Annual Report 2011

Transcription

Annual Report 2011

CONTENTS
Annual Report 2011
TAIWAN
STOCK EXCHANGE
02
05
Message from the Chairman and the President
Business Report
Statistical Highlights
Foreword
07
07
The Securities Market in 2011
08
Business Achievements in 2011
12
Objectives for 2012
27
Exchange Information
31
Board Members
31
The Organization
32
The Executives
33
Market Activities
35
Major Events in 2011
35
Listing Changes in 2011
39
Market Performance
41
Financial Review
43
Report of Independent Accountants
43
Balance Sheets
44
Income Statements
46
TAIWAN
STOCK EXCHANGE Annual Report 2011
02
M
essage from the Chairman and
the President
03
The year 2011 was a tumultuous time with global financial markets experiencing rough and jarring conditions. The
deterioration of the European sovereign debt crisis and lowering of U.S. sovereign debt ratings by S&P affected
Taiwan's stock market, which saw a fall in the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX)
as compared with 2010. On the final trading day, the closing was 7,072.08 points, with a 21.18% loss for the year. The
average daily trading value throughout the year fell 5.7% from NT$112.43 billion in 2010, to NT$106.06 billion in 2011.
The value of shares traded during the year fell 7.2% to NT$26.20 trillion, a fall of NT$2.02 trillion compared to last year.
Although the stock market was impacted by the instability of global financial circumstances, with the support of
shareholders and the dedicated work of our staff, new milestones were once again attained in 2011. The number
of companies listed on TWSE reached 824 (including 34 Taiwan Depositary Receipts, TDRs), 18 Exchange Traded
Funds (ETFs) and 6,869 new warrants were issued.
Over the past year, TWSE worked diligently with regulators to drive the stock market in the direction of greater
liberalization and internationalization. A series of enhancement measures were adopted in both the primary and
secondary markets in order to augment operating efficiency and service quality, as well as bringing TWSE in line with
international practices. These measures are outlined below:
1. Encouraging Qualified Domestic and Foreign Companies to List on TWSE and
Expanding the Scale of the Securities Market
The effectiveness of this measure was seen in 2011, with a record of 46 new companies listed, 25 local (including
transfers from GreTai Securities Market to TWSE) and 21 foreign. There were 12 primary listings by foreign companies,
double the number in 2010. There were also nine secondary listings (TDRs) by foreign companies, calling attention to
Taiwan as a fundraising platform for foreign companies.
3. Expediting Financial Product Innovation and Meeting Diversified Investment Needs
In 2011, three domestic ETFs were listed on TWSE, including two ETFs tracking domestic securities and one ETF
tracking foreign securities. At the same time, TWSE continuously improved the issuing and trading systems of offshore
ETFs, in addition to implementing mechanisms to facilitate the participation of foreign institutions in Taiwan's offshore
ETFs market; information was collected from various countries regarding listing regulations for offshore ETFs, supervisory
information exchange, market-making mechanisms and information disclosure to develop supporting measures.
TWSE achieved a new record with 13,831 new warrants listed, an increase of 3,788 from 2010, and transaction
values continued to climb in a hot market environment. Warrant issuers have been allowed to apply for the issuance of
derivatives with lower limits (bull contracts) and derivatives with upper limits (bear contracts) since July 1, 2011.
2. Promoting the Internationalization of Market Systems and
Enhancing Service Quality and Efficiency
4. Strengthening International Cooperation and Communication and
Raising the Visibility of the Taiwan Capital Market
Throughout 2011, TWSE devoted itself to furthering market development, raising service efficiency and aligning with
international practice. TWSE continued to work with listed companies to encourage fully disclosure, while also working
with TDR issuers to implement and strengthen synchronized information transparency. In April 2011, a real-time
system for obtaining material news from TDR primary exchanges was officially completed and online. In promoting
XBRL financial reporting adoption by listed companies, TWSE has achieved complete uptake with all listed companies
and subsidiaries of financial holding companies using the XBRL format in unconsolidated and consolidated financial
reports. In addition, in support of the 2013 adoption of the IFRS system in Taiwan, TWSE has continued to monitor the
implementation of this transfer by listed companies and proactively coordinated various advocacy measures to assist
companies in this adjustment.
TWSE remains active in international organizations such as the World Federation of Exchanges (WFE), Asian and
Oceanian Stock Exchanges Federation (AOSEF), International Organization of Securities Commissions (IOSCO), Global
Association of Central Counterparties (CCP12) and the World Financial Information Conference (WFIC). AMemorandum
of Understanding (MOU) on the sharing of regulatory information was signed with the Hong Kong Exchanges and
Clearing Limited in May 2011. Throughout the year, TWSE also visited Shanghai, Hong Kong and Japan to hold seminars
to promote TWSE listing advantages to foreign companies. TWSE also attended government investment activities in
China, Southeast Asia and Japan to accelerate foreign investment in Taiwan, and arranged interviews with local media to
strengthen the international visibility of Taiwan's capital market.
TWSE remains committed to internationalizing its trading and clearing systems, promoting active market trading and
increasing the transparency of trading information. In 2011, both market integrity and efficiency were enhanced by
services shortening the latency for index and statistical information disclosure to 15 seconds. This included disclosing
closing information, allowing foreign individual investors to open New Taiwan dollar accounts, adjusting the rate of
handling fees to 0.0052% and proposing to allow off-market trading.
To stay on the cutting edge of information technology, TWSE completed the promotion of a Network Integration Service
and the FIX Communications Integration in June 2011; this step strengthened the integration of information resources
for securities and futures operators. The planning and establishment of a trading system was completed to enable the
securities market in comprehensively promoting continuous trading. Moreover, adjustments were made to engine room
system monitoring and online facilities management in December 2011 to reinforce the services and management of IT
systems. Simultaneously, the active planning of a new computer center in Banqiao was conducted to provide a secure
environment for computer system processes and fulfill the future development needs of the securities market.
Looking forward, TWSE is committed to promoting the internationalization of the capital market, actively building an
internationally competitive fundraising platform and becoming a regional fundraising center. TWSE will continually
enhance information transparency, strengthen cross border regulatory cooperation, and reinforce overseas marketing to
increase Taiwan market visibility. In the area of market reforms, TWSE will endeavor to promote corporate governance
and corporate social responsibility, while continuing to boost trading system flexibility to enable sound market operation.
TWSE will also facilitate the development of new products by planning the introduction of overseas listing products and
providing innovative offerings to satisfy the needs of investors for global asset allocation.
Facing a rapidly changing international economic environment and the global capital market, TWSE will take steps to
establish a stable environment for overseas companies and funds, based on a fair, efficient and safe market. TWSE
remains committed to advancing Taiwan as an international fundraising platform with distinct competitive advantages,
and to guiding Taiwan's capital market in the new era of globalization.
Chairman
President
TAIWAN
04
05
Statistical Highlights
Unit: NT$1,000/1,000 shares
2011 (247 trading days)
2010 (251 trading days)
26,197,407,640
28,218,675,690
Average Daily Trading Value
106,062,379
112,425,003
Total Trading Volume
650,941,011
817,567,480
2,635,389
3,257,241
142,183,965
261,905,819
360,761,572
199,576,486
500,450
222,026
10,640,696
5,011,850
284,679,372
204,945,028
0
0
7,072.08
8,972.50
790
758
602,676,687
581,128,050
6,152,380,513
5,927,948,679
19,216,183,278
23,811,416,303
Number of Securities Brokers*
89
90
Number of Securities Dealers*
44
44
Stocks
Total Trading Value
Average Daily Trading Volume
Taiwan Depositary Receipts
Total Trading Value
Beneficiary Certificates
ETF Trading Value
Closed-end Funds Trading Value
Beneficiary Securities
Total Trading Value
Warrants
Total Trading Value
Corporate Bonds
Total Trading Value
TAIEX*
Total Listed Companies*
Total Listed Shares*
Aggregate Capital of Issued Shares*
Aggregate Market Value of Issued Shares*
* Year-end
Business Report
TAIWAN
06
Foreword
As the impact of the international financial tsunami was felt around the world, Taiwan's economy
displayed incredible results in 2010. Throughout the year, the economy grew by 10.82%, the highest
rate in over 20 years. In the first half of 2011, the Taiwan economy continued to strengthen steadily
with an average rate of 5.58%, performing better than the U.S., Japan and other developed countries
in Europe, and demonstrating more stability than many developing countries such as South Korea and
Singapore. Sudden changes in the second half of the year saw global financial markets thrown into
turmoil by the deterioration of the European sovereign debt crisis and the lowering of the U.S. sovereign
debt rating by S&P. Furthermore, prolonged flooding in Thailand affected Taiwan's technology industry.
As global economic conditions deteriorated, Taiwan's economy also felt the impact. The economic
growth rate decreased to 4.03%, a significant fall of 6.79% from 2010.
The confidence of Taiwanese investors was affected by the instability of global financial markets
and the TAIEX fell by 21.18% on the final trading day of 2011 compared to 2010. The total market
capitalization of listed stocks dropped NT$4.59 trillion, and was oversold by NT$27 billion by foreign
and mainland area investors. Faced with this grim situation, TWSE regrouped its efforts to expand
the market scale. In 2011, there was a total of 46 newly listed local and foreign companies (including
TDRs, but no GTSM transfers/FHCs), pushing to a new high from 39 companies in 2010. When
comparing the number of newly listed companies on various global exchanges, only Taiwan, Japan and
Shanghai showed growth amid recession, demonstrating that Taiwan's role as a center and platform for
international fundraising is gaining momentum.
Looking ahead, TWSE will continue to promote the internationalization of the capital market, develop
Taiwan into a regional fundraising center, enable sound market measures, accelerate international
alignment, facilitate the development of new and diversified financial products, strengthen the service
and management of IT systems and increase international competitiveness. TWSE embraces the
future with a confident outlook that the Taiwan stock market still has its best years yet to come.
07
The Securities Market in 2011
TAIWAN
08
1
09
Listing
In 2011, there were 39 primary listings and 7 delistings. 12 government bonds and 3 ETFs were listed, while 9
government bonds were delisted. 13,831 new call (put) warrants were listed, while 12,657 were delisted. 9 new TDRs
were listed, while 1 was delisted.
