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These Procedures are specially promulgated to maintain the security of futures market trading and clearing and settlement procedures by ensuring the normal operation of futures commission merchants ("FCMs") who have suspended operations (below, "suspended FCM") or clearing members who have suspended or terminated clearing and settlement operations in accordance with Article 4 or Article 6 of the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations and who then resume operations, resume trading (below, "resume operations") or resume clearing and settlement operations.
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Except where otherwise provided by law or regulation, suspended FCMs, or clearing members who have suspended or terminated clearing and settlement operations, who apply to resume operations or to resume clearing and settlement operations shall do so in accordance with these Procedures. Matters not provided for herein shall be handled in accordance with applicable rules, official letters, and public announcements of this Corporation.
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When an FCM which had no clearing member status prior to suspension applies to resume operations, in addition to the requirement for nonconformance with any of the conditions under Articles 128 and 130 of the Operating Rules of the Taiwan Futures Exchange Corporation, it shall also conform with the following provisions:
- Where the suspended FCM has provided an operating bond in accordance with regulations of the competent authority, if a court or the Office of Executive Administration of the Ministry of Justice has executed an attachment and there are creditors that enjoy the right of preferential payment under Article 60, Paragraph 2 of the Futures Trading Law, the [suspended FCM] shall first make up any deficiency in the amount of the bond, provided that where the creditor does not enjoy the right of preferential payment, the deficiency may be made up subsequent to transfer of the bond to the executing court or collection by the creditor.
- The FCM shall be in conformance with the number of sales agents prescribed in Article 8 of the Rules Governing the Establishment Criteria of Futures Commission Merchants.
- The FCM shall be in conformance with the Chinese National Futures Association provisions governing operating sites and equipment.
- The FCM shall have already entered into a contract for succession with another FCM in accordance with Article 75 of the Futures Trading Law.
- The FCM shall have already obtained the agreement of a clearing member to carry out clearing and settlement in accordance with Article 13, Subparagraph 8 of the Operating Rules of the Taiwan Futures Exchange Corporation.
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An FCM which had clearing member status prior to suspension and which is only applying for resumption of futures brokerage or proprietary futures trading operations, in addition to conformance with the provisions of Article 3 above, shall carry out clearing member termination of clearing and settlement operations in accordance with the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations.
An FCM which had clearing member status prior to suspension and which is applying for resumption of clearing and settlement operations as well as resumption of futures brokerage or proprietary futures trading operations shall, in addition to the requirement of conformance with the provisions of Article 3 above and the requirement of nonconformance with any of the conditions enumerated in Articles 129 or 131 of the Operating Rules of the Taiwan Futures Exchange Corporation, also conform to the standards required for clearing member status and make up any deficiency in the settlement and clearing fund as required under Article 111 of the Operating Rules of the Taiwan Futures Exchange Corporation before it may apply for resumption of clearing and settlement operations.
An FCM which has clearing member status and has suspended clearing and settlement operations in accordance with Article 6 of the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations shall, in addition to the requirement of nonconformance with any of the conditions enumerated in Articles 129 or 131 of the Operating Rules of the Taiwan Futures Exchange Corporation, conform to the standards required for clearing member status and make up any deficiency in the clearing and settlement fund as required under Article 111 of the Operating Rules of the Taiwan Futures Exchange Corporation before it may apply for resumption of clearing and settlement operations.
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A financial institution which has clearing member status, has suspended clearing and settlement operations in accordance with Article 6 of the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations, and applies for resumption of clearing and settlement operations shall, in addition to the requirement of nonconformance with any of the conditions enumerated in Articles 129 or 131 of the Operating Rules of the Taiwan Futures Exchange Corporation, conform to the standards required for clearing member status and make up any deficiency in the settlement and clearing fund as required under Article 111 of the Operating Rules of the Taiwan Futures Exchange Corporation before it may apply for resumption of clearing and settlement operations.
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When an FCM which did not have clearing member status prior to suspension applies to resume operations, it shall apply to this Corporation through submission of an application to resume operations and a Statement (in the format shown in Appendix 1).
