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Article 1
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These Measures are enacted in accordance with the provisions of Articles 82-2 and 109 of the Operation Rules of this Corporation.
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Article 2
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A securities lending and borrowing transaction shall refer to an act that the lender agrees to lend the securities and the borrower shall return the securities of same category and volume. The so-called "securities borrowing in demand" shall refer to the securities borrowing made by specific corporate institutions for strategic transaction and the securities borrowing made by a securities firm or a securities financing enterprise for settlement.
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Article 3
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The lender may collect lending charges from the borrower on account of securities lending.
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Article 4
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The lender or the borrower shall guarantee the integrity of the titles and rights of the securities provided by the lender for lending and the securities and the contents of bank guarantee provided by the borrower for securing the borrowing. In case of any defect or legal dispute, a substitution shall be made on the business day immediately following the date of notice.
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Article 5
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The borrowers and lenders of strategic transaction in demand shall be limited to the specific corporate institutions as follows:
1. Lenders: insurance companies, banks, investment and trust companies, securities investment trust companies (the raised funds), futures dealers, and others as approved by the competent authorities.
2. Borrowers: securities dealers, securities investment trust companies (the raised funds), futures dealers, and others as approved by the competent authorities.
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Article 6
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A borrower and a lender shall entrust a securities firm to handle securities lending and borrowing transaction after they have entered into "Letter of Entrustment for Securities Lending and Borrowing Transaction" with a securities firm, opened an account for securities lending and borrowing, a securities central depository account, and a deposit account at a financial institution, and reported to and been approved by this Corporation.
The "Letter of Entrustment for Securities Lending and Borrowing Transaction" shall contain the following particulars and its format shall be as shown in Appendix 1 hereto:
1. The borrower and the lender agree that the securities lending and borrowing transaction shall be subject to the "Letter of Entrustment for Securities Lending and Borrowing Transaction" and the "Master Contract of Securities Lending and Borrowing Transaction" entered into by and between the securities firm and this Corporation, as well as the easures Governing Lending and Borrowing of Securities" and the relevant regulations and rules of this Corporation.
2. A securities firm may from time to time submit the relevant information with regard to the account opening, details of transaction and inventory of securities, and the position on strategic transaction of a borrower and a lender to this Corporation, or provide the same for review.
3. A securities firm shall report to this Corporation in regard to any violation by a borrower or a lender of the obligations to be performed under a securities lending and borrowing transaction or any breach of its representations, and shall handle the relevant matters in accordance with the instructions of this Corporation, and may terminate or rescind the Letter of Entrustment.
A borrower shall entrust the same securities firm to handle the securities lending and borrowing transaction and the sale of the object securities.
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Article 7
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A securities firm may accept the entrustment of a lender or a borrower to handle the securities lending and borrowing only after it has entered into the "Master Contract of Securities Lending and Borrowing Transaction" with this Corporation.
The "Master Contract of Securities Lending and Borrowing Transaction" shall contain the following particulars and its format shall be as shown in Appendix 2 hereto:
1. The securities lending and borrowing transaction between a securities firm and this Corporation, between this Corporation and a borrower or a lender, and between a borrower and a lender shall be handled in accordance with the "Master Contract of Securities Lending and Borrowing Transaction" as well as the "Measures Governing Lending and Borrowing of Securities" and the relevant regulations and rules of this Corporation.
2. Before a securities firm is entrusted by a borrower or a lender to handle a securities lending and borrowing transaction, it shall enter into a "Letter of Entrustment for Securities Lending and Borrowing Transaction" with such borrower or lender, and the continual validity of the Letter of Entrustment shall be a condition precedent for the securities firm to be entrusted for handing such transaction.
3. A securities firm entrusted by a borrower or a lender to handle a securities lending and borrowing transaction shall exercise the care of a good administrator. A securities firm in handling a securities lending and borrowing transaction of this Corporation shall exercise the same care as it should exercise in handling its own affairs.
4. When placing order for a fixed-price securities transaction or a competitive-auction securities transaction under entrustment, a securities firm shall verify such order pursuant to the contents of entrustment and collect in advance qualified object securities and the collaterals for such borrowing; except for failing to complete the transaction, a securities firm shall not offset, seize, retain the securities and collaterals collected in advance, or make an assertion or conduct any other activities that may hinder the settlement and payment of such lending and borrowing.
5. Where a fix-price transaction or a competitive-auction transaction is concluded through the deal-matching system of this Corporation, the lending and borrowing relationship between the borrower and the lender shall come into force. Where a borrower or a lender is in breach of any of its obligations or representations, it shall pay a default penalty to this Corporation according to the agreement and shall be liable for damages, and the rights and obligations with respect to recovery or advance of payment out of such breach of contract shall be assumed by this Corporation.
6. Where a negotiated borrowing transaction is concluded through the negotiation of a borrower and a lender, the borrower and the lender shall be solely responsible for all rights and obligations arising from the lending and borrowing relationship and bear the risk of seeking recovery out of the breach of contract; this Corporation will not bear any responsibility for the performance of contract. The borrower and the lender shall forthwith entrust the securities firm to report to this Corporation the terms and conditions of each negotiated borrowing transaction, and this Corporation will provide confirmation of the conclusion of the transaction and notify of the handling of matters in regard to the book-entry and return of the object securities.
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Article 8
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The securities that can be the subjects of the securities borrowing in demand under a strategic transaction shall be publicly announced by this Corporation.
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Article 9
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The business hours for services rendered by this Corporation for securities borrowing under a strategic transaction shall be from 9:00 am to 2:30 pm of the market trading hours of the then current day.
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Article 10
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The volume under an application for securities lending and borrowing transaction shall be as follows:
1. Volume for lending: more than 10 trading units of the object securities;
2. Volume for securities borrowing: at least one trading unit of the object securities.
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Article 11
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The securities lending and borrowing transactions are categorized into the following three types according to different types of transactions:
1. Fixed-price transaction: an application shall be filed by the borrower and the lender subject to the charge rate publicly announced by this Corporation, and the transaction shall be concluded through deal-matching pursuant to Article 14 hereof;
2. Competitive-auction transaction: the securities borrowing charge rate and lending charge rate shall be reported by the borrower and the lender subject to the highest interest rate of 20% per annum, with 0.1% as the up/down unit, and such transaction shall be concluded through deal-matching pursuant to Article 16 hereof;
Negotiated borrowing transaction: the transaction charge rate shall be determined by the borrower and the lender through negotiation subject to the highest interest rate of 20% per annum, with 0.01% as the up/down unit.