The status of securities listed on TWSE in 2011 is as follows:
Item
Listed Stocks
Number
Shares
Listed
Number
Government
Outstanding
Bonds
Exchange
Traded
Funds (ETF)
Close-End
Funds
Number
Unit
Number
Unit
2011
2010
790
758
Change
32
602,676,688 (1,000 shares)
581,128,050 (1,000 shares)
21,548,638 (1,000 shares)
97
94
3
No. of Listed Companies
800
4,656,000,000 (NT$1,000)
18
3,804,899 (1,000 units)
1
500,000 (1,000 units)
4,348,000,000 (NT$1,000)
15
2,231,174 (1,000 units)
1
500,000 (1,000 units)
308,000,000 (NT$1,000)
700
790
790 7901200
790
800 800 800
758 758
741 758 741 758
741 741
718
718 718 718
698
700 700698
700 698 698
1000
600
600 600 600
500
500 500 500
Trading Volume
120012001200
1,089
400
400 400 400
300
300 300 300
200
200 200 200
100
100 100 100
0
0 (1,000 units)
0
600
600 600 600
400
400 400 400
200
200 200 200
No. of Securities Brokerage Firms
29,680
29,680
29,680
3000030000
30000 29,680
28,219
28,219 28,219
28,219
800
26,197
26,197
26,197
26,197
26,115
26,115 26,115
26,115
2500025000
25000
800 800 800
600
600 600 600
400
400 400 400
651 65120000
651
2000020000
20000
15000
1500015000
15000
10000
1000010000
10000
5000
500050005000
1000
997
997 997 997
990
990 990978
990 982
982
1000
10001000
978
978 965
965 978
965
965 982 982
30000
887 887 887
818 818 818 25000
818
800 800779 779 779
800779
651
(NT$ billion)
3500035000
35000
33,043
33,043 33,043
33,043
887
800
Trading Value
35000
1,0891,089
1,089
100010001000
3
1,573,725 (1,000 units)
(billion shares)
200
0
0 0
0 0
0
0 0
0
0
0
0
2007 2008 2009
2007 2010
2008
20072011
2007
2009
2008 2008
2010
2009
2011
2010 2010
2011
2007 2010
2008
20072011
2007
2009
2008 2008
2010
2009
2011
2010 2010
2011
2007 2010
2008
20072011
2007
2009
2008 2008
2010
2009
2011
2010 2010
2011
YearYear 2007 2008 2009
Year2011
YearYear
Year2009
Year2011
YearYear2007 2008 2009
Year2009
Year2011
Year2009
200 200 200
97
9597
0
2007
0
9791
95
97 959091
95 918990
91 90 89
90 89 89
0
2008
2007 2007
2009
2008
2007 2008
2010
2009
2008 2009
2011
2010
2009Year
20102011
2010 2011
Year2011
YearYear
Headquarters
Headquarters
Headquarters
Branches Branches
Branches
Headquarters
Branches
Beneficiary
Securities
Number
Call (Put)
Warrants
Number
Depositary
Receipts
Number
Unit
Unit
Unit
7
7
5,369,739 (1,000 units)
5,369,739 (1,000 units)
6,869
5,695
0
0 (1,000 units)
1,174
101,991,150 (1,000 units)
65,611,300 (1,000 units)
36,379,850 (1,000 units)
34
26
8
3,612,970 (1,000 units)
3,666,202 (1,000 units)
-53,233 (1,000 units)
2
TAIWAN
10
Trading
2. Securities Firms
As of the end of 2011, 91 securities firms had contracts with TWSE to operate in the market. 38 of these only engaged
in brokerage operations; 41 ran a combination of brokerage, proprietary dealing and underwriting businesses, with 35
of these also offering margin-financing services. The number of brokerage branches established in Taiwan was 997.
1. Stock Price Movements and Trading Volumes
In 2011, the TAIEX closed at 7,072.08 points on the last day of trading compared to 8,972.50 points in 2010, a loss
of 1,900.42 points and a fall of 21.18%. With over 247 trading days in the year, the range between TAIEX's year-high
and year-low was 2,512.02 points. The value of shares traded during the year fell 7.16% to approximately NT$26.20
trillion, a drop of NT$2.21 trillion compared to the NT$28.22 trillion worth of shares traded last year. Trading volume
was 650.94 billion shares, a 20.38% fall less when than last year.
Performance of TAIEX index from Jan. to Dec. 2011
Points
The total trading value for beneficiary certificates was NT$500 million, a upsurge of 125.40% compared to last
year. Trading volume was 64 million units, a 120.94% growth over last year.
9,300.00
9,100.00
9,025.30
(1/3)
9,145.35
(1/28)
8,900.00
The total trading value for call (put) warrants was NT$284.6 billion, an advance of 38.91% compared to last year.
Trading volume was 296.82 billion units, a 45.44% improvement from last year.
The total trading value for TDRs was NT$142.1 billion, a decrease of 45.71% compared to last year. Trading
volume was 11.08 billion units, a decline of 37.06% compared to last year.
The total trading value for ETFs was NT$361 billion, an increase of 80.76% compared to last year. Trading
volume was 9.27 billion units, a rise of 67.69% compared to last year.
8,700.00
8,500.00
8,300.00
8,100.00
7,900.00
7,700.00
7,500.00
7,072.08
(12/30)
7,300.00
The total trading value for beneficiary securities (real estate asset investment trust funds) was NT$10.6 billion,
an increase of 112.31% compared to last year. Trading volume was 767 million units, an increase of 60.52%
compared to last year.
7,100.00
6,900.00
6,633.33
(12/19)
6,700.00
6,500.00
1/3
1/19
2/14
3/3
3/21
4/8
4/26
5/13
5/31
6/17
7/5
7/21
8/8
8/24
9/9
9/28
10/17
11/2
11/18
12/6
12/22
Date
2011 Securities Trading Summary
Item
2011
2010
Change
The Five Most Active Stocks in 2011
TAIEX (last day of trading)
Listed Stocks
7,072
8,972
-21.2%
26,197,407
28,218,676
-7.2%
2,000
2,000
Trading volume (million shares)
650,941
817,567
-20.4%
1,800
1,800
Daily average price (NT$ million)
106,062
112,425
-5.7%
1,600
1,600
Trading value (NT$ million)
(NT$ billion)
The Five Biggest Industries in Terms of Market Capitalization in end-2011
1,964
1,964
3,500
3,500
ETFs
360,762
199,576
80.8%
1,461
795
83.8%
2,500
2,500
1,200
1,200
2,000
2,000
1,000
1,000
916
916
788
788
800
800
Call (Put)
Warrants
284,679
204,945
38.9%
1,153
817
41.1%
200
200
0 0
TDRs
142,184
261,906
-45.7%
576
1,043
-44.8%
886
886
780
780
1,500
1,500
676
676
600
600
400
400
3,370
3,370
(17.54%)
(17.54%)
3,000
3,000
1,529
1,529
1,400
1,400
(NT$ billion)
2,461
2,461
(12.81%)
(12.81%)
1,921
1,921
(10%)
(10%)
1,610
1,610
(8.38%)
(8.38%)
1,315
1,315
(6.84%)
(6.84%)
1,000
1,000
428
428
318
318
5,00
5,00
105
105
Trading Value
Trading Value
Market Capitalization
Market Capitalization
High Tech
High Tech Hon Hai
Hon Hai Media
Media Taiwan
Taiwan Wintek
Wintek
Computer
Computer Precision
Precision Tek.Tek. Semiconductor
Semiconductor
Manufacturing
Manufacturing
0 0
Industries
Industries
Semiconductors
SemiconductorsFinance
FinanceCommunications
CommunicationsPlastic
Plastic Computer
Computer
&Insurance
&Insurance Networks
Networks
Accessories
Accessories
11
(2) Events held Overseas: TWSE visited Shanghai, Hong Kong and Japan to host the Franchises Returning to List
in Taiwan Forum, TDRs Listing Seminar and Japanese Companies Listing in Taiwan Forum. TWSE also visited
local qualified companies and promoted the listing of such foreign companies in Taiwan.
(3) Events to promote investment in Taiwan: In adherence with the Council for Economic Planning and
Development's (CEPD) Ten Key Service Industries-Themed Monthly Activities, TWSE hosted the Strengthening
the Construction of a Fundraising Platform for the High-technology and Innovative Industries Forum, arranging a
variety of topics to advocate policies and exchange opinions with participants. TWSE participated in the CEPD's
investment promotion delegation to Japan in response to the government's global investment promotions,
attracting Japanese companies to invest in Taiwan and promoting business exchanges and cooperation
between Taiwan and Japan. TWSE also participated eight times in the Ministry of Economic Affairs' (MOEA)
2011 Taiwan Business Alliance, touring large cities in Mainland China and various locations in Southeast Asia to
host approximately 20 Taiwan business forums while visiting many local Taiwan-invested companies.
TAIWAN
12
c) Tangible Results of Promotion
Business Achievements in 2011
(1) A total of 27 domestic issuers successfully listed on TWSE, of which 25 submitted listing applications in 2011.
Under the guidance of the regulator, TWSE implemented various operational measures in accordance with its
(2) Throughout the year, 16 foreign companies submitted primary listing applications in Taiwan, with 12 newly listed.
A further 15 TDR issuance applications were submitted for secondary listings, with 9 TDRs newly listed.
annual plan to promote the healthy development of the securities market. Major achievements were as follows:
1
Listing
2. Strengthening of Governance and Services
for Listed Companies
a) Enhancing the Verification and Public Disclosure of
Material Information
1. Expanding the Scale of the Securities Market: Encouraging Domestic and
Foreign Companies to List in Taiwan
a) Amending Regulations
(1) TWSE amended its relevant regulations and enhanced transparency in the information disclosure of listed
companies, protected investor rights, assisted companies in establishing integrity in corporate culture and
setting up a remuneration committee, while expanding the eligible rules and facilitating the access to capital
market entry for agricultural-based enterprises.
