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Article 46
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When a securities finance enterprise engages in securities borrowing and lending, the use of its securities shall be restricted to the following:
- For use by customers in brokered sales of the securities through a securities firm.
- For redelivery by customers of spot securities borrowed in short sales.
- For performance by customers of settlement on call/put warrants, equity options, and other equity-type financial instruments.
- For use by customers in in-kind creation or redemption of exchange traded fund (ETF) units or offshore ETF units.
- For use by securities finance enterprises and customers for redelivery of borrowed securities or as compensation for securities entitlements.
- For use by securities finance enterprises as a source of securities for securities margin purchase and short sale business.
- For use by securities finance enterprises as a source of securities for the return of customer collateral in connection with securities trading margin purchase and short sale business.
- For use by securities finance enterprises in covering shortfalls of securities occurring in short sale business.
- To lend to a securities firm or another securities finance enterprise as a source of securities for conducting securities borrowing and lending business or securities margin purchase and short sale business.
- To lend through the TWSE securities borrowing and lending system.
- To participate in competitive auction lending transactions or negotiated lending transactions conducted by another securities finance enterprise.
- Other uses as approved by the competent authority.
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