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Article 18
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A quote to lend or borrow securities through a fixed-price transaction, any change or withdrawal of such a quote, and the book-entry transfer of securities shall be handled in the following manner:
- In the case of a quote to lend securities, its change or withdrawal, and book-entry transfer of the securities:
- A lender submitting a quote to lend securities shall have a securities firm to enter the account number, name of subject securities, quantity, and recall notification period into the TWSE securities lending system.
- Upon receipt of the quote, the TWSE will notify the central securities depository over a computer network to check the subject securities in the lender's central securities depository account (hereinafter, "CSD account") and put the securities on hold to make them available for lending; the quote will be invalid if the lender does not have enough subject securities in the account.
- A valid lending quote shall remain valid until executed, changed, or withdrawn, or if partially executed, remain valid with respect to the unexecuted portion.
- With respect to any unexecuted portion of the lending quote, the lender may at any time instruct the securities firm to reduce the lending quantity through the TWSE securities lending system, whereupon the TWSE will forthwith give notice of the reduction to the central securities depository to make a corresponding change to the quantity of subject securities put on hold.
- With respect to any unexecuted portion of the lending quote, the lender may at any time instruct the securities firm to withdraw its quote through the TWSE securities lending system. When the lender withdraws its lending quote, the TWSE will forthwith notify the central securities depository to release the subject securities put on hold for the unexecuted portion of the lending quote in the lender's CSD account.
- Upon execution of a transaction for the lending quote with a borrowing quote through a matching process, the TWSE will forthwith notify the central securities depository to effect a book-entry transfer of the subject securities on hold from the CSD account of the lender to that of the borrower.
- In the case of a quote to borrow securities, its change or withdrawal, and book-entry transfer of securities:
- A borrower submitting a quote to borrow securities shall have a securities firm enter the account number, name of subject securities, quantity, return date, recall notification period, and details of collateral to be provided, into the TWSE securities lending system. The TWSE will notify the central securities depository over a computer network to effect a book-entry transfer of the collateral securities, if such is the case, from the borrower's CSD account to the TWSE custodial account exclusively used for collateral securities against securities borrowing.
- The borrower's borrowing quote will become effective upon the TWSE's confirmation that the aggregate value of the designated collateral satisfies the original margin requirement.
- Upon posting of collateral in a sufficient amount, the borrower may at any time instruct the securities firm to change the quantity, return date, or to withdraw the quote through the TWSE securities lending system with respect to any unexecuted portion of the original borrowing quote.
- Upon withdrawal of the borrowing quote, or with respect to the unexecuted portion of the quote, the borrower may instruct the securities firm to apply to the TWSE for return of, or cancellation of pledge on, any excess portion of the cash, bank guarantee(s), book-entry central government bond(s) or other collateral it has provided. The TWSE will forthwith notify the central securities depository to effect a book-entry transfer of the excess portion of collateral securities, if such is the case, from the TWSE custodial account of exclusive use for collateral securities against securities borrowing back to the borrower's CSD account.
- Upon execution of a transaction for the borrowing quote with a lending quote through a matching process, the TWSE will forthwith notify the central securities depository to effect a book-entry transfer of the subject securities on hold from the CSD account of the lender to that of the borrower.
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