(2) TWSE amended its regulations regarding the review of listing applications, the supervision of listings, information
disclosure and margin trading. These amendments simplified the review process for foreign companies applying
for primary listing, allowed foreign primary listed companies to buy back listed shares, strengthened the investor
information inquiry system and allowed a no par value or par value not limitation of NT$10 per share for the
foreign primary listed shares in Taiwan,
b) Promoting Advocacy
(1) Events held in Taiwan: TWSE hosted the 2011 Intermediaries Forum, 2010 Underwriters, Accountants and
Lawyers Award Ceremony, Underwriters Promotional Event, Strengthening the Construction of a Fundraising
Platform for the High-technology and Innovative Industries Forum, Listed Company Responsible Persons Forum
and Listed Company-related Business Event, Overseas Companies Forum, Listed Companies Performance
Report Event, Listed Company Expo and TDR Forum. These events enhanced intermediaries’ understanding
of laws while recognizing outstanding performance and significant contributions to the capital market, provided
channels of assistance to help companies solve issues during their listing applications, and established a
platform for communication between foreign companies and investors. Visibility of foreign-listed companies in
the Taiwan capital market was increased and the confidence of the investing public was also boosted, while
advocating policies and conducting discussion on important market issues. All the above served as a future
direction in policies for promoting business.
(1) 30,243 pieces of material information were verified
and disclosed to the public. TWSE also made 852
material information checks and hosted 154 press
conferences on material information.
(2) Regulations related to material information were
amended, raising the upper penalty limit for
violation of material information regulations to
NT$5 million.
(3) Implementing and strengthening TDR issuers' synchronized information disclosure: When filing listing
applications to TWSE, TDR issuers shall ensure that a material information synchronized reporting system has
been established, and provide a letter of commitment for submitting documents to their primary listed exchange/
regulatory authorities and TWSE at the same time.
(4) On May 12, an MOU on the sharing of regulatory information was signed with the Hong Kong Exchanges and
Clearing Limited as a foundation for mutual information sharing.
(5) TWSE commissioned Reuters to establish a System to Obtain Real-Time Primary Market Material Information
for TDRs, going online from April.
(6) TWSE invited secondary listing companies and depositary institutions to attend three training courses on the
handling of TDR material information as well as financial reports.
(7) The handling of the earthquake situation in Japan: On the day of the 331 earthquake hitting Japan, TWSE
immediately informed listed companies to make self-evaluation as to their circumstances. Where conditions
seriously affected company operations, shareholders' rights and security prices, listed companies were asked
to release material information in accordance with Article 2-49 of the TWSE Procedures for Verification and
Disclosure of Material Information.
13
(4) Short-term third-stage goal – For financial statements in the fourth quarter of 2011, the classification standards
of a third stage of footnotes were deliberated. The proposal of a classification standard working group was
discussed, and footnote classification standards developed according to the outcome of meeting discussions,
while adjusting XBRL reporting tools and systems. Moreover, in order to enhance the understanding of all
companies of the third-stage report content addition of financial statement footnotes in the form section, seven
training seminars were held from December 2011 to January 2012.
TAIWAN
14
(5) In accordance with the 2013 implementation of IFRS, TWSE conducted the translation of IFRS classification
standards and, in June 2011, completed the translation of the four major statements and 2,268 labels in the
financial statement footnotes, while providing a report to the regulators after a successful review submitted to
IASB, and placed on the IFRS Download Area as a reference for all.
b) Enhancing the Efficacy of Corporate Governance
(1) From April 12 to April 15, 2011, the regulators, with MOEA, hosted a forum on Corporate Operation and
Social Responsibility, undertaken by TWSE and GreTai Securities Market (GTSM). This forum allowed the
administration to listen to thoughts and suggestions from companies while expounding upon government policy
initiatives. A manual of forum minutes was published and a Corporate Social Responsibility webpage area was
created for the reference and exchange of companies and related parties.
(2) TWSE amended the related articles of TWSE's Rules Governing Review of Securities Listings, for enforcement
from June 9. These amendments were conducted in tune with the added Article 14-6 of the Securities and
Exchange Act (the Act), stating that listed companies should establish a remuneration committee; and the
announcement published by the in accordance with the authority given by the Act, stipulating "Regulations
Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose
Stock is Listed on the Stock Exchange or Traded Over the Counter".
(3) TWSE conferred the Award to Excellent Disclosure of Corporate Social Responsibility Report on listed
companies: In response to the strongly advocated international trend for corporate social responsibility and to
encourage listed companies to pay greater attention to the compilation of corporate social responsibility reports,
TWSE commissioned external scholars and experts to select 10 listed companies with outstanding performance
in disclosing corporate social responsibility report. The recipients of the award were recognized on November
26, 2011 at the 2011 Listed Companies Expo, one of the TWSE 50th anniversary celebration activities,
including China Steel Corp., Lite-On Technology Corp., United Microelectronics Corp., Taiwan Semiconductor
Manufacturing Co. (TSMC), Asustek Computer Inc., AU Optronics (AUO), Chunghwa Telecom, Wistron Corp.,
CTCI Corp., and Sinyi Realty, Inc. (in order of stock code).
c) Promoting the Adoption of XBRL to file Financial and Business Information
(1) In accordance with the complete adoption of XBRL-only reporting in all 2010 financial statements, TWSE has
amended regulations, with a public announcement under process, discussed and formulated the launch of the
Market Observation Post System, GTSM and conglomerate database in addition to analyzed management
reports on the related effects of information integration on production. These actions addressed many matters
related to system changes.
(2) Short-term first-stage goal – From the fourth quarter of 2010, all financial statements were published using
XBRL format with the new addition of financial statement footnotes in the text section. For the fourth quarter of
2010 and first quarter of 2011 all listed companies and FHC subsidiaries completed parent company financial
statement publications (a total of 796 and 778) and consolidated financial statement publications (732 and 726).
(3) Short-term second-stage goal – For financial statements in the second quarter of 2011, accounting policies were
classified with more detail and divided into sections and labels, the contents of each section were made public
and were developed according to classification standards. At the same time, in conjunction with the adjustment
of reporting tools and systems, a training video was recorded and placed on WEBPRO for online learning for all
the companies. The majority of listed companies and FHC subsidiaries have completed 2011 second-quarter
individual and consolidated financial statement publications (790 and 739, respectively).
d) Promoting the Adoption of International Accounting Principles in Taiwan (IFRS)
(1) On March 2011, the first listed company questionnaire survey was conducted to assist the regulators to
understand the progress of listed companies in adjusting to IFRS information systems. Furthermore, experts
from industry, government and academia were invited to convene a meeting on how to assist companies in IFRS
conversion of information systems; after which, a Guide to the Assessment of Practices in the Adjustment of
Information Systems was compiled.
(2) From April 2011, TWSE published a monthly IFRS conversion planning progress schedule for the preparation
of IFRS conversion progress control and online publication for TWSE-listed, GTSM-listed, emerging company
and chartered financial industries. TWSE conducted a monthly inspection of execution progress and submitted a
report to the regulators, focusing on companies who were seriously behind in schedule. TWSE also collected the
published conversion planning information from FHCs, banks and investment trust consultants, providing these to
the regulators.
(3) In July 2011, seven events for Persons in Charge of Companies Implementing IFRS Events were held, in the
hope that through face-to-face communication with people in charge, companies will produce IFRS financial
statements in 2013.
(4) TWSE commissioned Professor Yann-ching Tsai's study team to conduct a Research Project on the Full Adoption
of International Financial Reporting Standards,
converting the 2010 financial statements of
five listed companies, such as TSMC, into the
IFRS statement. The project was completed in
September 2011, and not only was it promoted
in the IFRS First Year Commencement Event, it
is also available for reference in the IFRS Area.
(5) In August 2011, TWSE and GTSM co-hosted
the IFRS potential talent study camp and
conducted relevant courses to train domestic
IFRS talent.
(6) In September 2011, TWSE and GTSM cohosted the IFRS First Year Commencement
Event to show companies the determination of the government in meeting implementation expectations for IFRS
accounting principles in Taiwan, while internationally promoting the first year of Taiwan entering IFRS.
(7) In 2011, three second sub-group consultation meetings were held, and focused mainly on adjusting IFRS
accounting items and codes, collecting the challenges that companies may encounter when entering IFRS and
discussing related solutions, updating the compiled content of the main differences between IFRS and ROC GAAP
and producing Financial Statement Differences and Influences from International Insurance Companies Conversion.
(8) Throughout 2011, TWSE and GTSM co-hosted 15 IFRS training and promotional events for TWSE-listed, GTSMlisted and emerging companies.
15
2
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Trading
1. Market Reforms
17
a) Adjusting the Auction Reference Price at Market Opening
The adjustment of the auction reference price at market opening has been implemented since March 28, 2011
to allow investors handling price fluctuations in daily reportable transactions for desired securities to adjust with
market trends, increase transaction opportunities and elevate the efficiency of a market requiring price-reflexive
transactions.
b) Reducing the Latency of Index and Statistical Information Disclosures
To facilitate investors in transaction decisions through a solid grasp of accurate information, references were made
to the latency of index disclosures in the Asian region. The latency of indexes, trades and statistical transaction
information requests has been shortened to 15 seconds since January 17, 2011, synchronizing disclosure with
FTSE's Taiwan Index Series. Moreover, in addition to the overall market, the real-time statistical information for
transactions and commissions were classified into stocks, funds and warrants.
c) Before Market Close Data Disclosure
To provide investors with more trading references, TWSE has launched an order matching simulation mechanism
modeled on measures used by major stock exchanges across the world. According to the intervals of the intraday
call auction (currently approximately every 20 seconds), during the five minutes before the closing session the
simulation mechanism will simulate deals and disclose the highest bidding price and the lowest asking price as
trading references. In addition, supporting measures similar to the Intraday Volatility Interruption System will be
adopted during the closing system. When the simulation price of a stock rises or falls more than 3.5 percent in the
last minute before the closing session, stock trading will be suspended from 13:31, for two minutes. During the
suspension period, investors may add, cancel or adjust an order. The simulation mechanism will continue to match
orders and disclose the highest bidding price and the lowest asking price until the calculation of the weighted index
closing level at 13:33, to provide more market information to investors.
