The basic characteristics of block trading system are summarized below:
I. Non-paired Trade
II. Paired Trade
Comparison Table Between Non-paired Trade and Paired Trade
I. Non-paired Trade
¡@1. Term of Settlement
¡@ The settlement date of a block trade may be either the transaction date or the second
¡@ business day after the transaction date.
¡@2. Trading Period
¡@¡@(1) During market trading hours: 9:30 am to 9:50 am, 11:30 am to 11:50 am.
¡@¡@(2) After market trading hours: 1:35 pm to 1:50 pm.
¡@3. Types of Mandate
¡@¡@For non-paired trade and paired trade, trades for spot securities and sale of
¡@¡@borrowed securities (to be implemented on July 28, 2008) in block trading are
¡@¡@acceptable, whereas neither day-trade for spot securities nor margin purchases
¡@¡@or short sales for securities.
¡@4. Minimum Amount/Volume
¡@¡@(1) For a single security: at least 500 trading units, or more than NT$15 million;
¡@¡@(2) For a basket of stocks: at least 5 types of stocks and more than NT$15 million.
¡@5. Range of Prices (to be implemented on May 12, 2008)
¡@¡@Within 7% of the "auction reference price at market opening of the regular trading
¡@¡@session" on the then current day (usually being the closing price of the preceding
¡@¡@day).
¡@6. The price increment (up/down tick)
¡@¡@For non-paired trade and paired trade, the price increment is NT$0.01.
¡@7. Matching Method by Continuous Auction
¡@¡@(1) For a single security:
¡@¡@¡@ The time/price priority for matching shall be based on the following principles
¡@¡@¡@ whenever a buying or selling order enters the system:
¡@¡@¡@ Incoming buying (selling) orders whose prices are greater (less) than or equal
¡@¡@¡@ to the lowest (highest) previously entered buying (selling) orders will be
¡@¡@¡@ matched and executed at the individual ask (bid) prices sequentially from the
¡@¡@¡@ lowest (highest) to the highest (lowest); if two or more quotes show identical
¡@¡@¡@ bid (ask) prices, they will be matched and executed sequentially in
¡@¡@¡@ chronological order until all buying (selling) orders are satisfied or until the
¡@¡@¡@ price of the current incoming buying (selling) order is lower (higher) than the
¡@¡@¡@ bid (ask) prices of unexecuted selling (buying) orders.
¡@¡@(2) For a basket of stocks:
¡@¡@¡@ The stock codes, unit prices, and volumes of incoming buying (or selling)
¡@¡@¡@ orders shall all be identical to those of the previously entered selling (or buying)
¡@¡@¡@ orders; the orders are then executed with selling (or buying) orders sequentially
¡@¡@¡@ in chronological order.
¡@8. Pre-Collection of Purchase Price /Securities Method
¡@¡@(1) A securities firm may decide at its own discretion whether or not to require the
¡@¡@¡@ pre-collection in full or a certain percentage of the purchase price/securities
¡@¡@¡@ depending on the circumstances.
¡@¡@(2) Where a securities firm accepts the mandate to quote sales of securities in block
¡@¡@¡@ trades, such securities firm shall examine the investor's centralized securities
¡@¡@¡@ depository account to ensure that there is a sufficient amount for settlement and
¡@¡@¡@ shall retain records for examination. This measure shall be made a part of its
¡@¡@¡@ internal audit policy and shall be strictly carried out.
¡@9. Restrictions on the Amount in Respect of Which a Securities Firm May Accept Orders
¡@¡@(1) Where non-paired trade and paired trade will be settled on T Day and the
¡@¡@¡@ aggregate amount of the buying and selling orders exceeds 1/4 of the amount
¡@¡@¡@ that can be mandated on the then current day, the quotes shall be rejected.
¡@¡@¡@ After a margin in the amount equal to 50% of the aggregate amount
¡@¡@¡@ above-mentioned is deposited, the securities firm may continue to accept
¡@¡@¡@ quoted buying/selling orders subject to the restrictions on the amount in respect
¡@¡@¡@ of which such securities firm may accept orders. Upon deposit of an amount
¡@¡@¡@ equal to 50% of the aggregate amount of quotes, the securities firm may
¡@¡@¡@ continue to quote buying/selling orders. In order to loosen the restriction on
¡@¡@¡@ quotes for block trade, selling orders which are settled on T day will be excluded
¡@¡@¡@ from the calculation of the quote control as long as securities firms earmark the
¡@¡@¡@ securities sold before placing the order with TWSE.
¡@¡@(2) Where non-paired trade and paired trade will be settled on T+2 Days, the amount
¡@¡@¡@ of buying and selling orders shall be monitored and controlled along with the
¡@¡@¡@ mandated buying and selling amount for regular trading session.
¡@10. Methods of Monitoring and Controlling the Amount to be Invested by Foreigners
¡@¡@When monitoring and controlling regular trading session, where the quoted buying
¡@¡@order is from a foreigner, the corresponding purchase amount shall be deducted from
¡@¡@the amount which may be invested by foreigners, whereas where the quoted selling
¡@¡@order is from a foreigner, the corresponding sale amount shall be added to the amount
¡@¡@which may be invested by foreigners after the selling order is executed.
