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Article 5
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Securities borrowing and lending transactions as regulated by these Rules shall be divided into three types, defined as follows:
- Fixed-price transaction: a loan transaction in which a borrower or lender (each hereinafter referred to as an "SBL participant") places an order with a securities firm, authorizing and empowering it to enter a borrowing or lending quote, as the case may be, at a fee rate declared by the TWSE, and which is executed through a matching process on the TWSE securities lending system as stated in Article 19.
- Competitive bid transaction: a loan transaction in which an SBL participant fixes a fee rate for borrowing or lending securities, at an interest rate of not more than 16 percent per annum and subject to a minimum tick of 0.1 percent for submission of quotes, and places an order with a securities firm, authorizing and empowering it to enter a borrowing or lending quote at that fee rate, and which is executed through a matching process on the TWSE securities lending system as stated in Article 21.
- Negotiated transaction: a loan transaction in which an SBL participant seeks its own counterparty, and the two parties concerned negotiate and agree between themselves on the lending fee rate, to be an interest rate of not more than 16 percent per annum and subject to a minimum tick of 0.01 percent, and other loan terms and conditions.
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