| Article 1 |
These Trading Rules are adopted to maintain orderly trading of Mini Taiwan Stock Exchange Finance Sector Index Futures Contracts ("the Contracts") on the Taiwan Futures Exchange ("TAIFEX"), to ensure security and fairness in trading of the Contracts.
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| Article 2 |
Futures commission merchants that engage in trading of the Contracts shall observe these Trading Rules in addition to the Futures Trading Act and applicable acts and regulations. Matters on which these Trading Rules are silent shall be handled in accordance with the applicable bylaws and rules, public announcements, and circulars of the TAIFEX.
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| Article 3 |
The Contracts are abbreviated as " Mini Finance Sector Futures" with the ticker symbol "ZFF".
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| Article 4 |
The underlying of the Contracts is the TAIEX Finance and Insurance Sub-Index (hereinafter, the "Index"). Matters related to the Index calculation formula, constituents, base date, and adjustments thereto shall be as prescribed by the Taiwan Stock Exchange Corporation (TWSE).
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| Article 5 |
The value of the Contracts shall be 250 New Taiwan Dollars multiplied by the index point of Mini Finance Sector Futures.
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| Article 6 |
The minimum unit of price fluctuation ("tick") in trading orders for the Contracts shall be 0.2 index points. Each tick shall have a value of 50 New Taiwan Dollars.
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| Article 7 |
Prior to closing of the last trading day, a futures trader may settle rights and obligations under the Contracts by selling or buying back on the TAIFEX centralized exchange market part or all of the quantity originally bought or sold.
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| Article 8 |
The trading hours for the Contracts are 8:45 am to 1:45 pm on regular trading days of the TWSE. On the last trading day of the month in which the Contracts reach expiration, the trading hours are 8:45 am to 1:30 pm. However, if the TAIFEX has made other provisions, those provisions shall govern.
When for any reason the TWSE announces a halt of trading prior to market opening of the Contracts, or when other factors influence trading of the Contracts, trading of the Contracts may be halted; when the TWSE announces a halt of trading during trading hours of the Contracts, trading of the Contracts will continue. As necessary, however, the TAIFEX may announce a halt of trading based on the current situation, and report the halt to the competent authority for recordation on the next business day.
When the TWSE changes its trading hours, or when other factors influence trading of the Contracts, or in response to a suggestion by a futures industry association or the National Federation of Futures Industry Associations, the TAIFEX may change the trading hours for the Contracts after reporting to the competent authority for approval.
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| Article 9 |
Delivery months for the Contracts shall be the spot month and the next two calendar months, and the three nearest of the quarter months of March, June, September, and December, for a total of six periods, listed and traded concurrently. The last trading day for contracts of any delivery month shall be the third Wednesday of the month in which such contract reaches expiry; trading of contracts in the expiration month shall cease at close of market on the last trading day, and the last trading day shall be the final settlement day for the contracts in the expiration month.
If the last trading day referred to in the preceding paragraph falls on a holiday, or if trading may not proceed on that day due to a force majeure event, or if the TAIFEX has made other provisions, the next following business day shall be the last trading day.
The next business day following the last trading day of a contract in the expiration month shall be the date of initial trading for contracts in the new delivery month.
The TAIFEX may change the delivery months, initial trading days, final trading days, and final settlement days referred to in the preceding three paragraphs when it deems necessary after report to and approval from the competent authority.
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| Article 10 |
Orders for buying and selling the Contracts shall be matched automatically by computer. Matching shall be done by call auction at market opening, followed by continuous trading during market hours.
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| Article 11 |
Open positions held by traders are marked-to-market daily after market close based on the daily settlement price published by the TAIFEX.
The daily settlement price as referred in the preceding paragraph shall be the same as that for the TAIEX Taiwan Stock Exchange Finance Sector Index Futures contracts.
For traders holding open positions in the Contracts for various delivery months, four of the Contracts may be offset against one TAIEX Taiwan Stock Exchange Finance Sector Index Futures contract for the same delivery month.
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| Article 12 |
The daily price limits for the Contracts shall be 10 percent above and 10 percent below the clearing price of the preceding business day.
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| Article 13 |
The final settlement price of the Contracts shall be set based on the simple average price of the underlying index during the 30 minutes of trading before the TWSE market close on the final settlement day. If the TWSE postpones market closing or matching, the TAIFEX may extend the aforementioned 30-minute sampling time.
The calculation method under the preceding paragraph shall be separately prescribed by the TAIFEX.
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| Article 14 |
The Contracts shall be settled in cash with the trader delivering or receiving the net amount of the price differential in cash on the final settlement day based on the final settlement price.
