Regulations Governing the Preparation of Financial Reports by Futures Clearing Houses
2018-07-27
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Chapter I General Principles
Article 1
These Regulations are adopted under Article 97, paragraph 2 of the Futures Trading Act (the "Act").
Article 2
The financial reports of a futures clearing house shall be prepared in accordance with these Regulations and other applicable laws and regulations. Matters not provided for therein shall be governed by generally accepted accounting principles (GAAP).
The GAAP described in the preceding paragraph shall mean the following, as recognized by the Financial Supervisory Commission (FSC): International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).
The GAAP described in the preceding paragraph shall mean the following, as recognized by the Financial Supervisory Commission (FSC): International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).
Article 3
A futures clearing house shall establish an accounting system based on the nature of its accounting matters, the actual conditions and development of its business, and its management needs.
The accounting system referred to in the preceding paragraph shall provide the following individual items, based on the nature of the futures clearing house's business operations, and in a way that meets the needs of preparing consolidated financial reports and uniformity in the accounting policies of the futures clearing house and its subsidiaries:
1.A general description of the accounting system.
2.A chart of journals and ledgers.
3.Accounting items, accounting documents, account books, and accounting reports.
4.Accounting procedures.
5.Other items required by the FSC.
The futures clearing house shall see to it that its subsidiaries establish their accounting systems in accordance with the preceding paragraph.
The accounting system referred to in the preceding paragraph shall provide the following individual items, based on the nature of the futures clearing house's business operations, and in a way that meets the needs of preparing consolidated financial reports and uniformity in the accounting policies of the futures clearing house and its subsidiaries:
1.A general description of the accounting system.
2.A chart of journals and ledgers.
3.Accounting items, accounting documents, account books, and accounting reports.
4.Accounting procedures.
5.Other items required by the FSC.
The futures clearing house shall see to it that its subsidiaries establish their accounting systems in accordance with the preceding paragraph.
Article 4
The appointment and discharge of the in-charge accountant of a futures clearing house shall be approved by a majority of the directors present at a board of directors meeting attended by a majority of the directors, and shall be reported to the FSC for approval or recordation within 5 days after appointment or change.
Article 5
A futures clearing house shall use the calendar year as its financial year, with accounts closed on June 30 for the first half of the financial year and on December 31 for the whole financial year.
The accrual basis of accounting shall be used.
Accounts shall be expressed in New Taiwan Dollars (NT$).
The dollar amounts in the financial statements may be presented in thousands of NT dollars rounded to the nearest thousand.
The accrual basis of accounting shall be used.
Accounts shall be expressed in New Taiwan Dollars (NT$).
The dollar amounts in the financial statements may be presented in thousands of NT dollars rounded to the nearest thousand.
Article 6
"Financial reports" shall mean financial statements, statements of major accounting items, and any other disclosures and explanatory information helpful to the decision making of users.
A complete set of financial statements shall comprise a balance sheet, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and their accompanying notes or supplementary schedules.
A futures clearing house, unless newly established, or under any of the circumstances set out in paragraph 4 herein, or otherwise required by the FSC, shall prepare the major financial statements and notes described in the preceding paragraph by presenting comparative information for two consecutive periods. The major financial statements shall also be signed or sealed on each page by the futures clearing house's responsible person, managerial officer, and in-charge accountant.
When a futures clearing house applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements, it shall do so in accordance with the relevant provisions of IAS 1.
A complete set of financial statements shall comprise a balance sheet, a statement of comprehensive income, a statement of changes in equity, a statement of cash flows, and their accompanying notes or supplementary schedules.
A futures clearing house, unless newly established, or under any of the circumstances set out in paragraph 4 herein, or otherwise required by the FSC, shall prepare the major financial statements and notes described in the preceding paragraph by presenting comparative information for two consecutive periods. The major financial statements shall also be signed or sealed on each page by the futures clearing house's responsible person, managerial officer, and in-charge accountant.
When a futures clearing house applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements, it shall do so in accordance with the relevant provisions of IAS 1.
Article 7
Financial reports shall be able to present fairly the financial position, financial performance, and cash flows of a futures clearing house without being misleading to an interested party in making judgments and decisions.
If a financial report violates these Regulations or any other applicable requirements, for which the FSC as a result of an audit gives a notice of adjustment, the futures clearing house shall make the required adjustment and correction. If the adjusted amount reaches the threshold set forth in Article 6 of the Securities and Exchange Act Enforcement Rules, the financial report shall be restated and submitted to the FSC.
If a financial report violates these Regulations or any other applicable requirements, for which the FSC as a result of an audit gives a notice of adjustment, the futures clearing house shall make the required adjustment and correction. If the adjusted amount reaches the threshold set forth in Article 6 of the Securities and Exchange Act Enforcement Rules, the financial report shall be restated and submitted to the FSC.
Article 8
The following shall apply when a futures clearing house makes an accounting change:
1.Change in accounting policy:
A.When a futures clearing house changes an accounting policy voluntarily in a new financial year in order to produce financial reports that provide reliable and more relevant information about the effects of transactions or other events or conditions on the futures clearing house's financial position, financial performance, or cash flows, it shall request a certified public accountant (CPA) to provide an item-by-item analysis and review opinion on the reasonableness of the nature of the change in accounting policy, the reasons why applying the new accounting policy provides reliable and more relevant information, each line item affected and the estimated effect for the financial year preceding the earliest financial year affected by retrospective application of the new accounting policy, and the actual effect on the opening balance of retained earnings for the immediately preceding financial year. These shall be submitted as a proposal for adoption by resolution of the board of directors, after which they shall be submitted to the FSC for approval.
B.If, for the voluntary change in accounting policy in the new financial year, it is impracticable to determine either the period-specific effects or the cumulative effect of the change, as described in paragraph 23 of IAS 8, the futures clearing house shall calculate the effects in accordance with paragraph 24 of IAS 8 and the preceding item above, and shall request a CPA to provide an item-by-item analysis and review opinion on the reasonableness of the reasons why retrospective application is impracticable and how and from when the change in accounting policy has been applied, and also provide an opinion on the impact on the audit opinion for the earliest financial year affected by the change in accounting policy for which an application is submitted to the FSC for approval. The futures clearing house shall then follow the procedure described above.
C.Unless it is impracticable to determine the effects as described in the preceding item, then within 2 months after the beginning of the financial year in which the new accounting policy is adopted, the futures clearing house shall calculate the line items affected and the actual effects for the financial year preceding the earliest financial year affected by retrospective application of the new accounting policy and the actual effects on the opening balance of retained earnings for the immediately preceding financial year, and shall submit those for adoption by the board of directors, after which they shall be filed with the FSC for recordation. If the difference between the actual effects of the change in accounting policy and the effects originally filed with the FSC is NT$10 million or more, and is also 1 percent or more of net operating revenues for the immediately preceding financial year, or 5 percent or more of paid-in capital, the futures clearing house shall analyze the reasons for the difference and request a CPA to provide an opinion on its reasonableness. The analysis and the CPA's opinion shall also be filed with the FSC.
D.Except when applying a new accounting policy to newly purchased assets, in which case the provisions of the preceding items need not be applied, if a change in accounting policy is applied without having been duly filed for approval, the financial reports for the financial year in which the new accounting policy was applied shall be restated, and the new accounting policy may only be applied from the next financial year after a supplementary filing has been made and approved.
E.If the shares of the futures clearing house have a par value other than NT$10 per share, for the calculation of the 5 percent of paid-in capital under item C, 2.5 percent of the equity attributable to the owners of the parent as stated in the balance sheet shall be substituted.
2.With respect to any matter in accounting estimates relating to a change in the useful life or depreciation method of depreciable assets, a change in the amortization period or amortization method of intangible assets, or a change in the residual value of any such assets, in addition to complying with item D of the preceding subparagraph, a futures clearing house shall request a CPA to provide an analysis and review opinion on the reasonableness of the nature of the changes in accounting estimates and the reasons why the changes in accounting estimates would provide reliable and more relevant information. Those changes in accounting estimates shall then be submitted as a proposal for adoption by resolution of the board of directors, after which they shall be submitted to the FSC for approval.
1.Change in accounting policy:
A.When a futures clearing house changes an accounting policy voluntarily in a new financial year in order to produce financial reports that provide reliable and more relevant information about the effects of transactions or other events or conditions on the futures clearing house's financial position, financial performance, or cash flows, it shall request a certified public accountant (CPA) to provide an item-by-item analysis and review opinion on the reasonableness of the nature of the change in accounting policy, the reasons why applying the new accounting policy provides reliable and more relevant information, each line item affected and the estimated effect for the financial year preceding the earliest financial year affected by retrospective application of the new accounting policy, and the actual effect on the opening balance of retained earnings for the immediately preceding financial year. These shall be submitted as a proposal for adoption by resolution of the board of directors, after which they shall be submitted to the FSC for approval.
B.If, for the voluntary change in accounting policy in the new financial year, it is impracticable to determine either the period-specific effects or the cumulative effect of the change, as described in paragraph 23 of IAS 8, the futures clearing house shall calculate the effects in accordance with paragraph 24 of IAS 8 and the preceding item above, and shall request a CPA to provide an item-by-item analysis and review opinion on the reasonableness of the reasons why retrospective application is impracticable and how and from when the change in accounting policy has been applied, and also provide an opinion on the impact on the audit opinion for the earliest financial year affected by the change in accounting policy for which an application is submitted to the FSC for approval. The futures clearing house shall then follow the procedure described above.
C.Unless it is impracticable to determine the effects as described in the preceding item, then within 2 months after the beginning of the financial year in which the new accounting policy is adopted, the futures clearing house shall calculate the line items affected and the actual effects for the financial year preceding the earliest financial year affected by retrospective application of the new accounting policy and the actual effects on the opening balance of retained earnings for the immediately preceding financial year, and shall submit those for adoption by the board of directors, after which they shall be filed with the FSC for recordation. If the difference between the actual effects of the change in accounting policy and the effects originally filed with the FSC is NT$10 million or more, and is also 1 percent or more of net operating revenues for the immediately preceding financial year, or 5 percent or more of paid-in capital, the futures clearing house shall analyze the reasons for the difference and request a CPA to provide an opinion on its reasonableness. The analysis and the CPA's opinion shall also be filed with the FSC.
D.Except when applying a new accounting policy to newly purchased assets, in which case the provisions of the preceding items need not be applied, if a change in accounting policy is applied without having been duly filed for approval, the financial reports for the financial year in which the new accounting policy was applied shall be restated, and the new accounting policy may only be applied from the next financial year after a supplementary filing has been made and approved.
E.If the shares of the futures clearing house have a par value other than NT$10 per share, for the calculation of the 5 percent of paid-in capital under item C, 2.5 percent of the equity attributable to the owners of the parent as stated in the balance sheet shall be substituted.
2.With respect to any matter in accounting estimates relating to a change in the useful life or depreciation method of depreciable assets, a change in the amortization period or amortization method of intangible assets, or a change in the residual value of any such assets, in addition to complying with item D of the preceding subparagraph, a futures clearing house shall request a CPA to provide an analysis and review opinion on the reasonableness of the nature of the changes in accounting estimates and the reasons why the changes in accounting estimates would provide reliable and more relevant information. Those changes in accounting estimates shall then be submitted as a proposal for adoption by resolution of the board of directors, after which they shall be submitted to the FSC for approval.
Article 9
A futures clearing house shall prepare consolidated financial reports in accordance with Chapter II of these Regulations and IFRS 10, and shall prepare annual parent company only financial reports in accordance with Chapter IV of these Regulations.
