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Title: Taiwan Futures Exchange Corporation Contract for Clearing and Settlement of Futures Trading
Date: 2009.06.05 ( Announced )
Date: 2009.06.05 ( Amended )

Article Content

 
1     Pursuant to the provisions of Article 27 of the Rules Governing Futures Clearing Houses, the Taiwan Futures Exchange Corporation (hereinafter referred to as the "Corporation") and ______________ Co., Ltd. (hereinafter referred to as the "Member"), a futures clearing member, hereby agree to the terms of this Contract as follows:

Article 1
    This Contract shall become effective only after the Member has obtained documentation of company registration, documentation of business registration, and the license certificate issued by the Competent Authority. The Member shall not engage in clearing and settlement operations until the Corporation has executed and returned this Contract and the Member has become a clearing member.

Article 2
    The Member shall comply with the Corporation's Operating Rules and other guidelines, regulations, and announcements. The Member shall also comply with any amendments to the Corporation's Operating Rules and other rules, regulations, and announcements.

Article 3
    When the Member engages in clearing and settlement, it shall assume clearing and settlement obligations as well as all related responsibilities to the Corporation.

Article 4
    When engaging in clearing and settlement operations, the Member shall comply with the Corporation's rules governing marking to market, delivery and settlement on expiration, and position limits. When necessary, the Member shall render a clearing margin in advance.

Article 5
    Where the clearing margin rendered by the Member is less than amount prescribed by the Corporation, the Member shall cover the shortfall by the Corporation's deadline.

Article 6
    The Member agrees, pursuant to the Corporation's requirements, to instruct its settlement bank to provide the particulars of the Member's margin account. The Member also agrees that if Member fails to perform its clearing and settlement obligations, the Corporation may instruct the Member's settlement bank to suspend withdrawals by the Member from its margin account and to transfer funds from that account to an account designated by the Corporation as instructed by the Corporation.

Article 7
    No later than two months after this Contract takes force, the Member shall deliver to the Corporation copies of its succession contracts with other clearing members to take over the accounts of the Member and Member's principals in the event that the Member goes bankrupt, dissolves, suspends operations, or fails to perform its clearing and settlement obligations.

Article 8
    Should the Corporation, pursuant to Article 54 of the Futures Trading Law, designate the Member to take over relevant accounts of another clearing member and its principals, the Member shall not refuse and shall perform clearing and settlement obligations on behalf of that clearing member as instructed by the Corporation.

Article 9
    The Member shall not refuse to assume its apportionment as designated by the Corporation pursuant to Subparagraph 5 Paragraph 1 of Article 49 of the Futures Trading Law.

Article 10
    The Member shall pay clearing fees, settlement fees, positions adjustment fees, positions transfer fees, registration fees, annual license fees and other fees on time according to the schedules promulgated by the Corporation.

Article 11
    The Corporation shall not be liable for losses suffered by the Member caused by measures that the Corporation adopts dues to market emergencies, changes to relevant laws and regulations, orders from the Competent Authority, or any other events of force majeure.

Article 12
    The Member shall bear full liability for operations and all acts of clearing and settlement conducted by its employees on the Corporation's market. Where the Member makes personnel changes or removes employees, the Member shall continue to be fully liable until the Corporation received notification that the personnel change or removal of the employee has been registered.

Article 13
    Where any of the circumstances listed in the Subparagraphs below apply, the Corporation may, pursuant to its Operating Rules or other rules, regulations, or announcements, fine the Member for breach of contract, suspend or restrict the Member's clearing and settlement operations, or terminate this Contract:
  1. Violation of laws and regulations, failure to comply with administrative dispositions by the Competent Authority, or violation of the Corporation's Operating Rules or other rules, regulations, or announcements.
  2. Clearing and settlement acts in bad faith capable of injuring others.
  3. Refusal to take over the clearing and settlement operations of other clearing members in the circumstances described in Article 54 of the Futures Trading Law.
  4. Violation of the terms of this Contract.
Article 14
    In addition to termination by the Corporation for the reasons listed in the preceding Article, this Contract shall also terminate if either party goes bankrupt, is dissolved, ceases operations, or has its operating permit revoked.

Article 15
    Where the Member terminates this Contract pursuant to the preceding Article or is suspended from trading, the Member is obliged to unwind its trades on the Corporation's market. Where the Member terminates this Contract for other reasons, termination shall not take force until the Member notifies the Corporation in writing and the Corporation agrees to the termination.

Article 16
    The Corporation and the Member agree that any disputes arising from clearing or settlement of futures transactions shall resolved by arbitration. Should the arbitration period expire without an arbitration decision, both parties agree that the Taipei District Court shall be the court of first instance if a lawsuit is filed.

Article 17
    This Contract shall be executed in three copies. The Corporation, Member, and the Competent Authority shall each retain one copy.

    The Parties:
    The Corporation:

    Taiwan Futures Exchange Corporation
    Government Uniform Invoice No.
    Responsible Person
    ID No.
    Address 14F, No. 100 Roosevelt Rd. Section 2, Taipei

    Member:
    Government Uniform Invoice No.
    Responsible Person
    ID No.
    Address

    Date