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Chapter 1 General Principles
Article 1     These Directions are adopted pursuant to Articles 42, 43, 46, 49, 51, 52, 54, 60, 61-13, and 101 of the Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC).
Chapter 2 Account Opening
Article 2     The Taiwan Stock Exchange (TWSE) shall open a segregated "securities borrowing and lending book-entry account" ("SBL account") (A/C No.: 0010-9999966) under its book-entry depository account ("depository account"), so that book-entry operations can be carried out for securities borrowing and lending (SBL) transactions.
Article 3     The Taipei Exchange (TPEx) shall open a segregated SBL account (A/C No.: 0020-9999966) under its depository account, so that book-entry operations can be carried out for SBL transactions.
Article 4     A securities firm shall open a segregated "error account" (A/C type: 24) and a segregated "default processing account" (A/C type: 22) for handling erroneous buy and erroneous sell trades ("out-trades") and trade defaults. A securities broker or securities dealer shall additionally open a segregated SBL account (A/C No.: xxx0-9999966, xxxT-9999966) under its depository account, so that book-entry operations can be carried out for SBL transactions.
Chapter 3 Day Trades
Article 4-1     After reporting a day trade to TWSE or TPEx by 10 a.m. on the second business day after the trade date, a securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately adjust the securities firm's buy/sell trade settlement amount based on the net difference after offsetting the buy and sell trades of the day trade (netting of trades), and also make the entries in the securities firm account and notify the securities firm to make the necessary entries in its customer account.
Article 4-2     After reporting cancellation of a day trade to TWSE or TPEx by 10 a.m. on the second business day after the trade date, a securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately adjust the securities firm's buy/sell settlement amount based on the original buy and sell amounts, and also make the entries in the securities firm account and notify the securities firm to make the necessary entries in its customer account.
Article 4-3     A securities firm may report an out-trade or account number correction for a reported day trade only after having first cancelled the original day trade report.
Chapter 4 Out-Trades
Section 1 Reporting on the Trade Date
Article 5     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, sells the erroneously bought securities, or buys in securities ("buy-in securities") to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed in accordance with the following procedure:
  1. After reporting the erroneous buy or erroneous sell trade to TWSE or TPEx for the current day, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy or erroneous sell trade by changing the erroneous buying or erroneous selling of securities in that account to a buy or sell trade in the securities firm's error account.
  2. On the second business day after the trade date, after the erroneously bought securities or buy-in securities are transferred to the error account, the trade will be offset automatically.
Article 6     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, fails to sell the erroneously bought securities, or to buy in securities to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed according to the following procedures:
  1. In the case of an erroneous buy trade After reporting the erroneous buy trade to TWSE or TPEx for the current day, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy trade by changing the erroneous buying of securities in that account to a buy trade in the securities firm's error account.
  2. In the case of an erroneous sell trade
    1. After reporting the erroneous sell trade to TWSE or TPEx for the current day, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous sell trade by changing the erroneous selling of securities in that account to a sell trade in the securities firm's error account.
    2. On the second business day after the trade day, TDCC will on its own initiative carry out a transfer of securities for the portion that requires an SBL application and transfer the securities borrowed through the loan application from the SBL account to the error account temporarily in lieu of securities settlement.
    3. On the second business day after the trade day, TDCC will borrow securities based on TWSE's or TPEx's notification; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
    4. On the day securities are bought in to replace the erroneously sold securities and credited to the error account, TDCC will, based on TWSE's or TPEx's notification, transfer the buy-in securities to TWSE's or TPEx's SBL account for return of securities.
Article 7     When a securities firm reports to offset an erroneous buy trade and an erroneous sell trade occurring to the same type of securities on the same trade date, the operation shall proceed in accordance with the following procedure:
  1. After reporting the offsetting of the erroneous buy and erroneous sell trades to TWSE or TPEx for the current day, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy or erroneous sell trade by changing the erroneous buying or erroneous selling of securities in that account to a buy or sell trade in the securities firm's error account.
  2. On the second business day after the trade day, after securities are bought and credited to the error account, the trades will be offset automatically.
Article 8     When a securities firm, upon occurrence of an erroneous sell trade, applies to use its proprietary securities to offset the trade ("offsetting proprietary securities"), the operation shall proceed in accordance with the following procedure:
  1. After reporting the use of its proprietary securities to offset the erroneous sell trade to TWSE or TPEx for the current day, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous sell trade by changing the erroneous selling of securities in that account to a sell trade in the securities firm's error account.