A futures clearing house that does not have a subsidiary shall prepare individual financial reports in accordance with Chapter II of these Regulations, and when preparing annual individual financial reports shall also prepare statements of major accounting items in accordance with Article 25 of these Regulations.
A futures clearing house preparing interim financial reports shall follow the provisions of Chapters II and III of these Regulations as well as IAS 34 and when preparing semi-annual financial reports shall also prepare semi-annual parent company only financial reports pursuant to Articles 23 to 25, or semi-annual individual financial reports pursuant to Article 25.
A futures clearing house that does not have a subsidiary shall prepare individual financial reports in accordance with Chapter II of these Regulations, and when preparing annual individual financial reports shall also prepare statements of major accounting items in accordance with Article 25 of these Regulations.
A futures clearing house preparing interim financial reports shall follow the provisions of Chapters II and III of these Regulations as well as IAS 34 and when preparing semi-annual financial reports shall also prepare semi-annual parent company only financial reports pursuant to Articles 23 to 25, or semi-annual individual financial reports pursuant to Article 25.
Article 10
The meaning of "parent," "subsidiary," "associate," and joint arrangement, as used in these Regulations, shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28.
The meaning of "control," "significant influence," or "joint control" as used in these Regulations shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28.
The meaning of "control," "significant influence," or "joint control" as used in these Regulations shall be determined in accordance with IFRS 10, IFRS 11, and IAS 28.
Chapter II Financial Reports
Section I Balance Sheet
Article 11
Assets shall be properly classified. Current and non-current assets shall be distinguished.
For each asset line item, the total amount expected to be recovered within 12 months after the balance sheet date and the total amount expected to be recovered more than 12 months after the balance sheet date shall be separately presented in the financial statements or disclosed in the notes.
Current assets means that the futures clearing house expects to realize the asset, or intends to sell or consume it, in its normal operating cycle, or that it holds the asset primarily for the purpose of trading, or that it expects to realize the asset within 12 months after the balance sheet date, or that the asset is cash or a cash equivalent, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than 12 months after the balance sheet date. As a minimum, current assets shall include the following asset line items:
1.Cash and cash equivalents:
A.Cash on hand, demand deposits, and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
B.A futures clearing house shall disclose the components of cash and cash equivalents and the policy which it adopts in determining the composition of cash and cash equivalents.
2.Financial assets at fair value through profit or loss –current:
A.Financial assets not measured at amortized cost or measured at fair value through other comprehensive income.
B.Financial assets measured at amortized cost or measured at fair value through other comprehensive income which may be designated as financial assets measured at fair value through profit or loss according to IFRS 9.
3.Financial assets measured at fair value through other comprehensive income - current:
A.Debt instrument investments that meets all of the following conditions:
a.The futures clearing house holds the financial assets within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
b.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
B.Equity investments not held for trading, for which the entity has irrevocably elected at initial recognition to present changes in fair value in "other comprehensive income," and may not be re-recorded after being recognized.
C.The futures clearing house shall establish evaluation and assessment working procedures and collect reasonable supporting evidentiary information of its business model, contractual cash flows, and equity investments not held for trading, and the related control measures shall be incorporated into its accounting system.
4.Financial assets measured at amortized cost – current, meaning all of the following conditions are met:
A.The futures clearing house holds the financial assets within a business model whose objective is to hold the financial asset to collect the contractual cash flows.
B.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
C.The futures clearing house shall establish evaluation and assessment working procedures and collect reasonable supporting information with respect to its business model and contractual cash flows for financial instruments that it holds, and related control measures shall be incorporated into its accounting system.
5.Financial assets for hedging–current:
A.Financial asset that is a designated and effective hedging instrument under hedge accounting requirements.
B.The futures clearing house shall record these financial assets under the category of derivative instrument, non-derivative financial assets measured at fair values and not at fair values.
6.Trade receivables: Means the entity has an unconditional contractual right to consideration for services that have been transferred:
A.Trade receivables shall be measured in accordance with IFRS 9. However, short-term trade receivables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
B.With respect to discounted or transferred trade receivables, an assessment shall be made to determine whether the risks and rewards of the trade receivables, and the control retained over them, will qualify them for derecognition in accordance with IFRS 9.
C.Trade receivables from related parties in significant amounts shall be presented separately.
D.The futures clearing house shall disclose an aged analysis of trade receivables.
7.Other receivables refers to receivables other than trade receivables.
8.Current tax assets: The portion of the tax amount already paid in respect of current and prior periods that exceeds the amount due for those periods.
9.Prepayments: All prepayments and prepaid expenses.
10.Clearing margins:
A.Clearing margins collected from futures clearing members in accordance with the Act.
B.A note shall be added stating whether the collateral deposited for clearing margins is cash or FSC-approved securities.
11.Non-current assets held for sale:
A.Any non-current asset, or asset included in a disposal group held for sale, that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
B.The measurement, presentation, and disclosure of non-current assets held for sale and disposal groups held for sale shall be made in accordance with IFRS 5.
C.When non-current assets or disposal groups classified as held for sale no longer meet the criteria in IFRS 5, they shall no longer be classified as held for sale.
D.When assets or disposal groups meet the definition of held for distribution to owners, they shall be reclassified from held for sale to held for distribution to owners, and shall be deemed an extension of the original disposal plan, and the classification, presentation, and measurement of the new disposal plan shall apply. When the assets or disposal groups classified as held for distribution to owners no longer meet the criteria in IFRS 5, they shall cease to be classified as held for distribution to owners.
12.Other current assets: Current assets not attributable to any of the classes above.
Non-current assets refers to tangible, intangible, and financial assets of a long-term nature, other than assets classified as current. At a minimum, non-current assets shall include each of the following asset line items:
1.Investments accounted for using the equity method:
A.The valuation and presentation of investments accounted for using the equity method shall be made in accordance with IAS 28.
B.When investment gain or loss is recognized, if the financial reports prepared by an associate do not conform to these Regulations, those financial reports shall first be adjusted to achieve conformance before they may be used to recognize investment gain or loss. The financial reports of an associate used in applying the equity method shall be prepared as of the same date as that of the futures clearing house, and if prepared as of a different date, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the futures clearing house's financial reports. In no case shall there be more than 3 months difference between the balance sheet date of the associate and that of the futures clearing house. If a CPA determines, pursuant to Statement of Auditing Standards No. 51, that an associate has a material effect on the fair presentation of the financial reports of an futures clearing house, the financial reports of the associate shall be audited by a CPA in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards.
C.If an investment accounted for using the equity method is pledged as collateral or otherwise subject to any restriction or limitation, that fact shall be noted.
2.Property and equipment:
A.Tangible asset items that are held for use in the supply of goods or services, for rental to others, or for administrative purposes, and that are expected to be used during more than 1 financial year or 1 operating cycle.
B.Property and equipment shall be subsequently measured using the cost model and accounted for in accordance with IAS 16.
C.Each component of property and equipment that is significant shall be depreciated separately. The depreciation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The depreciable amount should be allocated on a systematic basis over the asset's useful life.
D.When items of property and equipment have different useful lives, or provide economic benefits in different ways, or are subject to different depreciation methods or depreciation rates, the notes shall show each class of their material components.
3.Right-of-use assets:
A.Means an asset that represents a lessee's right to use an underlying asset for the lease term.
B.A right-of-use asset shall be accounted for in accordance with IFRS 16.
4.Investment property:
A.Means property that is held by the owner or that is held by the lessee with the right of use, to earn rentals, or for capital appreciation, or both.
B.Investment property shall be accounted for in accordance with IAS 40. If the investment property is subsequently measured at fair value, the valuation model, qualifications of the appraiser, and information disclosure shall comply with Article 9, paragraph 4, subparagraph 4 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
5.Intangible assets:
A.Identifiable, non-monetary assets without physical substance that meet the definition of identifiability, control by an entity, and existence of future economic benefits.
B.Intangible assets shall be subsequently measured using the cost model and accounted for in accordance with IAS 38.
C.The amortization method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The amortized amount of an intangible asset shall be allocated on a systematic basis over its useful life.
6.Deferred tax assets: The amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits.
7.The compensation reserve fund:
A.This refers to the compensation reserves set aside as a lump sum, and then as 20 percent of revenues from clearing and settlement fees received during each quarter, in accordance with the Act and the Regulations Governing Futures Clearing Houses.
B.The compensation reserve fund shall be deposited in a segregated account at a bank designated by the FSC.
8.Settlement and clearing debit items:
A.This refers to settlement and clearing funds collected from futures clearing members and the interest revenue and relevant fees arising from these funds.
B.In preparing the balance sheet, settlement and clearing debit items shall be presented as a net balance after offsetting against settlement and clearing credit items, provided that their nature, content, utilization, and pledge status shall be indicated in the notes to the financial reports and the details shall be disclosed in the statements of related accounting items.
9.Other non-current assets: Non-current assets not attributable to any of the classes above.
The accounting and the recognition and measurement of allowance for losses of the items described in the preceding two paragraphs in relation to financial assets measured at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, , financial assets for hedging, trade receivables, and other receivables shall be in accordance with IFRS 9. The allowance for losses shall be classified as subtraction from financial assets measured at amortized cost, futures trading margins receivable, deduction from receivable and other receivables. Where the listed items are more specifically classified, the allowance for losses shall be shown separately accordingly.
A futures clearing house shall assess as of each balance sheet date whether there is any objective evidence of impairment for the items described in paragraphs 3 and 4 in relation to available-for-sale financial assets, financial assets measured at cost, debt instrument investment for which no active market exists, held-to-maturity financial assets, futures trading margins receivable, trade receivables, other receivables, investments accounted for using the equity method, property and equipment, right-of-use assets, investment property measured using cost model, and intangible assets. If any such evidence exists, the FCM shall recognize the amount of any impairment loss in accordance with IAS 36. If the recoverable amount of non-financial assets is determined on the basis of fair value less costs of disposal, disclose the extra information regarding the fair value measurement, including the level of the fair value hierarchy, the valuation techniques, and the key assumptions. If the recoverable amount is determined on the basis of value in use, disclose the discount rate for value in use measurement.
With respect to the items described in paragraph 3 and paragraph 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, trade receivables, other receivables, non-current assets held for sale, and investment property, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The items described in paragraphs 3 and 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, shall be distinguished as current and non-current based on liquidity.
For each asset line item, the total amount expected to be recovered within 12 months after the balance sheet date and the total amount expected to be recovered more than 12 months after the balance sheet date shall be separately presented in the financial statements or disclosed in the notes.
Current assets means that the futures clearing house expects to realize the asset, or intends to sell or consume it, in its normal operating cycle, or that it holds the asset primarily for the purpose of trading, or that it expects to realize the asset within 12 months after the balance sheet date, or that the asset is cash or a cash equivalent, unless the asset is to be used for an exchange or to settle a liability, or otherwise remains restricted, at more than 12 months after the balance sheet date. As a minimum, current assets shall include the following asset line items:
1.Cash and cash equivalents:
A.Cash on hand, demand deposits, and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.
B.A futures clearing house shall disclose the components of cash and cash equivalents and the policy which it adopts in determining the composition of cash and cash equivalents.
2.Financial assets at fair value through profit or loss –current:
A.Financial assets not measured at amortized cost or measured at fair value through other comprehensive income.
B.Financial assets measured at amortized cost or measured at fair value through other comprehensive income which may be designated as financial assets measured at fair value through profit or loss according to IFRS 9.
3.Financial assets measured at fair value through other comprehensive income - current:
A.Debt instrument investments that meets all of the following conditions:
a.The futures clearing house holds the financial assets within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.
b.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
B.Equity investments not held for trading, for which the entity has irrevocably elected at initial recognition to present changes in fair value in "other comprehensive income," and may not be re-recorded after being recognized.
