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Article 55-6
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The prices needed for and all expenses incurred from the buy-in of securities in the market by the TWSE for returning the borrowed securities pursuant to Article 55, paragraph 2 shall first be paid out of the cash portion of the securities firm's securities borrowing collateral, and in the event of any shortfall, the TWSE will then dispose of the posted non-cash collateral or otherwise exercise any rights to seek repayment or cover necessary payments; the procedures for disposing of the posted non-cash collateral shall be as follows:
- In the case of a bank guarantee used as non-cash collateral, the TWSE shall seek recovery directly from the guaranteeing bank.
- In the case of book-entry central government bonds pledged as collateral, the TWSE shall dispose of the bonds through the Taiwan Stock Exchange Corporation Account for Events of Default it maintains with a securities firm.
- All expenses arising from or in connection with the disposition of the non-cash collateral shall be borne by the borrowing securities firm.
- The proceeds from the disposition of the non-cash collateral after deducting the amount in arrears shall be returned to the borrowing securities firm; if the proceeds of the disposition are insufficient to cover the amount in arrears, the TWSE shall seek recovery from the securities firm for the insufficient amount.
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