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Article 12
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An application for securities borrowing of fixed-price transaction and competitive-auction transaction shall be valid only on the day of application, whereas an application for securities lending remains valid before it is withdrawn.
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Article 13
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The application for securities lending or for securities borrowing, alteration and withdrawal thereof, and the book-entry of securities of a fixed-price transaction shall be conducted in accordance with the following:
1. With respect to the application for securities lending, alteration and withdrawal thereof, and book-entry of securities:
(1) When a lender is to apply for securities lending, the account number, and title and volume of the securities shall be keyed in the securities lending system of this Corporation by a securities firm.
(2) Upon receipt of application, this Corporation will notify the Securities Central Depository Enterprise by way of computer linkage to pen in the securities in the securities central depository account of the lender to make it available for lending; in the event that the volume of the securities in the securities central depository account of the lender is insufficient, such application shall be null and void.
(3) An application for securities lending at a fixed charge rate shall remain valid if it is not concluded, altered, or withdrawn, whereas, if it is concluded in part, the unconcluded portion shall remain valid.
(4) With respect to the unconcluded portion, a lender may at any time curtail, through a securities firm, the volume for lending at the securities lending system of this Corporation, and this Corporation will notify the Securities Central Depository Enterprise to make alteration to the pen-in volume in the securities central depository account of the lender in accordance with the curtailment of volume for lending.
(5) With respect to the unconcluded portion, a lender may at any time withdraw, through a securities firm, its application at the securities lending system of this Corporation, and this Corporation will forthwith notify the Securities Depository Enterprise to release the pen-in securities for lending from the securities central depository account of the lender.
(6) After an application is concluded through deal-matching, this Corporation will forthwith notify the Securities Central Depository Enterprise to transfer the securities through book-entry from the securities central depository account of the lender into that of the borrower.
2. With respect to the application for securities borrowing, alteration and withdrawal thereof:
(1) When a borrower is to apply for securities borrowing, the account number, title and volume of the securities, date for return of securities, and detailed statement of the collaterals shall be keyed in the securities borrowing system of this Corporation by a securities firm.
(2) After this Corporation has confirmed that the keyed-in information regarding the collaterals is correct and meets the stipulated collateral ratio, and the pen-in of collaterals for securities is simultaneously completed, the application will come into effect.
(3) After a borrower has adequately provided the collaterals, it may at any time apply, through a securities firm, with respect to the unconcluded portion, for alteration to the volume or the date for return of securities, or withdrawal of the application.
(4) Upon application by a borrower for withdrawal of the unconcluded portion, this Corporation will forthwith notify the Securities Central Depository Enterprise to release the pen-in collaterals for the securities borrowing from the securities central depository account of the borrower.
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Article 14
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The application for securities borrowing or for securities lending of a fixed-price transaction is processed by way of deal-matching on a transaction by transaction basis, and the priority of deal-matching is determined according the following circumstances:
1. Application for securities borrowing:
(1) Where the volume of securities lending applied for does not exceed that of securities borrowing applied for, the securities lending applied for shall be entirely transacted.
(2) Where the volume of securities lending exceeds that of securities borrowing applied for, the securities lending applied for shall be matched in the priority randomly determined by computer.
2. Application for securities lending:
(1) Where the volume of securities borrowing applied for does not exceed that of securities lending applied for, the securities borrowing applied for shall be entirely transacted.
Where the volume of securities borrowing applied for exceeds that of securities lending applied for, the securities borrowing applied for shall be matched in sequence by the priority of keyed-in time.
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Article 15
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The application for securities lending or for securities borrowing, alteration and withdrawal thereof, and book-entry of a competitive-auction transaction shall be handled in accordance with the following:
1. With respect to the application for securities lending, alteration and withdrawal thereof, and book-entry of securities:
(1) When a lender is to apply for securities lending, the account number, title and volume of the securities, and the lending charge rate shall be keyed-in the securities borrowing system of this Corporation by a securities firm.
(2) Upon receipt of application, this Corporation will notify the Securities Central Depository Enterprise by way of computer linkage to pen in the securities in the securities central depository account of the lender to make it available for lending; in the event that the volume of the securities in the securities central depository account of the lender is insufficient, such application shall be null and void.
(3) An application for securities lending at a lending charge rate shall remain valid if it is not concluded, altered, or withdrawn, whereas, if it is concluded in part, the unconcluded portion shall remain valid.
(4) With respect to the unconcluded portion, a lender may at any time curtail the volume for lending or alter the lending charge rate, through a securities firm, at the securities borrowing system of this Corporation, and this Corporation will notify the Securities Central Depository Enterprise to make alteration to the pen-in volume in the securities central depository account of the lender in accordance with the curtailment of volume for lending
(5) With respect to the unconcluded portion, a lender may at any time withdraw, through a securities firm, its application at the securities borrowing system of this Corporation, and this Corporation will forthwith notify the Securities Central Depository Enterprise to release the pen-in securities for lending from the securities central depository account of the lender.
(6) After an application is concluded through deal-matching, this Corporation will forthwith notify the Securities Central Depository Enterprise to transfer the securities through book-entry from the securities central depository account of the lender into that of the borrower.
2. With respect to the application for securities borrowing, alteration and withdrawal thereof:
(1) When a borrower is to apply for securities borrowing, the account name, title and volume of the securities, borrowing charge rate, date for return of securities, and detailed statement of the collaterals shall be keyed in the securities borrowing system of this Corporation by a securities firm.
(2) After this Corporation has confirmed that the keyed-in information regarding the collaterals is correct and meets the stipulated collateral ratio, and the pen-in of collaterals for securities is simultaneously completed, the application will come into effect.
(3) After a borrower has adequately provided the collaterals, it may at any time apply, through a securities firm, with respect to the unconcluded portion, for alteration to the volume, the borrowing charge rate (the time of making alteration shall become the time of entrustment), or the date for return of securities, or for withdrawal of the application.
Upon application by a borrower for withdrawal of the unconcluded portion, this Corporation will forthwith notify the Securities Central Depository Enterprise to release the pen-in collaterals for the securities borrowing from the securities central depository account of the borrower
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Article 16
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Article 16: The application for securities borrowing or for securities lending of a competitive-auction transaction is processed by way of deal-matching on a transaction by transaction basis, and the priority of deal-matching is determined according to the following principles:
1. In case of an application for securities borrowing, when the keyed-in borrowing charge rate is higher than or equivalent to the lowest lending charge rate, the application for borrowing will be processed on the lending charge rates set by lenders on a from-low-to-high basis, whereas, if the volume for lending at a same charge rate exceeds that on demand for borrowing, the applications for borrowing will be processed on a random basis.
