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Article 4
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In securities trades conducted by securities firms on the exchange of the TWSE, if either the buyer or the seller fails to fulfill its settlement obligations, the TWSE shall designate another securities firms to perform settlement on its behalf. If no other securities firm is able to perform settlement on its behalf, the TWSE shall utilize the clearing and settlement fund to proceed to make payment. For any resulting price difference and expenses incurred, the TWSE shall utilize the clearing and settlement fund to pay compensation on behalf of the defaulting securities firm, and shall without exception pursue recovery from the defaulting securities firm.
The TWSE may sign a credit line contract with a bank. When it becomes necessary to utilize the clearing and settlement fund under the preceding paragraph, the TWSE may use such fund assets to obtain a loan from the bank to meet the requirements thereunder. The interest on the loan shall be deducted from the clearing and settlement fund, and the TWSE shall then pursue its recovery from the defaulting securities firm.
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