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Article NO. Content

Title:

Taiwan Stock Exchange Corporation Securities Borrowing and Lending Rules  CH

Amended Date: 2019.09.26 
Categories: Securities Exchange Market > Borrowing of Securities
Article 45-1     When an SBLparticipant is in one of the circumstances specified in the subparagraphs of Article 43, paragraph 1, and its negotiated transaction agreement contains a net settlement clause, the other participant may, based on the agreement of the clause, settle all outstanding claims and debts under the negotiated transaction, credit one against the other and pay the difference. Upon completion of settlement, it shall authorize a securities firm to submit a regulatory filing to the TWSE reporting that borrowing and lendingtransactions have been fully settled and satisfiedby submitting the related transaction information and supporting documents to the TWSE.The TWSE will then give notice to the central securities depositoryto remove the note for security borrowing for underlying securities and take other related actions.
    When reporting borrowing and lending transactionshave been fully settled and satisfiedin accordance with the preceding paragraph, the authorizedsecurities firm shall submit the following supporting documents:
  1. Where the circumstances under Article 43, paragraph 1, subparagraphs 1 to 6 exist, documents issued by Taiwan or foreign court or competent authority sufficient to prove the existence of these circumstances are required. For documents issued by a foreign court or competent authority, the documents shall be legalized by Taiwan's embassy or consulate or anequivalent agency.
  2. Where the circumstances under Article 43, paragraph 1, subparagraph 7 exist, specific supporting documents are required. All these documents, other than those issued by the court or competent authority, shall be notarized or certified. Foreign documents shall be legalized by Taiwan's embassy or consulate or an equivalent agency.
  3. Evidence of payment of all taxes payable in the Republic of China.
    The TWSE will dismiss any and all requests from an authorized securities firm that fails to perform a thorough review on and investigate into the circumstances under the subparagraphs of Article 43, paragraph 1 and fails to submit supporting documents described in the preceding paragraph. In the event an SBL participant has disputes arising therefrom or its rights and interests are damages as a result, the parties shall be responsible for the issue without concern to the TWSE.
    Where an authorized securities firm submit a regulatory filing to the TWSE reporting that transactions have been fully settled and satisfiedin accordance with the first paragraph, the TWSE may halt or terminate the participation of a party in one of the circumstances described in the subparagraphs of Article 34, paragraph 1 in securities borrowing and lending transactions.
    Where a party to negotiated transaction is in one of the circumstances described in the subparagraphs of Article 43, paragraph 1,and itsnegotiated transaction agreement does not contains a net settlement clause, the provisions of Article 45 shall apply mutatis mutandis.