Regulations Governing Futures Commission Merchants Article 22

When the shareholders' equity of a futures commission merchant is less than 60 percent of minimum paid-in capital, or when adjusted net capital is less than 20 percent of the total amount of customer margins required for the open positions of futures traders, the futures commission merchant shall immediately report to the FSC and FSC-designated institutions.When the shareholders' equity of a futures commission merchant is less than 40 percent of minimum paid-in capital, or when adjusted net capital is less than 15 percent of the total amount of customer margins required for the open positions of futures traders, except where necessary in order to deal with currently outstanding positions, the futures commission merchant shall immediately cease accepting orders from futures traders and submit a rectification plan to the FSC and FSC-designated institutions.Adjusted net capital shall be calculated in accordance with the rules of the FSC. The percentages set forth in the preceding two paragraphs may be adjusted by the FSC depending on domestic and foreign economic and financial conditions and the business conditions being experienced by ROC and foreign futures commission merchants.The provisions in paragraph 1 and paragraph 2 above shall apply mutatis mutandis to enterprises concurrently engaged in futures trading.