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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 55     If, on a day on which a borrowing securities firm reborrows securities for a securities loan not yet returned, the remaining balance of the securities borrowing collateral deposited is lower than 107 percent of the outstanding balance of the securities borrowing multiplied by the closing price of the securities on the preceding business day, then the securities firm shall, by 11 am on the reborrowing date, make additional deposit to bring the level to 114 percent of the outstanding balance of the securities borrowing multiplied by the closing price of the securities on the preceding business day. If there is no closing price available for the preceding business day, the closing price shall be determined by the principles given in Article 58-3, paragraph 2, subparagraphs 2 and 3 of the TWSE Operating Rules.
    Where the borrowing securities firm fails to deposit the securities borrowing collateral required under the preceding paragraph, or is unable to return the borrowed securities for a cause attributable to itself, the TWSE will buy in the securities in the market and return them to the lender. The prices needed and all expenses incurred shall first be paid out of the remaining balance of the securities borrowing collateral, and in the event of any shortfall, then be recovered from the borrowing securities firm; any amount remaining thereafter will be refunded to the borrowing securities firm.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis in the case where the TWSE borrows securities for the account of a seller securities firm or otherwise issues a securities delivery voucher as a temporary substitute for securities to satisfy the settlement requirement.
    If the securities firm defaults on its settlement obligations, the TWSE will forthwith suspend the securities firm's participation in securities borrowing and lending transactions.