C.The futures clearing house shall establish evaluation and assessment working procedures and collect reasonable supporting evidentiary information of its business model, contractual cash flows, and equity investments not held for trading, and the related control measures shall be incorporated into its accounting system.
4.Financial assets measured at amortized cost – current, meaning all of the following conditions are met:
A.The futures clearing house holds the financial assets within a business model whose objective is to hold the financial asset to collect the contractual cash flows.
B.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
C.The futures clearing house shall establish evaluation and assessment working procedures and collect reasonable supporting information with respect to its business model and contractual cash flows for financial instruments that it holds, and related control measures shall be incorporated into its accounting system.
5.Financial assets for hedging–current:
A.Financial asset that is a designated and effective hedging instrument under hedge accounting requirements.
B.The futures clearing house shall record these financial assets under the category of derivative instrument, non-derivative financial assets measured at fair values and not at fair values.
6.Trade receivables: Means the entity has an unconditional contractual right to consideration for services that have been transferred:
A.Trade receivables shall be measured in accordance with IFRS 9. However, short-term trade receivables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
B.With respect to discounted or transferred trade receivables, an assessment shall be made to determine whether the risks and rewards of the trade receivables, and the control retained over them, will qualify them for derecognition in accordance with IFRS 9.
C.Trade receivables from related parties in significant amounts shall be presented separately.
D.The futures clearing house shall disclose an aged analysis of trade receivables.
7.Other receivables refers to receivables other than trade receivables.
8.Current tax assets: The portion of the tax amount already paid in respect of current and prior periods that exceeds the amount due for those periods.
9.Prepayments: All prepayments and prepaid expenses.
10.Clearing margins:
A.Clearing margins collected from futures clearing members in accordance with the Act.
B.A note shall be added stating whether the collateral deposited for clearing margins is cash or FSC-approved securities.
11.Non-current assets held for sale:
A.Any non-current asset, or asset included in a disposal group held for sale, that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
B.The measurement, presentation, and disclosure of non-current assets held for sale and disposal groups held for sale shall be made in accordance with IFRS 5.
C.When non-current assets or disposal groups classified as held for sale no longer meet the criteria in IFRS 5, they shall no longer be classified as held for sale.
D.When assets or disposal groups meet the definition of held for distribution to owners, they shall be reclassified from held for sale to held for distribution to owners, and shall be deemed an extension of the original disposal plan, and the classification, presentation, and measurement of the new disposal plan shall apply. When the assets or disposal groups classified as held for distribution to owners no longer meet the criteria in IFRS 5, they shall cease to be classified as held for distribution to owners.
12.Other current assets: Current assets not attributable to any of the classes above.
Non-current assets refers to tangible, intangible, and financial assets of a long-term nature, other than assets classified as current. At a minimum, non-current assets shall include each of the following asset line items:
1.Investments accounted for using the equity method:
A.The valuation and presentation of investments accounted for using the equity method shall be made in accordance with IAS 28.
B.When investment gain or loss is recognized, if the financial reports prepared by an associate do not conform to these Regulations, those financial reports shall first be adjusted to achieve conformance before they may be used to recognize investment gain or loss. The financial reports of an associate used in applying the equity method shall be prepared as of the same date as that of the futures clearing house, and if prepared as of a different date, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the futures clearing house's financial reports. In no case shall there be more than 3 months difference between the balance sheet date of the associate and that of the futures clearing house. If a CPA determines, pursuant to Statement of Auditing Standards No. 51, that an associate has a material effect on the fair presentation of the financial reports of an futures clearing house, the financial reports of the associate shall be audited by a CPA in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards.
C.If an investment accounted for using the equity method is pledged as collateral or otherwise subject to any restriction or limitation, that fact shall be noted.
2.Property and equipment:
A.Tangible asset items that are held for use in the supply of goods or services, for rental to others, or for administrative purposes, and that are expected to be used during more than 1 financial year or 1 operating cycle.
B.Property and equipment shall be subsequently measured using the cost model and accounted for in accordance with IAS 16.
C.Each component of property and equipment that is significant shall be depreciated separately. The depreciation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The depreciable amount should be allocated on a systematic basis over the asset's useful life.
D.When items of property and equipment have different useful lives, or provide economic benefits in different ways, or are subject to different depreciation methods or depreciation rates, the notes shall show each class of their material components.
3.Right-of-use assets:
A.Means an asset that represents a lessee's right to use an underlying asset for the lease term.
B.A right-of-use asset shall be accounted for in accordance with IFRS 16.
4.Investment property:
A.Means property that is held by the owner or that is held by the lessee with the right of use, to earn rentals, or for capital appreciation, or both.
B.Investment property shall be accounted for in accordance with IAS 40. If the investment property is subsequently measured at fair value, the valuation model, qualifications of the appraiser, and information disclosure shall comply with Article 9, paragraph 4, subparagraph 4 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
5.Intangible assets:
A.Identifiable, non-monetary assets without physical substance that meet the definition of identifiability, control by an entity, and existence of future economic benefits.
B.Intangible assets shall be subsequently measured using the cost model and accounted for in accordance with IAS 38.
C.The amortization method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed. If that pattern cannot be determined reliably, the straight-line method shall be used. The amortized amount of an intangible asset shall be allocated on a systematic basis over its useful life.
6.Deferred tax assets: The amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits.
7.The compensation reserve fund:
A.This refers to the compensation reserves set aside as a lump sum, and then as 20 percent of revenues from clearing and settlement fees received during each quarter, in accordance with the Act and the Regulations Governing Futures Clearing Houses.
B.The compensation reserve fund shall be deposited in a segregated account at a bank designated by the FSC.
8.Settlement and clearing debit items:
A.This refers to settlement and clearing funds collected from futures clearing members and the interest revenue and relevant fees arising from these funds.
B.In preparing the balance sheet, settlement and clearing debit items shall be presented as a net balance after offsetting against settlement and clearing credit items, provided that their nature, content, utilization, and pledge status shall be indicated in the notes to the financial reports and the details shall be disclosed in the statements of related accounting items.
9.Other non-current assets: Non-current assets not attributable to any of the classes above.
The accounting and the recognition and measurement of allowance for losses of the items described in the preceding two paragraphs in relation to financial assets measured at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, , financial assets for hedging, trade receivables, and other receivables shall be in accordance with IFRS 9. The allowance for losses shall be classified as subtraction from financial assets measured at amortized cost, futures trading margins receivable, deduction from receivable and other receivables. Where the listed items are more specifically classified, the allowance for losses shall be shown separately accordingly.
A futures clearing house shall assess as of each balance sheet date whether there is any objective evidence of impairment for the items described in paragraphs 3 and 4 in relation to available-for-sale financial assets, financial assets measured at cost, debt instrument investment for which no active market exists, held-to-maturity financial assets, futures trading margins receivable, trade receivables, other receivables, investments accounted for using the equity method, property and equipment, right-of-use assets, investment property measured using cost model, and intangible assets. If any such evidence exists, the FCM shall recognize the amount of any impairment loss in accordance with IAS 36. If the recoverable amount of non-financial assets is determined on the basis of fair value less costs of disposal, disclose the extra information regarding the fair value measurement, including the level of the fair value hierarchy, the valuation techniques, and the key assumptions. If the recoverable amount is determined on the basis of value in use, disclose the discount rate for value in use measurement.
With respect to the items described in paragraph 3 and paragraph 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, trade receivables, other receivables, non-current assets held for sale, and investment property, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The items described in paragraphs 3 and 4 in relation to financial assets at fair value through profit or loss, financial assets measured at fair value through other comprehensive profit or loss, financial assets measured at amortized cost, financial assets for hedging, shall be distinguished as current and non-current based on liquidity.
Article 12
Liabilities shall be properly classified. Current and non-current liabilities shall be distinguished.
For each liability line item, the total amount expected to be settled within 12 months after the balance sheet date and the total amount expected to be settled more than 12 months after the balance sheet date shall be separately presented in the financial statements or disclosed in the notes.
Current liability means that the futures clearing house expects to settle the liability in its normal operating cycle; that it holds the liability primarily for the purpose of trading; that it expects to settle the liability when due within 12 months after the balance sheet date, even if an agreement to refinance or to reschedule payments on a long-term basis is completed after the balance sheet date and before the financial statements are authorized for issue; or that it does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Current liabilities shall include at least the following liability line items:
1.Short-term borrowings:
A.Short-term borrowings includes short-term borrowings from banks, overdrafts, and other short-term borrowings.
B.For short-term borrowing, the nature of the borrowing, the name of the lending bank, the interest rate range, the maturity date, and the guarantee status shall be noted based on the type of borrowing. If collateral is provided, the name and carrying amount of the collateral shall be stated.
C.Borrowings from financial institutions, shareholders, employees, related parties, and other individuals or institutions shall be separately noted.
2.Short-term bills payable:
A.Short-term bills issued through financial institutions to acquire funds from the money market, including commercial paper payable and bankers' acceptances.
B.Short-term bills payable shall be measured at amortized cost using the effective interest method. However, short-term bills payable with no stated interest rate may be measured at the original face amount if the effect of discounting is immaterial.
C.For short-term bills payable, the guarantor or accepting institution and the interest rate shall be noted. If collateral is provided, the name and carrying amount of the collateral shall be noted.
3.Financial liabilities at fair value through profit or loss–current:
A.Financial liabilities held for trading:
a.Liabilities that are incurred principally for the purpose of repurchasing them in the near term.
b.Liabilities that, upon initial recognition, are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking.
c.Liabilities that are financial liabilities, except for financial guarantee contracts or derivative financial liabilities that are designated and effective hedging instruments.
B.Financial liabilities that are designated as measured at fair value through profit or loss.
C.Financial liabilities at fair value through profit or loss shall be measured at fair value. However, with respect to a financial liability designated as at fair value through profit or loss, if the amount of change in the fair value of the financial liability is attributable to change in the liability's credit risk, it shall be recognized in other comprehensive income, unless for the purpose of avoiding accounting mismatch or in the case of loan commitments and financial guarantee contracts, under which circumstances the amount of changes in fair value shall be recognized in profit or loss.
4.Financial liabilities for hedging – current:
A.A financial liability that is a designated and effective hedging instrument under hedge accounting requirements.
B.The futures clearing house shall classify these as derivative instruments or as non-derivative financial liabilities measured at fair value through profit or loss or not measured at fair value through profit or loss.
5.Trade payables:
A.Payables resulting from principal business operations.
B.Trade payables shall be measured at amortized cost using the effective interest method. However, short-term trade payables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
C.Trade payables arising from operating activities shall be presented separately from other payables arising from non-operating activities.
D.Payables to related parties in material amounts shall be presented separately.
E.If collateral has been provided for trade payables, the name and carrying amount of the collateral shall be noted.
6.Other payables: Payables other than trade payables, such as tax payable, accrued payroll, and dividends payable. For dividends and bonuses payable passed by resolution of the shareholders meeting, the distribution method and scheduled payment date, if determined, shall be disclosed.
7.Current tax liabilities: Unpaid tax for current and prior periods.
8.Provisions–current:
A.Any liability of uncertain timing or amount.
B.Provisions shall be accounted for in accordance with IAS 37.
C.A provision shall be recognized when a futures clearing house has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
D.A futures clearing house shall disaggregate provisions into provisions for employee benefits and other items in the notes.
9.Futures traders' equity: A contra item to the "clearing margins" on the assets side.
10.Liabilities directly associated with non-current assets held for sale: Any liability included in a disposal group held for sale that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
11.Other current liabilities: Current liabilities not attributable to any of the classes above.
