The Taiwan Monthly

Trading Policies

TWSE amends clearing and settlement fund system, strengthening financial security and protection mechanisms

In line with the Financial Supervisory Commission (the "FSC") Capital Market Blueprint to enhance the Clearing and Settlement Fund system and to reinforce financial security and protection mechanisms, the Taiwan Stock Exchange (the "TWSE") has referred to the "Principles for Financial Market Infrastructures" issued by the International Organization of Securities Commissions and the Bank for International Settlements for centralized clearing institutions, as well as the systems of major international securities markets, and amended certain provisions of the "Rules for Administration of the Joint Responsibility System Clearing and Settlement Fund".

 

The amended provisions expressly set out the order of utilization and calculation method—in the event utilization of the Clearing and Settlement Fund becomes necessary due to a default on settlement obligations by a securities firm—of the capped amounts borne on a shared basis by the non-defaulting securities firms out of their contributions to the Fund. The amendments also specify that the TWSE compensation reserve fund is the resource of final recourse for utilization in such an event, and set out provisions relating to the replenishment of resources expended from the Clearing and Settlement Fund and special settlement fund contributions of securities firms and the TWSE. Finally, the amendments set out the requirements and procedures for non-defaulting securities firms that wish to apply to exit the market.

 

These amended provisions were announced and implemented on 4 July 2022. The detailed content of the amendments can be found on the market announcements page of the TWSE website (https://www.twse.com.tw/en/announcement/announcement_detail/955015D2FB3D11ECB2DA005056BE380E ).

 

For further inquiries, please contact Ms. Tseng at 1027@twse.com.tw.