Rules &Regulations of Clearing/Settlemen

Taiwan Stock Exchange Corp. (hereafter referred to as TWSE) acts as the Clearinghouse for all trades executed in TWSE's market. All securities firms have to fulfill settlement obligations to TWSE, which takes up final responsibility of ensuring the completion of settlement process in TWSE's market. Relevant rules and guidelines are in the following:

  • Article138 of Securities and Exchange Act (SEA) provides that a stock exchange shall, in addition to setting various rules, specify in detail in either its business bylaws or operational rules about the date and manner of clearing and settlement.
  • Article132 of SEA provides that the contract prepared by a firm-type stock exchange for the usage of its centralized securities exchange market shall contain provisions regarding the deposit of the settlement and clearing fund and the securities transaction charges to be paid by the securities broker or dealer.
  • Article153 of SEA provides that in securities transactions undertaken by members of a stock exchange, or securities brokers or dealers in a stock exchange, if any transacting party fails to fulfill its delivery obligation, the stock exchange shall designate other members or other securities brokers or dealers to deliver the securities in its place. The resultant price differences and the expenses incurred there from shall be indemnified by the settlement and clearing fund.
  • Chapter VIII 'Clearing and Settlement' of TWSE's Operating Rules provides for guidelines of security firms in the clearing and settlement operations, and Chapter IX 'Clearing and Settlement Funds and Handling Charges' of TWSE's Operating Rules provides for the principles of operations while security firms fails to fulfill the payment obligation when due.
  • Article 4 of TWSE's Contract for Use of the Centralized Securities Exchange Market regulates that the securities broker and dealer shall be responsible to the TWSE for completing all the obligations of clearing and settlement and the other related responsibilities arising from trading in TWSE's market.
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