Non-current liabilities refers to liabilities other than current liabilities, and shall include at least each of the following line items:
1.Bonds payable (including overseas bonds) refers to bonds issued by a futures clearing house:
A.For issued bonds, the total approved amount, interest rate, maturity date, name of collateral, carrying amount, issuing area, and other relevant terms and restrictions shall be noted in the notes to the financial reports. If the bonds are convertible bonds, the method of conversion and amounts already converted shall also be noted.
B.Premiums and discounts on bonds payable are valuations of bonds payable. They shall be presented as an addition to or deduction from bonds payable, and shall also be amortized, as an adjustment to interest expenses, using the effective interest method during the period of bond circulation.
2.Long-term borrowings:
A.Includes long-term borrowings from banks and other long-term borrowings or borrowings repaid in installments. For long-term borrowings, the content, maturity date, interest rate, name of collateral, carrying amount, and any other important restriction terms shall be noted.
B.For a long-term borrowing repaid in a foreign currency or in an amount translated at a foreign exchange rate, the name and amount of such foreign currency shall be noted.
C.Long-term borrowings from shareholders, employees, and related parties shall be noted separately.
D.Long-term payables shall be measured at amortized cost using the effective interest method.
3.Lease liabilities:
A.Means the present value of the lease payments that the lessee has not paid.
B.Lease liabilities shall be accounted for in accordance with IFRS 16.
4.Deferred tax liabilities: The amounts of income taxes payable in future periods in respect of taxable temporary differences.
5.Settlement and clearing credit items: A contra item to the "settlement and clearing debit items" on the assets side. In preparing the balance sheet, settlement and clearing credit items shall be presented as a net balance after offsetting against settlement and clearing debit items, provided that their nature, content, utilization, and pledge status shall be indicated in the notes to the financial reports and the details be disclosed in the statements of related accounting items.
6.Other non-current liabilities: Non-current liabilities not attributable to any of the classes above.
The items described in the preceding two paragraphs in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, and other payables shall be accounted for in accordance with IFRS 9.
With respect to the items described in paragraphs 3 and 4 in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, other payables, liabilities directly associated with non-current assets held for sale, bonds payable, and long-term borrowings, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The financial liabilities at fair value through profit or loss, financial liabilities for hedging, lease liabilities, and provisions described in paragraphs 3 and 4 shall be distinguished as current and non-current based on liquidity.
For each liability line item, the total amount expected to be settled within 12 months after the balance sheet date and the total amount expected to be settled more than 12 months after the balance sheet date shall be separately presented in the financial statements or disclosed in the notes.
Current liability means that the futures clearing house expects to settle the liability in its normal operating cycle; that it holds the liability primarily for the purpose of trading; that it expects to settle the liability when due within 12 months after the balance sheet date, even if an agreement to refinance or to reschedule payments on a long-term basis is completed after the balance sheet date and before the financial statements are authorized for issue; or that it does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Current liabilities shall include at least the following liability line items:
1.Short-term borrowings:
A.Short-term borrowings includes short-term borrowings from banks, overdrafts, and other short-term borrowings.
B.For short-term borrowing, the nature of the borrowing, the name of the lending bank, the interest rate range, the maturity date, and the guarantee status shall be noted based on the type of borrowing. If collateral is provided, the name and carrying amount of the collateral shall be stated.
C.Borrowings from financial institutions, shareholders, employees, related parties, and other individuals or institutions shall be separately noted.
2.Short-term bills payable:
A.Short-term bills issued through financial institutions to acquire funds from the money market, including commercial paper payable and bankers' acceptances.
B.Short-term bills payable shall be measured at amortized cost using the effective interest method. However, short-term bills payable with no stated interest rate may be measured at the original face amount if the effect of discounting is immaterial.
C.For short-term bills payable, the guarantor or accepting institution and the interest rate shall be noted. If collateral is provided, the name and carrying amount of the collateral shall be noted.
3.Financial liabilities at fair value through profit or loss–current:
A.Financial liabilities held for trading:
a.Liabilities that are incurred principally for the purpose of repurchasing them in the near term.
b.Liabilities that, upon initial recognition, are part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking.
c.Liabilities that are financial liabilities, except for financial guarantee contracts or derivative financial liabilities that are designated and effective hedging instruments.
B.Financial liabilities that are designated as measured at fair value through profit or loss.
C.Financial liabilities at fair value through profit or loss shall be measured at fair value. However, with respect to a financial liability designated as at fair value through profit or loss, if the amount of change in the fair value of the financial liability is attributable to change in the liability's credit risk, it shall be recognized in other comprehensive income, unless for the purpose of avoiding accounting mismatch or in the case of loan commitments and financial guarantee contracts, under which circumstances the amount of changes in fair value shall be recognized in profit or loss.
4.Financial liabilities for hedging – current:
A.A financial liability that is a designated and effective hedging instrument under hedge accounting requirements.
B.The futures clearing house shall classify these as derivative instruments or as non-derivative financial liabilities measured at fair value through profit or loss or not measured at fair value through profit or loss.
5.Trade payables:
A.Payables resulting from principal business operations.
B.Trade payables shall be measured at amortized cost using the effective interest method. However, short-term trade payables with no stated interest rate may be measured at the original invoice amount if the effect of discounting is immaterial.
C.Trade payables arising from operating activities shall be presented separately from other payables arising from non-operating activities.
D.Payables to related parties in material amounts shall be presented separately.
E.If collateral has been provided for trade payables, the name and carrying amount of the collateral shall be noted.
6.Other payables: Payables other than trade payables, such as tax payable, accrued payroll, and dividends payable. For dividends and bonuses payable passed by resolution of the shareholders meeting, the distribution method and scheduled payment date, if determined, shall be disclosed.
7.Current tax liabilities: Unpaid tax for current and prior periods.
8.Provisions–current:
A.Any liability of uncertain timing or amount.
B.Provisions shall be accounted for in accordance with IAS 37.
C.A provision shall be recognized when a futures clearing house has a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
D.A futures clearing house shall disaggregate provisions into provisions for employee benefits and other items in the notes.
9.Futures traders' equity: A contra item to the "clearing margins" on the assets side.
10.Liabilities directly associated with non-current assets held for sale: Any liability included in a disposal group held for sale that is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups, and whose sale must be highly probable.
11.Other current liabilities: Current liabilities not attributable to any of the classes above.
Non-current liabilities refers to liabilities other than current liabilities, and shall include at least each of the following line items:
1.Bonds payable (including overseas bonds) refers to bonds issued by a futures clearing house:
A.For issued bonds, the total approved amount, interest rate, maturity date, name of collateral, carrying amount, issuing area, and other relevant terms and restrictions shall be noted in the notes to the financial reports. If the bonds are convertible bonds, the method of conversion and amounts already converted shall also be noted.
B.Premiums and discounts on bonds payable are valuations of bonds payable. They shall be presented as an addition to or deduction from bonds payable, and shall also be amortized, as an adjustment to interest expenses, using the effective interest method during the period of bond circulation.
2.Long-term borrowings:
A.Includes long-term borrowings from banks and other long-term borrowings or borrowings repaid in installments. For long-term borrowings, the content, maturity date, interest rate, name of collateral, carrying amount, and any other important restriction terms shall be noted.
B.For a long-term borrowing repaid in a foreign currency or in an amount translated at a foreign exchange rate, the name and amount of such foreign currency shall be noted.
C.Long-term borrowings from shareholders, employees, and related parties shall be noted separately.
D.Long-term payables shall be measured at amortized cost using the effective interest method.
3.Lease liabilities:
A.Means the present value of the lease payments that the lessee has not paid.
B.Lease liabilities shall be accounted for in accordance with IFRS 16.
4.Deferred tax liabilities: The amounts of income taxes payable in future periods in respect of taxable temporary differences.
5.Settlement and clearing credit items: A contra item to the "settlement and clearing debit items" on the assets side. In preparing the balance sheet, settlement and clearing credit items shall be presented as a net balance after offsetting against settlement and clearing debit items, provided that their nature, content, utilization, and pledge status shall be indicated in the notes to the financial reports and the details be disclosed in the statements of related accounting items.
6.Other non-current liabilities: Non-current liabilities not attributable to any of the classes above.
The items described in the preceding two paragraphs in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, and other payables shall be accounted for in accordance with IFRS 9.
With respect to the items described in paragraphs 3 and 4 in relation to financial liabilities at fair value through profit or loss, financial liabilities for hedging, trade payables, other payables, liabilities directly associated with non-current assets held for sale, bonds payable, and long-term borrowings, the measurement and disclosure of fair value shall be made in accordance with IFRS 13.
The financial liabilities at fair value through profit or loss, financial liabilities for hedging, lease liabilities, and provisions described in paragraphs 3 and 4 shall be distinguished as current and non-current based on liquidity.
Article 13
Equity items, their components, and information to be disclosed in the balance sheet are as follows:
1.Equity attributable to owners of the parent:
A.Share capital:
a.Capital contributed by shareholders to a futures clearing house and registered with the competent authority in charge of company registration, but excluding preferred shares in the nature of liabilities.
b.For share capital, the classes, par value per share, the number of shares authorized, the number of shares issued and fully paid, a reconciliation of the number of shares outstanding at the beginning and at the end of the period, the rights, preferences and restrictions attaching to each class of share capital, shares in the futures clearing house held by the futures clearing house or by its subsidiaries or associates, shares reserved for issue (or for transfer or conversion) under options and contracts for the sale of shares, and special conditions shall be disclosed in the notes.
c.If convertible preferred shares or overseas depositary receipts are issued, the issuing area, issuance and conversion methods, converted amount, and special conditions shall be disclosed.
B.Capital surplus: Means the equity components of financial instruments issued by a futures clearing house or premiums resulting from share capital transactions between a futures clearing house and its owners, and typically includes premium in excess of the par value of the shares issued, donated surplus, and others arising as a result of regulatory provisions associated with these Regulations. Capital surpluses shall be presented separately according to their nature or by institution; if there is any restriction on their use, the restriction shall be disclosed in the notes.
C.Retained earnings (or accumulated deficit): Equity resulting from operating activities, including legal reserves, special reserves, and undistributed earnings (or deficit to be offset):
a.Legal reserve: A fixed-percentage reserve appropriated as required by the Company Act.
b.Special reserve: A reserve appropriated from earnings in accordance with the requirements of applicable laws and regulations, contracts, or articles of incorporation, or as resolved at shareholders meetings.
c.Undistributed earnings (or deficit to be offset): Undistributed and unappropriated earnings ("deficit to be offset" is deficit not yet offset).
d.An earnings distribution or offsetting of deficit shall not be accounted for unless and until approved by a shareholders meeting. However, when an earnings distribution or offsetting of deficit has been proposed, such shall be disclosed in the notes to the financial reports for the current period.
D.Other equity: Includes the accumulated balances of exchange differences resulting from translating the financial statements of a foreign operation, of financial assets measured at fair value through other comprehensive profit or loss, and of the gains and losses on hedging instruments, and of revaluation surplus.
E.Treasury shares: Treasury shares shall be accounted for using the cost method and presented as a deduction from equity. The number of shares shall be noted.
2.Non-controlling interest:
A.The equity in a subsidiary not attributable, directly or indirectly, to a parent.
B.For each business combination, the components of non-controlling interest in the acquiree shall be measured in accordance with IFRS 3.
C.A futures clearing house shall disclose information on any subsidiary in which it has a non-controlling interest of materiality and on the non-controlling interest in accordance with IFRS 12.
A futures clearing house may elect to recognize the remeasurements of defined benefit plans in retained earnings or other equity, and disclose the accounting policy in the notes. Remeasurements of defined benefit plans that have been recognized in other equity may not be reclassified into profit or loss or transferred into retained earnings in a subsequent period.
