Search Result

Article Content

 
Chapter I General Principles
Article 1     These Trading Rules are specially promulgated to maintain orderly trading of Taiwan Futures Exchange Corporation (TAIFEX) Single Stock Futures Contracts so as to ensure secure and fair trading.
Article 2     A futures commission merchant (FCM) engaging in trading of Single Stock Futures Contracts shall comply with these Rules as well as the Futures Trading Act and other applicable acts and regulations. Matters on which these Rules are silent shall be governed by applicable bylaws, public announcements, and official letters of the TAIFEX.
Article 3     The terms used in these Rules shall have the following meanings:
  1. Single Stock Futures Contract: A futures contract in which the underlying is a stock or beneficial certificate selected pursuant to TAIFEX regulations.
  2. Underlying Assets: The underlying content deliverable between the two parties to a Single Stock Futures Contract at the time of settlement.
  3. Underlying Securities: Securities encompassed by the Underlying Assets of a Single Stock Futures Contract.
  4. "Beneficial certificates," as used in these Rules, includes:
    1. Any beneficial certificate for an offering of an exchange-traded securities investment trust fund offered by a SITE pursuant to the Regulations Governing Securities Investment Trust Funds ("ETF"). If the component securities of the underlying index of such fund are all domestic securities, the fund is referred to as a domestic component securities ETF; if one or more of the component securities of the underlying index are foreign securities, or the fund is an ETF under Article 37 paragraph 4 of the Regulations Governing Securities Investment Trust Funds ("linked ETF"), the fund is referred to as an ETF with foreign component securities.
    2. Any beneficial certificate, fund share, or investment unit issued for an offering of offshore ETFs by an offshore fund manager or its designated institution pursuant to the Regulations Governing Offshore Funds ("offshore ETF").
Chapter II Stock Selection Criteria
Article 4     If the Underlying Security of a TAIFEX Single Stock Futures Contract is a stock, then the stock, or the issuer of the stock, shall comply with each of the following requirements:
  1. Common stock listed with the Taiwan Stock Exchange Corporation (TWSE) or the Taipei Exchange (TPEx).
  2. Market value of at least NT$10 billion.
  3. Trading volume during the most recent 3 calendar months equal to 20 percent or more of the total amount for all TWSE or TPEx listed shares, or average monthly trading volume for the most recent 3 calendar months of 100 million shares or more.
  4. No deficit in the financial statement for the most recent period audited and attested or reviewed by a CPA, or, a deficit for the most recent period but no accumulated deficit.
  5. Has not in the most recent three years been partially or completely suspended from trading by order of the competent authority due to any circumstance in Article 156 of the Securities and Exchange Act.
  6. Has not in the past year been subject to imposition of an altered trading method by the TWSE or TPEx, or an announcement of suspended trading under Article 50 or 50-3 of the TWSE Operating Rules or Article 12-1 of the TPEx Rules Governing Securities Trading on Over-the-Counter Markets.
  7. Has not in the most recent three months been subject to any sanction imposed by the TWSE pursuant to the TWSE Rules Governing Implementation of the Stock Market Surveillance System or the TPEx Regulations Governing Implementation of the Over-the-Counter Securities Market Surveillance System due to irregular fluctuations in the price of the Underlying Securities.
  8. Has not been subject to a public announcement by the TWSE or TPEx halting margin purchase and short sale transactions pursuant to Article 4 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale.
  9. Is not marked with any warning indicator in the Key Financials Section of the TWSE Market Observation Post System (MOPS).
  10. There is no other factor arising out the nature of the enterprise or special circumstances that may be deemed to have an adverse effect on the price of the Underlying Securities.
    If the shares of the issuer of the Underlying Securities of a TAIFEX Single Stock Futures Contract are de-listed from the TWSE or the TPEx due to the issuer's transformation into a financial holding company or an investment holding company through a 100 percent share exchange in accordance with the Financial Holding Company Act or the Business Mergers and Acquisitions Act, and if the date that the TWSE or TPEx has approved for the listing of the financial holding company or the investment holding company on the TWSE or the TPEx is the share exchange record date, the TAIFEX may select the financial holding company or investment holding company as [the issuer of] the Underlying Securities of a Single Stock Futures Contract, and the restrictions set forth in subparagraphs 2 to 10 of the preceding paragraph shall not apply.
Article 4-1      If the Underlying Security of a TAIFEX Single Stock Futures Contract is a beneficial certificate, that underlying security shall comply with each of the following requirements:
  1. It is a beneficial certificate for an ETF or offshore ETF listed on the TWSE or the TPEx.
  2. There has been no partial or complete suspension of trading of the beneficial certificate by order of the competent authority during the most recent three years due to any circumstance under Article 156 of the Securities and Exchange Act.
