obtained through succession, transfer procedure shall be completed and the certificate of payment of estate tax or other certification issued by the tax collection authority shall be submitted.
- Where the securities and the said entitlements are obtained pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235-1; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act, a certificate of employment valid at the time the employee obtains the shares through allotment, subscription or assignment and documents evidencing the allotment, subscription or assignment shall be submitted.
- Where the securities are obtained prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, document proving the source of the securities or other documents shall be submitted.
- Securities obtained in compliance with the preceding subparagraph may be sold by mutatis mutandis application of Article 82-1.
- Where foreign securities have been obtained before they are listed on the centralized securities exchange market of the TWSE on a primary listing basis, documentary proof of securities holdings issued by the shareholder services agent engaged by the foreign issuer, or the documentary proof that employees have subscribed to or been allotted shares in accordance with the laws and regulations of the country of registration, the power of attorney for the filing and payment of tax required by the tax collection authority, and the documentary proof of identity of the principal or the principal's company registration certificate (or document of equivalent validity) shall be submitted to conduct account opening. That account may only accept sell orders, and trading shall be limited to the sale of the amount of holdings. No such power of attorney is required if no tax agent is required. If the holder of those securities, after opening the present account, subsequently opens an account with a securities broker for securities trading under Article 77-4, the present account shall be canceled.
- A principal referred to in subparagraph 1, 2, or 4 that obtains stock of another TWSE listed company, TWSE primary listed company, or emerging stock company, by duly participating in a public tender offer through an offer to sell, or by the issuer's participation in a merger or acquisition, or that obtains stock as a result of allotment, subscription or assignment, may sell the stock through those accounts.
If the principal under the preceding paragraph is an offshore overseas Chinese or foreign natural person, he or she may mandate a Republic of China lawyer, CPA, custodian bank, or securities firm as his or her agent to open a New Taiwan Dollar account to be used solely for purposes of securities settlement, and shall submit the documents listed below:
- Documentary proof of identity: i.e., a certificate of nationality or photocopy of a valid passport, which shall be legalized by an overseas representative office or authorized entity of the Republic of China.
- Photocopy of the contract for opening of the securities account, and submit for inspection the original of the central depository account passbook.
- Power of attorney for the agent, which must be legalized by an overseas representative office or authorized entity of the Republic of China.
- Record of ID Number in the Republic of China issued by the National Immigration Agency of the Ministry of the Interior.
- A lawyer or CPA mandated as agent must have obtained a license to practice as a lawyer or CPA in the Republic of China, and shall submit for inspection the original of his or her documentary proof of identity and lawyer or CPA license; a custodian bank or securities firm mandated as agent shall provide the original of its business license, the original of which shall be returned after it has been inspected and a photocopy made to be retained on file.
Foreign banks with branch offices in the Republic of China may use the name of the branch office to open the account in accordance with Article 75. Such account may only accept sales orders, and purchase orders shall not be accepted.
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| Article 78 |
Securities firms engaging on their own or on behalf of others in securities trading margin purchases and short sales business shall handle it in accordance with the Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, Regulations Governing Securities Finance Enterprises, the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales, or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales.
If, after execution of a trading order through a securities firm that is engaged or acts on behalf of another to handle business under paragraph 1, or after execution of a sale of borrowed securities in accordance with the Taiwan Stock Exchange Corporation Securities Lending and Borrowing Rules, there is any change in the trading category, such change shall be handled in accordance with the provisions of the Directions for Securities Firms Handling Changes to Trading Category.
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| Article 79 |
A securities firm may accept authorization from a juristic person, other institutions or specific natural persons to decide on its behalf the price and time of placement of an order within the range of the price limits specified by such juristic person, institution or natural person; when placing quotes for trades, the securities broker shall consider the market conditions and the supply-demand relationship, and take care not to damage the formation of fair prices in the market and the sound development of the market, and the securities broker shall retain the customer authorization record in accordance with regulations.
"Specified natural person" in the preceding paragraph means a natural person who simultaneously meets all of the following conditions:
- Provides proof of financial capacity of NT$50 million or more.
- Possesses adequate professional knowledge or trading experience with respect to financial products.
- Issues a signed statement specifying that a registered qualified associated person of the securities firm has explained in detail to him/her the rights, obligations, and risks requiring attention in connection with discretionary orders, and confirming that he/she has been fully advised of and understood the same and agrees to sign as a specified natural person.
"Possesses adequate professional knowledge or trading experience with respect to financial products" in subparagraph 2 of the preceding paragraph means that the person meets one of the following conditions:
- The person has in the past held a position at a securities, futures, financial, or insurance institution, or has other academic qualifications or work experience sufficient to prove possession of professional knowledge of securities.