1.Equity attributable to owners of the parent:
A.Share capital:
a.Capital contributed by shareholders to a futures clearing house and registered with the competent authority in charge of company registration, but excluding preferred shares in the nature of liabilities.
b.For share capital, the classes, par value per share, the number of shares authorized, the number of shares issued and fully paid, a reconciliation of the number of shares outstanding at the beginning and at the end of the period, the rights, preferences and restrictions attaching to each class of share capital, shares in the futures clearing house held by the futures clearing house or by its subsidiaries or associates, shares reserved for issue (or for transfer or conversion) under options and contracts for the sale of shares, and special conditions shall be disclosed in the notes.
c.If convertible preferred shares or overseas depositary receipts are issued, the issuing area, issuance and conversion methods, converted amount, and special conditions shall be disclosed.
B.Capital surplus: Means the equity components of financial instruments issued by a futures clearing house or premiums resulting from share capital transactions between a futures clearing house and its owners, and typically includes premium in excess of the par value of the shares issued, donated surplus, and others arising as a result of regulatory provisions associated with these Regulations. Capital surpluses shall be presented separately according to their nature or by institution; if there is any restriction on their use, the restriction shall be disclosed in the notes.
C.Retained earnings (or accumulated deficit): Equity resulting from operating activities, including legal reserves, special reserves, and undistributed earnings (or deficit to be offset):
a.Legal reserve: A fixed-percentage reserve appropriated as required by the Company Act.
b.Special reserve: A reserve appropriated from earnings in accordance with the requirements of applicable laws and regulations, contracts, or articles of incorporation, or as resolved at shareholders meetings.
c.Undistributed earnings (or deficit to be offset): Undistributed and unappropriated earnings ("deficit to be offset" is deficit not yet offset).
d.An earnings distribution or offsetting of deficit shall not be accounted for unless and until approved by a shareholders meeting. However, when an earnings distribution or offsetting of deficit has been proposed, such shall be disclosed in the notes to the financial reports for the current period.
D.Other equity: Includes the accumulated balances of exchange differences resulting from translating the financial statements of a foreign operation, of financial assets measured at fair value through other comprehensive profit or loss, and of the gains and losses on hedging instruments, and of revaluation surplus.
E.Treasury shares: Treasury shares shall be accounted for using the cost method and presented as a deduction from equity. The number of shares shall be noted.
2.Non-controlling interest:
A.The equity in a subsidiary not attributable, directly or indirectly, to a parent.
B.For each business combination, the components of non-controlling interest in the acquiree shall be measured in accordance with IFRS 3.
C.A futures clearing house shall disclose information on any subsidiary in which it has a non-controlling interest of materiality and on the non-controlling interest in accordance with IFRS 12.
A futures clearing house may elect to recognize the remeasurements of defined benefit plans in retained earnings or other equity, and disclose the accounting policy in the notes. Remeasurements of defined benefit plans that have been recognized in other equity may not be reclassified into profit or loss or transferred into retained earnings in a subsequent period.
Section II Statement of Comprehensive Income
Article 14
A futures clearing house shall present all items of income and expense recognized in a period in a single statement of comprehensive income displaying components of profit or loss and components of other comprehensive income.
A futures clearing house shall present expenses recognized in profit or loss under the preceding paragraph using a classification based on their nature.
When items of income or expense are material, a futures clearing house shall disclose their nature and amount separately in the financial statements or in the notes.
As a minimum, the statement of comprehensive income shall include the following line items:
1.Revenue:
A.Operating revenue:
a.Clearing member registration fee revenue: Revenues, recognized on a yearly basis, that arise from clearing member registration fees paid to a futures clearing house by those becoming futures clearing members.
b.Clearing member annual license fee revenue: Clearing member annual license fees paid on a yearly basis by futures clearing members to a futures clearing house.
c.Clearing fee revenue: Clearing fees paid on a monthly basis by futures clearing members to a futures clearing house based on the number of contracts traded.
d.Settlement fee revenue: Settlement fees paid on a monthly basis by futures clearing members to a futures clearing house based on the number of contracts settled.
e.Position adjustment fee revenue: Position adjustment fees paid to a futures clearing house on a monthly basis by futures commission merchants requesting a position adjustment for the purpose of adjusting an out-trade, and based on the number of contracts involved in position adjustment.
f.Position transfer fee revenue: Position transfer fees paid to a futures clearing house on a monthly basis by futures clearing members requesting to make a position transfer or on which a compulsory position transfer is made, and based on the number of contracts involved in position transfer.
g.Other operating revenue: Operating revenues not attributable to any of the items above.
B.Other revenue: Includes revenue arising from the use by others of assets of a futures clearing house yielding interest and dividends.
C.The recognition and measurement of revenue from contracts with customers shall be made in accordance with IFRS 15. If a futures clearing house controls specific goods or services before it transfers the goods or services to its customer, it shall recognize the revenue based on the gross amount; otherwise, it shall recognize the revenue based on the net amount.
2.Operating expense: The expenses to be borne as a result of operating activities in the period, including employee benefits expense, depreciation and amortization expense, and other operating expense.
3.Expected credit impairment loss (or gain): The expected amount of credit loss (or reversal) according to IFRS 9.
4.Finance costs: Include interest expenditures incurred in relation to operating activities and for all classes of liabilities, with the portion eligible for capitalization being deducted.
5.Net profit or loss upon reclassification of financial assets: Means one of the following conditions, in accordance with IFRS 9:
A.Net profit (or loss) that arises when financial assets are reclassified from being measured at amortized cost to being measured at fair value through profit or loss.
B.Cumulative net profit (or loss) of debt instrument investment that arises when financial assets are reclassified from being measured at fair value through other comprehensive income to being measured at fair value through profit or loss.
6.Net profit or loss upon derecognition of financial assets measured at amortized cost: Means the net profit or less that arises when a futures clearing house derecognizes from its books financial assets measured at amortized cost that it had originally recognized.
7.Share of the profit or loss of associates and joint ventures accounted for using the equity method: The profit or loss of associates and interests in joint ventures that a futures clearing house recognizes using the equity method according to its share in the associates and the interests in joint ventures.
8.Tax expense (benefit): The aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
9.Profit or loss of discontinued operations:
A.The post-tax profit or loss of discontinued operations and the post-tax gain or loss recognized on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation.
B.The presentation and disclosure of profit or loss of discontinued operations shall be made in accordance with IFRS 5.
10.Profit or loss during the period: Earnings or deficit in the current reporting period.
11.Other comprehensive income: Refers to each component of other comprehensive income classified by nature, including share of the other comprehensive income of associates and joint ventures accounted for using the equity method:
A.Items that may be subsequently reclassified into profit or loss: Include exchange differences resulting from translating the financial statements of a foreign operation, unrealized valuation gains and losses from debt instrument investment measured at fair value through other comprehensive profit or loss , and the gains and losses on hedging instruments.
B.Items not to be reclassified into profit or loss: Include revaluation surplus, , remeasurements of defined benefit plans, and gains and losses on hedging instruments.
12.Total comprehensive income.
13.Allocations of profit or loss during the period attributable to non-controlling interest and owners of the parent.
14.Allocations of total comprehensive income during the period attributable to non-controlling interest and owners of the parent.
15.Earnings per share:
A.Basic and diluted earnings per share for profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity and for profit or loss attributable to the ordinary equity holders of the parent entity.
B.The calculation and presentation of earnings per share shall be made in accordance with IAS 33.
A futures clearing house shall present expenses recognized in profit or loss under the preceding paragraph using a classification based on their nature.
When items of income or expense are material, a futures clearing house shall disclose their nature and amount separately in the financial statements or in the notes.
As a minimum, the statement of comprehensive income shall include the following line items:
1.Revenue:
A.Operating revenue:
a.Clearing member registration fee revenue: Revenues, recognized on a yearly basis, that arise from clearing member registration fees paid to a futures clearing house by those becoming futures clearing members.
b.Clearing member annual license fee revenue: Clearing member annual license fees paid on a yearly basis by futures clearing members to a futures clearing house.
c.Clearing fee revenue: Clearing fees paid on a monthly basis by futures clearing members to a futures clearing house based on the number of contracts traded.
d.Settlement fee revenue: Settlement fees paid on a monthly basis by futures clearing members to a futures clearing house based on the number of contracts settled.
e.Position adjustment fee revenue: Position adjustment fees paid to a futures clearing house on a monthly basis by futures commission merchants requesting a position adjustment for the purpose of adjusting an out-trade, and based on the number of contracts involved in position adjustment.
f.Position transfer fee revenue: Position transfer fees paid to a futures clearing house on a monthly basis by futures clearing members requesting to make a position transfer or on which a compulsory position transfer is made, and based on the number of contracts involved in position transfer.
g.Other operating revenue: Operating revenues not attributable to any of the items above.
B.Other revenue: Includes revenue arising from the use by others of assets of a futures clearing house yielding interest and dividends.
C.The recognition and measurement of revenue from contracts with customers shall be made in accordance with IFRS 15. If a futures clearing house controls specific goods or services before it transfers the goods or services to its customer, it shall recognize the revenue based on the gross amount; otherwise, it shall recognize the revenue based on the net amount.
2.Operating expense: The expenses to be borne as a result of operating activities in the period, including employee benefits expense, depreciation and amortization expense, and other operating expense.
3.Expected credit impairment loss (or gain): The expected amount of credit loss (or reversal) according to IFRS 9.
4.Finance costs: Include interest expenditures incurred in relation to operating activities and for all classes of liabilities, with the portion eligible for capitalization being deducted.
5.Net profit or loss upon reclassification of financial assets: Means one of the following conditions, in accordance with IFRS 9:
A.Net profit (or loss) that arises when financial assets are reclassified from being measured at amortized cost to being measured at fair value through profit or loss.
B.Cumulative net profit (or loss) of debt instrument investment that arises when financial assets are reclassified from being measured at fair value through other comprehensive income to being measured at fair value through profit or loss.
6.Net profit or loss upon derecognition of financial assets measured at amortized cost: Means the net profit or less that arises when a futures clearing house derecognizes from its books financial assets measured at amortized cost that it had originally recognized.
7.Share of the profit or loss of associates and joint ventures accounted for using the equity method: The profit or loss of associates and interests in joint ventures that a futures clearing house recognizes using the equity method according to its share in the associates and the interests in joint ventures.
8.Tax expense (benefit): The aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
9.Profit or loss of discontinued operations:
A.The post-tax profit or loss of discontinued operations and the post-tax gain or loss recognized on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation.
B.The presentation and disclosure of profit or loss of discontinued operations shall be made in accordance with IFRS 5.
10.Profit or loss during the period: Earnings or deficit in the current reporting period.
11.Other comprehensive income: Refers to each component of other comprehensive income classified by nature, including share of the other comprehensive income of associates and joint ventures accounted for using the equity method:
A.Items that may be subsequently reclassified into profit or loss: Include exchange differences resulting from translating the financial statements of a foreign operation, unrealized valuation gains and losses from debt instrument investment measured at fair value through other comprehensive profit or loss , and the gains and losses on hedging instruments.
B.Items not to be reclassified into profit or loss: Include revaluation surplus, , remeasurements of defined benefit plans, and gains and losses on hedging instruments.
12.Total comprehensive income.
13.Allocations of profit or loss during the period attributable to non-controlling interest and owners of the parent.
14.Allocations of total comprehensive income during the period attributable to non-controlling interest and owners of the parent.
