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Glossary

 1.ETN issuer

An ETN issuer shall be an integrated securities firm that concurrently engages in securities brokerage, underwriting, and dealership business.

 2.A liquidity provider

A securities firm issuing an ETN shall itself serve or appoint another securities firm to serve as the liquidity provider to provide liquidity quotes for the ETN during the trading hours of the TPEx's automated trade matching system. The price quotes by a liquidity provider shall include buy (bid) prices and sell (ask) prices.

 3.Applicant

An applicant means a principal who authorizes a securities broker to apply for subscription or redemption of ETNs through a securities trading account opened with a securities firm, or a securities firm that applies for subscription or redemption of ETNs for its own account.

 4.Indicative Value

Indicative Value is a value for an ETN, which is calculated based on movements in the underlying index, accrued dividends, investor fees, and other relevant data.

 5.Subscription

Subscription means a securities firm, for its own account or on behalf of its customer, delivering cash consideration to an issuer to subscribe to ETNs. The subscription price shall be calculated based on the number of units prescribed in the ETN issuance plan and the indicative value announced after market close on the application date.

 6.Redemption

Redemption means a securities firm, for its own account or on behalf of its customer, delivering ETNs to an issuer in exchange for cash consideration prior to maturity of the ETNs. The redemption price shall be calculated based on the number of units prescribed in the ETN issuance plan and the indicative value announced after market close on the application date.

 7.Best buy-sell spread

Best buy-sell spread means the ratio of the difference between the lowest unmatched sell quote and the highest unmatched buy quote to the lowest unmatched sell quote, and is calculated as "[(lowest unmatched sell quote) - (highest unmatched buy quote)] / (lowest unmatched sell quote)x100%".

 8.Current-day discount or premium between closing price and closing indicative value

It means the ratio of the difference between the closing price and the closing indicative value, which is published after market close, of an ETN on a given day to that closing indicative value, calculated as "[(closing price) - (closing indicative value)] / (closing indicative value) x100%".

 9.The hedge account

The issuer should establish hedge strategies when issuing ETN. An issuer may report to the TPEx and open a hedge account for its risk hedging operations with respect to an ETN issued by it. The hedge account shall be established under its dealing department, with an account number of 888888-4 for a domestic securities firm, and 998888-4 for a branch established in the ROC (Taiwan) by a foreign securities firm.