In case of an application for securities lending, when the keyed-in lending charge rate is lower than or equivalent to the highest borrowing charge rate, the application for borrowing will be processed on the borrowing charge rates set by borrowers on a from-high-to-low basis, whereas, if the volume for borrowing at a same charge rate exceeds that on demand for lending, the applications for borrowing will be processed in sequence by the priority of keyed-in time.
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Article 17
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A negotiated borrowing transaction shall be handled by way of the following:
1. The borrower and the lender shall negotiate on the borrowing terms and conditions with respect to the securities category, volume, borrowing charge rate, term of borrowing, types and conditions of collaterals, and the manner in compensation for rights and interests, and shall enter into a "Contract of Negotiated Securities Borrowing Transaction" (please refer to Appendix 3 hereto for its format), under which the borrower shall provide collaterals to the lender.
2. The borrower and the lender shall respectively file application with securities firm(s) for conclusion of securities borrowing and lending transaction, and the securities firm(s) shall apply to this Corporation on behalf of the borrower and the lender through the securities borrowing system of this Corporation. The borrower and the lender may file such application with the same or different securities firm(s). The application shall contain the title of securities, borrowing volume, transaction charge rate, date for return of securities, ratio of collaterals, and the bank accounts and securities central depository accounts of the borrower and the lender.
3. After having received the applications for conclusion of securities borrowing and lending transaction and confirmed the conditions of the both parties to be in conformity, this Corporation will forthwith notify the Securities Central Depository Enterprise to transfer the securities through book-entry from the securities central depository account of the lender into that of the borrower.
This Corporation will notify the Securities Central Depository Enterprise to transfer the securities through book-entry in accordance with the provisions of the preceding paragraph and, if the lender is unable to have the securities transferred or there are insufficient securities, will cancel the application for conclusion of the negotiated borrowing transaction and inform the borrower and the lender. Upon cancellation of the conclusion of the transaction, the lender shall return the collaterals to the borrower.
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Article 18
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The term of securities borrowing under a strategic transaction shall not exceed 6 months from the date of conclusion of the borrowing transaction.
A securities borrower may return the borrowed securities at any time during the agreed term.
A lender of fixed-price transaction or a competitive-auction transaction may file an application for return of securities with this Corporation only upon expiry of 10 business days after the securities lending, and this Corporation will so inform the borrower.
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Article 19
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A borrower of fixed-price transaction or competitive-auction transaction shall return the securities by way of the following:
1. Return of securities on the due date: this Corporation will notify the borrower via the securities firm to return the securities two business days prior to the date scheduled for return of securities.
2. Return of securities prior to the due date: a borrower may return the securities at any time during the business hours between the business date immediately following the date of securities borrowing and the date due for return of securities.
3. Request for return of securities in advance: upon the request of a lender, this Corporation will give notice of return of securities in advance, and the borrower shall return the securities that it holds or borrows within 10 business days after receipt of such notice.
After a borrower is informed by a securities firm through the securities borrowing system of this Corporation, this Corporation will notify the Securities Central Depository Enterprise to transfer through book-entry the borrowed securities from the securities central depository account of the borrower to that of the lender, and this Corporation will inform the borrower and the lender via the securities firm.
The securities borrowed at one transaction shall be returned once in full; return in installments or in part is not permitted.
Only if the borrowed securities and all rights derived from the borrowed securities during the term of borrowing are returned or paid to the lender, should the obligation for return of securities by the borrower been performed.
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Article 20
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A borrower of negotiated borrowing transaction shall return the securities by way of the following:
1. Return of securities on the due date: this Corporation will notify the borrower via the securities firm to return the securities two business days prior to the date scheduled for return of securities.
2. Return of securities prior to the due date: a borrower and a lender may agree to the return of securities at any time prior to the due date for return of securities, and the parties shall report to this Corporation through a securities firm with regard to the change of the date for return of securities.
After a borrower is informed by a securities firm through the securities borrowing system of this Corporation, this Corporation will notify the Securities Central Depository Enterprise to transfer the borrowed securities from the securities central depository account of the borrower to that of the lender, and this Corporation will inform the borrower and the lender via the securities firm.
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Article 21
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This Corporation shall provide, via the computer linkage or internet, the following information for inquiries:
1. With respect to fixed-price transaction:
(1) The fixed charge rate;
(2) Information on concluded transactions: to reveal the total volume of each securities transacted;
(3) Information on securities for lending: to reveal the total volume of each securities for lending that has not been transacted;
(4) Information on securities borrowing: to reveal the total volume of each securities for borrowing that has not been transacted.
2. With respect to competitive-auction transaction:
(1) Information on concluded transactions: upon conclusion of each transaction through deal-matching, to reveal the transacted securities and volume, transaction charge rate, and the total volume of such securities transacted;
(2) Information on securities for lending: to reveal the volume for lending, the lowest five lending charge rates of each security, and the total lent volume of such security;
(3) Information on securities for borrowing: to reveal the volume for borrowing, the highest five borrowing charge rates security, and the total borrowed volume of such security;
3. With respect to negotiated borrowing transaction: the table of balance of borrowed securities.
This Corporation will publicize balance of borrowed securities on a daily basis; the table of balance of borrowed securities in connection with negotiated borrowing transaction may be consolidated with those in connection with fixed-price transaction and competitive-auction transaction.
This Corporation may adjust the contents of information according to the market situation.
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Article 22
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The collaterals for securities obtained by this Corporation on account of the securities lending and borrowing transaction shall be entrusted to the Securities Central Depository Enterprise for custody.
After a transaction of securities lending and borrowing has been concluded, the Securities Central Depository Enterprise shall mark on the borrowed securities.
The marked securities referred to in the preceding paragraph shall not be assigned, transferred and taken back, except for being used for return of securities, strategic transaction, and transfer to the securities central depository account of the borrower opened at a custodian bank pursuant to these Measures.
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Article 23
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This Corporation will not accept application for opening securities lending and borrowing account if a borrower or a lender has any of the following events:
1. Where it is not in compliance with the provisions of Articles 5 and 49 hereof;
2. Where it uses any other's name to open the securities lending and borrowing account;
3. Where the contract entered into with a securities firm for entrustment of securities trading is terminated.
The securities lending and borrowing account opened by a borrower and a lender with the same securities firm shall be limited to one only.
