News Letter = No2

Newsletter No:=20 009

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June,=20 2006

I. = News and=20 Events

(1)=20 TAIFEX Asia Roadshow was held successfully in Hong Kong, Singapore = and=20 Tokyo

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The = Taiwan Futures=20 Exchange (TAIFEX) successfully held a series of seminars in Hong = Kong ,=20 Singapore and Tokyo from May 29 to June 2. With more = than=20 expected attendance, the seminars provided international = investment=20 communities with excellent opportunities to learn more about the = market=20 environment in Taiwan and the latest updates on TAIFEX's = initiatives to=20 become an international derivatives exchange. It was the first = roadshow in=20 Asia conducted by TAIFEX. The delegation was headed by Mr. Arthur = Yeh,=20 Senior Executive Vice President. It received high recognition from = the=20 participants and the roadshow was regarded as an important channel = for=20 international investors to directly communicate with TAIFEX. = During=20 the roadshow, participants actively inquired TAIFEX's new measures = in=20 facilitating international participation, including the = liberalization of=20 market by allowing trading for non-hedging purposes and the = introduction=20 of omnibus accounts, and the newly launched US dollar-denominated = products=20 .

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Besides = the seminars,=20 the TAIFEX delegation also held a number of one-to-one meetings = with major=20 institutional investors. During the meetings, institutional = investors were=20 able to have in-depth discussions with the TAIFEX delegation about = how to=20 access the Taiwan derivatives market. Feedback from those = institutional=20 investors were valuable information for TAIFEX to further develop = its=20 market so as to better meet the needs of international=20 investors.

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(2)=20 MOU=20 between TAIFEX and OSE, TAIFEX and C-COM both Signed on May 30,=20 2006

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The = Taiwan Futures=20 Exchange (TAIFEX) separately signed a Memorandum of Understanding = (MOU)=20 with the Osaka Securities Exchange (OSE) and the Central Japan = Commodity=20 Exchange (C-COM) on May 30th.The signing of MOU will facilitate = the=20 exchanges to pursue business cooperation, share information and=20 experience, explore business opportunities, and enhance efficiency = and=20 integrity of the markets. Mr. Der-Shang Wang, Chairman of TAIFEX, = Mr.=20 Michio Yoneda, President & CEO of OSE, and Mr. Fumihiko = Kimura,=20 Chairman=20 & CEO of C-COM signed the MOU on behalf of their = respective=20 exchanges.

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As the = trend of=20 internationalization proceed, TAIFEX believes that the signing of = MOU with=20 OSE and C-COM presents opportunities for each exchange to = strengthen its=20 competitiveness on the global horizon. Currently, TAIFEX has = signed MOU=20 with eight exchanges, including the Osaka = Securities Exchange (OSE), the Central Japan Commodity Exchange=20 (C-COM), the New = York=20 Mercantile Exchange (NYMEX),=20 the Chicago Board of Trade (CBOT), the Korea Exchange (KRX), the = National=20 Stock Exchange of India (NSE), the Tokyo Commodity Exchange = (TOCOM) and=20 the Tokyo Financial Exchange (TFX).

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(3)=20 TAIFEX=20 Sets Daily Trading Volume Record on TAIEX Options

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The=20 daily = trading volume=20 of TAIEX Options (TXO) hit an all-time high with 937,216 contracts = traded=20 on May 5, surpassing the previous record volume of 930,373 = contracts set=20 on Jan 18, 2006.

The = TAIFEX daily=20 trading volume also benefited from the record high daily trading = volume of=20 TXO, which accounted for more than 85% of the market, and reached=20 1,038,450 contracts-the second highest daily trading volume in = history=20 after the record high of 1,049,624 contracts traded on Jan 18,=20 2006.

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From January to May, trading = volume of=20 TXO reached to = 44,918,523=20 contracts, compared with 24,723,413 contracts traded in the same = period=20 last year. According to the statistics from the Trade Data Global = Service,=20 TXO was ranked 3rd globally among all stock index options in 2005. =

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(4)=20 TAIFEX=20 Will Participate in FOW Derivatives & Securities World=20 London

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For the = first time,=20 TAIFEX will participate in FOW = Derivatives=20 & Securities World London from June 21 to June 22. Besides the = setting=20 up of exhibition booth (No.45), it will also give a presentation = at the=20 exhibition to update investors on the liberalization measures = introduced=20 at TAIFEX. The presentation is part of Seminar 8 titled = "Development in=20 Global Markets" and will take place on June 22, 12:25-12:50 pm. = Please=20 visit our booth at FOW London to find out more.

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As part = of its=20 initiatives to increase international participation, TAIFEX will = also=20 actively participate in other international derivatives = exhibitions,=20 including FIA Expo, FOW Derivatives &=20 Securities World Singapore, etc.

