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Article 12
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In the event of a default in the offshore investment activities performed by overseas Chinese and foreign nationals with domestic securities as collaterals, the collateral custodian should, at the collateral manager’s instruction, dispose of the collaterals and report to the TWSE prior to the disposal. The report should include without limitation to information about the collateral provider, collateral receiver, collaterals subject to disposal and quantity of these collaterals, etc.
When disposing of collaterals in accordance with the above regulations, the collateral custodian should open a collateral disposal account with the securities firm’s head office. Only one trading account may be opened with the same securities firm. The account number should be 9498XX-inspection code, with the ID code being 401.
When being requested by the collateral custodian to sell the collaterals through the trading account for the purpose of disposal as described in the preceding paragraph, the securities firm may only sell spot securities and is not subject to the requirements in the first half pf Article 79-1 of the TWSE Operating Rules and the first half of Article 63-1 of the Taipei Exchange Rules Governing Securities Trading on the TPEx, and may not trade the securities or make an allocation after trading of securities with the securities firm’s omnibus trading account.
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