Where any of the events set forth in any item of the preceding paragraph occurs after a securities lending and borrowing account is opened, this Corporation will suspend its participation in securities lending and borrowing transaction and notify the concerned party to settle their liability, and will cancel such securities lending and borrowing account upon settlement.
If a provisional seizure, provisional injunction, or compulsory execution is imposed by a court upon the borrowed securities of a borrower, Paragraph 2 of Article 41 hereof shall apply mutatis mutandis, and this Corporation may cancel such securities lending and borrowing account upon settlement.
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Article 24
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When a borrower and a lender apply for opening a securities lending and borrowing account, a duly authorized person shall handle the account opening procedures with a letter of authorization, and the securities firm shall submit the relevant documents to this Corporation. Copies of the submitted documents shall be affixed with seals of the applying company and its representative and marked with wording "identical to the original" In addition, this Corporation shall verify by letters that the account opener was under entrustment or authorization.
The securities firm shall transmit the information with respect to the account opening of a lender or a borrower, cancellation of account, to the computer system of this Corporation; the same shall apply to any changes thereto.
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Article 25
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In case of any changes to the company name, agent, name and I.D. number of the responsible person, the uniform number or withholding tax number, address or mailing address, or email address of the company as specified in the application for securities lending and borrowing account, such changes shall be entered by the securities firm into the securities borrowing system of this Corporation and a written notice shall be given to this Corporation.
In the event that an applicant fails to give such notice and this Corporation processes the lending and borrowing transaction by using the original information, such applicant shall be solely responsible for any legal problem arising therefrom and shall not raise any objection.
Where a notice of this Corporation is delivered by way of postal mail and such notice fails to be delivered due to the failure of the borrower or the lender to inform of the changed address or mailing address in accordance with the provisions of the preceding paragraph, or due to any event attributable to the borrower or the lender, such notice shall take effect as of the date on which it is delivered to a post office for the first time.
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Article 26
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The payment of money or delivery of securities by this Corporation to a borrower or a lender will be conducted by way of book-entry. In the case of money, this Corporation will remit to the bank account designated by the securities firm which, in turn, shall transfer such money into the bank account opened by the lender or the borrower at a financial institution, whereas, in the case of securities, the Securities Central Depository Enterprise will directly transfer to the securities central depository account of the borrower or the lender.
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Article 27
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When a lender or a borrower is to entrust a securities firm to lend or to borrow securities, it shall fill out a letter of entrustment marked with the wording "lend" or "securities borrowing" After the lending and borrowing transaction is concluded, the securities firm shall fill out a securities lending and borrowing report according to the transaction data of this Corporation, marked with the wording "lend"or "securities borrowing" the format of which is as shown in Appendix 4 hereto.
Paragraph 3 of Article 75 of Operation Rules of this Corporation shall apply mutatis mutandis to the circumstances set forth in the preceding paragraph.
The securities lending and borrowing report shall contain the particulars with respect to the names and account numbers of the borrower and the lender, date of transaction, reference number of the letter of entrustment, type of transaction, title of securities, volume, unit price, charge rate, and category and quantity of collaterals.
This Corporation will inform by way of transmission of files to the securities firm of the concerned borrower of the stipulated collateral ratio, collateral maintenance ratio and minimum collateral ratio.
This Corporation will inform the borrower and the lender via the securities firm of the notice of ex right or ex dividend and the statements pertaining to its calculation.
After a lending and borrowing transaction is settled, this Corporation will produce statements in connection with securities borrowing expenses, securities lending income, return of collaterals, and the net amount to receive and to pay, which shall be informed to the borrower and the lender by the securities firm.
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Article 28
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When a borrower or a lender is to apply for termination of its securities lending and borrowing account, it shall fill out the "application for termination of securities lending and borrowing account" the format of which is as shown in Appendix 5 hereto. After having confirmed that all of its securities lending and borrowing transactions have been settled, this Corporation will consent to the cancellation of account.
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Article 29
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When applying for securities borrowing, a securities borrower of fixed-price transaction or competitive-auction transaction shall provide collaterals, and such collateral shall be limited to the following:
1. Cash;
2. Listed or OTC-traded securities as approved by this Corporation;
3. Bank guarantee.
The collaterals referred to in the preceding paragraph shall be provided in the following manner:
1. Cash: to be transferred directly by the borrower to the bank account for security sum as designated by this Corporation;
2. Listed or OTC-traded securities: after the borrower files an application through a securities firm, this Corporation will notify the Securities Central Depository Enterprise to pen in such securities;
3. Bank guarantee: after the borrower has completed the guarantee procedures with a bank, it shall file an application through a securities firm and forward the original of such guarantee to this Corporation.
After a securities lending and borrowing transaction is concluded, this Corporation will notify the Securities Central Depository Enterprise to transfer the securities provided by the borrower as collaterals to this Corporation as a security.
The terms and conditions on which securities may be used as collaterals, and the discount ratio computed by reference to the opening price of the market of the day shall be determined and publicly announced by this Corporation.
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Article 30
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At the time of filing an application for securities borrowing, a securities borrower of fixed-price transaction or competitive-auction transaction shall provide to this Corporation the collaterals representing a specific ratio (stipulated collateral ratio) of the market value of the borrowed securities computed by reference to the opening price of the borrowed securities of the then current day. After the transaction is concluded, the collateral maintenance ratio shall be calculated on a daily and individual transaction basis. In case the collateral maintenance ratio is lower than the minimum collateral ratio, the borrower shall, after this Corporation has informed the securities firm of the borrower, provide additional collaterals on the business day immediately following the date of notice so as to bring the collateral maintenance ratio back to the stipulated collateral ratio.
The formula for calculation of the collateral maintenance ratio is as follows:
1. Collateral maintenance ratio shall be equivalent to the ratio of the total offset value of collaterals minus the securities borrowing expenses payable, divided by the total value of secured coverage, and times 100%.
2. The total offset value of collaterals shall be the closing price of the then current day of the securities which are provided as collaterals, multiplied by the volume and the discount ratio, plus the total value of cash collaterals and bank guarantee.
3. The total value of secured coverage shall be the closing price of the borrowed securities of the then current day multiplied by the volume of collaterals, plus the total value of cash dividend to be refunded.
4. The volume of collaterals shall be the volume of borrowed securities plus the volume of ex right stock dividend to be returned.
