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Home > About the TWSE > Introduction to TWSE >Service  
 Service
Listing of Securities |  Trading of Securities |  Computer and Information Safety |  Market Surveillance |  Clearing and Settlement |  TWSE Securities Borrowing and Lending System |  Internationalization of Securities Market |  Monitoring of Securities Firms |  Investors Service |  Securities Information
Listing of Securities
Domestic public companies or foreign issuers that have not listed their shares on any other stock exchanges abroad applying for initial public offerings have to meet certain financial and operational criteria. After close examination by TWSE’s listing departments, the application is submitted to the “Securities Listing Review Committee” for consideration. Thereafter, the application needs to be confirmed by a resolution from the Board of Directors for endorsement; after TWSE signs the listing contract with applicant company, the contract shall be filed with the Competent Authority for recordation. For foreign listed companies applying for the secondary listing on TWSE, the foreign listing department examines then signs the listing contract with applicant company, and the contract shall be filed with the Competent Authority for recordation.

After listing, the public company pays listing fees, and submits its quarterly certified financial reports to TWSE for examination.

TWSE actively promotes corporate governance of listed companies, supervises and regulates their financial and operational status on a routine basis, carries out investigations into unusual circumstances, and verifies material information disclosures. In addition, in order to enhance the quality of information disclosure in the securities market, TWSE works with GreTai Securities Market to manage a “Market Observation Post System”, and an “Information Disclosure Evaluation System”.

TWSE has focused on developing new products to enhance diversification of securities and provide investors with hedging tools. TWSE began to accept listing applications of call warrants in September 1997 and put warrants in January 2003. The first Exchange Traded Fund (ETF) was launched on June 30, 2003 then ETF warrants in July 2004; offshore ETFs were introduced in August 2009; furthermore, pioneering QFII ETFs which directly invest in China A shares were listed in September 2011. Listed securities on TWSE currently include stocks, entitlement certificates of convertible bonds, convertible bonds, government bonds, beneficiary certificates, call warrants, put warrants, ETFs and Taiwan Depository Receipts (TDRs).

Trading of Securities
When TWSE was established, trading in the centralized market place was carried out on an open trading floor. However, to meet the changing needs of the market environment, the trading system has progressed through several phases. In August 1985, the open trading floor was gradually replaced by a computer-aided trading system (CATS), which was eventually upgraded to a fully automated securities trading (FAST) system in 1993. The fully computerized trading system has helped boost the trading capacity and efficiency of the stock market.

The trading hours of the centralized market trading session are as follows:

Trading Sessions Trading Days Trading Hours
Regular Trading Monday - Friday 09:00 ~ 13:30
Off-hour Trading Monday - Friday 14:00 ~ 14:30
Odd-lot Trading Monday - Friday 13:40 ~ 14:30
Block Trading Non-paired Trade Monday - Friday 09:00 ~ 17:00
Paired Trade Monday - Friday 08:00 ~ 08:30
(Pre-opening trading hours)
09:00 ~ 17:00

Investors may place an order in person, by phone, fax or Internet. Orders are entered via terminals on securities firms’ premises into TWSE’s main computer, and are processed and executed by the trading system on a price-and-time-priority principle. In special cases, listed stocks may be traded through negotiation, auction, tender or other means.

Orders of all securities (except for warrants) are matched by call auction. TWSE conducts “intra-day volatility interruptions” to prevent over volatility of stock prices. Whenever the trading system detects that the potential execution price of the security will fall out of a specified range (+/-3.5%) of the last traded price, the security matching is postponed for 2-3 minutes. As for warrants, orders are matched on a continuous basis during an intraday regular trading session. At the opening and closing of the trading session, warrant orders are still matched by call auction. TWSE discloses the 5 best bid and ask prices/volume of unexecuted orders after the matching (including call auction or continuous trading method) on a real-time basis.

In addition, investors can trade through an omnibus trading account. After the transaction was made, the securities firms submit the post allocation transaction statement to TWSE, the trades are settled through the investor’s own account.