  3. There has been no public announcement by the TWSE or TPEx halting margin purchases and short sales of the beneficial certificate pursuant to Article 5 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale.
  4. There is no other special circumstance that could be deemed to adversely affect the price of the Underlying Security.
Article 5     Except where otherwise provided, each 3 months the TAIFEX will select securities qualified as Underlying Securities of Single Stock Futures Contracts under Article 4 and Article 4-1, and will examine and publicly announce the Underlying Securities of listed Single Stock Futures Contracts on the basis of market conditions.
Chapter III Contracts
Section I General Provisions
Article 6     The futures name and ticker symbol of each Underlying Securities of Single Stock Futures Contracts shall be separately designated by the TAIFEX.
Article 7      If the Underlying Security is a stock or a domestic component securities ETF, Single Stock Futures Contracts are traded from 8:45 am to 1:45 pm on the same trading days as the Underlying Securities. While the trading hours for a contract of a given expiration month on the relevant last trading day shall be from 8:45 am to 1:30 pm. If the Underlying Security is an ETF with foreign component securities or an offshore ETF, the trading hours are from 8:45 a.m. to 4:15 p.m., while the trading hours for a contract of a given expiration month on the relevant last trading day shall be from 8:45 am to 1:30 pm. However, if the TAIFEX has made other provisions, those provisions shall govern.
    If the Underlying Securities market announces a halt of trading for any reason before market opening of Single Stock Futures Contracts, or there are other factors affecting trading of the Single Stock Futures Contracts, trading of the Contracts may be halted. When the Underlying Securities market announces a halt of trading during trading hours of the Single Stock Futures Contracts, trading of the Contracts will still continue. As necessary, however, the TAIFEX may announce a halt of trading based on the current situation, and report the halt to the competent authority for recordation on the next business day.
     When the Underlying Securities market changes its trading hours, or when other factors influence trading of the Single Stock Futures Contracts, or in response to a suggestion by a futures industry association or the National Federation of Futures Industry Associations, the TAIFEX may change the trading days and trading hours for the Contracts after reporting to the competent authority for approval.
Article 8     Trading orders for Single Stock Futures Contracts, unless otherwise provided, are matched automatically by computer. Matching is done by call auction at market opening and by continuous trading after market opening.
Article 9     Unless otherwise provided, the quantity of any individual trading quote in proprietary or brokerage trading of Single Stock Futures Contracts by an FCM shall be less than 500 contracts.
    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 10     Before accepting an order to buy or sell Single Stock Futures Contracts, an FCM shall first collect from the principal a sufficient trading margin according to the aggregate order quantity, and from the transaction date until the expiration of the settlement period, shall mark to market daily 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 principal's margin account balance is lower than the required maintenance margin, the FCM shall promptly notify the principal to, within a prescribed time limit, deposit the cash difference between its margin account balance and the total trading margin amount required for open positions. If the principal fails to deposit the margin deficit within the time limit, the FCM may proceed to liquidate the principal's positions.
    The trading margin and maintenance margin referred to in the preceding two paragraphs shall not be lower than the initial and maintenance margin requirements publicly announced by the TAIFEX.
    The initial margin and maintenance margin publicly announced by the TAIFEX shall be calculated by multiplying the clearing margin, as determined under the Taiwan Futures Exchange Corporation Standards and Methods for Receipt of Clearing Margins, by a percentage prescribed by the TAIFEX.
Article 11     A trader may liquidate the contractual rights and obligations by selling or buying back in part or in whole the original long or short positions on the TAIFEX centralized exchange prior to closing of the last trading day.
Section II Contract Specifications
Article 12     If the Underlying Security of a Single Stock Futures Contract is a stock, the Underlying Assets of each Contract are 2,000 shares of the Underlying Securities. If the Underlying Security is an ETF, the Underlying Assets of each Single Stock Futures Contract are 10,000 beneficial units of the Underlying Security. If the Underlying Security is an offshore ETF, the Underlying Assets of each Single Stock Futures Contract will be separately prescribed by the TAIFEX.
    If the Underlying Security of the preceding paragraph is a stock, the TAIFEX may, depending on market conditions, add a contract for which the Underlying Assets are 100 shares of the Underlying Security.
     If a contract adjustment is duly made to a Single Stock Futures Contract, the Underlying Assets shall be adjusted accordingly.
Article 13     Prices of Single Stock Futures Contracts shall be quoted in NT dollars. If the Underlying Security is a stock, the contract multiplier is 2,000. If the Underlying Security is an ETF, the contract multiplier is 10,000. If the Underlying Security is an offshore exchange-traded fund, the contract multiplier will be separately prescribed by the TAIFEX.
    If a contract is added for which the Underlying Assets are 100 shares of the Underlying Security under paragraph 2 of the preceding Article, the contract multiplier is 100.