d) Allowing Foreign Individual Investors in Taiwan to Open NTD Accounts Through Domestic Agents
To facilitate overseas Chinese and non-resident foreigners selling stocks, TWSE added Article 77-2 to the Operating
Rules of the Taiwan Stock Exchange Corporation, stipulating that overseas Chinese and foreign nationals who meet
certain requirements may appoint lawyers, accountants, banks or security dealers to act as agents in the opening of
NTD accounts, with certified documents required for the identification of the deputy agent. This was announced and
became effective on July 29, 2011.
e) Setting Out Ways for Foreign Issuers to Repurchase Listed Securities
In accordance with Article 4 of the TWSE Rules Governing Foreign Issuers' Repurchase of Listed Securities (the
"Repurchase Rules"), foreigners are allowed to repurchase stocks of listed companies using a special account, and
related rules have been amended. The rules were announced and became effective on October 27, 2011.
f) Reducing the Rate of Handling Fees
In accordance with instruction from the regulators, from December 1, 2011, TWSE decreased handling fees from
the previous rate of 0.0065% discounted by 20% (0.00572%) to a further 20% discount (0.0052%), at the same
time, continuing to allocating the default damages reserve.
g) Developing the TDR Trading Suspension System
TWSE devised a system for suspending and resuming trading, applicable to TDRs and call (put) warrants of
which the underlying securities are TDRs and foreign securities, with the revision of related rules conducted in two
phases. Phase one was implemented in January 2011, executing the system for trading suspension of securities
during a trading session, with the resumption of trading on the next business day. Phase two was announced in
August 2011 and implemented in October of the same year, allowing the resumption of trading on the same day
following a suspension of trading.
h) Abolishment of T day Settlement for Block Trade Transactions
As the transaction date and settlement volume for block trade transactions occupy a relatively low percentage
of overall block trading, no effective method can be applied to keep investors from selling the shares which
are not yet delivered to the account due to different settlement period. Therefore, the settlement date for a
block trade is the second business day after the transaction date (T+2), related regulations were revised
accordingly, effective since December 19, 2011.
i) Adjusting Reporting Procedures for Omnibus Trading Account (OTA)
TWSE adjusted the OTA information reporting timeline in order to prevent securities firms from delaying
declarations and affecting follow-up computer operations. A securities firm shall submit the itemized postallocation transaction statement to TWSE between 3 pm and 6 pm on T-day, in the prescribed electronic
format. However, if the securities firm is unable to complete transaction allocation operations for an OTA
with foreign principals, it may report by 6 pm of T-day and preserve unallocated information in the prescribed
electronic format under the original OTA; it must report a partial allocation adjustment with respect to the
itemized transaction information by 6 pm of T+1 day. This measure became effective on March 26, 2012.
j) Study and Development of Off-market Trading
Under the supervision of the regulators, TWSE deliberated the influences of off-market trading on collective
market pricing, the elevation of Korea to a developed market by the UK's FTSE and its resulting effects,
and the related off-market trading regulations in Korea. The Securities and Futures Institute (SFI) was
commissioned to conduct a project researching the above issues. Research was completed in November
2011 and reported to the regulators.
k) Strengthening the Unified Reporting Functions for Securities Firms
TWSE updated functions related to the Supervision and Disclosure for the Wealth Management Businesses
of Securities Firms, adding a reporting/monitoring system for the Establishment of Representative Offices and
Investments for Cross-strait Securities Firms and a Securities Firms Reinvestment Search system. TWSE
also established a primary listings (TWSE & GTSM) cross-reference system and implementation method,
and amended FHC collective market reporting functions, while working with the regulators concerning the
improvement of the system for underwriters, adjusting the ceiling cap for public procurement of primary
listings (TWSE & GTSM) and primary issues of TDRs.
l) The Actuarial Analysis of the Settlement and Clearing Fund
The regulators approved a project conducting the actuarial analysis of the settlement and clearing fund on
December 5, 2011, reducing joint responsibility of clearing and settlement funds from NTD$8 billion to NT$6.4
billion. The Special Clearing Fund maintained by TWSE remained the same at NT$3 billion and the Joint
Settlement and Clearing Fund (JSCF) contributed to by securities firms was decreased from NTD$5 billion to
NTD$3.4 billion, while a mechanism was implemented allowing securities brokers flexibility in reallocation.
TAIWAN
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19
m) Margin Trading for Listed Securities
(1) Adopting suggestions from the Taiwan Securities Association, starting from May 3, 2011, the margin trading
accounts of securities firms as well as the securities and financial services industry were allowed to use USD
from margin trading as collateral when borrowing securities on the TWSE SBL system.
(2) To avoid concerns regarding the effect on stock prices by a high volume of short selling, since November 21,
2011, daily maximum short selling of borrowed stocks cannot exceed 20% of the average trading volume during
the previous 30 business days per stock.
2. Stimulating Derivative Product Trading
a) Continually improving the offshore ETF issuance and trade system
(1) Opinions were collected from foreign investors taking part in offshore ETF market allocation and trading in
Taiwan, formulating packaged measures and providing suggestions to the Central Bank after receiving approval
from the regulators.
(2) Information regarding offshore ETF listing regulations, the monitoring of information transfers and conditions as
well as market mechanisms, and information disclosure was collected from France, the UK, Germany, Mexico,
Singapore, Hong Kong, Macau and Japan and reported to the regulators.
b) Operations Related to Call (Put) Warrants
(1) Auditing the Issuance of Call (Put) Warrants by Securities Firms
The issuance of 13,806 call (put) warrant was audited, a total amount of NT$ 232,969,878 (thousands).
(2) Allowing Issuers to Issue Callable Bull/Bear Contracts
On June 3, 2011, amendments were made to related regulations and implemented on July 1, 2011.
(3) Organizing Promotional Activities for Warrants
TWSE and securities issuers co-hosted 30 promotional events for investors.
3. Strengthening Market Services and Supervision
a) Conducting Securities Firms Internal Control Information Forums
(1) To acquaint securities agents with the revisions of Criteria Governing the Establishment of Internal Control
System, a total of 13 information forums were conducted from May 9 to June 2, 2011 for securities firms'
auditors and other related persons.
(2) To enhance the financial structure of securities firms and maintain market trading order, in addition to prevent
violations by securities agents, managers were encouraged to strengthen the monitoring of practitioners'
compliance with regulations, and internal audit supervisors should instruct audit staff to thoroughly implement
internal controls, while conforming to regulations. From July 25 to September 5, 2011, TWSE conducted
10 Sharing and Discussion of Violation Cases information events. A total of 1,196 managers, internal audit
supervisors and legal compliance officers attended.
b) Conducting Risk Management Evaluations for Securities Firms
In 2001, to better understand the situations of securities firms in the implementation of risk management systems
according to the Operational Items for Securities Firms' Risk Management Evaluations Procedures, TWSE and
GTSM conducted risk management evaluations for eight securities firms engaged in derivative products business.
c) TWSE reviewed the financial statements and audited the finance, business and internal audit operations of
securities firms. In 2011, TWSE conducted a review of 230 financial statements, 2,036 monthly sheets and selfcapital adequacy reporting sheets and 16 previews of the raising of capital and issuance of securities. Also, 39
routine inspections were conducted into finance, business and internal audit operations. A total of 588 selected and
regular cases were audited.
d) Maintaining Market Order
(1) Continually Monitoring the Market
Throughout the year, a total of 852 trading irregularities were announced, containing 155 types of listed
securities and disposal measures were used to deal with 15 types of securities on 71 occasions. Moreover,
real-time trading news reports and internet information were monitored, discovering 64 parties with material
information that influenced the stock prices of listed companies. Request was made that they deliver public
retractions. 12 cross-market monitoring information reports were made.
(2) Recording and Monitoring of Cable TV Investment and Finance Programs
Throughout the year, around 3,291 cable TV programs on finance and investment analysis and explanation
were recorded and monitored; summarized program content showed that 8,857 company stocks were
recommended. Over 585 listed companies with individual stocks that were evidently promoted or had trading
abnormalities were selected from standard sampling and sent through daily e-mails to the Taiwan Securities
Association for members to download. Investors were asked to check company financial operations and other
related information through MOPS to ensure prudent investment. In regards to specific cases under inspection,
according to the instructions of the regulators, more controversial investment TV programs were monitored and
seven reports were delivered to the regulators. In addition, TWSE took the initiative to alert regulators of an
additional 290 irregularities including reservations over the qualifications of analysts.
3
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Computer Applications and Information Services
21
1. Executing the Securities and Futures' Peripheral Units Information Transmission
Integration Project
To carry out information resource integration of the securities and futures' peripheral units, improving the quality
and efficiency of information operations, decreasing operational costs and enhancing services provided to the
securities and futures industry, Web Integration and FIX Protocol Integration were promoted under the instructions
of the regulators. Construction was completed in June 2011 and provided for the industry to use after application.
2. Building a New Computer Center
In order to find a solution to bottlenecks at the Yang Te Center, provide a safe operation environment for computer
systems and satisfy the long-term development needs of the securities market, the building of a Banqiao Computer
Center (the first information center) has been planned. Discussions on the new computer center's architectural
design were initiated with a team of architects.
3. Planning and Implementing a Continuous Stock Trading System
In accordance with TWSE's timetable for the complete promotion of continuous trading, planning for trading system
proposals and installation was completed. Related operations including project management, needs analysis,
planning and design, as well as development tests will be conducted according to the scheduled timetable.
4. Outsourcing of a Research Project on Cloud Use
In accordance with government policies to provide better services for the market, TWSE requested that the Institute
for Information Industry research the employment of cloud computing technology in the securities market. With
its Securities Market Cloud Platform and Application Service Needs Research Plan, 18 types of cloud application
opportunities in TWSE were simulated; an implementation program for services was formulated, and suggestions on
the securities market's cloud platform promotional strategies and operational mechanisms were offered, all of which
served as future reference for subsequent planning and installation. The research report was completed in July 2011.