The market value of securities referred to in the preceding paragraph shall be calculated on the basis of closing price; however, for the 3 business days prior to the ex dividend or ex right date of the concerned securities, the market value of the securities which are provided as collaterals shall be calculated at the closing price of the then current day minus the value of dividend or the weighed value of ex right computed on the basis of the closing price of the then current day.
This Corporation will prepare a transfer statement and the medium information with respect to the securities which are provided as collaterals and will on the business day preceding the date on which the issuer suspends the transfer forward the same to the Securities Central Depository Enterprise, which will act as an agent to apply for transfer with the issuing company or its stock agent.
The stipulated collateral ratio, minimum collateral ratio, and discount ratio of securities which are provided as collaterals shall be publicly announced by this Corporation according to the market situation.
After the public announcement referred to in the preceding paragraph has come into effect, except that the existing securities borrowing shall be calculated according to the adjusted ratio, the same shall apply to the unreturned portion of the original securities borrowing.
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Article 31
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Where an application for securities borrowing of fixed-price transaction or competitive-auction transaction is not concluded, this Corporation will return the collaterals provided by the borrower in the following manner:
1. In the case of cash, this Corporation will on the following business day remit to the bank account of the securities firm, which shall in turn transfer the sum to the borrower;
2. In the case of listed or OTC-traded securities, this Corporation will directly notify the Securities Central Depository Enterprise to release the pen-in.
In the case of bank guarantee, this Corporation will return the original guarantee to the borrower on the following business day.
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Article 32
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The withdrawal of or substitution for the collaterals provided by a borrower of fixed-price transaction or competitive-auction transaction shall be handled in accordance with the following:
1. Where the collaterals provided by a borrower exceeds the required ratio due to partial conclusion of transaction, the borrower may apply via a securities firm through the securities borrowing system of this Corporation for withdrawal of those portion of the collaterals that exceeds the stipulated collateral ratio.
2. Where the borrower fails to designate the category of collaterals to be returned on the then current day, this Corporation will make the decision on its behalf upon receipt of application. In the case of securities, this Corporation will notify the Securities Central Depository Enterprise to return by way of book-entry, and, in the case of cash, it will be transferred from the bank account of this Corporation to the borrower on the following business day, as for bank guarantee, the borrower shall apply to this Corporation for return of the same.
3. Where the borrowed securities of one transaction of a borrower (including the portion for compensation of rights and interests) have been fully returned, the borrower may at any time apply for withdrawal at one time of the entire collaterals for such transaction; where the securities are borrowed for several transactions, and only the securities borrowed for one of the transactions are returned, the borrower may only apply for return of the collaterals at equivalent value of the returned securities on the same day (in the case of securities which are provided as collaterals, its value shall be calculated at the discount ratio of the reference opening price of the market of the then current day).
4. Where a borrower is to substitute for collaterals via a securities firm through the securities borrowing system of this Corporation, such substitution shall be processed only after additional collaterals have been provided, and the borrower may apply for return of the original collaterals of the equivalent value (in the case of securities which are provided as collaterals, its value shall be calculated at the discount ratio of the reference opening price at the market of the then current day.).
5. Where the securities or bank guarantee provided by a borrower as collaterals is no longer qualified after being audited, this Corporation will forthwith notify the borrower to make substitution prior to the following business day.
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Article 33
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Except for those provided for in Articles 31 and 32 hereof, where the net value of the collaterals provided by a borrower of fixed-price transaction or competitive-auction transaction has increased after deducting the liabilities due to the change of securities price the borrower may not request for return of the increased portion or for setoff against the securities borrowing expenses, cash collaterals and bank guarantee.
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Article 34
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This Corporation shall pay interest on the cash collaterals provided by a borrower of fixed-price transaction or competitive-auction transaction, which shall be calculated at the interest rate of the saving deposit account of the bank where this Corporation opened such an account.
If the interest rate referred to in the preceding paragraph is adjusted, the interest on the unsettled portion of the borrowing transaction shall be calculated at the adjusted rate as of the date of adjustment.
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Article 35
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With respect to the dividend, bonus or other benefits which are not received by a lender of fixed-price transaction or competitive-auction transaction due to the lending of the securities, the borrower shall return, via a securities firm through the securities borrowing system of this Corporation, the same to the lender in the following manner:
1. Rights and interests on cash:
(1) This Corporation will notify, via the securities firm, the borrower 5 business days prior to the payoff date;
(2) The borrower shall deposit, via the securities firm, the cash into the bank account designated by this Corporation on the payoff date, and key in via the securities firm the securities borrowing system of this Corporation for confirmation, this Corporation will transfer via the securities firm to the lender on the same day or on the following business day.
2. Rights and interests on securities:
(1) This Corporation will notify, via the securities firm, the lender after the ex dividend date, and the lender shall return either the securities or cash in equivalent value within 3 business days as of the date of notice of this Corporation, and key in via the securities firm the securities borrowing system of this Corporation, this Corporation will notify the borrower via the securities firm. In addition, where this Corporation notifies, via the securities firm, the borrower 5 business days prior to the payoff date, and if the lender fails to make selection within the time limit, this Corporation will return the securities.
(2) In case of return of securities by the borrower, a notice shall be given within 3 business days after the payoff date via the securities firm through the securities borrowing system of this Corporation to the Securities Central Depository Enterprise which will transfer to the lender through book-entry from the securities central depository account of the borrower. In case of return of cash in equivalent value, the amount shall be calculated on the ex dividend reference price and shall be returned on the payoff date in the manner for return of "rights and interests on cash".
(3) In case of return of securities, the securities may be returned prior to the payoff date since the rights and interests on securities are those securities which are already been traded on the market.
3. Rights to subscribe for securities to be newly issued
(1) This Corporation will notify the lender via the securities firm 5 business days prior to the deadline for subscription of securities to be newly issued. 3 business days prior to the deadline for subscription of securities to be newly issued, the lender shall express its intent of subscription via the securities firm to this Corporation and deposit the money, via the securities firm, to the bank account designated by this Corporation. After the foregoing is keyed in the securities borrowing system of this Corporation for confirmation, this Corporation will transfer the same via the securities firm to the borrower for subscription or for purchase from the market. Within 3 business days of the date of issuance of the new securities, this Corporation will notify the Securities Central Depository Enterprise via the securities firm through the securities borrowing system of this Corporation, to transfer through book-entry from the securities central depository account of the borrower to the lender.
