Futures Market Trading Surveillance
I. Objective: To maintain fairness in futures trading and prevent unlawful manipulative acts.
II. Legal Basis: The Criteria Governing Oversight of Futures Trading and Article 115 of the Operating Rules of the Taiwan Futures Exchange Corporation (hereinafter, "the Operating Rules").
III. Surveillance guidelines:
- If, when engaging in market surveillance, the Taiwan Futures Exchange Corporation (TAIFEX) discovers abnormalities in futures trading, it may publicize the trading data and take any necessary measures set forth in Article 117 of the Operating Rules. TAIFEX will monitor the following items:
- prices of futures contracts and of the relevant underlyings, and fluctuations therein;
- trading volumes and open positions of futures contracts, and fluctuations therein;
- trading volumes, open positions, and concentration of futures contracts of futures traders and futures commission merchants, and fluctuations therein;
- supply and demand with respect to physical delivery of futures contracts;
- false market information and rumors;
- other factors likely to affect orderly market functioning.
- If, in the course of market surveillance, TAIFEX discovers futures trading abnormalities, it may notify clearing members or FCMs to be aware of the situation, and may make inquiries of clearing members or FCMs and requisition relevant information, or notify them to provide explanations.
- If, when engaging in market surveillance, TAIFEX discovers any abnormal event, it will, in addition to making any necessary disposition of the matter, collect relevant information, analyze and study it, prepare a surveillance report, establish a complete reference file, and report to the Competent Authority within the prescribed deadline. Any violations of TAIFEX rules and regulations will be handled promptly. If there is any suspicion of unlawfulness, the matter will be directly submitted to judicial authorities and reported to the Competent Authority for recordation. TAIFEX periodically holds surveillance/supervision meetings and compiles analysis/review reports on its execution of market surveillance and reports the same to the Competent Authority for recordation by the tenth day of each month.
- In instances of market rumors or false media reports, TAIFEX may, after investigating, make a public announcement on the matter by means of information systems or in the places of business of FCMs or clearing members.
- To protect against illegal trading practices across markets, TAIFEX may, after reporting to and receiving approval from the Competent Authority, enter into cooperation agreements concerning exchanges of information, technical cooperation, or investigational assistance with the relevant domestic or foreign exchanges and institutions. Moreover, after reporting to and receiving approval from the Competent Authority, TAIFEX may exchange information and assist with investigations.
- TAIFEX has established a dedicated unit and personnel to execute market surveillance. Surveillance data is kept confidential except where, pursuant to the law, it is shared with judicial bodies and relevant institutions with which TAIFEX is cooperating in carrying out necessary investigative work.