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1.1.1. Trading of main board stocks

1. I have already opened an account with a securities firm to trade TWSE-listed stocks. Can I use the same account to trade main board stocks, or must I open a separate account? Where can I access quotes on main board stocks?

A separate account must be opened. If your securities firm has been licensed to perform main board stock trading service, you may open a main board trading account with the same firm.
Quotes on main board securities for the current or previous business day can be found in daily newspapers, evening newspapers, TV news programs and the TPEx website.

2. Is the central depository account passbook used for keeping records of main board and TWSE-listed stocks the same as bank account passbooks?

They are identical.

3. Since trading accounts for main board stocks and TWSE-listed stocks share the same account number, are investors required to complete additional account-opening procedures before trading main board stocks?

Inventors are required to complete separate account-opening procedures for the different markets. Simply approach a securities firm with a signatory seal and present the original and photocopy of your national ID card to open a TPEx trading account. Furthermore, investors who agree to trade no more than NT$1 million per day and do not require a margin trading account may open their accounts with the securities firm through correspondence or electronic means. Please contact individual securities firms’ websites for details.

4. What are the different ways by which investors may trade main board stocks?

Engage a securities dealer in bulk trading (100,000 shares or more per transaction) at negotiated price.
Engage a securities broker for trading of 1,000 shares or more over the automated trade matching system.
Engage a securities broker for trading of odd-lot over the odd-lot system.
Engage a securities broker for after-hours fixed-price trading of 1,000 shares or more.
Engage a securities broker for trading of 500,000 shares or more over the block trading system.

5. What are the trading hours for main board stocks?

For negotiated trades with a securities dealer: 9:00~15:00, Monday to Friday
For trades over the deal system: 9:00~13:30, Monday to Friday
For trades over the odd-lot system: 13:40~14:30, Monday to Friday
For trades over the after-hours fixed-price trading system: 14:00~14:30, Monday to Friday
For trades over the block trading system: transactions may proceed by way of non-paired trading or pair trading. Non-paired trading hours are 09:00~17:00. Pair trading hours are 08:00~08:30 and 09:00~17:00. Pair trading arrangement is valid throughout all trading sessions in the current day, and investors may withdraw pair trading arrangements at any session before a deal is matched. Submission of quotes for paired trades is temporarily suspended on all trading days on which no price fluctuation limit is imposed under the TPEx Trading Rules.

6. How do I perform consigned trading of main board stock?

The same as trading TWSE-listed stocks. Consigned trading can be raised in person or via telephone, Internet, IC card authentication, written correspondence, telegraph or fax.

7. Is there any restriction on the maximum number of shares that investors can trade over the deal system? If so, what is the maximum?

A maximum limit applies.
The maximum limit is 499,000 shares.

8. What is the tick size for main board stocks?

Tick sizes are the same as TWSE-listed stocks, i.e: 1 cent for the market value of each share less than NT$10; 5 cents for NT$10 to less than NT$50; 10 cents for NT$50 to less than NT$100; 50 cents for NT$100 to less than NT$500; NT$1 dollar for NT$500 to less than NT$1,000; NT$5 for NT$1,000 and above..

9. How are transactions matched on the deal system? Is priority given to "orders of the same bid/ask price"?

The system does NOT give priority to "orders of the same bid/ask price", but instead matches transactions based on the "price priority" and then "time priority" principles.

10. What is the function of the reference prices of TPEx-listed stocks? How to calculate reference prices?

Reference prices are used to calculate limit-up price and limit-down price. The reference prices of stocks shall be determined in the following order:

The reference price on the commencement date of TPEx trading is offering price.
The reference price after commencement date of TPEx trading shall be determined in the following order:
1. The closing price through the automated trading system on the preceding business day.
2. If for the preceding business day there is no record of a trade through the automated trading system, but there is a record of a buy quote(s) or sell quote(s) at the close of trading hours, if the highest quoted buy price is higher than the basis price of the opening of trading that day, then that highest quoted buy price will be taken as the reference price for the current day; if the lowest quoted sell price is lower than the basis price of the opening of trading that day, then that lowest quoted sell price will be taken as the reference price for the current day.
3. The basis price of the opening of trading through the automated trade matching system the preceding business day.

11. What is the price variation limit for main board stocks?

The range of daily fluctuation of the trading price of a stock shall be limited to 10 percent above or below the reference price of that day; provided that the fluctuation range of less than the minimum tick shall be calculated as the minimum tick, and the price may not fall lower than the minimum tick.

12. How is the price of odd-lot transaction determined?

Price is determined at the level that satisfies the largest trading volume, subject to a maximum variation of 10% above and below the stock's opening indicative price for the current day. However, the maximum gain/loss limit shall not apply to odd-lot trading in the first 5 days of listing, as ordinary trading of the stock is also exempted from gain/loss limits during this time.

13. Given that investors are able to trade stocks through price negotiation with a securities dealer when trading 100,000 shares or more, can I engage a securities dealer in such an arrangement using an account opened with the same firm? Is the deal price subject to gain/loss limits? Are trading hours the same as the deal system?

