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Article 47
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The securities lending fee for a fixed-price or competitive bid transaction shall be calculated, on a daily marked-to-market and on a transaction-by-transaction basis, as the sum of the products obtained by multiplying the outstanding balance of subject securities on loan on a given day by the closing price of the subject securities on that day and further by the lending rate fixed upon execution of the loan transaction. The total securities lending fees shall be collected/paid through the securities firm upon return of securities in satisfaction of the loan by the borrower.
The borrowing period shall begin on the date the subject securities are borrowed and end on the day preceding the date they are returned. If on the return date an act of God or accident occurs prompting the TWSE or TPEx to announce closure of the securities market, the next business day shall be treated as the return date. The preceding paragraph shall apply mutatis mutandis when calculating securities lending fees for holidays.
The time for settlement and collection of the securities lending fee of a fixed-price or competitive bid transaction is as follows:
- Monthly settlement and collection: On the first business day of each month, the TWSE will calculate the lending-related fees incurred, based on the quantity of the underlying securities that remained unsettled by the borrower in the previous month. The securities firm shall complete collection on the next business day following the TWSE’s notification.
- Collection upon return of securities: When the borrower completes the return of the borrowed securities or makes an early partial return, the TWSE will calculate the lending-related fees incurred in relation to the particular loan. The securities firm shall complete collection on the next business day following the TWSE’s notification.
When the borrower in a negotiated transaction completes the return of the borrowed securities or makes an early partial return, the TWSE will calculate the loan service fees incurred in relation to the particular loan and aggregate and include such fees in the service fees calculated on the first business day of the following month based on the quantity of underlying securities that remained unsettled in the previous month. The securities firm shall complete collection on the next business day following the TWSE’s notification.
The calculation and payment of the securities lending fee on a negotiated transaction shall be negotiated and agreed upon between the borrower and the lender themselves, notwithstanding the provisions of Article 31, paragraph 5.
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