5. Responding to the Latest Personal Data Protection Act (PDPA)
In response to the latest PDPA, a personal data protection taskforce was formed, and procedures for a Personal
Data Inventory and Personal Data Processing Risk Evaluation were completed. The result of the risk evaluation led
to the introduction of a remote operations audit control system and proposals to construct a database safety control
and audit system. Throughout the year, personal data-related educational courses were held, with a total of 328
participants. These aimed to enhance staff personal data protection awareness and management. Furthermore, 19
staff members were certified as leading auditors for the BS 10012 Personal Information Management System.
6. Enhancing IT Systems Service and Management Functions
a) Improvements were made to the operations and management functions of the trading mainframe, enhancing
system monitoring functions and web facility management to facilitate efficiency when handling irregularities.
Adjustments to the converters and firewalls in the Yang Te and Xin Yi computer rooms were completed. Customized
software went online as of December 23.
b) The integration and virtualization of non-trading computer systems such as Windows, Linux and Unix were
completed to boost resource use and system management efficiency, reducing the number of mainframes
and space used by computer rooms. The second-stage Windows and Linux resource integration checks were
completed, and the third-stage facility arrival and installation were completed on October 27. The second-stage
plans and bidding procedures for the development of a UNIX resource integration system were completed.
c) TWSE conducted the second-stage construction of the Non-trading Computer System: System Message
Management System, centralizing the monitoring of information on the Xin Yi computer room servers and storage
devices, simplifying the operational procedures and reducing labor time. System installation was completed and
the system went online.
d) TWSE integrated non-trading computer system back-up procedures and elevated the efficacy of system damage
restoration. On October 17, hardware was installed, and backup of the Internet, OPEN, OA, monitoring and all Xin
Yi computer room servers and advanced system data were completed and synthesized with the Xin Yi back-up
computer room.
e) TWSE continued to promote the system maintenance, product promotion and customer services of the Public
Information Transmission Monitoring Station, Network Information Shop and After-market Information, while
enriching multi-media service functions of the information center.
7. Maintaining the normal operations and security of the computer trading system,
non-trading computer system and network system
TWSE inspected and maintained the operational conditions of the computer mainframe, trading system network
and back-up modem, high/low voltage electricity, uninterruptible power supply, generator, fire control and air
conditioning, trading system application program, non-trading system network and hardware facilities on a regular
basis to ensure safety.
8. Licensing stock indexes
TWSE proactively conducted the licensing of stock indexes compiled by TWSE or in cooperation with FTSE. A total
of 45 licensing agreements were executed in 2011.
9. Participating in the Financial Information Exchange Platform service of Taiwan-CA Inc.
TWSE developed the Financial Information Exchange Platform with TWCA, hoping to provide the securities
industry with a safer information exchange platform, while cutting down industry costs. The TWSE computer
system connected to the platform and went online on July 20, 2010 and with TWCA FINE replaced the previous
information exchange platform service in 2012 to increase financial information exchange service efficacy.
10. Promoting Trading Information Services
TWSE strived to sign contracts with domestic and foreign information companies to use trading information
products or participate in various TWSE platform operations. Real-time trading information companies such
as Digital Efficiency, Goldman Sachs, TVBS, Next Media and Jaguar Cars Limited, and real-time stock price
information companies such as NHK and Next VIEW were added to the name list in 2011. The Financial Times
Limited, a delayed transaction information company, signed a contract with TWSE.
TAIWAN
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11. Providing a Stock Integrated Information Webpage Service
An integrated information webpage for all stocks was added to the TWSE website for users to browse and
check, allowing for better understanding of listed company trading information and related financial information,
enhancing efficacy when using the TWSE website and assisting users in searching for information, solving issues
with scattered website information and inconveniences for users in data collection.
3. Participating in International Forums
TWSE participated in various international forums, including the Forum on Hong Kong and Taiwan Financial
Cooperation in Hong Kong, Futures Industry Association Annual Meeting and Forum on Strengthening Investor
Relations and Enhancing International Visibility in Taiwan, Daiwa-Cathay Forum and Forum on Japanese
Companies Listing in Taiwan in Tokyo, Haixi Conference on The Cross-Strait Economic and Financial Development
in Xiamen, Baoa Forum for Asia on Hainan Island, 12th Five-year Plan and Shanghai-Taiwan Economic Trade
Conference, Lujiazui Forum and Forum on the Greater China Financial Center held in Shanghai, and the DBS
Access Asia Conference and World Exchange Congress Asia 2011 in Singapore.
4. Promoting the signing of MOUs in Cooperation with International Stock Exchanges
On May 12, 2011, an MOU for cooperation in information sharing was signed with the Hong Kong Stock Exchange,
extending the MOU on the exchange of market information signed by the two exchanges on May 20, 1998 and
taking a step further to strengthen the existing partnership. In total, TWSE has signed effective cooperation MOUs
with 28 stock exchanges.
5. Proactively Pursuing Mutually Beneficial Cooperation with Various Stock Exchanges
4
Research and Development for
the International Business
1. Encouraging offshore ETF and Feeder Fund ETF to List in Taiwan
In 2011, three domestic ETFs were listed on TWSE, including two domestic component ETF and one foreign
component ETF.
2. Participating in Activities Held by International Securities Organizations
a) TWSE attended the 8th Annual PASLA/RMA Conference on Asian Securities Lending (PASLA), Annual Meeting
of the Global Association of Central Counterparties (CCP12), 20th Annual International Securities Lending
Conference (ISLA) in Portugal and 6th Asia/ Oceania CCP Meeting (A/O CCP).
b) TWSE participated in the Financial Information Service Division (FSID) events, including the World Financial
Information Conference (WFIC), held in San Francisco, USA, and Asia Pacific Financial Information Conference
(APFIC), held in Hong Kong.
c) TWSE attended various meetings held by the WFE, including the Working Committee meeting in Mexico,
Statistics Advisory Group meeting in Paris, Annual Conference and Working Committee meeting in South Africa
and Regulation Task Force meeting in Singapore. TWSE also participated in events held by the International
Organization of Securities Commissions (IOSCO), including the Emerging Markets Committee (EMC) in Rio de
Janeiro, Brazil, 36th Annual Conference and Self-Advisory Working Committee meeting in Cape Town, South
Africa, EMC Annual Meeting in The Dominican Republic, and the Asian and Oceanian Stock Exchanges Federation
(AOSEF)Working Committee meeting in Mumbai, India.
In March, TWSE visited the Tokyo Stock Exchange and communicated on topics including mutually listed ETFs
and the holding of a listed company expo. In May, TWSE visited the Shanghai Stock Exchange and discussion
occurred on topics including mutually listed ETFs, the authorization of real-time trading information and the signing
of a cooperation MOU. In August, the WFE General Secretary and Hong Kong, South Africa, London and Tokyo
Stock Exchanges visited TWSE and exchanged views on international stock exchanges. In November, TWSE
held the 50th anniversary forum on international capital market developments, inviting directors of global stock
exchanges and industry experts to participate in an in-depth discussion on the challenges faced by global stock
exchanges and development trends.
23
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5
Securities Investment Education and Promotion
25
1. Arranging Securities Investment Education and Promotion
a) TWSE held the 2011 Industry Knowledge Workshop with training course topics including Prospects of Industrial
Rise and Fall from the Cross-Straits Situation, Current Situation and Future Development Trends of the Smart
Phone Industry, Analysis of the Development Trends of Multimedia Products, Current Situation and Future
Development Trends of the LED Industry, and Positions and Strategies of Cloud Computing Giants. TWSE invited
experts including Chairman Schive, the HTC IR Director, Epistar R&D Vice President, Wintek Chairman and III
Director, and analysts to conduct seminars. The courses were rich in content, containing both theory and practice.
TWSE staff attended the courses with participants from the Securities and Futures Bureau and GTSM.
b) TWSE hosted the Listed Companies Expo to boost the relationship between listed companies and investors, and
enhance the visibility and influence of the Taiwan securities market in the International securities market. A total
of 58 listed companies, six ETFs and warrant issuing securities firms, and 12 IT vendors exhibited, conducting 30
listed company information sessions and five investment and financial management seminars. Throughout the two
days, almost 20,000 members of the public participated.
c) TWSE held 50 community college financial lectures for the Financial Literacy Project: Investing in the Future Series,
with a total of 4,500 participants.
d) TWSE hosted the fifth Securities Knowledge Camps for Teachers from Primary and High Schools, lecturing on
securities market-related systems, investment and financial management. Two camps were held in Taipei, and one
in Taichung, Hualien and Kaohsiung respectively, with a total of 503 participants.
e) TWSE established a professional service center providing full-time service to investors, and improved the quality of
the investor services hotline. Three service personnel and six service hotlines were set up to receive related calls,
with almost 15,000 calls for suggestions made throughout the year.
f) TWSE hosted an online quiz game with prizes to the general public regarding the five topics of Investing in the
Stocks of Primary Listed Foreign Companies in Taiwan and the Issuance of TDRs, ETFs, Call (Put) Warrants and
Stock Market Knowledge. Over 1,200,000 people participated.
g) TWSE hosted the eighth Campus Knowledge King of Securities Investment campus education competitions, to
assist students in affirming both theory and practice. 92 tertiary institutions and 3,423 students participated in the
competition.
h) In order to increase and develop the understanding of investors in financial products and the capital market, TWSE
published educational and promotional leaflets and posters on securities investment, seven different educational
and promotional leaflets for topics such as callable (bear/bull) contracts, 11 posters concerning Adjusting Auction
Reference Prices at Market Opening etc., and a two-volume picture album illustrating Warrants and TDRs.
2. Holding Business Promotion and Employee Training Seminars
a) TWSE counseled securities firms in the dealing of margin trading and securities lending business, holding nine
events starting from the end of December.
b) TWSE held four Securities Firms New System Self-owned Capital Adequacy Training events.
c) TWSE held educational and promotional events on topics including Adjusting Auction Reference Prices at Market
Opening, Shortening the Latency of Index and Statistical Information Disclosure, The Market Suspension and
Resumption of Trading Measures and Other Business and the Securities Firms Business Explanation Website Live
Streaming Event. At the same time, TWSE visited various securities firms and made use of the internal training
network in the education and promotion of main and subsidiary companies while hosting a promotion of the
viewing of video recordings.
d) TWSE hosted 14 Forums on Securities Firms Clearing and Settlement and Listed Securities Lending Market
Explanation to educate and promote to securities firm employees regarding securities clearing and settlement
and listed companies lending market organization and practice guidelines.