  2. On the trade date, the securities firm shall perform a "Deposited Securities Transfer" transaction (transaction code: 130) ("transaction 130") to transfer the offsetting proprietary securities to its error account.
  3. After securities are bought in to replace the erroneously sold securities and credited to the error account, the securities firm shall perform transaction 130 to transfer the buy-in securities back to its proprietary account.
Section 2 Reporting on the First Business Day After the Trade Date
Article 9     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, sells the erroneously bought securities, or buys in securities to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed in accordance with the following procedure:
  1. After reporting the erroneous buy or erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy or erroneous sell trade by changing the record of buying or selling securities in that account to a record of buying or selling securities in the securities firm's error account. On the second business day after the trade date, after the erroneously bought securities or buy-in securities are transferred to the error account, the trade will be offset automatically.
  2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 10     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, fails to sell the erroneously bought securities, or to buy in securities to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed according to the following procedures:
  1. In the case of an erroneous buy trade
    1. After reporting the erroneous buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy trade by changing the record of buying securities in that account to a record of buying securities in the securities firm's error account. On the second business day after the trade date, TDCC will transfer the erroneously bought securities to the error account.
    2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
  2. In the case of an erroneous sell trade
    1. After reporting the erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous sell trade by changing the record of selling securities in that account to a record of selling securities in the securities firm's error account. On the second business day after the trade day, TDCC will on its own initiative carry out a transfer of securities for the portion that requires a securities loan application and transfer the securities borrowed through the loan application from the SBL account to the error account temporarily in lieu of securities settlement.
    2. On the second business day after the trade day, TDCC will borrow securities based on TWSE's or TPEx's notification; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
    3. On the day securities are bought in to replace the erroneously sold securities and credited to the error account, TDCC will, based on TWSE's or TPEx's notification, transfer the buy-in securities to TWSE's or TPEx's SBL account for return of securities.
Article 11     When a securities firm reports to offset an erroneous buy trade and an erroneous sell trade occurring to the same type of securities on the same trade date, the operation shall proceed in accordance with the following procedure:
  1. After reporting the offsetting of the erroneous buy and erroneous sell trades to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous buy or erroneous sell trade by changing the record of buying or selling securities in that account to a record of buying or selling securities in the securities firm's error account. On the second business day after the trade day, after the erroneously bought securities are transferred to the error account, the trades will be offset automatically.
  2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 12     When a securities firm, upon occurrence of an erroneous sell trade, applies to use its proprietary securities to offset the trade, the operation shall proceed in accordance with the following procedure:
  1. After reporting the use of its proprietary securities to offset the erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous sell trade by changing the record of selling securities in that account to a record of selling securities in the securities firm's error account. The securities firm shall perform transaction 130 to transfer the offsetting proprietary securities to its error account and complete the settlement.
  2. After securities are bought in to replace the erroneously sold securities and credited to the error account, the securities firm shall perform transaction 130 to transfer the buy-in securities back to its proprietary account.
Section 3 Reporting on or After the Second Business Day After the Trade Date
Article 13     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, sells the erroneously bought securities, or buys in securities to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed in accordance with the following procedure:
  1. By 10 a.m. on the second business day after the trade date, after reporting the erroneous buy or erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On that day, after the erroneously bought securities are transferred to the customer's account involved in the erroneous buy trade, or the buy-in securities are transferred to the securities firm's error account, TDCC will on its own initiative carry out a transfer of securities and transfer the erroneously bought securities to the securities firm's error account, or transfer the buy-in securities to the customer's account involved in the erroneous sell trade, and then the trade will be offset automatically.
  2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 14     When a securities firm, upon occurrence of an erroneous buy trade or erroneous sell trade, fails to sell the erroneously bought securities, or to buy in securities to replace the erroneously sold securities, through its error account on the trade day, the operation shall proceed according to the following procedures:
  1. In the case of an erroneous buy trade
    1. On the second business day after the trade date, after reporting the erroneous buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On that day, after the erroneously bought securities are transferred to the customer's account involved in the erroneous buy trade, TDCC will on its own initiative carry out a transfer of securities and transfer the erroneously bought securities to the securities firm's error account.
    2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
  2. In the case of an erroneous sell trade
    1. By 10 a.m. on the second business day after the trade date, after reporting the erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment to the customer's account involved in the erroneous sell trade by changing the sold securities in that account to sold securities in the securities firm's error account. TDCC will also on its own initiative carry out a transfer of securities for the portion that requires a securities loan application and transfer the securities borrowed through the loan application from the SBL account to the error account temporarily in lieu of securities settlement.