     If a contract adjustment is duly made to a contract under the preceding two paragraphs, the contract multiplier shall be adjusted accordingly.
    The minimum unit of price fluctuation (tick) for Single Stock Futures Contracts, when the Underlying Securities are stocks, is as follows:
  1. A quote of less than NT$10: NT$0.01.
  2. A quote of NT$10 to less than NT$50: NT$0.05.
  3. A quote of NT$50 to less than NT$100: NT$0.1.
  4. A quote of NT$100 to less than NT$500: NT$0.5.
  5. A quote of NT$500 to less than NT$1,000: NT$1.
  6. A quote of NT$1,000 or more: NT$5.
    The minimum unit of price fluctuation for Single Stock Futures Contracts, when the Underlying Securities are ETFs or offshore ETFs, is as follows:
  1. A quote of less than NT$50: NT$0.01.
  2. A quote of NT$50 or more: NT$0.05.
Article 14     If the Underlying Security of a Single Stock Futures Contract is a stock or a domestic component securities ETF, the daily price limit is the settlement price of the preceding trading day plus or minus 10 percent. If the Underlying Security is an ETF with foreign component securities or an offshore ETF, the daily price limit of the Single Stock Futures Contract is the settlement price of the preceding day plus or minus 15 percent. However, these restrictions shall not apply in cases of a duly made contract adjustment.
     If the Underlying Security of a Single Stock Futures Contract under the preceding paragraph is an ETF with foreign component securities or an offshore ETF, the TAIFEX may adjust the daily price limit on the basis of market conditions.
Article 15     Delivery months for Single Stock Futures Contracts shall be the 2 successive calendar months beginning with the spot month, and 3 nearest quarter months of March, June, September, and December, namely a total of 5 contract months, concurrently listed for trading.
    The last trading day for a Single Stock Futures Contract shall be the third Wednesday of the expiration month. This shall not apply, however, under any of the following circumstances:
  1. If the last trading day falls on a holiday, or if trading may not proceed on that day due to a force majeure event, the next business day shall become the last trading day.
  2. If the TAIFEX has made other provisions for other particular circumstances, those provisions shall govern.
    The trading of a contract reaching maturity ends at close of market on the last trading day. The last trading day is the final settlement day of the expiring contract.
    The next business day following the last trading day of the expired contract is the first trading day for the contract of the next nearest delivery month.
    After reporting to and receiving approval from the competent authority, the TAIFEX may, when it deems necessary, change the delivery months, initial trading days, final trading days, and final settlement days referred to in the preceding four paragraphs.
Article 16     Except where otherwise prescribed by the TAIFEX, the aggregate open positions on the same side of the market in futures contracts representing the same Underlying Securities held by a trader at any time shall be subject to the following tiered position limits:
  1. Tier 1: The position limit is 8,000 contracts for individual investors, 24,000 contracts for institutional investors, and 60,000 contracts for market makers.
  2. Tier 2: The position limit is 4,000 contracts for individual investors, 12,000 contracts for institutional investors, and 30,000 contracts for market makers.
  3. Tier 3: The position limit is 2,000 contracts for individual investors, 6,000 contracts for institutional investors, and 15,000 contracts for market makers.
     If a contract is added for which the Underlying Assets is 100 shares of the Underlying Security under Article 12, paragraph 2, the open positions, after being converted on the basis of a 20:1 contract multiplier, shall be incorporated in the aggregate open positions on the same side of the market in single stock futures contracts representing the same Underlying Securities as referred to in the preceding paragraph.
     The TAIFEX may adjust the limits on aggregate open positions held by market makers under paragraph 1 as it deems necessary in view of market conditions.
    The tiers applicable to Underlying Securities under paragraph 1 are as follows:
  1. Tier 1: The total trading volume of the Underlying Securities in the past 3 calendar months reached 1.6 billion or more shares or units, or total trading volume in the past 3 calendar months reached 1.2 billion or more shares or units, and the current number of outstanding shares, total issued beneficial units of an exchange-traded securities investment trust fund, or total number of units domestically offered and sold by an offshore exchange traded fund has reached 3.2 billion or more shares or units.
  2. Tier 2: Where the total trading volume of the Underlying Securities in the past 3 calendar months reached 800 million or more shares or units, or total trading volume in the past 3 calendar months reached 600 million or more shares or units, and the current number of outstanding shares, total issued beneficial units of an exchange-traded securities investment trust fund, or total number of units domestically offered and sold by an offshore exchange traded fund has reached 1.6 billion or more shares or units.
