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Article NO. Content

Title:

Operating Rules of the Taiwan Stock Exchange Corporation  CH

Amended Date: 2024.03.11 (Articles 43 amended,English version coming soon)
Current English version amended on 2022.04.28 
Categories: Basic Laws and Regulations
113     Securities firms and securities finance enterprises may not default on their settlement obligations.
    Where any securities firm violates the preceding paragraph, in addition to the TWSE designating another securities firm to effect delivery on its behalf in accordance with Article 153 of the Securities and Exchange Act, the TWSE shall also retain the sum and securities receivable; provided that in respect of the sum and securities that have been actually paid and delivered, the defaulting securities firm may engage the designated securities firm to collect the retained sum and securities equivalent thereto before making computation of the offsetting in accordance with paragraph 3 hereof.
    The designated securities firm shall compute and offset the sum and securities that have not been paid and delivered at the respective due date by the defaulting securities firm against the retained sum and securities. The balance thereof shall, after being verified with the TWSE to be correct and beginning from the following business date, be cleared off through purchases or sales on the Exchange on behalf of the defaulting securities firm. In case it is unable to clear off through purchases or sales, the TWSE may notify the designated securities firm to clear it through auction, price negotiation, reverse auction, or other trading methods; provided, however, that, in case auction or reverse auction approach is adopted, it may be exempted from the restrictions on volume applied for, pricing, period of public announcement, and transacted volume as specified in relevant regulations.
    The base price for handling the clearing off in auction, price negotiation, reverse auction or other trading methods referred to in the preceding paragraph shall be determined by the TWSE based on the closing price for the most recent business day plus or minus 10 percent.
    The defaulting securities firm shall not raise any objection in respect of the base price determined pursuant to the preceding paragraph.
    The difference on pricing and all expenses incurred from handling the clearing off pursuant to paragraph 3 hereof shall be borne by the defaulting securities firm.
    In the event that securities finance enterprises violate their obligations for settlement, the TWSE shall report to the Competent Authority for actions on a case by case basis.