15.Earnings per share:
A.Basic and diluted earnings per share for profit or loss from continuing operations attributable to the ordinary equity holders of the parent entity and for profit or loss attributable to the ordinary equity holders of the parent entity.
B.The calculation and presentation of earnings per share shall be made in accordance with IAS 33.
Section III Statement of Changes in Equity
Article 15
As a minimum, the statement of changes in equity shall include the following:
1.total comprehensive income during the period, showing separately the total amounts attributable to owners of the parent and to non-controlling interest;
2.for each component of equity, the effects of retrospective application or retrospective restatement recognized in accordance with IAS 8; and
3.for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing changes resulting from:
A.net profit (or net loss) for the period;
B.other comprehensive income; and
C.transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control.
A futures clearing house shall present, either in the statement of changes in equity or in the notes, the amount of dividends recognized as distributions to owners during the period, and the related amount of dividends per share.
1.total comprehensive income during the period, showing separately the total amounts attributable to owners of the parent and to non-controlling interest;
2.for each component of equity, the effects of retrospective application or retrospective restatement recognized in accordance with IAS 8; and
3.for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing changes resulting from:
A.net profit (or net loss) for the period;
B.other comprehensive income; and
C.transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control.
A futures clearing house shall present, either in the statement of changes in equity or in the notes, the amount of dividends recognized as distributions to owners during the period, and the related amount of dividends per share.
Section IV Statement of Cash Flows
Article 16
A statement of cash flows provides users of financial statements with a basis to assess the ability of the futures clearing house to generate cash and cash equivalents and the needs of the futures clearing house to utilize those cash flows. Namely, it presents, through inflows and outflows of cash and cash equivalents, a summary report on the operating, investing and financing activities of the futures clearing house during the period. The presentation and disclosure of cash flow information shall be made in accordance with IAS 7.
Section V Notes
Article 17
To meet the objective of presenting full and complete information about the financial position, financial performance, and cash flows of a futures clearing house, financial reports shall contain explanatory notes disclosing the following:
1.History and scope of business operations of the futures clearing house.
2.A statement that the financial reports comply with these Regulations, applicable laws and regulations (giving the title of the laws or regulations), as well as IFRS, IAS, IFRIC Interpretations, and SIC Interpretations.
3.The date when the financial reports were authorized for issue and the process involved in authorizing the financial reports for issue.
4.The effect or impact that may arise when it has or has not applied a new or revised IFRS, IAS, IFRIC Interpretation, or SIC Interpretation recognized by the FSC.
5.A summary of significant accounting policies used that are relevant to an understanding of the financial reports, and the measurement basis (or bases) used in preparing the financial statements.
6.Significant accounting judgments, estimations, and assumptions, as well as information about the assumptions it makes and other major sources of estimation uncertainty.
7.Objectives, policies and processes for managing capital, and any change in capital structure, including funding, liability, and equity.
8.If for a special reason there is a change in accounting treatment, thus affecting the comparison of financial data between two successive periods, the reason for the change and its effect on the financial reports shall be noted.
9.If it is necessary to provide the basis of valuation for any amount, financial instrument, or other item presented in the financial reports, the basis of valuation shall be noted.
10.If any item presented in the financial reports is subject to any legal, regulatory, contractual, or other restriction, the circumstances and timing of the restriction and other related information shall be noted.
11.Criteria for classifying assets and liabilities into current and non-current.
12.Material contingent liabilities and unrecognized contractual commitments
13.Financial risk management objectives and policies.
14.Long-term and short-term borrowings.
15.The addition, expansion, construction, lease, obsolescence, idling, sale, transfer, or long-term renting of major assets.
16.Principal investments in other enterprises.
17.Significant transactions with related parties.
18.Losses due to major disasters.
19.Major litigation pending or concluded.
20.The signing, completion, voidance, or lapse of major contracts.
21.Information about financial instruments. The information shall be disclosed in accordance with IFRS 7, including disclosure of the significance of financial instruments for the entity's financial position and performance; qualitative and quantitative disclosures describing risk exposures arising from financial instruments.
22.Comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers shall be disclosed in accordance with IFRS 15, including details of revenue recognized from contracts with customers, contract balances, contract obligations, significant judgments and changes in the judgments, and any assets recognized from the costs to obtain or fulfil a contract with a customer.
23.Relevant information about leases. The information shall be disclosed in accordance with IFRS 16, including disclosure of information that gives a basis for users of the financial statements to assess the effect that the leases have on the financial position, financial performance, and cash flows of the futures clearing house, and relevant qualitative and quantitative information about its leasing activities.
24.Major organizational adjustments and significant management reforms.
25.Information about employee benefits. The information shall be disclosed in accordance with IAS 19, and shall include the influence of defined benefit plans on the amount, timing, and certainty of future cash flows, actuarial losses and gains arising from changes in demographic assumptions and financial assumptions, and the expected contributions in the next reporting period in the following financial year.
26.Segment financial information in accordance with IFRS 8, including the scope of business, revenue, and gains and losses of each reportable segment.
27.Any research and development project funded by another party and the amount.
28.Information about investments in derivative instruments.
29.When subsidiaries hold shares in the parent, the names of the subsidiaries and the shareholdings, amounts, and reasons shall be separately presented.
30.In the case of private placement of securities, the type, issue date, and amount shall be disclosed.
31.Material effects of changes in government laws and regulations.
32.Material effects of discontinuance of operations.
33.Fair value information. The information shall be disclosed in accordance with IFRS 13, and shall include information on recurring or non-recurring fair value measurement of assets and liabilities, inputs such as fair value valuation technique and parameters or assumptions used in fair value measurement, and Level 3 of fair value hierarchy.
34.Foreign-currency-denominated assets and liabilities that have significant influence: Include the amount of risk exposure, currency, and exchange rate for monetary and non-monetary items denominated in foreign currencies, and the foreign exchange gains or losses on monetary items.
35.Supporting information for items presented in the balance sheet and in the statements of comprehensive income, of changes in equity and of cash flows, or other necessary descriptions essential for avoiding misunderstanding by users or for the fair presentation of the financial reports.
1.History and scope of business operations of the futures clearing house.
2.A statement that the financial reports comply with these Regulations, applicable laws and regulations (giving the title of the laws or regulations), as well as IFRS, IAS, IFRIC Interpretations, and SIC Interpretations.
3.The date when the financial reports were authorized for issue and the process involved in authorizing the financial reports for issue.
4.The effect or impact that may arise when it has or has not applied a new or revised IFRS, IAS, IFRIC Interpretation, or SIC Interpretation recognized by the FSC.
5.A summary of significant accounting policies used that are relevant to an understanding of the financial reports, and the measurement basis (or bases) used in preparing the financial statements.
6.Significant accounting judgments, estimations, and assumptions, as well as information about the assumptions it makes and other major sources of estimation uncertainty.
7.Objectives, policies and processes for managing capital, and any change in capital structure, including funding, liability, and equity.
8.If for a special reason there is a change in accounting treatment, thus affecting the comparison of financial data between two successive periods, the reason for the change and its effect on the financial reports shall be noted.
9.If it is necessary to provide the basis of valuation for any amount, financial instrument, or other item presented in the financial reports, the basis of valuation shall be noted.
10.If any item presented in the financial reports is subject to any legal, regulatory, contractual, or other restriction, the circumstances and timing of the restriction and other related information shall be noted.
11.Criteria for classifying assets and liabilities into current and non-current.
12.Material contingent liabilities and unrecognized contractual commitments
13.Financial risk management objectives and policies.
14.Long-term and short-term borrowings.
15.The addition, expansion, construction, lease, obsolescence, idling, sale, transfer, or long-term renting of major assets.
16.Principal investments in other enterprises.
17.Significant transactions with related parties.
18.Losses due to major disasters.
19.Major litigation pending or concluded.
20.The signing, completion, voidance, or lapse of major contracts.
21.Information about financial instruments. The information shall be disclosed in accordance with IFRS 7, including disclosure of the significance of financial instruments for the entity's financial position and performance; qualitative and quantitative disclosures describing risk exposures arising from financial instruments.
22.Comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers shall be disclosed in accordance with IFRS 15, including details of revenue recognized from contracts with customers, contract balances, contract obligations, significant judgments and changes in the judgments, and any assets recognized from the costs to obtain or fulfil a contract with a customer.
23.Relevant information about leases. The information shall be disclosed in accordance with IFRS 16, including disclosure of information that gives a basis for users of the financial statements to assess the effect that the leases have on the financial position, financial performance, and cash flows of the futures clearing house, and relevant qualitative and quantitative information about its leasing activities.
24.Major organizational adjustments and significant management reforms.
25.Information about employee benefits. The information shall be disclosed in accordance with IAS 19, and shall include the influence of defined benefit plans on the amount, timing, and certainty of future cash flows, actuarial losses and gains arising from changes in demographic assumptions and financial assumptions, and the expected contributions in the next reporting period in the following financial year.
26.Segment financial information in accordance with IFRS 8, including the scope of business, revenue, and gains and losses of each reportable segment.
27.Any research and development project funded by another party and the amount.
28.Information about investments in derivative instruments.
29.When subsidiaries hold shares in the parent, the names of the subsidiaries and the shareholdings, amounts, and reasons shall be separately presented.
30.In the case of private placement of securities, the type, issue date, and amount shall be disclosed.
31.Material effects of changes in government laws and regulations.
32.Material effects of discontinuance of operations.
33.Fair value information. The information shall be disclosed in accordance with IFRS 13, and shall include information on recurring or non-recurring fair value measurement of assets and liabilities, inputs such as fair value valuation technique and parameters or assumptions used in fair value measurement, and Level 3 of fair value hierarchy.
34.Foreign-currency-denominated assets and liabilities that have significant influence: Include the amount of risk exposure, currency, and exchange rate for monetary and non-monetary items denominated in foreign currencies, and the foreign exchange gains or losses on monetary items.
35.Supporting information for items presented in the balance sheet and in the statements of comprehensive income, of changes in equity and of cash flows, or other necessary descriptions essential for avoiding misunderstanding by users or for the fair presentation of the financial reports.
Article 18
Financial reports shall include explanatory notes on the following subsequent events that occur between the balance sheet date and the date when the financial reports are authorized for issue:
1.Change in capital structure.
2.Large long-term or short-term borrowings.
3.The addition, expansion, construction, lease, obsolescence, idling, sale, pledge, transfer, or long-term renting of major assets.
4.Principal investments in other enterprises.
5.Losses due to major disasters.
6.Major litigation pending or concluded.
7.The signing, completion, voidance, or lapse of major contracts.
8.Major organizational adjustments and significant management reforms.
9.Material effects of changes in government laws and regulations.
10.Other major events or measures capable of affecting future financial position, financial performance, and cash flows.
1.Change in capital structure.
2.Large long-term or short-term borrowings.
3.The addition, expansion, construction, lease, obsolescence, idling, sale, pledge, transfer, or long-term renting of major assets.
4.Principal investments in other enterprises.
5.Losses due to major disasters.
6.Major litigation pending or concluded.
7.The signing, completion, voidance, or lapse of major contracts.
8.Major organizational adjustments and significant management reforms.
9.Material effects of changes in government laws and regulations.
10.Other major events or measures capable of affecting future financial position, financial performance, and cash flows.
Article 19
A futures clearing house shall separately disclose in the notes to the financial reports information on the following events between the futures clearing house and its subsidiaries during the current period, and on parent-subsidiary transactions:
1.Information on significant transactions:
A.Lending funds to others.
B.Providing endorsements or guarantees for others.
C.Holding of securities at the end of the period (excluding the portion held due to investment in a subsidiary or an associate, and the portion held due to an interest in a joint venture).
