- Generally Securities Trading
- Margin Trading
- Securities Listing
- Broker Management
- Securities Lending
- Clearing and Settlement
Generally Securities Trading
- What documents are required for individual and corporate investors to open a trading account?
- Can I open two accounts at the same business premises of a securities broker?
- How does an overseas Chinese or a foreign national open an account for trade of securities?
- How do I make sure my name is not used by others to open a trading account without my authorization?
- How to close a trading account?
- Who is not eligible to open a trading account?
- How can I access information on "best five asks/bids"?
- What does Capitalization Weighted Stock Index mean?
- What is the meaning of P/E ratio?
- Can somebody use an alias or stay anonymous when reporting suspected violation of securities regulations by a securities firm or its employee?
- Can a securities broker settle transactions on behalf of its client?
- What is the difference between a put warrant and a call warrant?
- Can I provide my account to others for stock subscription?
- What is the closing price?
- What is the trading unit?
- Are listed stocks allowed to be traded off-Exchange?
- Is the market closed when natural disaster happens?
- How can a foreign national or company invest in Taiwan stock market?
1. What documents are required for individual and corporate investors to open a trading account?
Where the principal has the status of a natural person, he/she must open the account with his/her own identity card and put signature/affix seal personally, except where the following cases apply:
- Where the principal is incapacitated and/or of no legal capacity or limited legal capacity, his statutory agent or guardian may open the account with both the principal's and the agent's or guardian's identity cards and put the signature/affix a seal personally on the principal's behalf. If the principal has not yet received an identity card, a transcript of household certificate or household certificate may be supplied instead. The guardian shall provide a certificate of guardianship.
- Where the principal is a person dispatched by a juristic person to work overseas, he may entrust an agent to open the account against the original identity cards of the agent and the principal as well as the power of attorney and certificate of employment overseas issued by the said juristic person, both legalized by an ROC representative office or an institution entrusted by such office.
- Where the stipulated limit on the daily trading amount of the principal does not exceed NT$1 million, and where a margin trading account is not opened, the securities broker may accept the account opening by the principal through internet, correspondence or other means. The account shall become effective after the brokerage contract has been signed by the principal and confirmed by the securities broker. The securities firm may at its own discretion conduct credit investigation on the account opened in such way; provided that when the limit on the daily trading amount is adjusted in future, credit investigation shall be conducted again in accordance with relevant rules.
- Where the principal is a juristic person, the authorized person shall provide a copy of the registration document of the juristic person, a copy of the notice of issuance of uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting such copy of notice), the power of attorney, and photocopies of the identification cards of the responsible person of the juristic entity and that of the authorized person for processing. The securities broker shall confirm in writing that the account is opened through authorization.
2. Can I open two accounts at the same business premises of a securities broker?
Investors may only open one trading account, when the account is not a discretionary account, at the same business premises of the same securities broker. An offshore foreign institutional investor may open more than one investment trading account at the same securities broker premises (including branches) where his status falls under the Operation Directions for Applications by Overseas Chinese, Foreign Nationals, and Mainland Area Investors for Registration to Invest in Domestic Securities or Trade Domestic Futures. Domestic professional investors may also open multiple accounts at the same securities broker premises where his status falls under rule 19 of the Regulations Governing Securities Firms.
3. How does an overseas Chinese or a foreign national open an account for trade of securities?
Overseas Chinese or a foreign national wanting to open an account for the trade of securities must be above the age of 20 and shall register with Taiwan Stock Exchange. Please see the website for more information regarding the registration process and required documentation at: here
4. How do I make sure my name is not used by others to open a trading account without my authorization?
Investors could inquire the information about their trading accounts opened at different securities firms with either the Trading Department or the Compliance & Inspection Department of the TWSE by presenting investors' original ID document; they could find the account that was not opened by themselves.
5. How to close a trading account?
If an investor wants to cancel his/her trading account, he must fill out an account cancellation form and submit this along with the original identity card at the same securities broker where he/she opened said account.
