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Article 1     These Procedures are promulgated pursuant to Article 49 paragraph 2 of the Futures Trading Act and Article 24 of the Regulations Governing Futures Clearing Houses.
Article 2     If the outstanding obligation of a defaulting clearing member cannot be satisfied by the appropriations set forth and in the order provided for in Article 105, paragraph 1, subparagraphs 1 to 4 of the Operating Rules of the Taiwan Futures Exchange Corporation (the "Operating Rules" of the TAIFEX), the residual balance shall be jointly apportioned among the non-defaulting clearing members as follows:
  1. Fifty percent of the residual balance is based on a member's cleared volume in the six-month period before the defaulting day as a percentage of the total cleared volume of all non-defaulting clearing members.
  2. The other fifty-percent is based on a member's average daily open positions over the previous 30 trading days as a percentage of the average daily open positions of all non-defaulting clearing members.
    The cap on the residual balance jointly apportioned among the non-defaulting clearing members in the preceding paragraph shall be in accordance with Article 105, paragraph 2 of the Operating Rules.
Article 3     A clearing member shall pay its apportioned share in accordance with the apportionment and payment procedure indicated in the TAIFEX's written notification within the prescribed period.
Article 4     If a clearing member refuses to pay its share or does not comply with the payment procedure, the TAIFEX may halt the member's clearing and settlement operations or terminate its clearing and settlement contract with the member.
Article 5     The amount recovered by the TAIFEX from the defaulting clearing member shall be used to repay the following amounts in the following order, after deducting all expenses:
  1. Amount paid by the TAIFEX in accordance with Article 105, paragraph 1, subparagraph 6 of the Operating Rules.
  2. Apportioned amounts paid by the non-defaulting clearing members in accordance with Article 105, paragraph 1, subparagraph 5 of the Operating Rules.
  3. Amount paid from the non-defaulting clearing members' contributions to the clearing and settlement fund in accordance with Article 105, paragraph 1, subparagraph 4 of the Operating Rules.
  4. Amount paid from the TAIFEX's compensation reserve fund in accordance with Article 105, paragraph 1, subparagraph 3 of the Operating Rules.
Article 6     These Procedures and any amendments to them shall take force after they have been submitted to the competent authority for ratification.