TAIWAN FUTURES EXCHANGE-Clearing-OTC Derivatives Clearing-Clearing Member-Criteria of Clearing Membership

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Clearing

Exchange Traded Derivatives Clearing

OTC Derivatives Clearing

Qualifying Central Counterparty (QCCP) Disclosure

Quantitative Disclosure

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Clearing

Exchange Traded Derivatives Clearing

OTC Derivatives Clearing

Qualifying Central Counterparty (QCCP) Disclosure

Quantitative Disclosure

Criteria of Clearing Membership

	Individual Clearing Member	General Clearing Member
Identity qualifications	Companies approved by the competent authority to engage in derivatives trading or handle derivatives operations, and have obtained TAIFEX clearing membership qualifications.
Business Scope	Handle clearing operations of proprietary OTC derivatives	Handle clearing operations of proprietary and client OTC derivatives
Minimum paid-in capital requirement	NT$2 billion However, if the minimum paid-in capital of the company is less than NT$2 billion, its foreign head office, financial holding company, foreign financial holding company or controlling company may issue a guarantee or commitment letter to perform the clearing obligations and related responsibilities and apply for membership from TAIFEX	NT$8 billion
Financial structure requirements	Banks: Its Capital Adequacy Ratio shall not be less than 10.5%. Insurance enterprise: Its Risk-Based Capital adequacy Ratio shall equal to or exceed 200% and the Net Worth Ratio shall not be lower than 3%. Securities firms:Its Regulatory Capital Adequacy Ratio shall equal to or exceed 200%. Bills finance company: Its Capital Adequacy Ratio shall not be less than 8%. Futures commission merchant that concurrently operates as a leverage transaction merchant: The adjusted net capital shall not be less than 30% of the total amount of customer margins required for the open positions of futures traders. A subsidiary according to the Financial Holding Company Act:The capital adequacy ratio of such a group capital adequacy ratio calculated and reported by a financial holding company or foreign financial holding company shall not be lower than 100%. Subordinate company according to the Company Act: The financial structure of such controlling company shall meet the provisions of Items 1 to 5 of this subparagraph according to the type of business to which it is attributed. A branch established within the territory of the R.O.C. by a foreign financial institution according to the law: The financial structure of the head office shall meet the provisions of Items 1 to 5 of this subparagraph according to the type of business to which it is attributed.	Banks: Its Capital Adequacy Ratio shall not be less than 10.5%. Securities firms: Its Regulatory Capital Adequacy Ratio shall equal to or exceeds 200%. Futures commission merchant that concurrently operates as a leverage transaction merchant: The adjusted net capital shall not be less than 30% of the total amount of customer margins required for the open positions of futures traders.
OTC derivatives Default fund	Clearing members are required to contribute to TAIFEX the OTC derivatives Default Fund of NTD 20 million prior to engaging in clearing operations of OTC derivatives. Clearing members are required to contribute to the OTC derivatives Default Fund based on the amount computed by TAIFEX subsequent to engaging in clearing operations of OTC derivatives.	Clearing members are required to contribute to TAIFEX the OTC derivatives Default Fund of NTD 30 million prior to engaging in clearing operations of OTC derivatives. Clearing members are required to contribute to the Default Fund based on the amount computed by TAIFEX subsequent to engaging in clearing operations of OTC derivatives.
Supervisor and personnel conducting clearing operations	Appoint a supervisor to handle the clearing operation. Suitable and competent professionals shall be appointed to handle clearing operations. Personnel conducting the collection and payment of Margin and Settlement Amount, cashiers and accountants shall not concurrently serve one another's positions.	Appoint a supervisor to handle the clearing operation. Suitable and competent professionals shall be appointed to handle clearing operations. Personnel conducting the collection and payment of Margin and Settlement Amount, cashiers and accountants shall not concurrently serve one another's positions. Appoint competent specialists to engage in client clearing operations.
Premises and equipment requirements	Premises for handling clearing operations. Installation of information equipment for handling clearing operations. Completed connection with TAIFEX's OTC clearing system. Completed connection with TAIFEX-approved trade confirmation platform. Designation of specialists and installation of hotlines to contact TAIFEX.
non-violation of any disqualification statement	A company intending to apply to become a clearing member shall issue a Declaration of non-violation of any disqualification to TAIFEX, and the content of the aforementioned statement will be announced by TAIFEX additionally.
Other requirements	Issue a non-negative qualifications statement for the applicant of the clearing member Establish an OTC clearing internal control system pursuant to the rules and regulations of clearing operations prescribed by the competent authority and TAIFEX. Complete connection tests between TAIFEX's OTC clearing system and the TAIFEX-approved trade confirmation platform.

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