Fubon Financial

The trading of ETFs in Taiwan can be made through the following two ways:

1.Primary market: Investors may apply for In-Kind Creation/Redemption via a Participating Dealer to the Manager. In-Kind Creation refers to a Participating Dealer for itself or on behalf of investors delivering a portfolio of stocks and the cash component per basket for one creation unit or their integer multiples to the Manager in exchange for ETF beneficiary certificates. In-Kind Redemption refers to a Participating Dealer for itself or on behalf of investors delivering ETF beneficiary certificates to the Manager in exchange for a portfolio of stocks and the cash component per basket or their integer multiples.
2.Secondary market: Once the ETF is listed at TSEC, investors can buy/sell the ETF during trading hours of TSEC.

※The Portfolio Composition File will be posted by 8 p.m. for details every trading day. Investors can acquire such information on the website at http://www.fubonetf.com.tw or http://www.tse.com.tw for details.

The Participating Dealer refers to a securities firm that has signed a participant agreement with the Manager for the operation of In-Kind Creation/Redemption of a certain ETF. The Participating Dealers appointed for each ETF may be different and also changeable from time to time. The latest information about PD can be checked by visiting the following website: www.fubonetf.com

Investors are able to trade ETFs by their securities trading accounts with a brokerage house, with no additional accounts required.

It is exactly the same with that for the general stocks, from 9:00am to 1:30pm. The off-days shall be identical with those of banks in Taiwan.

ETFs, like general stocks, need to be traded at the licensed securities broker.

For the listed ETF, you can trade it in margin. Further, short selling of the ETF under margin trading is exempted from the tick rule, which requires short sales not to take place at a lower price than the previous day's closing price. However, before conducting short selling, please check the brokers to see whether there is any quota still available.

Like general stocks, the daily price up/down limit of pure domestic ETFs is 10%. Offshore ETFs or ETFs comprising foreign securities have no limit.

The bid/ask spread of ETFs per unit is NT$0.01 when the trading price of the unit is below NT$50; NT$0.05 when the unit price is above NT$50.

The cost of ETFs trading includes the processing fee and securities transaction tax. The processing fee is the same as that of general stock trading, varying according to different brokers but no higher than 0.1425% of the consideration. Securities transaction tax of ETFs is 0.1% levied on the sales of the units, one third of that of stocks, levied at 0.3%.

The minimum board lot is 1,000 beneficiary units in the stock market, and also applicable to the regulation of block or odd-lot trading.

Due to the unique in kind Creation/Redemption mechanism of ETF, there exists the phenomenon of appreciation and depreciation. When the market price of ETF is above its net assets value(NAV), there is an appreciation; on the contrary, an depreciation occurs. However , the fact that institutional investors sell ( when appreciation exists and , at the same time, exchanging the index basket for the ETF ) / buy ( when depreciation exists and , at the same time, exchanging the ETF for index basket ) the ETF in the secondary market lowers/improves the market price of the ETF and eventually minimizes the gap between the market price and the NAV of the ETF.

Yes. The TSEC Taiwan Index Series constituents will be periodically upedated. The TSEC Taiwan Index Series constituents are quarterly reviewed on the third Friday in January, April, July and October. Any constituent changes will be implemented on the next trading day following the third Friday of the same month of the review meeting.