6. Who is not eligible to open a trading account?
Upon discovering that an investor falls in any of the following categories, a securities broker shall refuse to open an account to, or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
- Incapacitated persons without legal capacity or with limited legal capacity, who do not have the agency or authorization of their legal guardian.
- Personnel or employees of the Competent Authority in charge of securities matters without a letter of consent.
- Employees of the TWSE without a letter of consent.
- Persons declared bankrupt and whose rights have not been reinstated.
- Interdicted persons who are not represented by their statutory agents.
- Juristic persons opening accounts that cannot supply proof of authorization to open the account.
- Securities dealers who have not been approved by the Competent Authority.
- A principal who has engaged a director, supervisor, or employee of a securities firm to open an account with such securities firm as an agent or representative of the principal.
- When more than one discretionary investment account has been opened at the same business premises of the same securities broker by the same principal with respect to the same authorized discretionary trader; provided, this restriction shall not apply to a principal that is a government fund such as a civil servant pension fund, labor pension fund, labor insurance fund, or postal remittance and savings fund and that, when authorizing the same authorized discretionary trader for discretionary investment, may open, at the same business premises of the same securities broker, different discretionary investment accounts for different brokerage contracts.
- Investor applying to transfer his discretionary account to regular account.
- Any person that has breached a contract relating to securities trading, where the TWSE or the Over-the-Counter Securities Exchange have notified all securities brokers of this fact, where the case has not been closed and less than five years have elapsed. The contra orders of the margin trade and day trade on the notification day are not included.
- Any person that has violated the Securities and Exchange Act or been suspected of forging (altering) listed or OTC securities documents and has been under public prosecution, or has been adjudicated criminally guilty by a final and unappealable court judgment within the last five years.
- Any person that has breached a futures contract where the case has not been closed and less than five years have elapsed, or that has violated future trading laws or regulations and has been adjudicated criminally guilty by a final and unappealable judgment of a judicial authority within the past five years.
7. How can I access information on "best five asks/bids"?
Investors could inquire about the unexecuted price & volumes of the best five asks/bids through the stock price terminal, website or sales trader. Besides, they could check the above information on the TWSE website of http://mis.twse.com.tw/stock/index.jsp?lang=en_us.
8. What does Capitalization Weighted Stock Index mean?
The Taiwan Stock Exchange Capitalization Weighted Stock Index or TAIEX is an index that reflects the overall market movement and is weighted by the number of outstanding shares. Its base year value as of 1966 was set at 100. Widely quoted in Taiwan's stock market, TAIEX covers all stocks listed on Taiwan Stock Exchange, as set forth below:
- Stocks of newly listed companies are included in the sample from the first trading day of the next month following one full calendar month from listing; provided, stocks of listed companies converted into financial holding companies and listed companies transferred from OTC market are included in the sample from the day of listing.
- Stocks suspended from trading are included in the sample from the first trading day of the next month following one full calendar month from reinstatement of normal trading; provided, stocks suspended from trading because of issuance of replacement shares due to capital reduction resulted from a corporate split are included in the sample from the day of resuming trading of the new shares.
- Stocks which trading method is changed to "Full-Delivery" are excluded from the sample.
9. What is the meaning of P/E ratio?
P/E ratio means the price-earnings ratio of a stock; "price" is the per-share cost of buying the stock on the market, and "earnings" means the per-share earnings of the stock. P/E ratio is computed by dividing the current market price of one share of a stock by its per-share earnings. For example, a P/E ratio of 30 means the current share price of a company is 30 times its per-share earnings. The per-share earnings are typically that of the company in the previous year. Some P/E ratios are calculated based on projected per-share earnings. Since per-share earnings represent a company's profitability, a P/E ratio of 30 means investors must pay a price that is 30 times the annual profit of the company to own its stocks. Higher P/E ratio means the company has greater growth potential. Thus growing companies usually have higher P/E ratio than mature companies. Besides P/E ratio for individual stocks, there are P/E ratios for the industry sector and the market. To learn more about P/E ratio, you are welcome to pick up a brochure at the PR Office of TWSE.
10. Can somebody use an alias or stay anonymous when reporting suspected violation of securities regulations by a securities firm or its employee?