D.Aggregate purchases or sales of the same securities reaching NT$100 million or 20 percent of paid-in capital or more.
E.Acquisition of real estate reaching NT$100 million or 20 percent of paid-in capital or more.
F.Disposal of real estate reaching NT$100 million or 20 percent of paid-in capital or more.
G.Accounts receivable from related parties reaching NT$100 million or 20 percent of paid-in capital or more.
H.Trading in derivative instruments.
I.Others: The business relationship between the parent and the subsidiaries and between each subsidiary, and the circumstances and amounts of any significant transactions between them.
2.Information on investees:
A.If the futures clearing house directly or indirectly exercises significant influence or control over, or has a joint venture interest in, an investee company, it shall disclose information on the investee company, showing the name, location, principal business activities, original investment amount, shareholding at the end of the period, profit or loss for the period, and recognized investment gain or loss.
B.The futures clearing house is exempted from the requirements of items (1) to (4) of the preceding subparagraph when the investee company it controls directly or indirectly is a financial, insurance, or securities enterprise.
If the shares issued by a futures clearing house have a par value other than NT$10, for the calculation of a transaction amount of 20 percent of paid-in capital under subparagraph 1, items D to G of the preceding paragraph, 10 percent of the equity attributable to owners of the parent as stated in the balance sheet shall be substituted.
1.Information on significant transactions:
A.Lending funds to others.
B.Providing endorsements or guarantees for others.
C.Holding of securities at the end of the period (excluding the portion held due to investment in a subsidiary or an associate, and the portion held due to an interest in a joint venture).
D.Aggregate purchases or sales of the same securities reaching NT$100 million or 20 percent of paid-in capital or more.
E.Acquisition of real estate reaching NT$100 million or 20 percent of paid-in capital or more.
F.Disposal of real estate reaching NT$100 million or 20 percent of paid-in capital or more.
G.Accounts receivable from related parties reaching NT$100 million or 20 percent of paid-in capital or more.
H.Trading in derivative instruments.
I.Others: The business relationship between the parent and the subsidiaries and between each subsidiary, and the circumstances and amounts of any significant transactions between them.
2.Information on investees:
A.If the futures clearing house directly or indirectly exercises significant influence or control over, or has a joint venture interest in, an investee company, it shall disclose information on the investee company, showing the name, location, principal business activities, original investment amount, shareholding at the end of the period, profit or loss for the period, and recognized investment gain or loss.
B.The futures clearing house is exempted from the requirements of items (1) to (4) of the preceding subparagraph when the investee company it controls directly or indirectly is a financial, insurance, or securities enterprise.
If the shares issued by a futures clearing house have a par value other than NT$10, for the calculation of a transaction amount of 20 percent of paid-in capital under subparagraph 1, items D to G of the preceding paragraph, 10 percent of the equity attributable to owners of the parent as stated in the balance sheet shall be substituted.
Article 20
A futures clearing house shall fully disclose information on related party transactions in accordance with IAS 24, and the following provisions shall be complied with:
1.The name and relationship of the related party shall be presented.
2.If the transaction amount or balance of any single related party reaches 10 percent or more of the futures clearing house 's total transaction amount or balance of that type of transaction, the name of each such related party shall be individually presented.
In considering whether a counterparty is a related party, attention shall be directed to the substance of the relationship in addition to the legal form. Unless it can be established that no control, joint control, or significant influence exists, a party falling within any of the following shall be deemed to have a substantive related party relationship, and relevant information shall be disclosed in the notes to the financial reports in accordance with IAS 24:
1.An affiliated enterprise within the meaning given in Chapter VI-I of the Company Act, and any of its directors, supervisors, and managerial officers.
2.A company or institution governed by the same general management office as the futures clearing house, and any of its directors, supervisors, and managerial officers.
3.A person holding the position of manager or higher in the general management office.
4.A company or institution shown as an affiliated enterprise in the futures clearing house's publications or public announcements.
5.Another company or institution whose board chairman or president is the same person as, or is the spouse or a relative within the second degree of kinship of, the board chairman or president of the futures clearing house.
1.The name and relationship of the related party shall be presented.
2.If the transaction amount or balance of any single related party reaches 10 percent or more of the futures clearing house 's total transaction amount or balance of that type of transaction, the name of each such related party shall be individually presented.
In considering whether a counterparty is a related party, attention shall be directed to the substance of the relationship in addition to the legal form. Unless it can be established that no control, joint control, or significant influence exists, a party falling within any of the following shall be deemed to have a substantive related party relationship, and relevant information shall be disclosed in the notes to the financial reports in accordance with IAS 24:
1.An affiliated enterprise within the meaning given in Chapter VI-I of the Company Act, and any of its directors, supervisors, and managerial officers.
2.A company or institution governed by the same general management office as the futures clearing house, and any of its directors, supervisors, and managerial officers.
3.A person holding the position of manager or higher in the general management office.
4.A company or institution shown as an affiliated enterprise in the futures clearing house's publications or public announcements.
5.Another company or institution whose board chairman or president is the same person as, or is the spouse or a relative within the second degree of kinship of, the board chairman or president of the futures clearing house.
Section VI Titles of Financial Statements
Article 21
Titles and forms of financial statements are as follows:
1.Balance sheet (Forms 1 and 1-1).
2.Statement of comprehensive income (Forms 2 and 2-1).
3.Statement of changes in equity (Form 3).
4.Statement of cash flows (Form 4).
5.Schedules to the financial reports (Forms 5-1 to 5-9).
1.Balance sheet (Forms 1 and 1-1).
2.Statement of comprehensive income (Forms 2 and 2-1).
3.Statement of changes in equity (Form 3).
4.Statement of cash flows (Form 4).
5.Schedules to the financial reports (Forms 5-1 to 5-9).
Chapter III Interim Financial Reports
Article 22
Interim financial reports shall include interim financial reports for each of the following periods:
1.Balance sheets as of the end of the current interim period, as of the end of the immediately preceding financial year, and as of the end of the comparable interim periods of the immediately preceding financial year.
2.Statements of comprehensive income for the current interim period, for the current financial year to the end of the current interim period, for the comparable interim periods of the immediately preceding financial year, and for the immediately preceding financial year to the end of the comparable interim periods.
3.Statement of changes in equity for the current financial year to date, with a statement of changes in equity for the same period of the immediately preceding financial year.
4.Statement of cash flows for the current financial year to date, with a statement of cash flows for the same period of the immediately preceding financial year.
Interim financial reports shall disclose events or transactions of materiality that have occurred since the date of the end of the reporting period of the immediately preceding financial year; the disclosure shall be made in accordance with IAS 34, and shall include the following information:
1.Possible impact that the application of newly issued or revised standards or interpretations will have on the futures clearing house, as required to be disclosed in accordance with IAS 8.
2.Qualitative and quantitative disclosure of risks arising from financial instruments, including credit risk, liquidity risk, and market risk, and management of such risks.
3.Aged analysis of trade receivables, and changes in loss allowances.
4.Foreign-currency-denominated assets and liabilities that have significant influence, including the amount of risk exposure, currency, and exchange rate for monetary and non-monetary items denominated in foreign currencies, and the foreign exchange gains or losses on monetary items.
5.Sensitivity analysis of exchange rate risk for monetary items denominated in foreign currencies.
1.Balance sheets as of the end of the current interim period, as of the end of the immediately preceding financial year, and as of the end of the comparable interim periods of the immediately preceding financial year.
2.Statements of comprehensive income for the current interim period, for the current financial year to the end of the current interim period, for the comparable interim periods of the immediately preceding financial year, and for the immediately preceding financial year to the end of the comparable interim periods.
3.Statement of changes in equity for the current financial year to date, with a statement of changes in equity for the same period of the immediately preceding financial year.
4.Statement of cash flows for the current financial year to date, with a statement of cash flows for the same period of the immediately preceding financial year.
Interim financial reports shall disclose events or transactions of materiality that have occurred since the date of the end of the reporting period of the immediately preceding financial year; the disclosure shall be made in accordance with IAS 34, and shall include the following information:
1.Possible impact that the application of newly issued or revised standards or interpretations will have on the futures clearing house, as required to be disclosed in accordance with IAS 8.
2.Qualitative and quantitative disclosure of risks arising from financial instruments, including credit risk, liquidity risk, and market risk, and management of such risks.
3.Aged analysis of trade receivables, and changes in loss allowances.
4.Foreign-currency-denominated assets and liabilities that have significant influence, including the amount of risk exposure, currency, and exchange rate for monetary and non-monetary items denominated in foreign currencies, and the foreign exchange gains or losses on monetary items.
5.Sensitivity analysis of exchange rate risk for monetary items denominated in foreign currencies.
Chapter IV Parent Company Only Financial Reports
Article 23
A futures clearing house preparing parent company only financial reports shall apply accounting treatment conforming to the requirements of Chapter II of these Regulations, except when it has control or significant influence over, or a joint venture interest in, an invested company, in which case it shall value the long-term equity investment using the equity method.
The profit or loss during the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.
The profit or loss during the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.
Article 24
A futures clearing house preparing parent company only financial reports is not required to prepare segment information within the scope of IFRS 8.
Article 25
A futures clearing house preparing parent company only financial reports shall prepare statements of major accounting items.
Titles and forms of statements of major accounting items are as follows:
1.Statements of assets and liabilities items:
A.Statement of cash and cash equivalents (Form 6-1).
B.Statement of financial assets at fair value through profit or loss–current (Form 6-2).
C.Statement of financial assets measured at fair value through other comprehensive profit or loss–current (Form 6-3).
D.Statement of financial assets for hedging–current (Form 6-4).
E.Statement of financial assets measured at amortized cost–current (Form 6-5).
F.Statement of trade receivables (Form 6-7).
G.Statement of other receivables (Form 6-8).
H.Statement of prepayments (Form 6-9).
I.Statement of clearing margins (Form 6-10).
J.Statement of non-current assets held for sale (Form 6-11).
K.Statement of other current assets (Form 6-12).
L.Statement of changes in financial assets at fair value through profit or loss–non-current (Form 6-13).
M.Statement of financial assets measured at fair value through other comprehensive profit or loss–non-current (Form 6-14).
N.Statement of changes in financial assets for hedging–non-current (Form 6-16).
O.Statement of financial assets measured at amortized cost–non-current (Form 6-17)
P.Statement of changes in investments accounted for using the equity method (Form 6-19).
Q.Statement of changes in accumulated impairment of investments accounted for using the equity method (Form 6-20).
R.Statement of changes in property and equipment (Form 6-21).
S.Statement of changes in accumulated depreciation of property and equipment (Form 6-22).
T.Statement of changes in accumulated impairment of property and equipment (Form 6-23).
U.Statement of changes in right-of-use assets (Form 6-24).
V.Statement of changes in accumulated depreciation of right-of-use assets (Form 6-25).
W.Statement of changes in accumulated impairment of right-of-use assets (Form 6-26).
X.Statement of changes in investment property (Form 6-27).
Y.Statement of changes in accumulated depreciation of investment property (Form 6-28).
Z.Statement of changes in accumulated impairment of investment property (Form 6-29).
AA.Statement of changes in intangible assets (Form 6-30).
BB.Statement of deferred tax assets (Form 6-31).
CC.Statement of other non-current assets (Form 6-32).
DD.Statement of changes in compensation reserve fund (Form 6-33)
EE.Statement of settlement and clearing funds (Form 6-34).
FF.Statement of settlement and clearing funds and bank credit lines (Form 6-35).
GG.Statement of receipts, payments, and use of settlement and clearing funds (Form 6-36).
HH.Statement of short-term borrowings (Form 7-1).
II.Statement of short-term bills payable (Form 7-2).