Computer and Information Safety
TWSE’S computerized trading, settlement, and information transmissions are highly efficient. For the purpose of maintaining market integrity and safeguarding investor rights, TWSE pays close attention to information and communication safety mechanisms. TWSE has two full capacity back-up computer sites to guard against any possible system failure. TWSE acquired ISO9001 Quality Management System, ISO27001 Information Security Management System, and ISO20000 IT Service Management System certifications for its computer information systems.
Market Surveillance
A healthy and orderly market should be able to protect investors’ rights and privileges, suppress manipulation and insider trading. In accordance with market surveillance regulations, TWSE discloses daily information about abnormal securities trading to alert investors, thereby protecting investors’ rights. TWSE may take disciplinary measures, as defined in the Regulations, to constrain abnormal market behavior, and prevent damage to the market.
Clearing and Settlement
According to the “Securities and Exchange Act”, and TWSE’s “Operating Rules” and “Contract for Use of the Centralized Securities Exchange Market”, TWSE acts as a clearinghouse for all the trades executed in the market. All securities firms have to fulfill settlement obligations to TWSE, which acts as the Central Counter Party “CCP” and gives settlement guarantees to all the trades in the market.

TWSE implements a same-day clearing method and employs a multilateral net settlement to calculate the net amounts of shares and funds receivables and payables between securities firms and TWSE. The settlement cycle is T+2.

Settlement obligations of securities firms have to be fulfilled on settlement day; they are not permitted to be deferred to the next business day. A securities shortfall can be covered by applying to use TWSE’s “Settlement Coverage Securities Borrowing System” which requires a collateral deposit and a borrowing fee from the borrowing securities firm. If a sufficient amount of securities cannot be borrowed to cover the shortfall, the buying securities firm will get due bills issued by TWSE as temporary coverage and the selling securities firm has to purchase shares for the buying securities firm within the settlement cycle.

Settlement of securities in the form of book-entry is operated by the Taiwan Depository and Clearing Corporation (TDCC, the CSD in Taiwan), entrusted by TWSE; settlement of funds is through the Electronic Interbank Funds Transfer and Settlement System (CIFS) of the Central Bank, which acts as the settlement bank of the securities market.

When a securities firm defaults, another securities firm will be designated by TWSE to complete settlement on behalf of the defaulted firm and to liquidate the defaulted positions in the market. Losses and expenses incurred will be initially covered by the Joint Settlement Clearing Fund (JSCF) contributed to by the defaulted securities firm, then the First Special Clearing Fund (SCF) contributed to by TWSE, followed by the Second SCF and the JSCF contributed to by the other securities firms, shared jointly pro rata.

TWSE Securities Borrowing and Lending System
TWSE established a Securities Borrowing and Lending System (SBL) on June 30, 2003. Participants include institutional investors such as securities firms, trust companies, insurance companies and foreign institutional investors, while TWSE serves as an intermediary. The system provides three kinds of transactions: fixed-rate, competitive auction and negotiated. Upon collecting borrowers’ collateral in fixed-rate and competitive auction transactions, TWSE acts as the central counterparty to assume risks. The introduction of the SBL mechanism in Taiwan not only increases the liquidity of the Taiwan securities market, but also attracts foreign investors to our market and makes our market more competitive. More information about SBL can be found at the TWSE website (http://www.twse.com.tw/en/products/SBL/SBL_edu.php).
Internationalization of Securities Market
In order to enhance international information exchange and cooperation, TWSE has entered into Memorandums of Understanding with more than 20 foreign stock exchanges, and actively participates in global securities meetings and organizations, such as WFE, AOSEF, ANNA and IOSCO.

To accelerate the liberalization and internationalization of the Taiwan securities market, TWSE has vigorously engaged the world in recent years. We have held promotional tours to major global financial centers and the Middle East. We wish to connect the entrepreneurial spirit of Taiwan with foreign investors’ funds, and in turn enhance the stock market’s depth. In addition, TWSE has held conferences and meetings, at which famous foreign scholars and experts have spoken to investment houses, individual and foreign investors about current international market trends as well as providing updates on the continuing liberalization of our stock market.

In order to keep up with the international trend of developing index-related products, TWSE, in association with FTSE International Limited (FTSE), launched a series of tradable indices: the “FTSE TWSE Taiwan 50 Index” on October 29, 2002, “FTSE TWSE Taiwan Mid-Cap 100 Index” and “FTSE TWSE Taiwan Technology Index” on November 29, 2004, “FTSE TWSE Taiwan Eight Industries Index” and “FTSE TWSE Taiwan Dividend+ Index” on January 15, 2007. Furthermore, TWSE cooperated with Research Affiliates, LLC (RA) to launch the “Taiwan RAFIR EMP 99 Index “on December 30, 2010, and “Taiwan RAFIR CO 101 Index” on September 11, 2012. TWSE will continue to work with international index companies to compile more indices suitable for the development of index related products.