- The person simultaneously meets all of the following conditions:
- At least six months have elapsed since the person opened the account.
- The person provides proof of the number of his/her trades on the securities market for the most recent year having reached 20; the same shall apply in the case where 1 year has not elapsed since the person opened the account.
- The person has never had any record of default in securities trading.
Securities brokers may accept an order specifying the term of validity.
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| Article 80 |
Purchase or sale orders accepted by a securities broker shall be processed by registered and qualified associated persons.
When executing orders to trade in securities, the registered and qualified associated persons referred to in the preceding paragraph shall wear the registration pass issued by the TWSE. When accepting trading orders, the associated persons shall fill out order tickets in accordance with the provisions of subparagraph 8 of Article 75, assign serial numbers to the orders, and process them in the order in which they are received.
When a trading order has been matched, the securities broker shall produce a trade report. The format and the particulars to be specified on the report shall be in accordance with the regulations prescribed by the Competent Authority.
For orders received by telephone, the securities broker shall synchronously record the conversation and shall keep the telephone recording in its place of business.
The above-stated telephone recording shall be preserved for at least 1 year. Where there are disputes relating to a trading order, the recordings shall be preserved until the dispute has ended. In the event the securities broker suffers facilities breakdowns or it is remiss in its procedures, it shall within 2 days of the occurrence of the event report to the TWSE regarding the facts and causes and its remedial measures.
The telephone recordings preserved in accordance with the preceding paragraph shall be construed as a type of trade voucher. In case the securities firm avoids or refuses inspection, it shall be punished in accordance with paragraph 2 of Article 25 and the Standards for Determining Securities Firms Avoiding or Refusing Inspections and Handling Procedures Thereof.
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| Article 81 |
After accepting a brokerage trading order, a securities broker may cancel or amend particulars of the order only if notified by the principal to do so, and only if the order has not yet been executed.
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| Article 82 |
After accepting a brokerage trading order for normal settlement, a securities broker, following execution of the trade, shall collect the price payable for the securities bought, or collect the securities sold, pursuant to Article 12 of the Regulations Governing Brokerage Contracts, or collect the price difference after offsetting purchases and sales pursuant to the Operational Rules Governing Day Trades of Securities.
A securities broker filing a report of delayed settlement for an offshore overseas Chinese or foreign national, or for a mainland area investor, with the TWSE shall do so in compliance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals, and shall notify the principal or the custodian institution pursuant to the agreement.
In the case of brokerage orders for margin trades, the securities broker shall collect from its principal the margin for the margin purchase or the margin for the short sale, as the case may be, pursuant to Article 12 of the Regulations Governing Brokerage Contracts.
Where the TWSE has taken any disciplinary measure against a specific securities in accordance with the "Regulations for Implementation of Stock Market Monitoring System" and other relevant operation rules, a securities broker shall, on the date it accepts the order, collect in advance from its principals the funds or securities, or the margin for margin purchases, or the margin for short sales.
Where a securities broker believes that there are any defect on the rights of the securities delivered by its principal for sale or there is legal dispute or other doubtful matter, it may decline to sell such securities; provided that the above shall not be applicable where its principal has provided adequate collateral as approved by the securities broker.
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| Article 83 |
A securities broker shall keep complete and true records and vouchers when receiving or delivering securities or payments in connection with brokerage trading.
The vouchers referred to in the preceding paragraph shall include receipts for funds and securities collected in advance, vouchers on securities delivered, and trade reports. The format thereof and the particulars to be entered therein shall conform to the regulations prescribed by the Competent Authority. Where a financial institution concurrently engages in the business of a securities broker and has opened specific accounts for depositing funds which can be verified, it need not use trade reports.
A securities broker shall handle the receipt of securities or funds from its principals or delivery of securities or funds to its principals referred to in paragraph 1 of this Article by book-entry through the central securities depository accounts opened by its principals or through the deposit accounts opened by its principals with financial institutions designated by the securities broker, except under any of the following circumstances:
- Where a securities investment trust fund, venture capital enterprises invested by the National Development Fund of the Executive Yuan, insurance enterprise, offshore overseas Chinese or foreign national, or an overseas Chinese or foreign national or mainland area investor who has converted overseas corporate bonds held by him into stock or has converted overseas depositary receipts held by him into the underlying securities, has a deposit account opened by the custodian institution on behalf thereof, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account.
- Fund collection or payment operations of centralized segregated trust asset accounts under the management of a trust enterprise that has the status of a central depository participant may be carried out by means of transfer (remittance).
