Search Result

Article Content

 
Article 1     These Rules are specially prescribed to maintain orderly trading of NT Dollar Denominated 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 "NT Dollar Gold Futures" with the ticker symbol "TGF".
Article 4     The underlying of the Contracts is 10 Taiwan taels (375 grams) of refined gold of not less than 0.9999 fineness.
Article 5     Prices of the Contracts shall be quoted in NT dollars per unit of one Taiwan cian [one Taiwan cian equals one tenth of a Taiwan tael]. The minimum unit of price fluctuation (tick) shall be NT$0.5 per Taiwan cian, which generates a price change of NT$50 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 as follows:
  1. Regular trading session: from 8:45 am to 4:15 pm.
  2. After-hours trading session: from 5:25 p.m. to 5 a.m. of the following day.
    When, during the trading hours referred to in the preceding paragraph, exceptional circumstances occur that affect trading of the Contracts, the TAIFEX may announce a temporary suspension of trading as dictated by the circumstances at the time, and immediately report the suspension to the competent authority for recordation.
    The TAIFEX may change the trading days and trading hours referred to in paragraph 1 after reporting to the competent authority and obtaining its approval.
Article 8     Delivery months for the Contracts shall be the six successive 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 expiring month Contracts shall cease at close of the regular trading session on the last trading day. The next business day following the last trading day shall be the final settlement day for an expiring month Contract.
    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 business day shall be the last trading day, provided that the TAIFEX may adjust the last trading day as warranted by the circumstances.
    Trading in a new delivery month shall commence from the regular trading session of the next business day following the last trading day of an expiring month Contract.
    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 held by traders are marked-to-market daily after close of the regular trading session based on the daily settlement price published by the TAIFEX.
    The daily settlement price referred to in the preceding paragraph shall be set based on the trading information of the regular trading session and 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 daily 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      With the exception of the conditions described in paragraph 2, paragraph 3, and paragraph 4, the price limit for the Contracts in any trading session shall be the daily settlement price of the previous regular trading session plus or minus 5 percent.
     From market opening to 10 minutes before the market closes in any trading session of the Contracts, if the transaction price of the nearest-month contract touches the ±5% price limit, or the best bid price of the nearest-month contract touches the +5% price limit, or the best ask price of the nearest-month contract touches the -5% price limit, the price limit for the contracts for all delivery months will, 10 minutes after the limit is touched, expand to ±10% of the daily settlement price of the previous regular trading session.
     From the time the price limit for the Contracts in any trading session expands to ±10% of the daily settlement price of the previous regular trading session to 10 minutes before the market closes, if the transaction price of the nearest-month contract touches the ±10% price limit, or the best bid price of the nearest-month contract touches the +10% price limit, or the best ask price of the nearest-month contract touches the -10% price limit, the price limit for the contracts for all delivery months will, 10 minutes after the limit is touched, expand to ±15% of the daily settlement price of the previous regular trading session.
     The price limit for the regular trading session for contracts for all delivery months will be the expanded price limit if the conditions described in paragraph 2 or paragraph 3 are met in the previous after-hour trading session.
     TAIFEX may adjust the provisions of the preceding 4 paragraphs as it deems necessary based on market conditions.
Article 12     The final settlement price of the Contracts shall be set on the basis of the LBMA Gold Price AM announced by ICE Benchmark Administration Limited (IBA) on the same calendar day as the last trading day and the USD/TWD spot exchange rate at 11 AM Taiwan time announced by Taipei Forex Inc. on the last trading day, after conversion for weight and fineness. The formula for its calculation is as follows:
    ( LBMA Gold Price AM ÷ 31.1035 × 3.75 × 0.9999 ÷ 0.995) × the USD/TWD spot exchange rate at 11 AM.
    *Note: One fine troy ounce is 31.1035 grams. One Taiwan cian is 3.75 grams. The LBMA Gold Price is the price of refined gold of not less than .995 fineness. The underlying object of this contract is gold of .9999 fineness.
    In the event that the LBMA Gold Price AM referred to in the preceding paragraph has for any reason not yet been generated before the TAIFEX executes procedures for settlement at expiration, the LBMA Gold Price PM as announced by ICE Benchmark Administration Limited (IBA) after market close on the same calendar day as the last trading day shall be used as the basis for calculation of the final settlement price. When for any reason neither the LBMA Gold Price AM nor the LBMA Gold Price PM has been announced, the TAIFEX shall determine the final settlement price by taking into reference, in order, the key gold market prices in New York, Chicago, Tokyo, and Hong Kong. In the event that the USD/TWD spot exchange rate at 11 AM has for any reason not been announced by Taipei Forex Inc., the first USD/TWD spot exchange rate announced by Taipei Forex Inc. after 11 AM on the last trading day shall be used as the basis for calculation of the final settlement price.
Article 13     The Contracts shall be settled in cash, with the futures trader delivering or receiving the net amount of the price difference in cash on the final settlement day based on the final settlement price. The trader with open positions may also, pursuant to the Taiwan Futures Exchange Operational Key Points of Clearing and Settlement for Futures Commission Merchants and Clearing Members, apply for delivering or receiving the physical gold that is registered to and regulated by Taipei Exchange.
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 margin 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.
Article 15     The combined total volume of open positions held at any time by a trader in the Contracts on either the long or short side of the market 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 limit standards under the preceding paragraph, for the bracket 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 bracket 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 regular trading session on the next business day after the TAIFEX announcement date. Any lowering of the position limit will take effect from the regular trading session on the next business day after 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.
    Aggregate open positions in the Contracts held in omnibus accounts are not subject to the limits in paragraph 2, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
    As required for their hedging needs, institutional investors may apply to the TAIFEX for a relaxation of the position limit.
    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     Except as otherwise provided, an FCM engaging in proprietary or brokerage trading of the Contracts shall be subject to a limit of 100 contracts on the quantity of each trading quote.
    The TAIFEX may adjust the limit on the quantity of trading quotes set out in 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 Rules 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.