    2. TDCC will borrow securities based on TWSE's or TPEx's notification; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
    3. On the day securities are bought in to replace the erroneously sold securities and credited to the error account, TDCC will, based on TWSE's or TPEx's notification, transfer the buy-in securities to TWSE's or TPEx's SBL account for return of securities.
Article 15     When a securities firm reports to offset an erroneous buy trade and an erroneous sell trade occurring to the same type of securities on the same trade date, the operation shall proceed in accordance with the following procedure:
  1. By 10 a.m. on the second business day after the trade date, after reporting the offsetting of the erroneous buy and erroneous sell trades to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On that day, after the erroneously bought securities are transferred to the customer's account involved in the erroneous buy trade, TDCC will on its own initiative carry out transfers of securities and transfer the erroneously bought securities to the securities firm's error account and transfer the erroneously sold securities from that error account to the customer's account involved in the erroneous sell trade, and then the trades will be offset automatically.
  2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 16     When a securities firm, upon occurrence of an erroneous sell trade, applies to use its proprietary securities to offset the trade, the operation shall proceed in accordance with the following procedure:
  1. By 10 a.m. on the second business day after the trade date, after reporting the use of its proprietary securities to offset the erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then on its own initiative carry out a transfer of securities and transfer the erroneously sold securities from the securities firm's error account to the customer's account involved in the erroneous sell trade. The securities firm shall perform transaction 130 to transfer the offsetting proprietary securities to its error account and complete the settlement.
  2. After securities are bought in to replace the erroneously sold securities and credited to the error account, the securities firm shall perform transaction 130 to transfer the buy-in securities back to its proprietary account.
Article 17     If a securities firm fails to report an erroneous sell trade and also fails to complete the settlement of securities by 10 a.m. on the second business day after the trade date, TWSE or TPEx will notify TDCC to handle securities borrowing and return operations with respect to the securities firm in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Securities and Money Borrowing and Lending.
    If a securities firm reports an erroneous sell trade to TWSE or TPEx after 10 a.m. on the second business day after the trade date, TDCC will only record the reported information.
Article 17-1     In the case of a day trade, after 10 a.m. on the second business day after the trade date, the securities firm may report an out-trade to TWSE or TPEx only for the portion of the net difference after offsetting the buy and sell trades of the day trade.
Article 18     If it is on record that a securities firm has reported a failed trade in accordance with applicable TWSE or TPEx provisions, when the securities firm reports an out-trade for the same trade, the operation shall proceed according to the following procedures:
  1. In the case of an erroneous buy trade By the third business day after the trade date, after reporting the erroneous buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx and shall on its own perform a "Deposited Securities Correction and Account Transfer" transaction (transaction code: 131) ("transaction 131") to transfer the erroneously bought securities from the customer's account involved in the erroneous buy trade to the securities firm's error account.
  2. In the case of an erroneous sell trade
    1. By the third business day after the trade date, after reporting the erroneous sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On the first business day after the report, TDCC will borrow securities; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
    2. On the day securities are bought in to replace the erroneously sold securities and credited to the error account, TDCC will, based on TWSE's or TPEx's notification, transfer the buy-in securities to TWSE's or TPEx's SBL account for return of securities.
Chapter 5 Account Number Corrections
Article 19     After reporting an account number correction for a securities trade to TWSE or TPEx on the trade date, a securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment by changing the buying or selling of securities in the customer's account before correction to a buy or sell trade in the customer's account after correction.
Article 20     When a securities firm reports an account number correction on the first business day after the trade date, the operation shall proceed according to the following procedures:
  1. In the case of an account number correction for a buy trade
    1. After reporting the account number correction for the buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment by changing the record of buying securities in the customer's account before correction to a record of buying securities in the customer's account after correction.
    2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
  2. In the case of an account number correction for a sell trade
    1. After reporting the account number correction for the sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then immediately make an adjustment by changing the record of selling securities in the customer's account before correction to a record of selling securities in the customer's account after correction.
    2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 21     When a securities firm reports an account number correction on the second business day after the trade date, the operation shall proceed according to the following procedures:
  1. In the case of an account number correction for a buy trade
    1. After reporting the account number correction for the buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then carry out a transfer of securities for the account number correction and transfer the bought securities from the customer's account before correction to the customer's account after correction.
