A securities firm or securities finance enterprise lodging the performance bond in cash shall deposit by way of a virtual account the bond by wire transfer in the bank account designated by the TWSE and make a report in the securities firm's securities lending system, according to the Instructions on Performance Bond Virtual Account Remittance(Appendix 1).
Where a securities firm or securities finance enterprise lodges the performance bond in the form of bank guarantee, it shall submit an application accompanied by an original of the certificate of guarantee to the TWSE after completing the guarantee procedure with the bank, and the TWSE shall enter the name of the bank, and amount and maturity date of the guarantee, before the guarantee may be used for Securities Borrowing.
A bank guarantee denominated in New Taiwan dollars may not be used as collateral from the third business day prior to the maturity date. In the event of more than one bank guarantee, with different maturity dates involved, the closest maturity date shall prevail.
A bank that issues the guarantee in paragraph 2 may not be an affiliate of, or belong to the same financial holding company as, a party to the lending and borrowing transaction, and shall have at least one of the following credit ratings; the TWSE may reject or accept the guarantee depending on the guaranteeing bank's risk status:
- Taiwan Ratings Corp. long-term issuer credit rating of twA or above.
- Fitch Ratings Limited, Taiwan Branch domestic long-term rating of A (twn) or above.
- Moody's Investors Service long-term credit rating of A or above.
- Standard & Poor's Corp. long-term credit rating of A- or above.
- Fitch Inc. long-term credit rating of A or above.