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Title: Taiwan Stock Exchange Corporation Regulations Governing Trading of Depositary Receipts
Date: 2008.06.26 ( Announced )
Date: 2012.06.07 ( Amended )

Article Content

 
Article 1     These Regulations are promulgated pursuant to Article 55 of the Operating Rules of the Taiwan Stock Exchange Corporation.
Article 2     Depositary receipts issued by foreign issuers in accordance with the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers may be traded on the Taiwan Stock Exchange Corporation's (TWSE) centralized securities exchange market upon approval for listing by the TWSE.
Article 3     Trading of listed depositary receipts shall be performed in accordance with these Regulations; any matters not provided for herein shall be governed by the Operating Rules of the Taiwan Stock Exchange Corporation or other applicable regulations.
Article 3-1     With the exception of qualified institutional investors, a principal that makes an initial trade of listed depositary receipts shall first sign a risk disclosure statement before the securities broker may accept the principal's trading order.
    The risk disclosure statement of the preceding paragraph is to be announced by the TWSE.
    The term "qualified institutional investor" as used in paragraph 1 means a foreign or domestic bank, insurance company, bills finance company, securities firm, fund management company, government investment institution, government fund, pension fund, mutual fund, unit trust, securities investment trust company, securities investment consulting company, trust enterprise, futures commission merchant, futures service enterprise, and any other institution approved by the competent authority.
Article 4     The volume of a purchase or sale order shall be one trading unit or an integral multiple thereof. A trading unit shall be one thousand units.
    Where the volume of an order is less than one trading unit, trading shall be done in accordance with the applicable provisions of the Regulations Governing the Trading of Odd-Lot Shares.
Article 5     The price quoted for purchase or sale of depositary receipts shall be the price of a single depositary receipt unit.
    Provisions governing the tick size for prices of listed stocks apply mutatis mutandis to tick size for depositary receipt trade order prices.
Article 6     After depositary receipts have been listed, provisions governing the daily price fluctuation limits for listed stocks apply mutatis mutandis to those for depositary receipts.
Article 7     Except where otherwise provided, in competitive auction trading of depositary receipts after initial listing, the public underwriting price shall be taken as the reference basis for calculating the fluctuation limits.
    However, for a depositary receipt for which public underwriting is not duly required, the TWSE may use the unit value of the depositary receipt, translated from the most recent closing price of the underlying security 1 business day before the listing of the depositary receipt, as the reference basis for calculating the fluctuation limits.
    If the underlying security goes ex-dividend or ex-rights in its original trading market after the public underwriting and before the listing of the depositary receipt, the provisions of the TWSE Operating Rules shall apply mutatis mutandis to the reference basis for calculating the price fluctuation limits.
Article 8     The provisions of Article 58, paragraph 5 of the Operating Rules of the Taiwan Stock Exchange Corporation apply mutatis mutandis to the posting of quotations and trading volumes.
Article 9     Trading of depositary receipts is restricted to trading through limit orders.
    Depositary receipts are traded through automated computer trading, with trade orders limited to day orders only.
Article 10     For foreign nationals or overseas Chinese opening accounts for trading of depositary receipts, Article 77-4 of the Operating Rules of the Taiwan Stock Exchange and other relevant regulations apply.
Article 11     Within the deadlines specified below, depository institutions shall perform conversion to New Taiwan Dollar amounts for the following data on price and value, uniformly applying the closing interbank foreign exchange market rate for the previous business day, and report the results to the TWSE:
  1. For the securities represented by depositary receipts listed and outstanding on a foreign stock exchange or stock market, the most recent closing price on the foreign stock exchange or stock market shall be submitted to the TWSE one-half hour prior to the opening of its centralized securities market.
  2. Information on distribution of entitlements of the securities represented by the depositary receipt, which shall be submitted to the TWSE within 12 days from the foreign issuer's date of decision, provided that where law or regulation in the issuer's home country requires reporting within a shorter period, that period shall apply.
Article 12     The Operating Rules of the Taiwan Stock Exchange Corporation apply mutatis mutandis to ex-dividend and ex-rights procedures for depositary receipts.
    When there is an additional distribution of a depositary receipt as a result of a split in the underlying security, or a reissuance of a depositary receipt as a result of a reverse stock split in the underlying security, the depository institution shall set a price adjustment date consistent with the rights and obligations of the original underlying security.
    Calculation of the fluctuation limits for the price adjustment date of a depositary receipt shall be based on the previous day's closing price divided by the ratio of the total number of depositary receipt units after the additional distribution or the reissuance to the original number of depositary receipt units.
    If on the price adjustment date there is no closing price for the previous day, the closing price used as the basis for the calculation of the preceding paragraph shall be replaced by the price determined according to the principle set out in Article 58-3, paragraph 2, subparagraph 2 of the TWSE Operating Rules.
Article 13     Separate settlement calculation tables shall be produced for clearing of depositary receipts; clearing and settlement of depositary receipts is governed mutatis mutandis by the provisions of the Operating Rules of the Taiwan Stock Exchange Corporation.
Article 14     For fees collected from principals by securities firms taking orders for trading of depositary receipts, and for collection of transaction charges from securities firms by the TWSE, the fee schedules will be determined by the mutatis mutandis application of provisions applicable to listed stocks.
Article 15     These Regulations, and any amendments hereto, will be promulgated and enforced upon ratification by the competent authority.