    2. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
  2. In the case of an account number correction for a sell trade
    1. If the securities firm reports the account number correction for the sell trade to TWSE or TPEx by 10 a.m., then after reporting it shall notify TDCC through TWSE or TPEx. TDCC will then carry out a transfer of securities for the account number correction and transfer the sold securities from the customer's account after correction to the customer's account before correction.
    2. If the securities firm reports the account number correction for the sell trade to TWSE or TPEx after 10 a.m., then after reporting it shall notify TDCC through TWSE or TPEx and shall on its own perform transaction 131 to transfer the sold securities from the customer's account after correction to the customer's account before correction.
    3. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 22     If it is on record that a securities firm has reported a failed trade in accordance with applicable TWSE or TPEx provisions, when the securities firm reports an account number correction for the same trade, the operation shall proceed according to the following procedures:
  1. In the case of an account number correction for a buy trade: By the third business day after the trade date, after reporting the account number correction for the buy trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx and shall on its own perform transaction 131 to transfer the bought securities from the customer's account before correction to the customer's account after correction.
  2. In the case of an account number correction for a sell trade: By the third business day after the trade date, after reporting the account number correction for the sell trade to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will then carry out a transfer of securities for the account number correction and transfer the sold securities from the customer's account after correction to the customer's account before correction.
Chapter 6 Failed Trades
Article 22-1     After reporting a failed buy trade to TWSE or TPEx, a securities firm shall notify TDCC through TWSE or TPEx. After fulfilling the settlement obligation for the account of the customer, the securities firm may perform a "Securities Retention" transaction (transaction code: 503) to retain the securities bought by the customer, and perform a "Retention Information Query" transaction (transaction code: 505) to print a "securities retention itemized report" and view the retention details.
    After the customer settles the payment for the buy trade and the securities firm reports cancellation of the failed trades to TWSE or TPEx, the securities firm may perform a "Retention Release" transaction (transaction code: 504) to release the retention of the securities bought by the customer, and perform a "Retention Release Information Query" transaction (transaction code: 506) to print a "securities retention release details itemized report" and view the retention release details.
Article 22-2     When a securities firm reports a failed sell trade by 10 a.m. on the second business day after the trade date, the operation shall proceed in accordance with the following procedure:
  1. After reporting the failed sell trades to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On the second business day after the trade date, TDCC will on its own initiative carry out a transfer of securities for the portion that requires a securities loan application and transfer the securities borrowed through the loan application from the SBL account to the account involved in the failed sell trades temporarily in lieu of securities settlement.
  2. On the second business day after the trade day, TDCC will borrow securities based on TWSE's or TPEx's notification; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
  3. After the relevant securities are credited to the account involved in the failed sell trades and the securities firm reports cancellation of the failed trades to TWSE or TPEx, TDCC will, based on TWSE's or TPEx's notification, transfer such securities to TWSE's or TPEx's SBL account for return of securities.
Article 22-3     If a securities firm fails to report a failed sell trade and also fails to complete the settlement of securities by 10 a.m. on the second business day after the trade date, TWSE or TPEx will notify TDCC to handle securities borrowing and return operations with respect to the securities firm, and the relevant operations shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Securities and Money Borrowing and Lending.
    If a securities firm reports a failed sell trade to TWSE or TPEx after 10 a.m. on the second business day after the trade date, TDCC will only record the reported information.
Chapter 7 Handling of Customer Defaults
Article 23     After reporting a buy trade default to TWSE or TPEx, a securities firm shall notify TDCC through TWSE or TPEx. After the securities firm fulfills the settlement obligation for the account of the customer, TDCC will transfer the bought securities from the customer's account involved in the defaulted buy trade to the default processing account opened by the securities firm.
    If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 24     When a securities firm reports a sell trade default by 10 a.m. on the second business day after the trade date, the operation shall proceed in accordance with the following procedure:
  1. After reporting the sell trade default to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. On the second business day after the trade date, TDCC will on its own initiative carry out a transfer of securities for the portion that requires a securities loan application and transfer the securities borrowed through the loan application from the SBL account to the customer's account involved in the sell trade default temporarily in lieu of securities settlement.
  2. On the second business day after the trade day, TDCC will borrow securities based on TWSE's or TPEx's notification; if TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
  3. On the day securities are bought in to cover the defaulted sell trade and credited to the default processing account, TDCC will, based on TWSE's or TPEx's notification, transfer such securities to TWSE's or TPEx's SBL account for return of securities.