3. Holding Educational and Promotional Forums on Strengthening the Prevention of
Insider Trading and Internal Equity Management
a) In order to boost the views of listed company internal persons and various sections of society towards insider
trading regulations' knowledge and abidance, TWSE hosted 10 different educational and promotional activities
on the prevention of insider trading. These activities included promotional workshops, contest events with prizes,
advocacy for listed companies, and sending promotional information for the reference of companies listing for
the first time. There were a total of 72,841 participants.
b) To strengthen full awareness of companies on the Securities Exchange Act regulations regarding to insider
equity management, various educational and promotional workshops were held on insider equity trading laws.
These workshops were focused on participants from unlisted (GTSM) public companies, listed companies and
companies listed for the first time.
Objectives for 2012
6
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Media Communication and Caring for the Community
1
Promote Internationalization of the Capital Market
1. Develop into a Regional Fundraising Center
1. Publishing Material Information and News of the Securities Market
TWSE arranged 153 listed companies' material information press conferences, allowing listed companies to
disclose material information. TWSE also worked to deliver accurate material market information, issued 1,791
bilingual press releases, and received press coverage 689 times. It also worked with the mainstream financial
media in Taiwan to cohost investment forums, and delivered a total of 11 speeches, as well as promoting news,
advertising and interviews with domestic TV broadcasters, newspapers and magazines.
2. Corporate Social Responsibility
TWSE organized a number of charitable activities to demonstrate its concern for society, particularly for the elderly,
children and other people in need who are contributing community members.
a) Providing assistance services to the elderly and displaying the warmth of society, TWSE sponsored the Li Shin
Charity Fund to provide food delivery services to the elderly in the Wanhua District.
b) Providing a fair and supportive learning environment for children in situations of economic distress, TWSE
sponsored 32 elementary and junior high schools in Taipei City, New Taipei City, Hsinchu City, Miaoli County,
Taichung City, Nantou County, Pingtung County, Ilan County and Taitung County to provide after school tutorial
classes, living allowances and emergency assistance to children in economic hardship.
c) Encouraging prison inmates to rehabilitate and reintegrate into society by stimulating their determination and
strength to change, TWSE sponsored the ROC Light up Cultural Association to arrange 20 Light Up Your Life
speech tours to prisons across Taiwan. The objective of these speeches was to encourage inmates to change their
lives by inviting previously rehabilitated inmates to share their moving life stories of change and positively moving
forward in society.
a) Promote the listing of qualified domestic and foreign companies
b) Cooperate with the Fund-Raising Platform for Hi-Tech and Innovative Firms initiative to stimulate listing applications
for agricultural technology industries
c) Continue to promote the market trading of foreign index ETFs
2. Expedite International Alignment and Strengthen Cooperation
a) Upgrade the Taiwan stock market to a developed market by adjusting trading, clearing and settlement, and
securities lending operations
b) Promote and assist Taiwanese companies in adopting International
Financial Reporting Standards in their financial statements
c) Promote and implement the use of XBRL in the Taiwan capital
market
d) Adopt international protocol standards for information exchange
governance
e) Participate in activities arranged by international securities
organizations, arrange international meetings and promote
interaction and cooperation with overseas securities institutions
2
Promote a Comprehensive and Strong
Mechanism for Market Operation
1. Issuance
a) Promote Better Corporate Governance and Corporate Social Responsibility
(1) Encourage listed companies to develop a comprehensive Corporate Governance System
(2) Educate listed companies to place more emphasis on corporate social responsibility and display more integrity
in their business
b) Implement synchronized information disclosure of secondary listed companies
2. Trade: Increase Flexibility of the Trading System
a) Discuss the content of information disclosures at market opening and before market closing, and related supporting
measures
b) Promote the comprehensive execution of continuous trading
c) Discuss the adjustment of preferential measures for foreign ETF liquidity providers
d) Develop the use of instant price stabilization measures for warrants
e) Explore the trading suspension system and related measures
3. Clearing: Provide a Comprehensive Clearing System
a) Implement related measures for the actuarial analysis of the Settlement and Clearing Fund, handling the clearing
and settlement of securities firms with a monthly tracking mechanism
27
b) Continue to upgrade the TWSE SBL system and bolster the
management of securities lending transactions
TAIWAN
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3. Research the securities market applications of cloud computing
4. Products: Develop New Products
4. Conduct Enhancement of TWSE Personal Data Protection in accordance with the
stipulations of the Personal Data Protection Act
a) Plan for new put call (put) warrants
5. Reinforce the security of information pathways and management systems
b) Discuss the development of new financial products and indices
6. Upgrade IT system management functions
5. Information: Set up a platform for the disclosure
of warrant information and increase information
transparency
a) In accordance with the open computer platform of the new trading system, develop open computer platform tools
such as system management, scheduling software, delivery software to enhance system management efficiency
3
Strengthen Market Supervision and Services
1. Reinforce Supervision and Services of Listed Companies
a) Toughen the supervision of conglomerates
b) Supervise the real-time reporting information and material information disclosure of listed companies
c) Strengthen the normal supervision mechanisms over the financial operations of foreign issuers and promote the
implementation of primary listed company internal control systems
d) Assist listed companies in promoting investor relations
2. Boost Supervision of Market Operations
a) Improve efficacy in illegal trading inspections, undertake online and offline market supervision and enhance
communication with law enforcement agencies
b) Upgrade the investor database to expand the investor information inquiry system
c) Strengthen statistical and analytical operations for specific transactions undertaken by investors
d) Further cross-market surveillance and relations
e) Strengthen the reporting and management of internet and other reports on trading irregularities that deviate from
the fundamentals of individual stocks
3. Enhance Management and Services of Securities Firms
a) Improve audit operations of securities firms
b) Enhance the services provided to securities firms and simplify management measures
c) Gradually implement new capital requirements for securities firms, and cooperate with IFRS to amend capital
requirement calculation methods and reports
d) Host educational and promotional workshops for securities firms in accordance with related legal amendments, and
the promotion of new products or trading systems
4
Enhance IT Services and Management
b) Continue the integration of data backups for non-trading computer systems in order to increase efficacy in data
recovery
c) Increase security by installing Pathway Server Config check tools
d) Continue the virtualization and resource integration of non-trade computer systems to enhance resource use and
system management efficacy, decreasing the number of mainframes and space used by the computer rooms
e) Upgrade the power of the non-trade computer system's ISO27001 information security management system to
increase operational security
f) Improve the power and air-conditioning facilities in the Yang Te mainframe room
7. Increase IT system service functions
a) Continue importation of ISO20000 IT flow management tools, thereby strengthening the connectivity of various
information service procedures, providing multi-faceted information on system management and related service
management reports for a better grasp of information department efficacy
b) Research the securities market's developmental needs for the setting up of a cloud computing infrastructure
environment to decrease the securities market information dissemination costs and augment TWSE's trading
information services
c) Promote classification of information services to provide customized
information services
5
Enhance Management Efficiency and Performance
1. Adopt IFRS financial reporting and strengthen financial
operations
2. Strengthen internal management and ensure the effective
use of human resources
3. Upgrade the functionality of legal and procedural operations
to strengthen TWSE's personal data protection mechanism
4. Strengthen internal controls and reduce operational risk
6
Compliment Government Policies
1. Set up two information centers in Banqiao to facilitate TWSE's long-term development
1. Promote implementation of the Fundraising Platform for Hi-Tech and Innovative Firms initiative
2. Establish a new IT system: Plan and install computer platforms and related operations required
by the New Trading System
2. Coordinate with the promotions of the Taipei Financial Zone
29
TAIWAN
30
31
Exchange Information
Board Members
Chairman
Directors
Schive Chi
(Government Appointed)
Bank of Taiwan
(Representative:Ming-Daw Chang)
Land Bank of Taiwan
(Representative:Yao-Shing Wang)
CPC Corporation, Taiwan
(Representative:Maw-Wen Lin)
Mega International Commercial Bank
(Representative:Mckinney Y. T. Tsai)
China Development Industrial Bank
(Representative:Lawrence S. Liu)
Taiwan Cement Corporation
(Representative:Nelson Chang)
Fubon Securities Co.,Ltd.
(Representative:Jerry Harn)
Yuen Foong Yu Investment Company Ltd.
(Representative:Show-Chung Ho)
Yuanta Securities Co., Ltd.
(Representative:Lee-Chiou Chang)
Samuel J.S. Hsu
Tsing-Yuan Hwang
Len-Yu Liu
Wang-Ruu Tseng
Shang-Wu YU
Chien-Fu Lin
Hua Nan Commercial Bank, Co., Ltd.
(Representative:Jiunn-Chih Wang)
Chiloo Industries, Inc.
(Representative:Hwe-Ching Wong)
Supervisors
Resident
Supervisor
Supervisors
Internal Audit Office
The Organization
Domestic Listing
Department
The Executives
Foreign Listing Department
TAIWAN
32
Shareholders'
Meeting
Trading Department
33
Clearing Department
Surveillance Department
Board of Directors
Chairman
Supervisors
Compliance & Inspection
Department
System Development
Department
President
Committees
Computer Operation
Department
Market Data & Corporate
Systems Department
Corporate Communications
Department
Corporate Planning &
Strategy Department
Senior Executive
Vice President
Finance Department
Administration Department
Legal & Secretarial Services
Department
Labor Security Office
Organization
Organization
Organization
• Left to right
Senior Vice President, Market Data & Corporate Systems / Lung Chao
Senior Vice President, Legal & Secretarial Services / Pauline Cheng
Senior Vice President, Domestic listing Department / Thann-shing Lao
Senior Vice President, Computer Operation / Charles Hsu
Executive Vice President, Administration / Labor Security / Shie-jay Yang
Executive Vice President, Foreign listing Department / Hui-chuan Tu
Executive Vice President, System Development / Chang-ching Lin
Senior Vice President, Surveillance / Wen-kuei Hwah
Senior Vice President, Internal Audit / Chen-tsung Chiang
Senior Executive Vice President / Michael Lin
Senior Executive Vice President / Chao-zon Yang
Senior Executive Vice President / Lih-chung Chien
Senior Vice President, Corporate Planning & Strategy / Shin-chung Chen
Senior Vice President, Clearing / Fred Lin
Senior Vice President, Compliance & Inspection / Chun-chin Hsieh
Senior Vice President, Corporate Communications / Gau-nian Shane
Executive Vice President, Trading / Rebecca Chen
Senior Vice President, Finance / Wendy Shih
Market Activities
February
January
Major Events in 2011
20
TWSE announced that, listed companies and primary listed foreign issuers using
ROC GAAP financial reporting should convert to the XBRL format by the deadline for
the submission of financial reports. This is apart from those exempt from submitting
financial reports with the current TXT format and those continuing to file using written
financial statements or electronic books according to provisions set by the regulators,
starting from the submission of 2010 financial reports,
28
The FSC announced that apart from when operating overseas funds, securities
investment consultancies may not carry out securities investment analysis activities
through radio or television media.