(2) If the securities to be newly issued have already been traded on the market, the new securities may be returned even before they are issued.
(3) If the lender fails to express or expresses beyond the deadline its intent of subscription or, after expressing such intent, fails to pay the money for subscription within the prescribed deadline, the lender shall be deemed to have waived the rights to subscribe for the new securities.
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Article 36
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Where a lender of fixed-price transaction or competitive-auction transaction desires to exercise its voting right, it shall make a request for return of securities in advance 10 business days prior to the final transfer date for a shareholders' meeting, which request will be conveyed by this Corporation to the securities broker of the borrower.
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Article 37
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The terms and conditions for the collaterals, stipulated collateral ratio, collateral maintenance ratio, minimum collateral ratio, and the manner of transfer of collaterals of a negotiated borrowing transaction shall be determined through negotiation by the lender and the borrower.
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Article 38
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The cash, securities, and the right to subscribe for the securities to be newly issued, as well as the right to exercise voting power of negotiated borrowing transaction that cannot be obtained by the lender due to the lending of the securities shall be negotiated and determined by the lender and the borrower.
The lender and the borrower shall submit, via a securities firm through the securities borrowing system of this Corporation, the detailed information referred to in the preceding paragraph and any changes thereto to this Corporation; in the case of securities, this Corporation will notify the Securities Central Depository Enterprise for transfer through book-entry.
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Article 39
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A borrower of fixed-price transaction or competitive-auction transaction will be deemed to be in breach of contract under any of the following events, and this Corporation will dispose of the collaterals from the following business day and will purchase or borrow the securities for return from the market. If the securities are not purchased or borrowed within 3 business days after the date of such breach, the return shall be made with cash of equivalent value calculated on the basis of the closing price at the market as of the 3rd business day:
1. Where the borrower fails to return the securities within the prescribed deadline on the due date or upon request of the lender for return of the securities in advance;
2. Where the borrower fails to pay the compensation of rights and interests upon the due date for such compensation;
3. Where the borrower fails to provided additional collaterals or substitute qualified collaterals within the prescribed time limit.
4. Where the borrower fails to pay the relevant expenses when due.
The handling charge of the disposition referred to in the preceding paragraph shall be borne by the borrower.
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Article 40
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With respect to the disposition of securities which are provided as collaterals, this Corporation may entrust a securities firm to report the sale to this Corporation or to the OTC securities exchange; such collaterals, if reported but not transacted, shall be continually reported until transacted.
In the case of cash collateral, it shall be used for purchase of the securities or for setoff against the related expenses, whereas, in the case of bank guarantee, this Corporation will directly demand for payment from the bank issuing such guarantee.
The disposition of securities which are provided as collaterals shall be handled by virtue of the "Special Account for Handling Default Matters of Taiwan Stock Exchange Corporation" opened by this Corporation with the securities firms.
The defaulting party shall not raise any objection to the time and price at which this Corporation disposes of the collaterals.
This Corporation will seek recovery from the borrower and the related expenses arising from handling the default, in case the proceeds from disposition of collaterals are insufficient to cover the amount owed.
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Article 41
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Where a borrower of fixed-price transaction or competitive-auction transaction has any of the events set forth in Paragraph 1 of Article 39 hereof, or where a lender has the event set forth in Sub-paragraph 4 of Paragraph 1 of Article 39 hereof, this Corporation may suspend its participation in the securities lending and borrowing transaction.
This Corporation may settle other securities borrowing transactions on behalf of a borrower and use the proceeds derived therefrom for setoff, in case the proceeds from disposition of collaterals are insufficient to cover the amount owed. In case of any remaining balance, such balance will be returned or, in case of any shortfall, this Corporation will give notice to pay for such shortfall by a prescribed deadline and, if the borrower fails to do so, this Corporation will terminate its right to participate in the securities lending and borrowing transaction.
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Article 42
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Where a borrower of negotiated borrowing transaction has any of the events set forth in Sub-paragraphs 1 and 4 of Paragraph 1 of Article 39 hereof, or where a lender has the event set forth in Sub-paragraph 4 of Paragraph 1 of Article 39 hereof, this Corporation may suspend its participation in the securities lending and borrowing transaction, and if such borrower or lender fails to make payment or to deliver after being notified by this Corporation, this Corporation may terminate its participation in the securities lending and borrowing transaction.
In the event of occurrence of any default in a negotiated borrowing transaction, the concerned party shall forthwith report to this Corporation on handling of such default.
Either party of a negotiated borrowing transaction shall solely bear the risk; this Corporation will assume no responsibility.
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Article 43
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Where a borrower or a lender of fixed-price transaction and competitive-auction transaction has an event of default, in addition to handling it according to the regulations, this Corporation may charge a default penalty calculated at 10% of the securities borrowing charge. As for any payment advanced by this Corporation on account of handling a default, a default interest shall be charged at the rate of 5% per annum from the date of advance payment to the date of repayment in full.
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Article 44
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The securities borrowing charge of fixed-price transaction and competitive-auction transaction shall be calculated on a daily and individual transaction basis. The daily closing price of the object securities multiplied by the volume of collaterals, and further multiplied by the transaction charge rate will be the total securities borrowing charge, which shall be collected or paid by the securities firm upon return of the securities.
The term of securities borrowing referred to in the preceding paragraph shall be from the date of borrowing of the object securities to the date preceding the date of return of such securities; the securities borrowing charge for a holiday shall be calculated on the closing price of the preceding business day multiplied by the volume of collaterals, and further multiplied by the transaction charge rate.
The calculation and payment for the securities borrowing charge of a negotiated borrowing transaction shall be determined by the borrower and the lender through negotiation, for which Paragraph 6 of Article 27 hereof shall not apply.
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Article 45
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A securities firm entrusted to handle the securities lending and borrowing transaction shall collect the handling charge, whereas this Corporation providing securities lending and borrowing service on the market will collect a lending and borrowing service fee.
The handling charge and lending and borrowing service fee of the securities lending and borrowing transaction, along with their rates, shall be determined by this Corporation in conjunction with the Chinese Securities Association and shall be implemented after being submitted to and approved by the competent authority.
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Article 46
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This Corporation undertakes the possible damage pursuant to Article 39 hereof, and therefore shall appropriate a reserve from the collected lending and borrowing service fee at a certain percentage; in case of any shortfall, such shortfall shall be paid from the self-owned capital of this Corporation.