  4. If the "order type" reported by the securities firm is "margin trade," the operation shall proceed in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Margin Purchase and Short Sale Business.
Article 25     If a securities firm fails to report a customer's sell trade default and also fails to complete the settlement of securities by 10 a.m. on the second business day after the trade date, TWSE or TPEx will notify TDCC to handle securities borrowing and return operations with respect to the securities firm in accordance with TDCC's Directions for the Handling by Participants of Book-Entry Operations for Securities and Money Borrowing and Lending.
    If a securities firm reports a customer's sell trade default to TWSE or TPEx after 10 a.m. on the second business day after the trade date, TDCC will only record the reported information.
Article 26     If it is on record that a securities firm has reported a failed sell trade in accordance with applicable TWSE or TPEx provisions, when the securities firm reports a customer default for the same trade, the operation shall proceed according to the following procedures:
  1. In the case of a buy trade default: By the third business day after the trade date, after reporting the buy trade default to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx and shall on its own perform transaction 130 to transfer the bought securities to the default processing account opened by the securities firm.
  2. In the case of a sell trade default
    1. By the third business day after the trade date, after reporting the sell trade default to TWSE or TPEx, the securities firm shall notify TDCC through TWSE or TPEx. TDCC will borrow securities based on TWSE's or TPEx's notification; If TDCC is unable to obtain securities through borrowing, TWSE or TPEx will issue a securities delivery voucher in lieu of securities settlement.
    2. On the day securities are bought in to cover the defaulted sell trade and credited to the default processing account, TDCC will, based on TWSE's or TPEx's notification, transfer such securities to TWSE's or TPEx's SBL account for return of securities.
Article 27     When a securities firm reports to TWSE or TPEx on the same report date a buy trade default and a sell trade default occurring to the same account and to the same type of securities, it shall notify TDCC through TWSE or TPEx. The securities firm may offset the portions of the defaulted buy and defaulted sell trades that are equal in amount (netting of trades), without having to make opposite offsetting trades by selling or buying securities of the same type and quantity through its default processing account. The same also applies when a securities firm reports a day trade default to TWSE or TPEx.
Chapter 8 Daily Balances and Account Reconciliation
Article 28     After reporting a relevant trading event to TWSE or TPEx, a securities firm shall perform a "Securities Firm Reporting and Account Adjustment Query" transaction (transaction code: 181) to print a "securities firm reporting and account adjustment query form" and view the account adjustment details.
Article 29     A securities firm shall, on the first business day after the trade date, perform a "Depository Account Sale Shortfall Information Query" transaction (transaction code: A68) to print a "Depository Account Sale Shortfall Information Query Form." If such a shortfall exists, it shall ensure that, by 10 a.m. on the second business day after the trade date, a corresponding transfer is carried out to make up the shortfall.
    A securities firm shall, by 10 a.m. on the second business day after the trade date, perform a "Depository Account Settlement Shortfall Information Query" transaction (transaction code: 168) to print a "Depository Account Settlement Shortfall Report" to query whether such a shortfall exists. If so, it shall ensure that a corresponding transfer is carried out to make up the shortfall. Additionally, after all customers complete settlement of their sell trades, it shall perform a "Sale Settlement Completion Notification" transaction (transaction code: A00) for notification to TDCC, to be then forwarded to TWSE or TPEx.
Article 30     After reporting a day trade or cancellation of a day trade to TWSE or TPEx, a securities firm shall perform a "Securities Day Trade Information Query" transaction (transaction code: K97/K97F) and check the relevant account information. If any discrepancy exists, it shall investigate the reason and correct the situation in a timely manner.
    At the end of business operations each day, a securities firm shall consolidate all documents related to its out-trade, account number correction, and default reports, and perform an "Out-Trade and Account Adjustment Information Query" transaction (transaction code: 615), an "Account Number Correction and Account Adjustment Information Query" transaction (transaction code: 616), a "Handling and Account Adjustment Information Query" transaction (transaction code: 617), or a "Default and Account Adjustment Information Query" transaction (transaction code: 627) and check the relevant account information. If any discrepancy exists, it shall investigate the reason and correct the situation in a timely manner.
Article 31     Before an issuer's publicly announced book closure date, TWSE, TPEx, and securities firms shall close out the relevant balances of securities under central custody in their SBL accounts.
Chapter 9 Supplementary Provisions
Article 32     Any matters on which these Directions are silent shall be governed by the TDCC Operating Rules and other applicable provisions.