  3. Tier 3: Where the requirements of the two preceding subparagraphs are not met.
    The "number of outstanding shares" in the preceding paragraph and in Article 17, paragraph 1 means the total number of shares issued by the issuer of the Underlying Securities, less the following:
  1. The total percentage of shares held by directors and supervisors under statutory shareholding ratio requirements.
  2. Number of pledged shares.
  3. The number of shares that companies newly listed on the TWSE or TPEx are required to place in compulsory central custody.
  4. Shares repurchased under the Regulations Governing Share Repurchase by TWSE Listed and TPEx Listed Companies, but not yet retired.
  5. Shares on which the competent authority imposes a restriction on listing or trading on the TWSE or TPEx.
    The TAIFEX will, once every 3 months or according to market status, examine the tier grade of the Underlying Securities based upon the criteria set out in paragraph 2.
    Any raising of the position limit will take effect from the TAIFEX announcement date, and any lowering of the position limit will take effect upon expiration of the next-nearest month contract that is already listed on the announcement date; provided, the TAIFEX 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.
    Where a trader violates the provisions regarding position limits, the TAFIEX may restrict the trader from adding new positions, or instruct the FCM concerned to liquidate the trader's positions under conditions where this will not affect market price.
    An institutional investor may apply to the TAIFEX for a position limit increase based on hedging needs.
    The aggregate open positions in the contracts held in omnibus accounts are not subject to the limits in paragraph 1, with the exception of undisclosed omnibus accounts, which accounts are subject to the limits for institutional investors.
    In addition to complying with the provisions of this Article, a trader shall also comply with the Taiwan Futures Exchange Corporation Rules Governing Surveillance of Market Positions in holding open positions in Single Stock Futures Contracts.
Article 17      If the Underlying Security of Single Stock Futures and Stock Options is a stock, then when the aggregate number of shares represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 15 percent of the total number of outstanding shares of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those futures are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 12 percent, the TAIFEX may remove the restriction starting from the next trading day.
     If the Underlying Security of Single Stock Futures and Stock Options is an ETF, then when the aggregate number of beneficial units represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 70 percent of the total number of outstanding beneficial units of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those Futures are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 56 percent, the TAIFEX may remove the restriction starting from the next trading day.
    If the Underlying Security of Single Stock Futures and Stock Options is an offshore ETF, then when the aggregate number of beneficial units represented by the open positions of the Single Stock Futures and Stock Options in the same Underlying Security after close of market on any trading day exceeds 70 percent of the total number of the domestically offered and sold beneficial units of the Underlying Security, unless otherwise provided, the TAIFEX may impose a restriction to the effect that no trades in those Futures are allowed except to close out existing positions, starting from the next trading day. When the above percentage falls below 56 percent, the TAIFEX may remove the restriction starting from the next trading day.
Article 18     The daily settlement price for a Single Stock Futures Contract shall be determined as follows:
  1. The daily settlement price for a Single Stock Futures Contract 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 contract during the last minute before market close, 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 spot-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 spot-month futures contract and the above price difference will be taken as the daily settlement price of the distant-month contract.
  5. The daily settlement price shall be decided by the TAIFEX where a daily settlement price cannot be determined by any of the methods in subparagraphs 1 to 4, or if the settlement price as calculated by those methods is obviously unreasonable.
     Single stock futures contracts with the same Underlying Securities and the same delivery month will have the same daily settlement prices, provided that this restriction shall not apply in cases of a duly made contract adjustment.
Article 19     The final settlement price for a Single Stock Futures Contract shall determined by the arithmetic mean of the prices of the Underlying Securities on the securities market on the final settlement day that are available within the last 60 minutes of trading immediately preceding the close of market that day. If the Taiwan Stock Exchange postpones market closing or matching, the TAIFEX may extend the aforementioned 30-minute sampling time.
    The method of the calculation under the preceding paragraph shall be as separately adopted by the TAIFEX.
    If the final settlement day of a Single Stock Futures Contract falls on a day on which the Underlying Securities are suspended from trading, the day for determining the final settlement price shall be substituted by the business day before the first day on which the trading is suspended.
Article 20     For open positions, on the final settlement day the Underlying Asset value is calculated based on the final settlement price, with amounts lower than NT$1 unconditionally rounded down, and the net amount is delivered or received in cash.
    Settlement of a Single Stock Futures Contract at expiration shall be handled in accordance with Point 6 of the Taiwan Futures Exchange Operational Key Points of Clearing and Settlement for Futures Commission Merchants and Clearing Members.
Chapter IV Contract Adjustments
Article 21     If the Underlying Security of a Single Stock Futures Contract is a stock, and any of the following circumstances applies to the issuer, the TAIFEX shall adjust the terms and conditions of the contract and publicly announce the adjusted contract content prior to the effective date of the adjustment:
  1. Distribution of cash dividends.
  2. Conversion of capital reserves or earnings into capital.
  3. Cash capital increase. However, this shall not apply if the shareholders do not have preemptive rights to subscribe common shares.
