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Article 39
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Upon occurrence of any of the following circumstances to an SBL participant in a fixed-price or competitive bid transaction, the TWSE will, as from the next business day, place an order with a securities firm to, under the name of the Taiwan Stock Exchange Corporation Borrowing and Lending Transaction Processing Account opened and maintained by the TWSE, submit a quote to buy in subject securities on the exchange or GTSM to return securities in satisfaction of the loan, and further, to the extent necessary for the full satisfaction of the monies required for the execution of the order to buy in securities and other related fees and expenses, dispose of the loan collateral, or otherwise demand payment of the guaranteed amount from the guaranteeing bank, as the case may be.
- Where the borrower fails to return the subject securities within the time limit when the loan becomes due, or when the lender makes a recall request, or when any cause for compulsory early return of securities exists under Article 26, paragraph 1, subparagraph 4, (1) or (2).
- Where the borrower fails to pay entitlement compensation to the lender by the payment date for such entitlement compensation.
- Where the borrower fails to cover any collateral shortfall, or to provide eligible collateral for replacement, by the specified date and time.
- Where the borrower fails to pay any fee by the due date for payment.
Any processing fees incurred in connection with the buy-in of subject securities or disposal of loan collateral shall be borne by the borrower, and the borrower may not raise any objection as to the timing, quantity, and price at which the TWSE places an order to buy in subject securities or dispose of loan collateral, as the case may be.
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Article 44
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If a circumstance arises under Article 39 or the preceding article that requires a buy-in of securities for return of securities borrowed in a fixed-price or competitive bid transaction, and if due to the constraint of the settlement period the lender is unable to exercise its shareholder's rights in a timely manner, the TWSE may, in addition to placing an order with a securities firm to buy in subject securities, borrow subject securities for return to the lender and effect a further return of securities when the bought securities are credited to the account.
If a circumstance arises under Article 39 or the preceding article that requires a buy-in of securities for return of securities borrowed in a fixed-price or competitive bid transaction, and if due to the trading status of the market generally or the subject securities specifically it is not possible to buy in subject securities within 2 consecutive business days after the date of the circumstance, the TWSE will repay the shortfall by cash in an amount determined by reference to the closing price on the second business day.
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