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Article 47
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In the event that the object securities are suspended from trading, delisted or ceased to be traded on the OTC market, merged, have a capital reduction, or cease to be qualified securities after being audited, this Corporation may request the borrower to return the securities and end the transaction.
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Article 48
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Except as otherwise provided for in Articles 41 and 42, where a party to a securities lending and borrowing transaction is in breach of these Measures, Master Contract of Securities Lending and Borrowing Transaction, Letter of Entrustment for Securities Lending and Borrowing Transaction, or the relevant regulations and rules, publications, or letters of notice, this Corporation may suspend its participation in the securities lending and borrowing transaction or notify it to make improvement, depending upon the extent of such breach.
Where a party to a securities lending and borrowing transaction fails to improve after being notified to make improvement, this Corporation may terminate its participation in the securities lending and borrowing transaction.
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Article 49
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A person whose participation in the securities lending and borrowing transaction is terminated by this Corporation pursuant to Articles 41, 42, and 48 hereof, may re-participate in the securities lending and borrowing transaction upon expiry of one year after completion of payment, performance or improvement.
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Article 50
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Where a securities firm is unable to complete the settlement of securities for reasons that an error occurs to an entrusted transaction or to a transaction of its own, or that a client fails to complete the settlement on time, or that the securities provided by the securities firm has any of the events set forth in Paragraph 1 of Article 109 of the Operation Rules, or for any other probable causes, the securities firm shall borrow securities, after having completed the reporting or application procedures in accordance with the relevant provisions of the Operation Rules.
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Article 51
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A securities firm, when applying for securities borrowing, shall deposit into this Corporation a security sum equivalent to 120% of the closing price of the object securities on the date on which the transaction is concluded multiplied by the volume of securities applied for, and shall act in accordance with "Particulars to be Noted by Securities Firms for Provision of Security Sum to Cure Defective Securities When Handling Relevant Settlement Operation".
When a securities firm fails to complete the settlement of securities and further fails to complete the reporting or application procedures in accordance with the time prescribed in Article 104 of Operation Rules, and if such securities firm is not required to otherwise provide checks pursuant to the provisions of the "Particulars to be Noted" referred to in the preceding paragraph, this Corporation may borrow securities on behalf of the securities firm, and notify such securities firm on the following date, and the securities firm shall not raise any objection to the securities borrowing charge incurred thereby.
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Article 52
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The securities for borrowing shall be limited to the securities listed on the centralized exchange market as shown in the depository accounts of the Securities Central Depository Enterprise. Where an owner of the foregoing securities intends to lend such securities, it shall fill out a "Form of Lending Entrustment" and entrust its securities broker or a bank approved by the competent authority to operate the custodial business and serving as a custodial institution for it, through which the relevant information will be keyed in the securities lending and borrowing computer system for reporting the lending. Such owner may change the contents of the report or cancel the report from time to time before the lending is completed.
The Form of Lending Entrustment referred to in the preceding paragraph shall contain the title and volume of the securities for lending as well as the lending charge rate, whereas its format shall be framed by this Corporation.
With respect to the volume referred to in the preceding paragraph, the reported lending unit shall be one trading unit or its multiples according to Article 60 of the Operation Rules of this Corporation, and the lending charge rate shall not exceed 7% of the closing price of the object securities.
In case of ex dividend or ex right of the securities, the borrowing securities firm shall compensate the lender by cash based on the value of such ex dividend or ex right computed by this Corporation for the object securities.
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Article 53
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The application for borrowing filed by a securities firm will be processed on the lending charge rates set by lenders on a from-low-to-high basis through the securities lending and borrowing computer system from the date following the date of application for such lending. In case the volume for lending at a same charge rate is more than that on demand, such application will be processed on a random basis.
The securities lending charge for the securities of same category shall be shared by all securities firms applying for borrowing of such securities in proportion to the volume borrowed by each securities firm.
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Article 54
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The borrowed securities shall be retuned on a daily basis from the business day following each lending date.
A borrowing securities firm, after competing the securities borrowing, shall return or make up the securities by the prescribed or committed deadline. Before the return or make-up of securities is completed, it shall continue to borrow the securities on each business day so as to use the same for the return pursuant to the preceding paragraph.
The securities returned or made-up by a borrowing securities firm by the prescribed or committed deadline shall be returned through the Securities Central Depository Enterprise. Upon notice of such return and completion of transfer by the Securities Central Depository Enterprise, this Corporation will pay the securities lending charge, by deducting from the refundable security sum, to the lender through the securities firm of the lender or through the bank approved by the competent authority to operate the custodial business and serving as a custodial institution for the lender. Thereafter, this Corporation will return to the securities firm the balance of the security sum after deducting the securities lending charge.
A securities firm of a lender or a bank approved by the competent authority to operate the custodial business and serving as a custodial institution for a lender shall inform the lender of the status of securities lending and return of securities, and may therefore charge the lender a service fee; however, such service fee shall not exceed 10% of the securities lending charge.
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Article 55
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If the security sum for the portion of unreturned securities of a borrowing securities firm, after deducting the accrued securities lending charge, is less than 107% multiplied by the closing price of the object securities of the then current day and further multiplied by the volume of unreturned securities, such borrowing securities firm shall make it up to 120% on the following business day.
Where a borrowing securities firm fails to pay the security sum in accordance with regulations or is unable to return the borrowed securities for reasons attributable to itself, this Corporation will purchase the securities from the market and return to the lender. The prices and all expenses incurred therefrom will be paid from the security sum; in case of any shortfall, this Corporation will recover it from the borrowing securities firm, whereas, in case of any remaining balance, such balance will be returned to the borrowing securities firm.
In the event that a securities firm is in violation of the settlement obligation, this Corporation will forthwith suspend its participation in the securities lending and borrowing transaction.
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Article 56
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If the total volume of a specific financed securities of a securities financing enterprise plus the volume of the securities borrowed by securities firms from such securities financing enterprise for financing exceeds the total volume of the same securities obtained by the securities financing enterprise from its business of securities financing and re-financing, and the volume is still insufficient after it has applied for securities borrowing to other securities financing enterprises, it shall borrow by tender from the owners of such securities from 8:00am of the following business day. If there is still shortfall, it shall negotiate with specific persons for borrowing before 2:00pm of the same day.
In the event that the volume acquired pursuant to the procedures set forth in the preceding paragraph is still insufficient, the securities financing enterprise shall entrust securities firms to conduct purchase by tender at this Corporation from 3:00pm to 3:30pm of the then current day.