JJ.Statement of financial liabilities at fair value through profit or loss–current (Form 7-3).
KK.Statement of financial liabilities for hedging–current (Form 7-4).
LL.Statement of trade payables (Form 7-6).
MM.Statement of other payables (Form 7-7).
NN.Statement of provisions–current (Form 7-8).
OO.Statement of liabilities directly associated with non-current assets held for sale (Form 7-9).
PP.Statement of other current liabilities (Form 7-10).
QQ.Statement of changes in financial liabilities at fair value through profit or loss–non-current (Form 7-11).
RR.Statement of financial liabilities for hedging–non-current (Form 7-12).
SS.Statement of bonds payable (Form 7-13).
TT.Statement of long-term borrowings (Form 7-14).
UU.Statement of lease liabilities (Form 7-15).
VV.Statement of provisions–non-current (Form 7-16).
WW.Statement of deferred tax liabilities (Form 7-17).
XX.Statement of other non-current liabilities (Form 7-18).
2.Statements of profit or loss items:
A.Statement of operating revenue (Form 8-1).
B.Statement of operating expense (Form 8-2).
C.Statement of finance costs (Form 8-3).
D.Statement of expected credit impairment loss (or gain) (Form 8-4).
E.Statement of other gains and losses (Form 8-5).
A futures clearing house may determine, having regard to the concept of materiality, whether or not to separately present the statements of assets and liabilities items described in subparagraph 1 of the preceding paragraph.
Titles and forms of statements of major accounting items are as follows:
1.Statements of assets and liabilities items:
A.Statement of cash and cash equivalents (Form 6-1).
B.Statement of financial assets at fair value through profit or loss–current (Form 6-2).
C.Statement of financial assets measured at fair value through other comprehensive profit or loss–current (Form 6-3).
D.Statement of financial assets for hedging–current (Form 6-4).
E.Statement of financial assets measured at amortized cost–current (Form 6-5).
F.Statement of trade receivables (Form 6-7).
G.Statement of other receivables (Form 6-8).
H.Statement of prepayments (Form 6-9).
I.Statement of clearing margins (Form 6-10).
J.Statement of non-current assets held for sale (Form 6-11).
K.Statement of other current assets (Form 6-12).
L.Statement of changes in financial assets at fair value through profit or loss–non-current (Form 6-13).
M.Statement of financial assets measured at fair value through other comprehensive profit or loss–non-current (Form 6-14).
N.Statement of changes in financial assets for hedging–non-current (Form 6-16).
O.Statement of financial assets measured at amortized cost–non-current (Form 6-17)
P.Statement of changes in investments accounted for using the equity method (Form 6-19).
Q.Statement of changes in accumulated impairment of investments accounted for using the equity method (Form 6-20).
R.Statement of changes in property and equipment (Form 6-21).
S.Statement of changes in accumulated depreciation of property and equipment (Form 6-22).
T.Statement of changes in accumulated impairment of property and equipment (Form 6-23).
U.Statement of changes in right-of-use assets (Form 6-24).
V.Statement of changes in accumulated depreciation of right-of-use assets (Form 6-25).
W.Statement of changes in accumulated impairment of right-of-use assets (Form 6-26).
X.Statement of changes in investment property (Form 6-27).
Y.Statement of changes in accumulated depreciation of investment property (Form 6-28).
Z.Statement of changes in accumulated impairment of investment property (Form 6-29).
AA.Statement of changes in intangible assets (Form 6-30).
BB.Statement of deferred tax assets (Form 6-31).
CC.Statement of other non-current assets (Form 6-32).
DD.Statement of changes in compensation reserve fund (Form 6-33)
EE.Statement of settlement and clearing funds (Form 6-34).
FF.Statement of settlement and clearing funds and bank credit lines (Form 6-35).
GG.Statement of receipts, payments, and use of settlement and clearing funds (Form 6-36).
HH.Statement of short-term borrowings (Form 7-1).
II.Statement of short-term bills payable (Form 7-2).
JJ.Statement of financial liabilities at fair value through profit or loss–current (Form 7-3).
KK.Statement of financial liabilities for hedging–current (Form 7-4).
LL.Statement of trade payables (Form 7-6).
MM.Statement of other payables (Form 7-7).
NN.Statement of provisions–current (Form 7-8).
OO.Statement of liabilities directly associated with non-current assets held for sale (Form 7-9).
PP.Statement of other current liabilities (Form 7-10).
QQ.Statement of changes in financial liabilities at fair value through profit or loss–non-current (Form 7-11).
RR.Statement of financial liabilities for hedging–non-current (Form 7-12).
SS.Statement of bonds payable (Form 7-13).
TT.Statement of long-term borrowings (Form 7-14).
UU.Statement of lease liabilities (Form 7-15).
VV.Statement of provisions–non-current (Form 7-16).
WW.Statement of deferred tax liabilities (Form 7-17).
XX.Statement of other non-current liabilities (Form 7-18).
2.Statements of profit or loss items:
A.Statement of operating revenue (Form 8-1).
B.Statement of operating expense (Form 8-2).
C.Statement of finance costs (Form 8-3).
D.Statement of expected credit impairment loss (or gain) (Form 8-4).
E.Statement of other gains and losses (Form 8-5).
A futures clearing house may determine, having regard to the concept of materiality, whether or not to separately present the statements of assets and liabilities items described in subparagraph 1 of the preceding paragraph.
Chapter V Concurrent Operation of the Business of a Futures Clearing House
Article 26
When a futures exchange or other institution that concurrently operates the business of a futures clearing house is subject to other requirements regarding the treatment of accounting matters, as provided in regulations governing the preparation of financial reports by a futures exchange or other institution, or in these Regulations, such requirements shall govern.
Article 27
The nature and classification of the particular accounting items set up by a futures exchange or other institution for its concurrent operation of the business of a futures clearing house are described below:
1.Operating capital for clearing business and operating capital: As required by the Standards Governing the Establishment of Futures Clearing Houses, a futures exchange or other institution that concurrently operates the business of a futures clearing house shall allocate an amount equal to the minimum paid-in capital of a futures clearing house as earmarked operating capital for use in the futures clearing segment. Operating capital for clearing business is presented as an item under other non-current assets in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment), and operating capital is presented as an item under equity in the balance sheet for the futures clearing segment. However, in preparing a consolidated balance sheet, these two items shall be offset against each other rather than being presented separately.
2.Intra-entity accounts–clearing segment: In the case of a futures exchange or other institution concurrently operating the business of a futures clearing house, these are monetary transactions between a non-futures clearing segment and the futures clearing segment. For such intra-entity accounts, a debit balance is presented as an item under other assets in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment) or in the balance sheet for the futures clearing segment, and a credit balance as an item under other liabilities in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment) or in the balance sheet for the futures clearing segment. However, in preparing a consolidated balance sheet, a net balance shall be presented after offsetting debits against credits, provided that the details shall be indicated in the notes to the financial reports.
1.Operating capital for clearing business and operating capital: As required by the Standards Governing the Establishment of Futures Clearing Houses, a futures exchange or other institution that concurrently operates the business of a futures clearing house shall allocate an amount equal to the minimum paid-in capital of a futures clearing house as earmarked operating capital for use in the futures clearing segment. Operating capital for clearing business is presented as an item under other non-current assets in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment), and operating capital is presented as an item under equity in the balance sheet for the futures clearing segment. However, in preparing a consolidated balance sheet, these two items shall be offset against each other rather than being presented separately.
2.Intra-entity accounts–clearing segment: In the case of a futures exchange or other institution concurrently operating the business of a futures clearing house, these are monetary transactions between a non-futures clearing segment and the futures clearing segment. For such intra-entity accounts, a debit balance is presented as an item under other assets in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment) or in the balance sheet for the futures clearing segment, and a credit balance as an item under other liabilities in the balance sheet of the futures exchange or other institution (excluding the futures clearing segment) or in the balance sheet for the futures clearing segment. However, in preparing a consolidated balance sheet, a net balance shall be presented after offsetting debits against credits, provided that the details shall be indicated in the notes to the financial reports.
Article 28
In the case of a futures exchange or other institution concurrently operating the business of a futures clearing house, items associated with stock shares, such as share capital, share premiums under capital surplus, and treasury shares, are not presented in the financial statements for the futures clearing segment. If as a result an increase or decrease occurs in the allocation of operating capital for clearing business, there shall be a concurrent increase or decrease in the operating capital for clearing business of the futures exchange or other institution (excluding the futures clearing segment) and in the operating capital of the futures clearing segment.
Article 29
When a futures exchange or other institution concurrently operates the business of a futures clearing house, then if there is an annual deficit or earnings for the futures exchange or other institution (excluding the futures clearing segment) and the futures clearing segment conversely has annual earnings or deficit, and if the earnings of one exceed the deficit of the other, then the full amount of the appropriation from earnings for the legal reserve and special reserve made in accordance with the Company Act, the articles of incorporation, or a resolution of the shareholders meeting shall be recognized for the one that had the annual earnings, whether the futures exchange or other institution (excluding the futures clearing segment) or the futures clearing segment.
Article 30
If as a result of its concurrent operation of the business of a futures clearing house a futures exchange or other institution needs to prepare a standalone balance sheet and statement of comprehensive income for its futures clearing segment, their titles and forms are as follows:
1.Balance sheet (Form 9).
Balance sheet–futures clearing segment (Form 9-1).
2.Statement of comprehensive income (Form 10).
Statement of comprehensive income–futures clearing segment (Form 10-1).
1.Balance sheet (Form 9).
Balance sheet–futures clearing segment (Form 9-1).
2.Statement of comprehensive income (Form 10).
Statement of comprehensive income–futures clearing segment (Form 10-1).
Chapter VI (Deleted)
Article 31
(Deleted)
Article 32
(Deleted)
Article 33
(Deleted)
Chapter VII Joint Arrangements
Article 34
Joint arrangements are either joint operations or joint ventures, and have the following characteristics:
1.All of the parties are bound by a contractual arrangement.
2.The contractual arrangement gives two or more of those parties joint control of the arrangement.
When a joint arrangement is a joint operation, the assets, liabilities, revenues, and expenses relating to the joint operation shall be recognized in accordance with these Regulations, applicable IFRSs, and contractual agreement.
When a joint arrangement is a joint venture, the interest in the joint venture shall be accounted for using the equity method pursuant to Article 11, paragraph 4, subparagraph 1 and IAS 28.
1.All of the parties are bound by a contractual arrangement.
2.The contractual arrangement gives two or more of those parties joint control of the arrangement.
When a joint arrangement is a joint operation, the assets, liabilities, revenues, and expenses relating to the joint operation shall be recognized in accordance with these Regulations, applicable IFRSs, and contractual agreement.
When a joint arrangement is a joint venture, the interest in the joint venture shall be accounted for using the equity method pursuant to Article 11, paragraph 4, subparagraph 1 and IAS 28.
Chapter VIII Supplementary Provisions
Article 35
These Regulations shall come into force from the date of issuance, with the exception of Articles 3, Article 6, Article 9, paragraph 1, Articles 10 to 15, Article 17, Article 19, Article 21, Article 22, Article 23, Article 30, Article 32, and Article 34, as amended on 15 September 2014, which shall come into force from financial year 2015, the amendments of 10 February 2017, which shall come into force from financial year 2017, the amendments of 8 November 2017, which shall come into force from financial year 2018, and Article 11, paragraph 4, subparagraphs 3 and 4, and paragraph 6, Article 12, Article 17, Article 25, Forms 1 and 1-1 of Article 21, and Forms 9 and 9-1 of Article 30, as amended on 27 July 2018, which shall come into force from financial year 2019.