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| Article 15 |
A futures commission merchant engaging in brokerage trading of the Contracts, prior to accepting an order, shall first collect a sufficient trading margin based on the aggregate total of the brokerage trading order, and from the date of the trade until the expiry of the settlement period, shall mark to market on a daily basis the balance of equity in the positions held by each principal based on the daily settlement price, and credit the aggregate total to the balance of the margin account of the client.
When the balance in a principal's margin account is lower than the required maintenance margin, the futures commission merchant shall immediately notify the principal to deposit cash funds within a specified time frame sufficient to cover the difference between the balance in the margin account and the total amount of the trading margins required for the principal's open positions. If a principal fails to make the deposit within the prescribed time limit, the futures commission merchant may offset the positions on the principal's behalf.
The trading margin and the maintenance margin as referred in the preceding two paragraphs may not be lower than the publicly announced TAIFEX standard for the initial margin and the maintenance margin.
The initial margin and maintenance margin announced by the TAIFEX shall be based on the clearing margin calculated according to the Taiwan Futures Exchange Corporation Methods and Standards for Receipt of Clearing Margins plus a percentage prescribed by the TAIFEX.
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| Article 16 |
The total open positions in the Contracts, after translation by the one-to-four contract scale, held on either the long or short side of the market at any time by a futures trader plus the total open positions in TAIEX Taiwan Stock Exchange Finance Sector Index Futures Contracts held on the same side of the market by the futures trader shall not in combination exceed the limits publicly announced by the TAIFEX.
Every three months, or as occasioned by market conditions, the TAIFEX shall announce the applicable position limit standards under the preceding paragraph, according to the levels given below, based on the higher of the daily average trading volume or open interest of the Contracts, after translation by the one-to-four contract scale plus TAIEX Taiwan Stock Exchange Finance Sector Index Futures Contracts during that period, with the benchmark set at 5 percent thereof for individuals and 10 percent thereof for institutional investors. However, the lowest position limit shall be 1,000 contracts for individuals, and 3,000 contracts for institutional investors:
- When the benchmark is 1,000 or more contracts, the position limit is the benchmark rounded down to the nearest integral multiple of 200 contracts.
- When the benchmark is 2,000 or more contracts, the position limit is the benchmark rounded down to the nearest integral multiple of 500 contracts.
- When the benchmark is 5,000 or more contracts, the position limit is the benchmark rounded down to the nearest integral multiple of 1,000 contracts.
- When the benchmark is 10,000 or more contracts, the position limit is the benchmark rounded down to the nearest integral multiple of 2,000 contracts.
The position limit for a proprietary trader for the Contracts shall be three times the position limit for an institutional investor set out in paragraph 2.
When the TAIFEX examines the applicable position limit levels, if the increase or decrease in the daily average trading volume or outstanding volume for the period, as compared to that at the time of the previous adjustment, does not exceed 2.5 percent, no adjustment shall be made even if the level for adjustment has been reached.
Any raising of the position limit will take effect from the TAIFEX announcement date. Any lowering of the position limit will take effect from the expiration of the next-nearest month contract that is already listed on the announcement date. Provided, the TAIFEX may adjust this according to circumstances.
When the position limit is lowered under the preceding paragraph, a position held by a trader prior to the effective date that surpasses the lowered limit may be held until the expiration date of the contract; provided, no new position may be added until the lowered limit has been complied with.
The total open positions in the Contracts held by an omnibus account are not subject to the limits in paragraph 2, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
A juristic institution may apply to the TAIFEX for relaxation of the limits on positions when based on hedging requirements.
In addition to conforming to the provisions of this article, the limits on open positions in the Contracts held by futures traders shall also conform to the TAIFEX Rules Governing Surveillance of Market Positions.
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| Article 17 |
A futures commission merchant engaging in proprietary or brokerage trading of the Contracts shall, unless otherwise provided, be subject to a limit of 100 contracts on the quantity of each trading quote.
The TAIFEX may make adjustments to the limit on the quantity of per order in the preceding paragraph in view of market trading conditions.
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| Article 18 |
Where any circumstance under Article 31 of the Operating Rules of the Taiwan Futures Exchange Corporation requires suspension of trading or delisting of the Contracts, the TAIFEX shall make a public announcement 30 days prior to implementation, with the exception of termination of the index licensing agreement by the Index compiling institute, which results in suspension of trading or delisting of the Contracts.
All open positions shall be liquidated by the announced implementation date for the suspension of trading or delisting. Any positions still open on the implementation date shall be settled at the settlement price of the trading day preceding the implementation date.
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| Article 19 |
These Trading Rules and any amendments hereto shall be implemented following ratification by the competent authority.
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