¡@11. Information Disclosure
¡@¡@(1) TWSE's MIS website will in real time post the range of the quoted ask or bid price
¡@¡@¡@ of each individual order for non-paired trade and the most updated information on
¡@¡@¡@ unexecuted and executed prices and trading volumes, which will be transmitted to
¡@¡@¡@ the information vendors in real time.
¡@¡@(2) After 5:00pm, the trading volumes and executed prices will be included in the
¡@¡@¡@ trading records of the then current day.
¡@12. Clearance and Settlement
¡@¡@(1) Where non-paired trade and paired trade will be settled on T Day, the clearance
¡@¡@¡@ and settlement thereof shall be handled jointly. Securities firms shall complete the
¡@¡@¡@ delivery of purchase price and securities by 2:30pm on the trading day.
¡@¡@(2) Where non-paired trade and paired trade will be settled on T+2 Days, the
¡@¡@¡@ clearance and settlement thereof shall be handled in combination with regular
¡@¡@¡@ settlement.
II. Paired Trad
¡@1. Method for Quoting
¡@¡@(1) In a paired trade, a buying order and a selling order of the same stock(s) with same
¡@¡@¡@ volume in the same price may be quoted by the same securities firm or by a
¡@¡@¡@ number of securities firms.
¡@¡@(2) It is optional for investors to conduct settlement on T Day or T+2 Days. In case of
¡@¡@¡@ settlement on T Day, the quote shall be completed by 1:50pm.
¡@2. Trading Period
¡@¡@Pre-opening trading hours: 8:00 am to 8:30 am.
¡@¡@During market trading hours: 9:30 am to 9:50 am, 11:30 am to 11:50 am.
¡@¡@After market trading hours: from 1:35pm to 5:00pm. In case of settlement on T Day, the
¡@¡@quote shall be completed by 1:50pm.
¡@3. Minimum Amount/Volume (to be implemented on May 12, 2008)
¡@¡@(1) For a single security: at least 500 trading units, or more than NT$15 million;
¡@¡@(2) For a basket of stocks: at least 5 types of stocks and more than NT$15 million.
¡@4. Price Range (to be implemented on May 12, 2008)
¡@¡@Within 7% of the "auction reference price at market opening of the regular trading
¡@¡@session" on the then current day (usually being the closing price of the preceding day).
¡@5. Pre-Collection of Purchase Price/Securities Method
¡@¡@(1) A securities firm may decide at its own discretion whether to require the pre-collection
¡@¡@¡@ in full or in a certain percentage of the purchase price/securities depending on the
¡@¡@¡@ circumstances.
¡@¡@(2) Where a securities firm accepts the mandate to quote sales of securities in block
¡@¡@¡@ trades, such securities firm shall examine the investor's centralized securities
¡@¡@¡@ depository account to ensure that there is a sufficient amount for settlement and shall
¡@¡@¡@ retain such record for examination. This measure shall be made a part of its internal
¡@¡@¡@ audit policy and shall be strictly carried out.
¡@6. Method for Matching
¡@¡@Transactions shall be executed according to the term of settlement, volumes and prices
¡@¡@quoted by the buyer and the seller.
¡@7. Restrictions on the Amount in Respect of Which a Securities Firm May Accept Orders
¡@¡@To be monitored and controlled along with non-paired trade; provided that in the case
¡@¡@of a paired trade under a buying order and a selling order of the same stock(s) with same
¡@¡@volume in the same price, which will be settled at the same securities firm on T Day
¡@¡@or T+2 Days and the net amount of buying and selling orders is zero, such mandated
¡@¡@buying and selling amount shall not be subject to monitoring and control as pertaining to
¡@¡@the amount in respect of which the securities firm may accept orders.
¡@8. Method of Monitoring and Controlling the Amount to be Invested by Foreigners
¡@¡@Where buying and selling securities firms complete a quoted paired trade, the basis for
¡@¡@calculation shall be the net volume of such buying and selling by foreigners quoted by
¡@¡@the securities firms, and the net buying volume shall be deducted from the amount which
¡@¡@may be invested by foreigners, whereas if such paired trade is completed, the net
¡@¡@selling volume shall be added to the amount which may be invested by foreigners.
¡@9. Disclosure of Trading Information
¡@¡@(1) After a transaction is completed, TWSE's MIS website will in real time post the
¡@¡@¡@ information on executed prices and trading volumes, which will be transmitted to
¡@¡@¡@ information vendors by way of making public announcements on the market. Trading
¡@¡@¡@ price data from this pre-opening session¡]8:00 am - 8:30am¡^ will be disclosed after
¡@¡@¡@ 9:00 am.
¡@¡@(2) After 5:00pm, the trading volumes and executed prices will be included in the trading
¡@¡@¡@ records of the then current day.
¡@10. Clearance and Settlement
¡@¡@The settlement shall be conducted in combination with non-paired trade.
¡E Comparison Table Between Non-paired Trade and Paired Trade
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