When an FCM which did not have clearing member status prior to suspension applies to resume operations, this Corporation will in principle perform a document review, but may perform on-site inspection as necessary.
When an FCM which did not have clearing member status prior to suspension applies to resume operations, the criteria for determining the applicant's conformance with the provisions of Article 3 above shall be the file data current on the date of receipt of the application by this Corporation.
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An FCM which had clearing member status prior to suspension and is only applying to resume futures brokerage or proprietary futures trading operations shall apply to this Corporation with an application form for resumption of operations and a declaration (in the format shown in Appendix 2). In addition, the FCM shall apply to this Corporation to carry out matters related to termination of clearing and settlement operations by submitting the documents required by the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations.
An FCM which had clearing member status prior to suspension and applies to resume clearing and settlement operations as well as futures brokerage or proprietary futures trading operations shall apply to this Corporation with an application form for resumption of operations and for resumption of clearing and settlement operations, and a declaration (in the format shown in Appendix 3).
An FCM with clearing member status which has suspended clearing and settlement operations in accordance with Article 6 of the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations and applies to resume clearing and settlement operations shall apply to this Corporation with an application form for resumption of clearing and settlement operations and a Statement (in the format show in Appendix 4).
This Corporation will in principle employ a document review [in reviewing applications], but may perform on-site inspection as necessary.
For an FCM applying for resumption of operations or resumption of clearing and settlement operations, the criteria for determining the applicant's conformance with the provisions of Article 4 above shall be the file data current on the date of receipt of the application by this Corporation.
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A financial institution with clearing member status which suspended clearing and settlement operations in accordance with Article 6 of the Taiwan Futures Exchange Procedures for Suspension or Termination of Futures Commission Merchant and Clearing Member Operations and applies for resumption of clearing and settlement operations shall apply to this Corporation with an application form for resumption of clearing and settlement operations and a declaration (in the format show in Appendix 5).
This Corporation will in principle employ a document review [in reviewing applications], but may perform on-site inspection as necessary.
When a financial institution with clearing member status applies for resumption of clearing and settlement operations, the criteria for determining the applicant's conformance with the provisions of Article 5 above shall be the file data current on the date of receipt of the application by this Corporation.
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A suspended FCM or a clearing member which suspended or terminated clearing and settlement operations that applies to resume operations or to resume clearing and settlement operations and whose application is found after review to conform to regulations may resume trading or clearing and settlement operations; this Corporation will report such fact to the competent authority for recordation.
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The application forms and documents for resumption of operations or resumption of clearing and settlement operations submitted by a suspended FCM or a clearing member that suspended or terminated clearing and settlement operations shall at the latest be delivered to this Corporation ten business days prior to the intended date for resumption of trading or clearing and settlement operations. If submission of the documents is delayed such that review cannot be completed on time, this Corporation may postpone the resumption of trading or clearing and settlement operations by the given FCM or clearing member.
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When a suspended FCM or a clearing member that has suspended or terminated settlement and clearing operations applies for resumption of operations or resumption of clearing and settlement operations and, after review, is found not in conformance with these Procedures, this Corporation may, in view of conditions, consent to resumption of operations or to a postponed resumption of operations or clearing and settlement operations following rectification and formal delivery of notification of the same to this Corporation.
When a suspended FCM or a clearing member that has suspended or terminated settlement and clearing operations applies for resumption of operations or resumption of clearing and settlement operations and, after review, is found not in conformance with these Procedures, and no rectification of that condition is effected, this Corporation may temporarily withhold consent for resumption of operations or resumption of clearing and settlement operations by the FCM.
When a suspended FCM or a clearing member that has suspended or terminated clearing and settlement operations applies to resume operations or to resume clearing and settlement operations, and resumption of operations is postponed or consent is temporarily withheld for resumption of trading or resumption of clearing and settlement operations by the given FCM or clearing member due to the conditions set forth in either of the preceding paragraphs, [this Corporation] shall immediately report the same to the competent authority for recordation, and notify the FCM or clearing member of the same.
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These Procedures and any amendments hereto shall be implemented following passage by [this Corporation's] board of directors and submission to and approval for recordation by the competent authority.
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