1
The FSC announced that securities brokers may use self-owned funds to invest in
the futures market and hedge risks.
24
TWSE became the fourth stock exchange in the world to obtain ISO20000
certification.
25
Japanese company Elpida issued Taiwan TDRs and became the first Japanese
company to establish a secondary listing in Taiwan.
1
The FSC announced that securities investment trust enterprises investing in
Mainland China securities with private securities trust funds are limited to listed
securities (including underwritten stock) and the invested amount must not be more
than 30% of the net asset value of the fund.
11
In the northeast Japanese Tohoku area, off the coast of Miyagi Prefecture, an
earthquake of 8.9 magnitude caused a mighty tsunami as well as the Fukushima
nuclear power plant explosion and other natural disasters, leading to global market
setbacks.
15
Taiwan's FSC became a signatory of the International Organization of Securities
Counsel's Multilateral Memorandum of Understanding on cooperation and information
exchange (IOSCO MMOU); this is one of several MMOUs on cooperation with
international organizations. Others include the International Association of Insurance
Supervisors' (IAIS) MMOU on the supervision of cooperation in June 1999.
28
On this date, TWSE adjusted the auction reference point at market opening, targeting
securities with no previous day closing price.
March
TAIWAN
34
35
29
The NTD and USD exchange rate closed at 28.763, a new record high in the past 13
and a half years.
12
3
TWSE and the Hong Kong Exchanges and Clearing Ltd signed an MOU on the
supervision of information sharing, furthering the MOU on the cooperation of
information exchange signed between the two stock exchanges on May 20, 1998 and
taking a further step in the strengthening of their cooperation relationship. According
to the MOU, both shall exchange information on events and news that may influence
market activities.
The Financial Consumer Protection Act was passed by the Legislative Yuan after
three readings.
The first TWSE callable bull/bear warrants officially listed on the market.
13
The FSC announced the relaxing of the limitations on the total percentage of
brokers' trading commission of securities investment enterprises through securities
investment trust funds. Due to country (regional) investment laws and local securities
market requirements, when the trading total proportion for an individual broker
commissioned by an individual fund surpasses 30% of the fund's total annual trading
amount, local related requirements should be followed and a request made to the
FSC for an exemption from limits.
14
The FSC members meeting resolved to recognize the completed application and
successful obtainment by Ruen Chen Investment Holding Co. of equity in Nan Shan
Life Insurance Co., Ltd.
21
The FSC announced the establishment of the Regulations on the Conduct of
Renminbi Business by Banks in the Taiwan Area, allowing the overseas business
units (OBU) of Taiwanese banks and foreign branches to conduct renminbi business.
July
August
The FSC allowed securities firms to issue callable bull/bear warrants, projecting
implementation to be in the second half of 2011.
6
September
May
June
19
8
TAIWAN
36
April
7
The FSC agreed to the planning and development by the Taiwan Futures Exchange
for a futures market block trading system. Initial plans were to start with the most
actively traded products in Taifex, small Taiwanese stock index futures and Taiwan
stock index options as products to engage in block trading, with no limitations to the
participants trading in this area.
In the evening of August 5, American time, Standard & Poor officially downgraded
the United States' credit rating from AAA to AA+, added to the spreading of the
European sovereign debt crisis to countries such as Greece; the world's major stock
markets plummeted with many European countries. The U.S. and Korea followed
with announcements restricting the short selling of stocks.
24
The FSC announced the relaxing of limitations on the procurement of funds issued
by their company by persons-in-charge of securities investment enterprises and
members of industry, shortening the minimum holding periods of currency futures
from a month to seven days.
26
TWSE announced amendments to Article 4 of the TWSE Rules Governing Block
Trading of Listed Securities, deleting the settlement date for transaction day
settlement during block trading, in effect from December 19, 2011.
2
The FSC announced considerations on the size of the protection fund and the sound
financial structure of the protection agency while taking into account burdens on the
industry, and adjusted the ratio of the required protection fund contributions made by
securities and futures firms. The ratio of transaction totals contributed to the protection
fund by securities and futures firms was decreased from 0.000285% to 0.000185%.
7
The FSC announced amendments to certain articles of the Regulations Governing
the Banking Activity and the Establishment and the Investment by Financial Institution
Between the Taiwan Area and the Mainland Area, deleting the regulations limiting
Taiwan banks to enter into Mainland China only as branches and subsidiary banks.
The "choose two of three" form of investment and "choose one of two" restrictions on
the investing entity were also eliminated.
22
The Association of East Asian Relations and the Ogaki International Exchange
Association represented Taiwan and Japan in the signing of the Arrangement
Between the Association of East Asian Relations and the Interchange Association for
the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment.
This provided the greatest breakthrough in Taiwan and Japan relations since the
1972 severance of diplomatic relations. It was also the first significant result seen by
Taiwan on foreign economic diplomacy since the cross-strait signing of ECFA.
37
Listing Changes in 2011
Listings: Common Stocks (Total 39 companies)
November
October
Code
December
TAIWAN
38
25
For the 50th year anniversary of the establishment of TWSE, a 50th year anniversary
tea party and exhibition looking back at history and culture was specially held. Listed
companies, securities firms and senior investors were all invited under one roof.
Vice-President Sean Chen of the Executive Yuan and Chairman Yuh Chang Chen of
the FSC personally gave speeches and participated in the entire event.
31
The major American futures broker MF Global unexpectedly filed for bankruptcy
protection, becoming the first major American financial institution to file for bankruptcy
due to the European sovereign debt crisis. In reference to assets, they were the
eighth largest bankrupt case in American history.
18
The FSC, Executive Yuan and the Public Company Accounting Oversight Board
(PCAOB) signed an agreement on cooperation supervision.
6
The FSC announced the approval of a draft regulation adjustment submitted by
TWSE and GTSM. From January 1, 2012, foreign companies applying to list on the
(GTSM) and emerging stock markets may issue no-par or par value not limited to $10.
15
The FSC announced that in response to the European sovereign debt crisis, when
calculating unrealized gains or losses with the capital adequacy ratio, the investment
industry must carry out the valuation using the average calculated price from the
daily closing price in the six months prior to the day of calculation.
20
The FSC announced that the effective date of liquidity investment by Mainland
Chinese banks in Taiwan was set at January 2, 2012. The shareholdings of an
individual Mainland Chinese bank must not exceed 5% of the Taiwanese bank or
FHC subsidiary being invested in and the combined shareholding with other investors
from Mainland China must not exceed 10%.
22
The FSC agreed to preparation for the establishment of Taipei branches of Mainland
China's Bank of China in addition to the Bank of Communications as the first wave of
Mainland China banks establishing branches in Taiwan.
3705
3598
4746
3257
3665
3694
8404
4942
3454
4935
4934
1337
3669
4984
8199
5007
8011
1789
3698
3645
3679
4144
8422
5706
4956
4960
5906
4952
6702
8411
3149
5880
6183
8210
8427
5871
4426
4958
5215
Name
Yungshin Global Holding Corporation
Ili Technology Corp.
Formosa Laboratories, Inc.
Champion Microelectronic Corp.
Bizlink Holding Inc.
Azurewave Technologies, Inc.
Paiho Shih Holdings Corporation
Chia Chang Co., Ltd
Vivotek Inc.
Global Lighting Technologies Inc.
Tainergy Tech Co., Ltd.
Asia Plastic Recycling Holding Limited
Aver Information Inc.
Coadna Holdings, Inc.
Huga Optotech Inc.
San Shing Fastech Corp.
Tai Tung Communication Co., Ltd.
Scinopharm Taiwan, Ltd.
Lextar Electronics Corp.
Taimide Tech. Inc
Nishoku Technology Inc.
Coland Holdings Limited
Cleanaway Company Limited
Phoenix Tours International, Inc.
Epileds Technologies, Inc.
Chi Mei Materials Technology Corp.
Tainan Enterprise(Cayman)Co., Limited
Generalplus Technology Inc.
Transasia Airways Corporation
Kingcan Holdings Limited
G-Tech Optoelectronics Corporation
Taiwan Cooperative Financial Holding Co., Ltd.
Trade-Van Information Services Co.
Chenbro Micom Co., Ltd.
Keysheen (Cayman) Holdings Co., Limited
Chailease Holding Company Limited
Li Cheng Enterprise Co.,Ltd.
Zhen Ding Technology Holding Limited
Ko Ja (Cayman) Co., Ltd.
Date
2011/1/3
2011/1/11
2011/3/1
2011/3/21
2011/4/21
2011/5/3
2011/5/18
2011/6/27
2011/7/22
2011/7/28
2011/8/16
2011/8/17
2011/8/25
2011/8/31
2011/9/8
2011/9/16
2011/9/19
2011/9/29
2011/9/29
2011/10/5
2011/10/5
2011/10/5
2011/10/5
2011/10/21
2011/10/24
2011/10/24
2011/10/24
2011/11/1
2011/11/1
2011/11/1
2011/11/23
2011/12/1
2011/12/1
2011/12/1
2011/12/6
2011/12/13
2011/12/16
2011/12/26
2011/12/26
Delistings: Common Stocks (Total 7 companies)
Code
1716
6012
2463
3534
2854
3367
5854
Name
Yung Shin Pharm. Ind. Co., Ltd.
