Search Result

Article Content

Article 1     These Regulations are adopted pursuant to Article 8 of Taipei Exchange Rules for Administration of the Joint Responsibility System Clearing and Settlement Fund (the Administration Rules).
Article 2     The Taipei Exchange (TPEx) may, upon a resolution by the Joint Responsibility System Clearing and Settlement Fund Committee (the "Committee"), notify a securities firm to make an additional deposit to the Clearing and Settlement Fund (the "Fund") if any of the following events occurs to the securities firm:
  1. Irrevocable execution of assets by a court.
  2. Dishonor of any issued negotiable instrument due to insufficient funds, where the record of dishonor has not been canceled.
  3. A substandard rating under the Operational Rules for Early Warning of Operational Risk of Securities Firms, or consecutive losses with net worth lower than three-fifths of paid-in capital.
  4. A substandard rating for internal auditing, where improvements still have not been made after repeated guidance and evaluation
  5. Any deficiency in credit review or credit extension operations, where improvements have not been made or are substandard after repeated notices to make improvements.
  6. Material violation of law or regulation or TPEx rules or bylaws, for which the competent authority or the TPEx has imposed repeated sanctions without seeing improvements.
  7. Other material unforeseen event or upon the instructions of the competent authority.
     If any relevant unit of the TPEx finds any circumstance under the preceding paragraph with respect to a securities firm in the course of auditing the finances and business of the securities firm or through the surveillance system, the unit shall submit regular reports to the Committee.
Article 3      If any circumstance under paragraph 1 of the preceding Article applies to a securities firm, the TPEx may, depending on the severity of the circumstance, submit a concrete proposal to the Committee and request a resolution as to whether the securities firm should be required to make an additional deposit to the Fund and the amount of the additional deposit.
Article 4     The TPEx shall notify securities firms to make additional deposits to the Fund according to the Committee's resolutions. The securities firm shall make the contribution within three days from the day the securities firm receives the notice.
Article 5     Each month the TPEx shall calculate the daily average value at risk (the "calculated value") for each securities firm for the previous month, and notify the securities firm to make a supplemental deposit, or make a refund to the securities firm from the fund, as provided below:
  1. If 80 percent of the calculated value is greater than the basic amount the securities firm has already deposited to the Fund, the securities firm shall make a supplemental deposit to cover the difference.
  2. If 80 percent of the calculated value is less than the basic amount the securities firm has already deposited into the Fund, then the TPEx shall refund the difference. The securities firm's balance remaining in the Fund after refunding of the difference may not be less than its basic amount deposited into the Fund.
    "Basic amount" in the preceding paragraph means the amount that the securities firm is required to deposit into the Fund, which is calculated according to Article 3 of the Administration Rules. "Daily average value at risk" means the daily average value calculated by the TPEx's value-at-risk calculation model.
Article 6      For any difference that a securities firm deposits to the Fund under the preceding article, or any difference refundable from the Fund by the TPEx to the securities firm under the preceding article, the deposit or refund shall be made within 3 business days from the date of the notice by the TPEx.
Article 7      If a securities firm fails to make a deposit to the Fund as required by a notice under Article 4 or 6, or makes an insufficient deposit, the TPEx will proceed directly to adjust the firm's daily trading limit pursuant to Article 8 of the Administration Rules, and the adjusted limit may not exceed five times the amount that the securities firm has deposited to the Fund.
    If the securities firm makes the required deposit into the Fund after the TPEx has adjusted the amount of trades that the firm may place daily pursuant to the preceding paragraph, the TPEx shall immediately restore the firm's pre-adjustment daily trading limit.
Article 8     The amounts deposited by securities firms in accordance with Articles 3 and 5 are not subject to the prorating provisions stated in Article 13, paragraph 1, subparagraph 2 of the Administration Rules.
Article 9      If any of the following events occurs on the TPEx market, the TPEx shall submit the matter to the Committee for deliberation and a resolution, upon the passage of which, it shall notify all securities firms to make additional deposits to the Fund within a designated time limit:
  1. More than one-fifth of all securities firms experience any event in any subparagraph of in Article 2, paragraph 1, in a single calendar month.
  2. The total number of securities firms whose daily average value at risk for any month reaches twice the basic amount that the firm has already deposited to the Fund exceeds one-fifth of all securities firms.
  3. A securities firm defaults on its settlement obligations.
  4. The market encounters any circumstance that the TPEx considers likely to have a material effect on orderly clearing and settlement in the market.
  5. Any other event as approved by the competent authority.
    A circumstance under subparagraph 4 of the preceding paragraph shall also be reported to the competent authority for approval.
    All amounts that are required to be additionally deposited by all, and by individual, securities firms under paragraph 1, shall be additionally deposited after the method of calculation and the scale of allocations have been deliberated and passed by a resolution of the Committee. A securities firm that, upon notice by the TPEX, fails to make a desposit or makes an insufficient deposit shall have its trading on the TPEx market halted.
Article 10     If a circumstance under Article 2, paragraph 1 no longer applies to the securities firm after it has made an additional deposit to the Fund, upon a resolution by the Committee, all or part of the amount of the additional deposit may be reimbursed to the firm.
Article 11     These Rules, and any amendments hereto, shall be passed by the Committee, and shall be publicly announced and implemented following submission to and approval by the competent authority.