The collateral securities received by the TWSE in conducting securities loan transaction business shall be delivered to the custody of the central securities depository.
Upon execution of a securities loan transaction, the central securities depository shall make a notation on the borrowed subject securities as per notification from the TWSE. The same does not apply, however, to securities borrowed through a securities borrowing and lending account of a securities firm or of a securities finance enterprise.
No subject securities on which a notation has been made under the preceding paragraph may be transferred or withdrawn, except for the following purposes:
When borrowed securities are used for the in-kind creation of units of ETFs or offshore ETFs under subparagraph 5 of the preceding paragraph, any further lending thereof is prohibited.
- For sale through a sell order given to a securities firm.
- For returning securities borrowed or for compensating for securities entitlements.
- For returning spot securities in short sales.
- For the purposes associated with the exercise of call (put) warrants, equity options, and other equity-type financial instruments.
- For use in the in-kind creation or redemption of units of ETFs, futures ETFs, or offshore ETFs.
- For such other purposes as may be approved by the TWSE.