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Article 1     These Rules are specially prescribed to maintain orderly trading of Gold Futures Contracts ("the Contracts") at the Taiwan Futures Exchange Corporation ("TAIFEX"), so as to ensure secure and fair trading of the Contracts.
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.
Article 3     The Contracts are abbreviated as "Gold Futures" with the ticker symbol "GDF".
Article 4     The underlying of the Contracts is 10 ounces of refined gold of not less than 0.995 fineness.
    "Ounce" in these Regulations means a fine troy ounce.
Article 5     Prices of the Contracts shall be quoted in US dollars per one-ounce unit. The minimum price fluctuation (tick) shall be US$0.10 per ounce, which generates a price change of US$1 dollars per contract.
Article 6     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 volume originally bought or sold.
Article 7     The trading days for the Contracts are the business days of the TAIFEX. The trading hours are 8:45 am to 4:15 pm. When exceptional circumstances occur that affect trading of the Contracts, however, the TAIFEX may announce a temporary suspension of trading according to the current situation, and immediately report the suspension to the competent authority for recordation.
    The TAIFEX may change the trading days and trading hours referred to in the preceding paragraph after reporting to the competent authority and obtaining its approval.
Article 8     Delivery months for the Contracts shall be the six even calendar months. The last trading day for Contracts of any delivery month shall be the third to last business day of the month in which the Contracts reach expiration; trading of contracts reaching expiration shall cease at close of market on the last trading day, and the next business day following the last trading day shall be the final settlement day for a Contract at expiration.
    If the last trading day referred to in the preceding paragraph falls on a domestic holiday or a trading holiday of the London gold market or if trading cannot proceed on that day due to a force majeure event, the next following business day shall be the last trading day, provided that the TAIFEX may adjust the last trading day as warranted by the circumstances.
    The final settlement day of an expiring contract shall be the initial trading date 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 reporting to and receiving approval from the competent authority.
Article 9     Trading orders for the Contracts are automatically matched by computer. Matching is carried out by call auction at the opening of market, and then by continuous matching during market hours.
Article 10     All open positions are marked-to-market daily based on the daily settlement price published by TAIFEX.
    The daily settlement price referred to in the preceding paragraph shall be set in accordance with the following provisions:
  1. It shall be the volume-weighted average price of all trades during the last minute before market close.
  2. If there is no trade price for the Contracts during the last minute before market close on the current day, the average of the highest unexecuted bid and lowest unexecuted ask quoted as of market close shall be taken as the daily settlement price.
  3. When there is no quoted bid price, the lowest quoted ask price shall be taken as the daily settlement price; when there is no quoted ask price, then the highest quoted bid price shall be taken as the daily settlement price.
  4. When there is no quoted bid nor ask price for a distant-month futures contract, then the price difference between the settlement price of the nearest-month futures contract and the settlement price of the distant-month futures contract on the previous business day shall be taken as the basis of calculation, whereby the sum of the current day's settlement price of the nearest-month futures contract and the above price difference will be taken as the daily settlement price of the distant-month contract.
  5. If a current-day settlement price cannot be determined by any of the methods in subparagraphs 1 to 4, or if the settlement price yielded is obviously unreasonable, the settlement price shall be set by the TAIFEX.
Article 11     The daily price limit of the Contracts shall be the settlement price of the preceding trading day plus or minus 15 percent.
Article 12     The final settlement price of the Contracts shall be the LBMA Gold Price AM announced by ICE Benchmark Administration Limited (IBA) on the same calendar day as the last trading day. If, however, the LBMA Gold Price AM has for any reason not yet been generated before the TAIFEX executes procedures for settlement at expiration on the final settlement day, the TAIFEX will determine the final settlement price according to the Guidelines for the Final Settlement Price of Gold Futures.
Article 13     The Contracts shall be settled in cash, with the futures trader delivering or receiving the net amount of the price differential in cash on the final settlement day based on the final settlement price.
Article 14     Before accepting an order to buy or sell the Contracts, a futures commission merchant shall collect from the principal a sufficient trading margin based on the total quantity ordered, and from the day of the transaction until the expiration of the settlement period shall mark to market on a daily basis the equity in the position held by each principal based on the daily settlement price and count it in the calculation of the principal's margin account balance.
    If the balance in the principal's margin account falls below the maintenance margin level, the futures commission merchant shall immediately notify the principal to deposit in cash the difference between the margin account balance and the required margin for all open positions within a prescribed time period. If the principal fails to deposit the margin within the prescribed time limit, the futures commission merchant may proceed to liquidate the principal's positions.
    The trading margin and the maintenance margin referred to in the preceding two paragraphs shall not be lower than the initial margin and maintenance margin requirements announced by the TAIFEX.
    The initial margins and maintenance margin announced by the TAIFEX shall be based on the clearing margin calculated according to the TAIFEX Standards and Methods for Receipt of Clearing Margins plus a percentage prescribed by the TAIFEX.
    Payment/receipt of the principal's margins referred to in paragraphs 1 and 2 may be in New Taiwan Dollars or another foreign currency as announced by the TAIFEX, in accordance with the agreement between the client and the futures commission merchant, with the futures commission merchant acting as foreign exchange settlement agent. The futures commission merchant shall conduct the required exchange settlements in accordance with the Regulations Governing the Reporting of Foreign Exchange Receipts and Disbursements or Transactions prescribed by the Central Bank of China.
Article 15     The combined total volume of open long or short same-side positions in the Contracts held at any time by a trader may not exceed the limit standards publicly announced by the TAIFEX.
    Every three months, or as occasioned by market conditions, the TAIFEX will 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 the open volume of the Contracts for that period, with the benchmark set at 5 percent thereof for natural persons and 10 percent thereof for institutional investors. However, the lowest position limit shall be 1,000 contracts for natural persons, and 3,000 contracts for institutional investors:
  1. When the benchmark is 1,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 200 Contracts.
  2. When the benchmark is 2,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 500 Contracts.
  3. When the benchmark is 5,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 1,000 Contracts.
  4. When the benchmark is 10,000 or more Contracts, the position limit shall be the benchmark rounded down to the nearest integral multiple of 2,000 Contracts.
    The aggregate total of a futures proprietary merchant's open positions in the Contract shall be limited to three times the institutional investor limit as given in paragraph 2. The TAIFEX, however, may adjust this limit for market makers of the Contracts as it deems necessary in view of market conditions.
    When the TAIFEX examines the applicable position limit levels, if the increase or decrease in the daily average trading volume or open 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. The TAFIEX, however, 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 standard may be held until the expiration date of the Contracts, provided that no new position may be added until the lowered limit standard has been complied with.
    The combined aggregate of open positions in the Contracts held in omnibus accounts are not subject to the limits of paragraph 2, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
    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 Taiwan Futures Exchange Corporation Regulations Governing Surveillance of Market Positions.
Article 16     Futures commission merchants shall limit the size of orders they accept for the Contracts to no more than 100 Contracts per order.
    When necessary, the TAIFEX may make appropriate adjustments to the limit applied to the volume of individual trade orders under the preceding paragraph in view of market trading conditions.
Article 17     Where any circumstance exists requiring suspension of trading or de-listing of the Contracts as enumerated in Article 31 of the Operating Regulations of the Taiwan Futures Exchange Corporation, the TAIFEX shall make a public announcement 30 days before implementation.
    All open positions shall be liquidated by the announced implementation date of suspension of trading or de-listing. Any positions still open on the implementation date will be settled at the settlement price for the trading day immediately preceding the implementation date.
Article 18     These Trading Rules and any amendments hereto shall be implemented following ratification by the competent authority.