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Article 2
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A securities firm or securities finance enterprise which borrows securities for conducting securities borrowing and lending business or margin purchases and short sales in securities trading (hereinafter, "Borrowed Securities" or "Securities Borrowing") shall pay a performance bond to the Taiwan Stock Exchange Corporation ("TWSE") at 10% of the total amount of Borrowed Securities which is calculated based on the closing price of the end of the preceding month, within three business days of the end of each month.
Where the performance bond lodged by the securities firm or securities finance enterprise is less than the 10% of the total amount of Borrowed Securities above, the securities firm or securities finance enterprise shall make up the shortfall to the TWSE before it may borrow additional securities and extend the transaction.
The performance bond shall be in the form of cash in New Taiwan dollars or bank guarantee only and kept by the TWSE in the interest of the lender.
The total amount of Borrowed Securities as referred to in paragraph 2 is calculated on the basis of the auction reference price at market opening of the date of the lending and borrowing transaction, and marked-to-market daily by the TWSE based on the closing price.
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