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Article NO. Content


Directions for Collateral Management in Fixed-price and Competitive Auction Securities Borrowing and Lending Transactions  CH

Amended Date: 2016.12.20 
Categories: Securities Exchange Market > Borrowing of Securities
3     Applications for collateral substitution
  1. A securities borrower may apply to increase, decrease, or substitute a different type of collateral during the borrowing period.
  2. A securities borrower that makes a collateral substitution through a securities firm by means of the TWSE securities lending system shall first submit extra collateral, then apply to withdraw an amount of the originally provided collateral within the value of the extra collateral.
  3. Submission and withdrawal of collateral when making substitutions of cash, bank guarantees, and book-entry central government bonds are performed in the manner set out under Points 2.2, 2.4, 2.5 and Point 4.3 of these Directions.
  4. Submissions and withdrawals of collateral in substitutions of TWSE and GTSM listed securities are effected by TWSE notification of the central securities depository to immediately transfer the securities between the TWSE securities collateral account and the borrower's central depository settlement account.
  5. If the TWSE or GTSM listed securities, bank guarantees, or book-entry central government bonds provided by a borrower are found by TWSE review to be ineligible, the TWSE will on the same day notify the borrower to make a substitution. The borrower shall make a substitution of eligible collateral by the following business day.
    If collateral is reviewed and found to be ineligible, the value of that collateral on the given day will be taken as zero for purposes of calculating the collateral maintenance ratio.