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II. = Announcement

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(1)=20 Margin Adjustments for TAIFEX=20 Gold Futures

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On May = 22nd 2006,=20 the Taiwan Futures Exchange announced the margin adjustment for = TAIFEX=20 Gold Futures. The adjustments took effect after market closed on May 23, 2006. = This was the=20 second time in the month due to the price fluctuation of = gold.

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The margin amounts are shown=20 below:

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Contract After BeforeInitial margin Maintenance margin Clearing Margin Initial margin Maintenance margin Clearing MarginGDF US$5,270 US$4,290 US$3,900 US$3,780 US$3,080 US$2,800

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On May = 3rd 2006,=20 the Taiwan Futures Exchange announced the margin adjustment for = TAIFEX=20 Gold Futures. The adjustments took effect after market closed on = May 4th=20 2006.

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The margin amounts are shown=20 below:

&nbs= p; = ; = &= nbsp; &n= bsp; &nb= sp; &nbs= p; = ; = &= nbsp; &n= bsp; =20 Unit: US$

Contract After BeforeInitial margin Maintenance margin Clearing Margin Initial margin Maintenance margin Clearing MarginGDF US$3,780 US$3,080 US$2,800 US$2,430 US$1,980 US$1,800

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III. Trading=20 Statistics=A1@

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TAIFEX May=20 2006 Trading Statistics

Trading
Volume 2006 May. 2005 May. % change 2006 Apr. % change Jan.-May. Jan.-May. % change Daily Average
Trading Vol of 2006. Month=20 end
OI=A1@ =A1@ =A1@ =A1@ =A1@ =A1@ 2006 2005 =A1@ (Jan.-May.) =A1@TX 1,000,977 = 571,589 = 75.12% 856,971 = 16.80% 4,169,171 = 2,759,541 = 51.08% 42,543 40,629 MTX 161,965 = 87,815 84.44% 121,475 = 33.33% 637,296 = 481,377 = 32.39% 6,503 8,501 T5F 45 1,758 -97.44% 39 15.38% 199 3,864 -94.85% 2 2 TE 154,851 = 103,748 = 49.26% 129,053 = 19.99% 682,748 = 449,061 = 52.04% 6,967 8,193 TF 134,693 = 83,186 61.92% 66,049 103.93% 381,648 = 438,460 = -12.96% 3,894 7,622 GBF 683 318 114.78% 997 -31.49% 2,680 2,165 23.79% 27 41 GDF 2,228 0 0.00% 1,573 41.64% 4,785 0 0.00% 106 71 MSF 468 0 0.00% 608 -23.03% 1,464 0 0.00% 33 2 CPF 0 4 -100.00% 6 -100.00% 14 175 -92.00% 0 0 TXO 10,932,282 = 6,488,157 = 68.50% 10,281,653 = 6.33% 44,918,523 = 24,723,413 = 81.68% 458,352 = 846,485 TEO 64,253 130,725 = -50.85% 64,699 -0.69% 287,034 = 233,775 = 22.78% 2,929 4,693 TFO 76,609 117,092 = -34.57% 85,216 -10.10% 359,221 = 236,666 = 51.78% 3,666 6,765 Equity = Options 101,135 = 71,931 40.60% 84,569 19.59% 433,227 = 480,910 = -9.92% 4,421 9,167 MSO 42,475 0 0.00% 23,916 77.60% 113,045 = 0 0.00% 2,512 273 Total 12,672,664 7,656,323 65.52% 11,716,824 8.16% 51,991,055 29,809,407 74.41% 531,955=20 932,444=20

Note: = If you=20 expect to receive this newsletter, or have your name deleted from = the=20 sending list, or have your email information changed, please send=20 it = to = service@taifex.com.tw.If=20 you'd=20 like=20 to know more details = about = the Taiwan Futures=20 Exchange=20 (TAIFEX), please visit our = website at:=20 www.taifex.com.tw.

Disclaimer:=20 TAIFEX did its utmost to = ensure=20 that the information in newsletter is complete =20 and true. All materials on this =20 newsletter are for general information only. They are = not=20 legal or other professional advice and shall not be relied on as = such.=20 TAIFEX and its employees = do not=20 warrant the accuracy and completeness of the materials and = disclaim all=20 liabilities for eventual loss or damage. Links to external = websites are=20 provided purely for = convenience. =20 TAIFEX has no control = over the=20 websites and does not assume any responsibility for their = contents.=20 Inclusion in this website of any = document=20 from a third party or the provision of links = does not=20 constitute endorsement of the contents.

Copyright = Notice: Copyright = protected=20 materials on this newsletter shall not be used for =20 commercial purposes. TAIFEX permits accurate=20 reproduction of the materials for non-commercial use. When third = party=20 copyright is involved, permission for reproduction =20 must be obtained direct from the = appropriate copyright=20 owner.