Taiwan International Securities Corporation
Aaeon Technology Inc.
Ralink Technology Corp
Polaris Securitues Co., Ltd.
Inventec Appliances Corp
Taiwan Cooperative Bank
Date
2011/1/3
2011/5/2
2011/6/1
2011/10/1
2011/10/3
2011/10/7
2011/12/1
39
Market Performance
Listing: ETFs (Total 3 funds)
Code
PMT
Fubon SSE180
Sinopac TAIEX ETF
Date
41
2011/5/12
2011/9/26
2011/9/28
TAIEX
Listing: TDRs (Total 9 companies)
Code
910801
916665
911616
912000
911619
910708
911622
910069
911626
Taiwan 50 Index
Name
Golden Meditech Holdings Limited
Elpida Memory,Inc.
Dukang Distillers Holdings Limited
SIM Technology Group Limited
HISAKA Holdings Ltd.
New Media Group Holdings Limited
Tycoons Worldwide Group (Thailand) Public Co.
Serial System Ltd.
Multi Sports Holdings Ltd
Date
2011/1/24
2011/2/25
2011/3/9
2011/4/25
2011/6/24
2011/7/19
2011/9/29
2011/10/5
2011/12/30
10,000.00
9,145.35
(1/28)
8,000.00
Trading Value
Trading Volume
95
1900
90
1800
85
1700
80
1600
75
1500
70
1400
65
1300
60
1200
55
1100
50
1000
45
900
40
800
35
700
30
600
25
500
Delisting: TDRs (Total 1 company)
Code
9102
Name
Eastern Asia Technology Limited
Date
2011/1/17
6,633.33
(12/19)
6,000.00
Listing: Government Bonds (Total 12 kinds)
Code
Central Government Construction Bonds
Kaohsiung Provincial Construction Bonds
Date
2011/1/5
2011/1/13
2011/2/14
2011/2/22
2011/3/17
2011/5/26
2011/7/20
2011/8/2
2011/8/22
2011/9/30
2011/10/17
2011/12/13
4,000.00
2,000.00
Delisting: Government Bonds (Total 9 kinds)
Code
A95101
D96101
A90101
00955
C90101
C90102
A95105
A86309
A98107
Name
Taipei Provincial Construction Bonds
Taipei Provincial Construction Bonds
Date
2011/1/6
2011/1/7
2011/1/9
2011/3/22
2011/5/30
2011/7/18
2011/7/20
2011/8/23
2011/10/21
0.00
1
2
3
4
5
6
7
2010
8
9
10 11 12 1
2
3
4
5
6
7
2011
8
9
10 11 12
20
15
10
5
0
Trading Volume : 100 million shares
A00101
A00102
A00103
A00104
A00105
A00201
A00106
A00107
A00108
A00109
HB0001
HB0002
Name
Trading Value : NT$100 billion
TAIWAN
40
6203
6205
6204
Name
400
300
200
100
0
Financial Review
Report of Independent Accountants
TAIWAN
42
To the Board of Directors and Stockholders of Taiwan Stock Exchange Corporation
We have audited the accompanying non-consolidated balance sheets of Taiwan Stock Exchange
Corporation as of 31st December 2011 and 2010, and the related non-consolidated statements of
income, of changes in stockholders' equity and of cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these non-consolidated financial statements based on our audits. We did not audit the 2011
and 2010 financial statements of Taiwan Depository and Clearing Corporation, Taiwan-Ca. Inc. and
Taiwan Ratings Corporation, investees accounted for under the equity method. These long-term equity
investments amounted to NT$7,215,265 thousand and NT$6,600,075 thousand as of 31st December
2011 and 2010, respectively, and their related investment income amounted to NT$813,854 thousand
and NT$827,572 thousand for the years then ended. These financial statements were audited by
other auditors, whose reports thereon were furnished to us and our opinion, insofar as it relates to the
amounts included in the financial statements relative to these long-term investments, is based solely on
the reports of other auditors.
We conducted our audits in accordance with the "Rules Governing the Examination of Financial
Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic
of China. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable basis for our opinion.In our opinion, based
on our audits and the reports of other auditors, the non-consolidated financial statements referred
to in the first paragraph present fairly, in all material respects, the financial position of Taiwan Stock
Exchange Corporation as of 31st December 2011 and 2010, and the results of its operations and its
cash flows for the years then ended, in conformity with the "Criteria Governing Preparation of Financial
Reports by Company-Type Stock Exchanges" and generally accepted accounting principles in the
Republic of China.
27th March 2012
Taipei, Taiwan
43
BALANCE SHEETS
31st December, 2011 and 2010
TAIWAN
44
ASSETS
2011
2010
%
Amount
2011
%
Amount
Current Assets
42
$ 42,641,046
51
Available-for-sale financial assets
1,917,096
3
5,075,990
6
Held-to-maturity financial assets
2,050,242
3
1,274,060
Accounts receivable-net
234,925
-
Interest receivable
146,789
Other receivables-net
Other current assets
Total Current Assets
Financial assets carried at cost-noncurrent
Default damages fund
Long-term equity investments accounted for under the equity method
Total Funds and Long-Term Investments
%
Amount
36,518
-
Accrued expenses
828,720
2
Income tax payable
454,111
1
Securities lending and borrowing collateral payable
-
148,105
-
Other current liabilities
-
-
147,398
-
5,831
-
5,946
-
31,686,677
48
49,746,656
60
Funds and Long-term Investments
Held-to-maturity financial assets-noncurrent
LIABILITIES AND STOCKHOLDERS’ EQUITY
2010
%
Amount
Current Liabilities
$ 27,331,794
Cash and cash equivalents
Unit: NT$ 1,000
Unit: NT$ 1,000
15,563,415
24
16,341,349
20
821,652
1
821,652
1
8,171,010
13
7,995,246
9
7,215,265
11
6,600,075
8
31,771,342
49
31,758,322
38
Property, Plant and Equipment
82,660
-
1
777,231
1
133,058
-
206,672
-
21,816,597
34
40,722,402
49
518,840
1
516,588
1
23,333,733
36
42,305,553
51
8,192,994
12
8,036,253
10
Deposits received
43,915
-
45,800
-
Reserve for land value increment tax
44,599
-
44,599
-
8,281,508
12
8,126,652
10
-
-
-
-
31,615,241
48
50,432,205
61
5,983,213
9
5,837,281
7
37,682
-
37,682
-
Payable for securities settlement service
Total Current Liabilities
$
$
Other Liabilities
Default damages reserve
Total Other Liabilities
Securities Settlement Credit
Total Liabilities
Stockholders' Equity
Original Cost
Capital stock
Land
129,496
-
129,496
-
Buildings
180,233
-
180,233
-
Computer equipment
449,942
1
1,459,305
2
Capital reserve
Other equipment
285,686
1
498,258
1
Retained earnings
37,084
-
37,084
-
Legal reserve
4,197,006
6
3,933,324
5
1,082,441
2
2,304,376
3
Special reserve
21,220,762
33
19,849,613
24
( 515,015 )
(1)
( 1,601,393 )
( 2)
2,472,842
4
2,660,919
3
811,063
1
101,612
-
1,378,489
2
804,595
1
-
49,966
-
33,709,725
52
32,368,785
39
$ 65,324,966
100
$ 82,800,990
100
Appreciation – land
Less:Accumulated depreciation
Construction in progress and prepayments on equipment
Total Property, Plant and Equipment
Other Assets
Common stock
Capital reserve
Unappropriated earnings
Other adjustments to Stockholders' Equity
Unrealized gain or loss on financial instruments
Total Stockholders' Equity
85,203
-
85,657
-
Commitments
Operations guarantee deposits
300,000
1
300,000
1
Significant Subsequent Event
Refundable deposits and miscellaneous assets
103,255
-
105,760
-
488,458
1
491,417
1
-
-
-
-
$ 65,324,966
100
$ 82,800,990
100
Rental assets
Total Other Assets
Securities Settlement Debit
TOTAL ASSETS
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
( 201,780 )
45
INCOME STATEMENTS
Unit: NT$ 1,000
31st December, 2011 and 2010
TAIWAN
46
2011
ASSETS
2010
%
Amount
%
Amount
Operating revenues
3,069,329
62
Market data fees
417,841
Listing fees
3,309,108
65
8
412,894
8
858,505
17
745,346
15
82,252
2
82,658
2
Data processing fees
142,193
3
195,208
4
Others
373,317
8
321,257
6
4,943,437
100
5,066,471
100
Trading fees
$
Computer and other equipment fees
Total Operating Revenues
$
Operating expenses
Personnel
( 1,223,911 )
( 25 )
( 1,209,085 )
( 24 )
General and administrative
( 2,388,686 )
( 48 )
( 2,386,584 )
( 47 )
( 3,612,597 )
( 73 )
( 3,595,669 )
( 71 )
1,330,840
27
1,470,802
29
Interest income
741,037
15
668,554
13
Equity in net income of investee companies
813,854
16
827,572
16
-
-
150,932
3
36,449
1
24,191
1
1,591,340
32
1,671,249
33
Total Operating Expenses
Operating income
Non-operating income
Gain on disposal of investments
Other income
Total Non-operating Income
Non-operating expenses
Interest expense
( 13,093 )
-
Loss on disposal of investments
( 19,007 )
( 1)
Other expenses
( 65,918 )
( 1)
( 84,621 )
( 2)
( 98,018 )
( 2)
( 153,735 )
( 3)
Total Non-operating Expenses
2,824,162
Income before income tax
( 355,884 )
Income tax expense
Net income
$
2,468,278
Pre tax
Basic earnings per share (NT$)
$
4.72
( 69,114 )
-
57
2,988,316
( 7)
( 351,491 )
50
$
After tax
$
4.13
2,636,825
Pre tax
$
4.99
( 1)
-
59
( 7)
52
After tax
$
4.41

Annual Report 2011

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