Investors could inquire the information about their trading accounts opened at different securities firms at archive of TWSE (located at 3rd floor of Taipei 101 Tower from Monday through Friday, 9:00 a.m. ~ 5:00 p.m.) by presenting investors' original ID document; they could find the account that was not opened by themselves.
11. Can a securities broker settle transactions on behalf of its client?
A securities broker may not use its own capital or securities holding, or borrow funds or securities to settle transactions on behalf of its clients.
12. What is the difference between a put warrant and a call warrant?
A "put warrant" offers its holder (the investor) the right to sell and a "call warrant" offers its holder the right to buy underlying equity at a predetermined price (strike price) on specified dates (European style), or at any time, up to the end of a predetermined time period (American style), or settle the difference in cash.
13. Can I provide my account to others for stock subscription?
You are advised against offering your account or providing any information thereof to any other person. We offer the following instances:
- It is a well known phenomenon that "big-lot players" in the market will attempt to entice investors, as part of a lucky draw contest, to give these players information regarding investors' (1) trading accounts; (2) bank accounts (for payment transfer); and (3) central depository accounts and use these accounts to place subscription orders (participate in lot-drawing), transfer funds, and then sell the stocks won in lot-drawing to make quick profits.
- You are advised against letting others borrow your (1) trading accounts; (2) bank accounts (for payment transfer); and (3) central depository accounts as dummy accounts for subscription of stocks, as you will ultimately bear the risks of "default trade" and "evasion of gift tax" associated with this kind of scheme.
Pursuant to Clauses 3, 13, and 15 of Article 37 of Rules Governing Securities Firms as well as Clauses 7, 8, and 19 of paragraph 1 of Article 18 of Rules governing the Responsible Person and Associated Persons of Securities Firms, a securities firm and its employees shall not engage in the following conducts:
(1) Providing account for customers to subscribe and/or trade securities;
(2) Accepting from any person other than the customer himself/herself or an agent without the power of an attorney issued by the customer giving instructions to open account, subscribe or trade stocks;
(3) Using the name or account of a customer to subscribe and/or trade securities;
(4) Letting customers to subscribe or trade stocks in the names of other persons or relatives;
- TWSE has included the aforementioned subscription operation in the audit of securities firms.
14. What is the closing price?
The closing price shall be the price of trades matched upon accumulation of all trading orders over a period of time prior to market closing (i.e. the close of trading hours). Where unexecuted, the closing price shall be the last traded price during the current session.
15. What is the trading unit?
The trading orders shall be given in a single trading unit or multiples thereof. The trading unit of stocks shall be 1,000 shares of 10 dollar par value stocks. The trading unit of government bonds and corporate bonds shall be bonds with par value of 100,000 dollars.
Where a portion of the principal of government bonds and corporate bonds has been paid, the trading unit shall be calculated based on its remaining principal.
16. Are listed stocks allowed to be traded off-Exchange?
No, the trading of listed stocks shall be conducted in the Exchange except in the following situations:
- Transactions in government bonds.
- Due to the operation of laws, the transacting parties are unable to acquire or dispose of the ownership of the securities through trading on the centralized securities market.
- Direct private transfer of securities not in excess of one trading unit, and the interval between two such transfers is not less than three months.
- Other transactions in conformity with the regulations prescribed by the competent authority.
17. Is the market closed when natural disaster happens?
- It depends on whether the Taipei city government agency is closed or not, which is determined by the Taipei city mayor.
- When the market is closed, all securities firms close as well. The clearing and settlement matters will be postponed to the following business day.
When the market is not closed, securities firms shall open and the clearing and settlement matters will be treated as usual.
In case the area outside Taipei is stricken by natural disaster and the local government agency is closed, the clearing and settlement matters for those securities firms located in that area will be postponed to the following business day.
- When the mayor of Taipei City announces cancellation of work for all personnel of government and educational institutions in Taipei City in the afternoon of the given day, the TWSE centralized exchange market shall not close; however, all other after-hours trading shall be suspended.
18. How can a foreign national or company invest in Taiwan stock market?
Please refer to "Foreign Investment" section.