- Where a depositary institution of overseas depositary receipts has been engaged by its principal to redeem the overseas depositary receipts and sell the stock, it may receive the proceeds thereof by way of account transfer (or remittance) through the deposit account maintained at the custodian institution.
- Where a principal places engages a securities investment consulting enterprise or a SITE to conduct discretionary securities trading, the principal may open and maintain a deposit account at the custodian institution, and the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account. When processing trade settlement, it is prohibited to transfer payment funds or securities between separate discretionary investment accounts of the same principal.
- If a domestic bank or insurance company obtains a rating of twA- or higher from the Taiwan Ratings Corporation, or its rating by a credit rating institution approved or recognized by the Competent Authority meets or exceeds the qualification requirements of the Taiwan Ratings Corporation's twA- rating, its receipt and payment of purchase prices may be effected by account transfer (or remittance) during the period for which the aforementioned rating is valid.
- If government agencies conduct securities trading settlement through deposit accounts of such institutions in accordance with laws and regulations, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such accounts.
- If a principal agrees to keep settlement money in dedicated accounts for settlement with a securities firm, an arrangement may be made with the securities firm to have the receipt and payment of the purchase prices be effected by account transfer (or remittance) through the principal's own deposit accounts.
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| Article 84 |
(deleted)
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| Article 85 |
A securities broker shall not accept any discretionary order to decide the type, volume, price or purchase or sale of securities on behalf of its principal.
A securities broker shall not purchase or resell for its own profit any securities it has accepted an order to trade, or guarantee to share profits with its principals, or accept trading orders by installment payments.
When recommending its principals or on website to buy or sell securities, a securities broker shall comply with the "Regulations Governing Securities Brokers' Practice on Recommending Principals to Buy and Sell Securities" as stipulated by the TWSE.
The website provided by securities brokers shall show, in a conspicuous manner, the risk disclosure statement and the alternative to be adopted in case of inability to execute electronic transmission, and the most up-to-date information shall be transmitted. The securities brokers shall carefully select hyperlink websites, and shall be responsible for the supervision and administration of their associates' use of electronic mail, group electronic mail, bulletin board system, website, etc. in activities associated with business operations.
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| Article 86 |
A securities broker shall keep all matters in which it is engaged by the principal in confidence and shall not disclose them to others; provided that the above shall not be applicable if the TWSE makes enquiries of the securities broker.
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| Article 87 |
A securities broker that has made a mistake when executing a trade shall report the out-trade and/or correct the account number in accordance with the TWSE Directions for the Handling of Out-Trades and Correction of Account Numbers by Securities Brokers.
A securities broker shall open a segregated error account in its own name, and shall assign it with an account number and fill its company profit seeking enterprise uniform invoice number therein, and said segregated error account shall be treated in the same manner as the account of its principals. All trades transacted through the said segregated error account shall be deemed as ordinary trades, for which securities transaction tax shall be paid. Gains and losses resulted from the said segregated error account shall be handled in accordance with the Principles Governing the Preparation of Financial Reports by Securities Firms.
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| Article 88 |
Where a principal places an order to trade listed securities of a specified category whose volume is too large and it is believed that handling such trade as an ordinary trade would affect the normal market, the securities broker may in accordance with Article 74 report to the TWSE and consult with it about changing the method for execution of the order to price negotiation, auction, reverse auction, or other methods.
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| Article 89 |
A securities broker and its branch offices shall not engage in the following activities:
- Offset purchase orders against sales orders for the same securities in whole or in part in private off-market trading.
- Engage in matched-order trading with another securities firm or firms outside the Exchange.
- Trade securities not listed by the TWSE, without the approval of the Competent Authority.
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| Article 90 |
A securities broker may not violate brokerage contract when conducting brokerage trading. In the event that a securities broker breaches the brokerage contract, the principal may report the matter to the TWSE.
Any claim by the principal against the clearing and settlement fund deposited with the TWSE by a securities broker that arises out of breach of contract by the securities broker in brokered market trades shall have the second highest priority after that of the TWSE.
The principal may request the TWSE for payment from the clearing and settlement fund deposited with the TWSE by its contracted securities broker only if it has obtained the consent of the securities broker or a final adjudication of execution or of an arbitral award.
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| Article 91 |
Where the principal fails to fulfill its settlement obligations on time, the principal is in default. In such an event, the securities broker shall report the default in accordance with the TWSE Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals , and shall simultaneously notify the principal.
When the principal is an offshore overseas Chinese or foreign national, or a mainland area investor, and a report of delayed settlement has been filed in accordance with Article 82, paragraph 2, if settlement is not completed in accordance with provisions and it is not an out-trade, the principal is in default. The securities broker shall handle the matter pursuant to the provisions in the preceding paragraph.