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Article 57
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Where a securities financing enterprise has filed an application with this Corporation for handling borrowing by tender, it shall have its personnel key in the data of the securities for borrowing by tender with respect to the category, volume, time and the highest unit price into the borrowing-by-tender system of this Corporation by 9:00am of the date of application for such borrowing, which will be publicly announced by this Corporation from 9:00am in the "reports on the basic market situation".
The highest unit price for securities borrowing by tender referred to in the preceding paragraph shall be limited to 7% of the closing price of the object securities of the date on which the deficiency of financed securities occurs, and the borrowing will be processed on the tendered unit prices of the then current day on a from-low-to-high basis. Where the volume of securities for lending with a tendered unit price exceeds the volume on demand for borrowing by tender, such borrowing shall be processed on the basis of priority of the keyed-in time.
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Article 58
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An owner of securities participating in lending by tender shall fill out a form of tender and entrust a securities firm to handle it. The form of tender shall contain the name of the client, account number, title of securities, and volume and unit price for lending, and the securities for lending by tender shall be limited to those deposited in its securities depository account with the Securities Central Depository Enterprise. A securities firm, upon acceptance of entrustment, shall proceed to conduct a pen-in (except for such securities that had been lent out in the previous business day). After a securities firm accepts entrustment, it shall mark the time and reference number on the form of tender, and enter the contents of such tender in sequence into the borrowing-by-tender system of this Corporation.
The keyed-in time as referred to in the preceding paragraph shall be from 9:00am to 12:10pm of the day of application for borrowing by tender, and tender opening will be automatically completed at 12:30pm. After the tender opening is completed, this Corporation will publicly announce the unit prices and volume of securities of the awarded tender in the "reports on the basic market situation".
The reports on the borrowing-by-tender entrustment and successful tender will be printed out through the printer of the entrusted securities firms. Also, this Corporation will provide successful tender inquiry from 2:00pm.
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Article 59
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The securities financing enterprise shall pay to this Corporation a security sum in the amount of 120% of the closing price of the object securities on the then current day multiplied by the awarded volume of tender by 2:00pm of the day of application for such borrowing by tender.
After the securities financing enterprise has paid the security sum, this Corporation will notify the Securities Central Depository Enterprise to transfer the awarded securities to the special account of the securities financing enterprise on the first business day following the date of application for borrowing by tender (the lending date).
The security sum referred to in the preceding paragraph may be paid by way of bearer government bond or transferable bearer certificate of deposit, and the setoff value shall be counted at 90% of the face value of such collaterals.
The lent securities will be returned through the Securities Central Depository Enterprise on the first business day following the lending date.
By 10:00am of the first business day following the lending date, the securities financing enterprise shall pay the securities borrowing charge (securities borrowing charge = lending unit price x volume) to the lender through the entrusted securities firm, and this Corporation will return the security sum to the securities financing enterprise.
The entrusted securities firm may collect a handling fee from the lender; such handling fee shall not exceed 10% of the securities borrowing charge.
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Article 60
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If a securities financing enterprise is unable to return the borrowed securities to the owner by the due time, this Corporation will employ the security sum to make up the object securities and return to the lender. In case of any remaining balance thereafter, such balance will be returned to the securities financing enterprise. However, in case the security sum is insufficient to make up the object securities, this Corporation will give the security sum to the lender.
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Article 61
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When two or more securities financing enterprises proceed to the borrowing by tender for the same securities, such borrowing will be processed on the basis of the total volume. With respect to the borrowing-by-tender charge, an average amount will be derived from the total borrowed volume, and each securities financing enterprise will be charged according to its total borrowed volume.
In case of deficiency for the borrowing by tender referred to the preceding paragraph, the distribution will be made in proportion to the volume applied for borrowing by each securities financing enterprise up to an integer unit. In the event of any remainder, further distribution will be made in accordance with the decimal figure of the distributable volume of each securities financing enterprise on a big-figure-first basis; in case of a same decimal figure, distribution will be determined by lot drawing.
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Article 62
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When a securities financing enterprise conducts a borrowing by negotiation, this Corporation will send personnel for supervision. The unit price for borrowing by negotiation shall not exceed 10% of the closing price of the object securities of the date on which the deficiency of financed securities occurs.
After an owner of securities agrees to lend the securities, it shall deliver the endorsed securities along with complete attachments as well as the securities lending statement to the securities financing enterprise by 2:00pm of the then current day, or transfer the same to the special account of the securities financing enterprise with the Securities Central Depository Enterprise. The securities financing enterprise shall produce a receipt and deliver the same to the lender by 12:00pm of the first business day following the borrowing-by-negotiation date.
The criterion for payment of security sum shall be solely determined by the securities financing enterprise and the lender through negotiation.
The securities financing enterprise shall return the borrowed securities and pay the securities borrowing charge (securities borrowing charge = negotiated unit price x volume) to the lender by 2:00pm of the second business day following the borrowing-by-negotiation date, and collect the security sum back from the lender.
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Article 63
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If, during the term of securities borrowing conducted by a securities financing enterprise for shortfall of financed securities, a securities firm applies to the securities financing enterprise for the same securities, the distribution of the securities obtained through borrowing by tender or through borrowing by negotiation shall be conducted in accordance with the relevant regulations governing the operation of securities financing enterprises for re-refinancing applied by securities firms.
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Article 64
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None of the securities having any of the following events shall be the subject of borrowing by tender or borrowing by negotiation:
1. Any securities of less than one trading unit;
2. Any issued name-bearing stocks acquired by a shareholder or by an investor as a result of capital increase through recapitalization of earnings, capital increase through recapitalization of employees' bonus, capital increase by venture capital companies through recapitalization of undistributed profits pursuant to Article 13 of the Statute for Encouragement of Investment, and Articles 16 and 17 of the Statute for Upgrading Industries that have not been transferred and taxed, or the right to defer tax payment has not been waived.
The owner of lent securities shall guarantee the integrity of the rights over the securities. In case of any defect or legal dispute, the owner shall, after being notified by the securities financing enterprise, replace the securities of same category and in same volume, or, if failing to do so, it shall return the securities borrowing charge and, additionally, shall be liable for damages, if any.
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Article 65
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Any matters not set forth herein shall be governed by applicable laws and regulations as well as the rules and regulations of this Corporation.
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Article 66
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These Measures shall be implemented by public announcement of this Corporation after they have been submitted to and approved by the competent authority. Subsequent amendment hereto shall be effected in the same manner.
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