TWSE Press Release

Additional Prior Notice for Recall of Loaned Securities

Publish Date︰2006/02/03 17:07

With the modified SBL computer system, TSEC announced that amendments to Articles 13, 14, 15, 16, 18, 19 and 20 of the TSEC SBL Regulations are effective from January 23rd, 2006. Consequently, a measure of a minimum notice of three days prior to the date of early return has been added. In order to reduce settlement risk from a lender and encourage the lender to participate in SBL market, TSEC introduced an additional choice for early recall of loaned securities. The new regulations allow 3-day prior notice apart from the current 10-day prior notice by a lender in a fixed-rate or a competitive auction transaction. For instance, if orders are executed under the condition of 3-day prior notice, once the lender makes an early recall, the borrower has to return the loaned securities within 3 days. Moreover, TSEC shall give a notice to the borrower via the securities firm ten days prior to expiration of the loan. And the period of an application for a roll-over has been extended, so that the borrower could apply for it even on the due date. These new measures facilitate more flexible operation for market participants.