  4. The company will be a non-surviving company after a corporate merger.
  5. Capital reduction. However, this shall not apply to cancellation of shares upon share repurchase or upon a shareholder's waiver of shares in accordance with regulations.
  6. Exchange of shares for those of a subsidiary of another company.
  7. Any other event causing a change to the name, type, or quantity of shares held by shareholders, or distribution of other benefits to shareholders.
Article 21-1     If the Underlying Security of a Single Stock Futures Contract is a beneficial certificate, and there is any of the following circumstances, the TAIFEX shall adjust the contract terms and publicly announce the adjusted terms prior to the date on which the adjustment takes effect:
  1. A distribution of income.
  2. The fund will be a non-surviving fund after a merger.
  3. Any other circumstance causing a change in the name, type, or number of beneficial certificates held by beneficial owners, or the receipt of a distribution of other benefits.
Article 22     The effective date of Single Stock Futures Contract adjustment shall be the second business day prior to the book closure date of the Underlying Securities or the date of suspension of changes to entries in the register of beneficial owners. However, this shall not apply if the Underlying Security is a stock and any of the following circumstances applies to the issuer:
  1. In the case of a statutory consolidation or an exchange of shares for those of a newly established company, the effective date of Contract adjustment shall be the record date of the merger or the record date of the share exchange.
  2. In the case of a capital reduction to cover losses, or a capital reduction by returning share capital in cash only, the effective date of Contract adjustment shall be the date when the trading of the Underlying Securities is resumed.
    On a case-by-case basis, the TAIFEX may otherwise set the date of Contract adjustment referred to in the preceding paragraph.
    A trader shall handle all trading and liquidation operations in compliance with the content of the post-adjustment Single Stock Futures Contract, both for positions in the futures contract already held prior to the effective date of contract adjustment and those opened thereafter.
Article 23     After a Single Stock Futures Contract is adjusted, the ticker symbol shall be changed, provided that this shall not apply when the adjustment is only to the addition to the buy-side equity amount and the deduction from the sell-side equity amount or to the last trading day.
Article 24     If the Underlying Security of a Single Stock Futures Contract is a stock and the issuer makes a cash dividend distribution, adjustment of the Single Stock Futures Contract pursuant to Article 21, subparagraph 1 shall be carried out as follows:
  1. For buy-side and sell-side positions held in Single Stock Futures Contracts at market close on the business day preceding the effective date of contract adjustment (i.e., the ex-dividend date of the Underlying Securities), the addition to the buy-side equity amount and the deduction from the sell-side equity amount shall be adjusted on the effective date of contract adjustment by the equivalent of the cash dividend amount received on the quantity of shares of the Underlying Securities as defined in Article 12, with amounts of less than NT$1.00 unconditionally rounded down. The adjustments shall be carried out in accordance with the Taiwan Futures Exchange Corporation Operation Directions for Clearing and Settlement Operations by Futures Commission Merchants and Clearing Members.
  2. The Underlying Assets of the post-adjustment contract are the ex-dividend securities, exclusive of cash dividend distribution received.
    Public announcement of the amount of the adjustment made pursuant to the preceding paragraph shall be made together with the public announcement for Article 21, subparagraph 1.
    Where contract adjustment is made in any circumstance under subparagraphs 2 and 3 of Article 21, the Underlying Assets shall be adjusted to the total of the following items:
  1. The quantity of shares of the ex-rights Underlying Securities as defined in Article 12.
  2. Gratis capitalization issue or certificates of entitlement to new shares, allocated to the quantity of shares of the Underlying Securities as defined in Article 12.
  3. Fair value of preemptive rights to participate in cash capital increase granted to the quantity of shares of the Underlying Securities as defined in Article 12, rounded down to the New Taiwan Dollar.
    The "fair value of preemptive rights to participate in cash capital increase" of subparagraph 3 of the preceding paragraph is computed as follows:
  1. The difference between the closing price of the Underlying Securities on the deadline for payment [for shares] and the subscription price of the cash capital increase, multiplied by the number of shares that may be subscribed with the preemptive rights to participate in the cash capital increase granted to the quantity of shares of the Underlying Securities as defined in Article 12. Provided, where the closing price of the Underlying Securities on the deadline for payment is lower than the subscription price of the cash capital increase, computation is excluded.
  2. Where the deadline for payment under the preceding subparagraph is later than the final settlement date, the difference between the closing price of the Underlying Securities on the final settlement date and the subscription price of the cash capital increase, multiplied by the number of shares that may be subscribed with the preemptive rights to participate in the cash capital increase granted to the quantity of shares of the Underlying Securities as defined in Article 12. Provided, where the closing price of the Underlying Securities on the final settlement date is lower than subscription price of the cash capital increase, computation is excluded.