A securities broker which receives securities or consideration in accordance with paragraph 1 or paragraph 2 of this Article shall engage another securities broker to dispose of it on the Exchange no later than the first business day after the principal's default. Thereafter, the securities broker shall forthwith report to the TWSE and notify its principal in accordance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals. However, those securities which belong to the same account and are of the same type and same volume may be offset against each other.
Where the aggregate number of [shares represented by] the share certificates of securities received by a securities broker under paragraph 1 and paragraph 2 during the period of a single default reaches 5 percent or more of the number of shares of the underlying securities already issued, and furthermore reaches or exceeds the average daily volume of the underlying securities during the 20 trading days prior to reporting of the default, the securities broker may adopt either of the following measures to handle the default:
- If handling of the default cannot be completed through reverse transactions during the 3 consecutive business days from the day next following the date of confirmation of the default by the principal, the securities broker, by reaching a mutual agreement with the principal or by notice to the principal, may, depending on market conditions, in accordance with the content of the agreement or the notice, complete handling of the default through reverse transactions within 180 days, and report the agreement or notice to the TWSE via letter for recordation.
- The securities broker may reach an agreement with the principal setting a price(s) to serve as the basis for calculating profit/loss, and submit the written agreement reached between the parties to the TWSE via letter for recordation.
Based on the report of a securities broker referred to in paragraph 1 or paragraph 2 of this Article, the TWSE will forthwith notify each securities broker, which shall act in accordance with paragraph 3 of Article 76 hereof.
In the event that the principal suffers losses or there is any other dispute arising out of the notification sent by the TWSE to each securities broker based on the report by a securities broker, the securities broker reporting the default shall be fully responsible therefor.
If a securities broker, for a reason not attributable to the broker, is unable in a timely manner to take measures pursuant to paragraphs 3 and 4, it shall prepare a handling record and keep it on file for inspection along with related documentary evidence.
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| Article 92 |
A securities broker accepting an order to trade securities shall immediately deliver to the principal the securities bought or the proceeds of the securities sold after it is transacted and settled and, in case it is not transacted, shall forthwith return to the principal the securities or funds received; provided that the securities broker may keep the settlement in funds in the settlement account of the securities firm subject to the consent of the customer, and shall comply with the TWSE Directions for the Creation of Customer Ledgers of Securities Firm Settlement Accounts.
A securities broker delivering the securities or funds referred to in the preceding paragraph, unless otherwise provided, shall request the principal to sign and seal on relevant vouchers so as to complete the procedures. A power of attorney shall be required in the event that the principal appoints another person to sign and seal on its behalf.
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| Article 93 |
Before the principal settles the debt arising out of the brokerage trade, a securities broker may retain the property received from the principal and the sum payable to the principal in connection with the brokerage trade.
A securities broker shall prepare and send to each of its principals a monthly reconciliation statement; provided that the above shall not apply to case where there has not been any trade in that particular month and the principal does not request in writing for the statement.
The format and particulars to be specified in the statement referred to in the preceding paragraph shall be in accordance with the regulations prescribed by the Competent Authority.
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| Article 94 |
After a brokerage trade has been executed, the securities broker may collect a processing fee from the principal. The fee schedule shall be formulated by the TWSE and approved by the Competent Authority.
A securities broker may at its sole discretion adopt a rate schedule, based on the customer transaction amount, for securities transactions fees that it collects, and may also adopt discounts and single-order minimum fees, and shall report such schedule, discounts, and fees to the TWSE for recordation through the One-Stop Window for Securities Firm Filings before implementation. After collecting transaction fees, a securities broker may settle accounts at regular intervals (e.g. monthly, weekly). Any amount refundable or deductible shall be transferred into the original customer's settlement account, and recorded in the customer's monthly reconciliation statement and the monthly accounting summary filed with the TWSE. If the fee adopted by a securities broker exceeds 0.1425 percent of the amount of a transaction, the securities broker shall notify the customer of this fact by an appropriate method before accepting the order, and retain a record of that notification, provided that offshore overseas Chinese and foreign nationals may be notified before settlement.
A securities broker shall not pay, in whole or in part, any processing fee receivable by it to any introducing person related to the trading as their remuneration; provided, this restriction shall not apply to any of the following circumstances:
- where it is paid under a contract to a foreign financial institution that is registered and permitted by the competent authority of the local country to operate securities business.
- where, under a contract entered into for cross-selling, it is paid to a subsidiary of a financial holding company.
The term "local country" in subparagraph 1 of the preceding paragraph shall be separately defined by the TWSE.
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