Investors may use accounts opened with any branch of a securities firm to engage the head office"s securities dealers trade negotiation.
Deal price is still subject to the gain/loss limits announced by TPEx for the current day.
Trading hours are "09:00~15:00, Monday to Friday", which are longer than the deal system.

14. The securities firm that I work for has just commenced main board stock trading service. If I want to trade main board stocks, am I required to open a trading account with my employer?

According to regulations, securities firm employees must open trading accounts with their employers if they wish to trade securities.

15. I won the IPO lottery for a main board company and intend to transfer shares to my first son who is currently in elementary school. What are the required procedures and whom should I approach?

First, you should multiply the number of shares you intend to transfer with the company"s indicative price published by TPEx as of the day of transfer, and multiply the product with 0.3% to calculate the amount of securities transaction tax payable. You then have to deliver the share certificates, proof of tax payment, photocopy of ID cards, and required documents to the company"s stock transfer agent either through registered mail or in person to complete the ownership transfer.

16. Are main board stock deals matched by way of call auction trading or continuous trading?

TPEx adopts an automated trade matching system (for instruments including main board stocks, options, ETFs and convertible/exchangeable corporate bonds). The system matches transactions entirely based on call auction trading before March 23, 2020. From March 23, 2020 onwards, the first matching (i.e., the opening) on the market adopts call auction, and then continuous trading is adopted for matching during the period afterwards until 13:25. Call auction is still adopted between 13:25 and the closing
For more details on the continuous trading system, please visit TPEx Home > Mainboard > Trading System > Continuous Trading

17. What is the difference between continuous trading and call auction?

The major differences between continuous trading and the currently adopted call auction are as follows:

Under the current call auction trading system, batched orders are matched once every 5 seconds. Under the continuous trading system, orders are executed on a continuous basis whenever they are placed.
Call auction uses a single price to match the orders of buyers and sellers, while continuous trading may arrive at several prices in a single match.
Support various order types: Continuous trading offers various order types. Beyond the limit orders currently available, there will be market orders, immediate or cancel (IOC) orders, and fill or kill (FOK) orders. These new types of orders will enhance investment flexibility and trading strategies for investors.
The current call auction trading system does not have automatic delete function, while under the continuous trading system, market orders may be automatically deleted.
The current call auction trading system does not support price change function. The newly implemented continuous trading system will allow direct price change for limit orders.

18. What are the types of orders that investors may place when trading main board stocks?

For trading of main board stocks, options, ETFs and convertible/exchangeable corporate bonds, only "limit rest-of-day (Limit ROD)" orders can be placed before March 23, 2020. From March 23, 2020 onwards, investors will be able to place 5 new types of orders during the intraday continuous trading session (from the time the first transaction is matched until 13:25), in addition to Limit ROD: "limit immediate-or-cancel (Limit IOC)", "limit fill-or-kill (Limit FOK)", "market rest-of-day (market ROD)", "market immediate-or-cancel (Market IOC)", and "market fill-or-kill (Market FOK)".
The above terminology is briefly explained below. For more details, please visit TPEx Home > Mainboard > Trading System > Continuous Trading:
1. A limit order is one where the investor specifies to trade at a particular price. A market order is one that is given the highest match priority without specifying price.
2. A Rest-of-day (ROD) order is one that remains valid throughout the day until a deal is matched or is withdrawn by the investor. Outstanding ROD orders are automatically nullified if the market closes without investors having to cancel.
3. An Immediate-or-cancel (IOC) order is one that is automatically canceled by the system if a deal is not matched immediately.
4. A Fill-or-kill (FOK) order is one that either matches immediately in its entirety or none at all and is canceled by system.

19. When a listed stock undergoes ex-rights/ex-dividend, how its basis price at the opening of trading and daily price fluctuation limits are calculated?

Ex-rights/Ex-dividend reference price (A) = (Closing price before ex-rights/ex-dividend - Cash dividend + Subscription price per share X Subscription ratio to new shares issued)/(1+ Stock dividend ratio + Subscription ratio to new shares issued)
Dividend deducted reference price (B) = (Closing price before ex-rights/ex-dividend - Cash dividend)/ (1 + Stock dividend ratio)
“Cash dividend” includes cash distributed from retained earnings, legal reserve and capital reserve.
Basis price at the opening of trading: For ex-rights not including a cash capital increase, the tick price closest to the ex-rights/ex-dividend reference price is used; for ex-rights including a cash capital increase, the tick price closest to the dividend deducted reference price is used.

Calculation of limit-up price and limit-down price:

When there is no cash capital increase:
1. Limit-up price = The closest tick price not higher than[ex-rights/ex-dividend reference price x 1.1]
2. Limit-down price = The closest tick price not lower than[ex-rights/ex-dividend reference price x 0.9]
When there is cash capital increase:
1. Limit-up price = The closest tick price not higher than [A or B, whichever is higher x 1.1]
2. Limit-down price = The closest tick price not lower than [A or B, whichever is lower x 0.9]

Note: The English translation is for reference only. In case of any discrepancy between the English version and the Chinese version, the Chinese version shall prevail.

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Investors Q&A