Article 24-1     If the Underlying Security of a Single Stock Futures Contract is a beneficial certificate, and the issuer makes a distribution of income, adjustment of the Single Stock Futures Contract pursuant to Article 21-1, subparagraph 1 shall be carried out as follows:
  1. For buy-side and sell-side positions held in Single Stock Futures Contracts at market close on the business day preceding the effective date of contract adjustment (i.e., the ex-dividend date of the Underlying Securities), the addition to the buy-side equity amount and the deduction from the sell-side equity amount shall be adjusted on the effective date of contract adjustment by the equivalent of the income distribution amount received on the Underlying Securities in the quantity of the Underlying Assets as defined in Article 12, with amounts of less than NT$1.00 unconditionally rounded down. The adjustments shall be carried out in accordance with the Taiwan Futures Exchange Corporation Operation Directions for Clearing and Settlement Operations by Futures Commission Merchants and Clearing Members.
  2. The Underlying Assets of the post-adjustment contract are the ex-dividend securities, exclusive of the income distribution received.
    Public announcement of the amount of the adjustment made pursuant to the preceding paragraph shall be made together with the public announcement for Article 21-1, subparagraph 1.
Article 25     A contract adjustment under Article 21, subparagraph 4 or 6 shall be made in the following manner:
  1. If the shareholders of the issuer of the Underlying Securities receive distribution only of stock of a single company, and the distributed stock is, on the effective date of Contract adjustment, the Underlying Securities of a Single Stock Futures Contract listed by the TAIFEX, the Underlying Assets shall be adjusted to the distributed stocks or certificates of entitlement to new shares, in the same amount as the quantity of shares of the Underlying Securities as defined in Article 12 may be exchanged for the shares of the distributed stock. If cash distribution is received at the same time, however, the distributed cash shall be subject mutatis mutandis to the provisions of Article 24, paragraph 1, subparagraph 1.
  2. When the distribution received by the shareholders of the issuer of the Underlying Securities is other than the interests referred to in the preceding subparagraph, the Single Stock Futures Contracts that have the stock of the company as Underlying Securities shall be delisted from the TAIFEX.
    On a case-by-case basis, the TAIFEX may otherwise provide for Contract adjustment referred to in the preceding paragraph.
Article 25-1     A contract adjustment under Article 21-1, subparagraph 2 shall be made in the following manner:
  1. If the beneficial owners of the Underlying Securities receive distribution only of a single type of beneficial certificate, and the distributed beneficial certificates are, on the effective date of Contract adjustment, the Underlying Securities of a TAIFEX Single Stock Futures Contract, the Underlying Assets shall be adjusted to the distributed beneficial certificates, and the quantity shall be the quantity of the distributed beneficial certificates for which the quantity of the Underlying Securities of the Underlying Assets as defined in Article 12 may be exchanged. If cash distribution is received at the same time, however, the distributed cash shall be subject mutatis mutandis to the provisions of Article 24-1, paragraph 1, subparagraph 1.
  2. When the distribution received by the beneficial owners of the Underlying Securities is not the interests referred to in the preceding subparagraph, the Single Stock Futures Contracts that have the beneficial certificates as the Underlying Securities shall be delisted from the TAIFEX.
    On a case-by-case basis, the TAIFEX may otherwise provide for Contract adjustment referred to in the preceding paragraph.
Article 26     A contract adjustment under Article 21, subparagraph 5 shall be made in the following manner:
  1. When the issuer of the Underlying Securities carries out a capital reduction to cover losses, the Underlying Assets shall be adjusted to the Underlying Securities after capital reduction, by the quantity of shares as defined in Article 12 less the number of shares representing the percentage of the capital reduction.
  2. When the issuer of the Underlying Securities carries out a capital reduction in connection with return of share capital:
    1. When the shareholders receive only a cash distribution, the Underlying Assets shall be adjusted to the Underlying Securities after capital reduction, by the quantity of shares as defined in Article 12 less the number of shares representing the percentage of the capital reduction; any cash distributed shall be subject mutatis mutandis to the provisions of Article 24, paragraph 1, subparagraph 1.
    2. When the distribution received by the shareholders is other than the interests referred to in the preceding item, the last trading day for each of the listed contracts shall be adjusted to the third business day prior to the book closure date of the Underlying Securities.
  3. When the issuer of the Underlying Securities carries out a capital reduction in connection with demerger:
    1. When the issuer of the Underlying Securities is a surviving company, and the shareholders receive distribution of non-cash interests, the last trading day of each of the listed contracts shall be adjusted to the third business day prior to the book closure date of the Underlying Securities.
