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Article 57
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A securities finance enterprise wishing to borrow securities through a competitive bid process shall submit an application to the TWSE and thereafter, by 9 am on the competitive bid loan application date, have a staff member enter into the TWSE competitive bid loan system the information on that competitive bid loan, keeping separate those for shortfalls in securities in margin and short trading and those for shortfalls in securities in day trading, and specify the type of securities to be borrowed, quantity, time, and highest acceptable rate. The TWSE will, according to the aggregate quantity of each type of securities to be borrowed through competitive bid, publish such information from 9 am on that day on its Market Information System.
The highest acceptable rate for the borrowing of a security through the competitive bid process, as described in the preceding paragraph, shall in no case be more than 7 percent of the auction reference price at market opening of the security on the competitive bid application date; the borrowing quantity will be matched against one or more of the competitive bids available on that day, determined in ascending order of rate, until the borrowing quantity is reached; if the borrowing quantity is reached at a rate at which the total number of shares offered for lending from all competitive bids at that rate is higher than the number of shares needed to be borrowed through the competitive bid process, one or more of those competitive bids will be selected for matching, in order of the time they are entered, until the needed quantity is reached.
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