Monitoring of Securities Firms
According to the Securities and Exchange Law, the establishment of a securities firm and its branch has to be approved and licensed in advance by the relevant authority. Prior to participating in the market, a securities firm must sign a contract with TWSE then deposit a settlement and clearing fund. The securities firm is responsible for its employees in both sales representation and ethical behavior when conducting centralized market business.

To enhance their financial structure and risk management, all securities firms must meet the regulatory capital adequacy ratio to maintain regular business. TWSE regularly sends inspectors to check the securities brokers and dealers on-site to verify that their business operations and financial status meet all these requirements. In addition, TWSE maintains a warning system that scrutinizes the operational risk of securities firms, and also sets up a risk control database for margin trading to strengthen the risk management of securities firms.

For the purpose of simplifying and reducing paperwork of trading participants, TWSE established a unified reporting system in 1999 for securities brokers to file all TWSE-required reports through a single electronic user interface. TWSE also provides securities brokers with e-mail trading and direct market access (DMA) to make full use of the most advanced technology. Furthermore, TWSE has relaxed requirements for securities firms’ sites and facilities in addition to encouraging their automation effort so as to reduce operational cost.

Investors Service
TWSE employs television, newspapers, magazines, posters and other media for promotional purposes, as well as holding activities, workshops and seminars to inform and educate investors in regards to investment and finance. Investors are welcome to ask questions by calling the Investor Service Center (886-2) 8101-3101 or 2792-8188.

To enhance and protect investors’ rights and interests, TWSE and other securities-related institutions jointly established the “Securities Investors’ Protection Fund”. Following the promulgation of the “Securities Investors and Futures Traders Protection Act”, which became effective on January 1, 2003; the “Securities and Futures Investors Protection Center” was established. The Center manages a protection fund to compensate investors should securities or futures companies be unable to do so due to financial difficulties. According to Article 18 of the Act, TWSE and other securities-related institutions are required to contribute funds to the Center.

TWSE has implemented an “investor personal data inquiry system”. This system helps to reduce the manual handling of personal data processing. It also provides speedy and convenient responses to personal information inquiries, thus helping to lower the possibility of fraud or forgery.

Securities Information
To enhance the fairness and efficiency of securities trading, as well as providing a computer system for stock trading and matching, TWSE uses various channels such as websites and publications to give investors easy access to securities information.

TWSE’s website ( http://www.twse.com.tw/en/ ) carries official announcements concerning securities listing and trading, as well as other securities information for investors’ consultation. In addition, the following 3 websites established by TWSE can be accessed from TWSE’s home page.
1. Market Information System ( http://mis.twse.com.tw/stock/index.jsp?lang=en_us ): This website provides real-time trading information about the market and individual stocks, including “Market Summary, Sector Group Quotes, Five Best Bids and Asks, Category Zone, Block Trade, Odd Lot Trade, SBL Inquiry and Market Announcements”.
2. Market Observation Post System ( http://mops.twse.com.tw ): This website provides financial and operational information about listed companies, including company profiles, financial statements, operational summaries, electronic book and material information.
3. Data e Shop ( http://dataeshop.twse.com.tw/frontend/en/index.jsp ): This website provides data vendors and investors with on-line subscriptions to data services, including end-of-day market statistics, index constituents and historical trading data.

To provide investors with versatile reference data, TWSE publishes a “Stock Chart of Taiwan Stock Exchange Capitalization Weighted Stock Index and Trading Volume & Value” at the beginning of each year, showing market trends since 1977 (in Chinese only). In addition, TWSE also puts out the following periodicals, which are also available on TWSE’s website:
1. Taiwan Stock Exchange Review Monthly (monthly)
2. Taiwan Stock Exchange Statistical Data (annual)
3. Highlights of TWSE Listed Securities (annual)
4. Status of Securities Listed on Taiwan Stock Exchange (monthly)
5. Taiwan Stock Exchange Annual Report (annual)
6. Fact Book (annual)

To inform and educate investors, TWSE has compiled a series of booklets. Investors can either access the booklets on TWSE’s website ( http://www.twse.com.tw/en/ ), or obtain hard copies at securities firms’ premises.

TWSE has established an “Investors Reading Room” (3F, No. 7, Sec. 5, Xinyi Rd., Taipei) to display prospectuses and quarterly financial reports of all listed companies, as well as monthly and semiannual financial reports of all securities brokers and dealers.

To bring the public closer to the stock market, TWSE set up an Information Center in mid-2008. The Center provides the following information:
● market data displays such as trading graphs, international stock market data, foreign exchange rates, trade data displays;
● current trends in TWSE;
● live broadcasts of ceremonies and speeches.