    2. When the issuer of the Underlying Securities is not a surviving company, and the shareholders receive distribution only of stock of a single company, and the distributed stock is, on the effective date of Contract adjustment, the Underlying Securities of a Single Stock Futures Contract listed by the TAIFEX, the Underlying Assets shall be adjusted to the distributed stocks or certificates of entitlement to new shares, in the same amount as the quantity of shares of the Underlying Securities as defined in Article 12 may be exchanged for the shares of the distributed stock.
    3. When the issuer of the Underlying Securities is not a surviving company, and the distribution received by the shareholders is other than the interest referred to in the preceding item, the Single Stock Futures Contracts that have the stock of the company as Underlying Securities shall be delisted from the TAIFEX.
    On a case-by-case basis, the TAIFEX may otherwise provide for Contract adjustment referred to in the preceding paragraph.
Article 27     The TAIFEX may execute contract adjustments under Article 21, subparagraph 7, or Article 21-1, subparagraph 3, on a case-by-case basis.
Article 28     Where during its duration an adjusted contract is subject to further adjustment under Article 21 or Article 21-1, the Underlying Securities of the Underlying Assets shall be adjusted pursuant to the relevant provisions of Articles 24 through 27, and the quantity of the Underlying Assets shall be calculated as the number of shares or units of the Underlying Securities subsequent to the prior adjustment of the contract.
Article 29     The TAIFEX will add no new contract months for the pre-adjustment version of a contract that has been adjusted; any contract month of such a contract that has zero open positions after close of market on any business day will be delisted from the next business day, provided that this shall not apply when the only adjustment made is the adjustment under Article 21, subparagraph 1.
Article 30     On the effective date of a contract adjustment under Article 21 or Article 21-1, the TAIFEX may add listings of new contract months, for the quantity of the Underlying Securities defined in Article 12.
    Article 15, paragraph 1 shall apply mutatis mutandis to the additional listing of new contract months under the preceding paragraph.
Article 31     Upon adjustment of a Single Stock Futures Contract in any circumstances under Article 21 or Article 21-1, the position limit shall be computed by inclusion of all types of futures with the same Underlying Securities held by the trader; if there is any adjustment in the number of Underlying Securities, it shall also be based upon the total number of shares or the total number of units of the Underlying Assets.
    Adjustment contents and reversion dates for position limits under the preceding paragraph shall be publicly announced by the TAIFEX.
Chapter V Suspension of the Listing of New Contract Months
Article 32     If the Underlying Security of a Single Stock Futures Contract is a stock, the TAIFEX shall suspend the listing of new contract months for that Contract in any of the following circumstances with respect to the Underlying Securities or their issuer:
  1. Where the market value is less than NT$5 billion.
  2. The volume of shares traded during the most recent 3 calendar months accounts for less than 8 percent of the total amount of all TWSE or TPEx listed shares, and the average volume of shares traded in the most recent 3 calendar months is less than 40 million shares.
  3. Where it is publicly announced that the issuer will be a non-surviving company after a corporate merger.
  4. Where the competent authority has ordered the partial or complete suspension of trading of the Underlying Securities.
  5. Where the TWSE or TPEx has publicly announced a change of trading method for the Underlying Securities.
  6. Where suspension of trading of the Underlying Securities has been announced by the TWSE pursuant to Article 50 or 50-3 of the TWSE Operating Rules or by the TPEx pursuant to Article 12-1 of the TPEx Rules Governing Securities Trading on Over-the-Counter Markets.
  7. Where the TWSE or TPEx has announced the halting of margin purchase and short sale transactions pursuant to Article 4 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale, or a TPEx listed security is transferred to a TWSE listing and the TWSE publicly announces that it is not eligible for margin purchases or short sales.
    The TAIFEX shall make a quarterly examination and announcement with respect to any suspension of the listing of new contract months under subparagraphs 1 and 2 of the preceding paragraph; with respect to suspension of the listing of new contract months under any of the other subparagraphs, it shall make the announcement upon learning of the event.
    In addition to complying with the provision of paragraph 1, the TAIFEX may suspend the listing of new contract months based upon the condition of the issuer of the Underlying Securities or upon market conditions.
    In the circumstances under subparagraphs 1 or 2 of paragraph 1, the TAIFEX may continue to add listings of new contract months to meet market needs.
     If the financial holding company or the investment holding company that may serve as [the issuer of] the Underlying Securities under Article 4, paragraph 2 is announced by the TWSE or TPEx as having its securities prohibited from margin purchases and short sales, no new contract months will be listed from the share exchange record date.
Article 32-1     If the Underlying Security of a Single Stock Futures Contract is a beneficial certificate and any of the following circumstances exists, the TAIFEX shall suspend the adding of new series of the contract:
  1. Where it is publicly announced that the fund will be a non-surviving fund after a merger.
  2. Where the competent authority has ordered the partial or complete suspension of trading of the Underlying Securities.
  3. Where the TWSE or TPEx has announced the halting of margin purchase and short sale transactions pursuant to Article 5 of the Standards Governing Eligibility of Securities for Margin Purchase and Short Sale.
     With respect to any suspension of adding new series under any subparagraph of the preceding paragraph, the TAIFEX shall make the announcement upon learning of the event.
    In addition to complying with the provisions of paragraph 1, the TAIFEX may suspend the adding of new series based upon the condition of the Underlying Securities or upon market conditions.
Article 33     Where the additional listing of new contract months is suspended, the TAIFEX may resume the additional listing of new contract months in either of the following circumstances:
  1. In the case of suspension of listing new contract months in any of the circumstances under subparagraphs 1 and 2 of paragraph 1 of Article 32: the Underlying Securities or the issuer thereof meets the requirements under Article 4.
  2. In the case of suspension of listing new contract months in any of the circumstances under subparagraphs 3 or 7 of paragraph 1, or under paragraph 3, of Article 32, or under subparagraphs 1 or 3 of paragraph 1, or under paragraph 3, of Article 32-1: the circumstances which led to the suspension cease to exist.
     Where the financial holding company or the investment holding company that may serve as [the issuer of] the Underlying Securities under Article 4, paragraph 2 does not list new contract months due to Article 32, paragraph 5, if the cause therefor ceases to exist, the TAIFEX may resume listing new contract months.
    Upon resumption of adding or listing of new contract months, contracts of all delivery months shall be listed in accordance with Article 15.
Article 34     After the additional listing of new contract months of a Single Stock Futures Contract is suspended, or pursuant to Article 32, paragraph 5 no new contract months will be listed, the contract shall be delisted upon expiration of all contract months already listed.
     Where the financial holding company or the investment holding company that may serve as [the issuer of] the Underlying Securities under Article 4, paragraph 2 falls under the provision not to list new contract months pursuant to Article 32, paragraph 5, and there are zero open positions with respect to the contract adjustment conducted under Article 25, the Single Stock Futures Contract shall be delisted on the share exchange record date.
Chapter VI Suspension of Trading and Delisting
Article 35     Where trading of the Underlying Securities of a Single Stock Futures Contract is suspended by the TWSE or the TPEx, trading of futures contracts on the Underlying Securities shall also be suspended.
    The TAIFEX may, pursuant to applicable laws and regulations or TAIFEX bylaws, or as it deems necessary based on any other cause sufficient to affect market order or the rights and interests of investors, halt trading of the Single Stock Futures Contract or, following approval by the competent authority, suspend trading, or terminate the listing, of the Single Stock Futures Contract, or proceed directly to announce suspension of trading of the Single Stock Futures Contract and then report to the competent authority for recordation.
Article 36     Where a Single Stock Futures Contract expires during a period in which its trading is suspended, the trader shall handle clearing and settlement matters in accordance with Article 20, paragraph 2 hereof except where otherwise prescribed by the TAIFEX.
Article 37     During a period of suspended trading of a Single Stock Futures Contract, when the TWSE or TPEx resumes trading of the Underlying Securities, the TAIFEX shall promptly resume the trading of the Single Stock Futures Contracts for those Underlying Securities. When the trading in a Single Stock Futures Contract is resumed, the provisions of Article 33, paragraph 3 shall apply mutatis mutandis to the listing of contracts of all delivery months thereof.
Article 38     A Single Stock Futures Contract whose trading is suspended shall, unless its trading is resumed, be delisted upon expiration of all contract delivery months.
Article 39     The TAIFEX shall delist a Single Stock Futures Contract in any of the following circumstances with respect to the Underlying Securities:
  1. Where the competent authority has ordered the suspension of all trading of the Underlying Securities.
  2. Where the TWSE or TPEx has delisted the Underlying Securities after reporting to and receiving approval from the competent authority.
  3. Where an issuer of Underlying Securities applies for delisting from the TWSE or TPEx, and the application is approved, provided that this shall not apply when the listing of a security is transferred from the TPEx to the TWSE.
  4. Other events confirmed by the competent authority as requiring delisting of Underlying Securities from the TWSE or TPEx.
    The delisting date for a Single Stock Futures Contract is the date on which the Underlying Securities are suspended from trading on or are delisted from the TWSE or TPEx.
Article 40     Upon delisting, a Single Stock Futures Contract is deemed to reach maturity, and except where otherwise prescribed by the TAIFEX, its open positions shall all be handled pursuant to Article 20, paragraph 2.
Chapter VII Supplementary Provisions
Article 41     These Trading Rules, and any amendments hereto, shall be implemented upon ratification by the competent authority.