Chapter II Book-entry Central Government Bond Lending Practices |
| Article 5 | Securities firms are required to establish lending agreements with customers and issue Risk Declaration Statements to disclose to customers the possible risks involved in lending book-entry central government bonds.
The sample formats for the abovementioned lending agreement and Risk Declaration Statement are determined by the Securities Investment Trust and Consulting Association of the R.O.C. (SITCA).
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| Article 6 | Securities firms shall maintain a separate account for each customer and maintain the following details on a daily basis:
- Lending and return of securities.
- The name and value of collaterals and the percentage of coverage.
- Placement, withdrawal, replacement, and disposal of collaterals.
- Compensation payable to the other party.
Securities firms shall provide customers with monthly statements containing the above details; no statement is required provided that no transaction has taken place in the current month and the customer has not request for it in writing.
Securities firms shall obtain written consents from customers, thereby allowing securities lending data to be legally gathered, computer-process, used or transmitted cross-border by TPEx, TSEC, or any institution designated by the competent authority.
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| Article 7 | All notifications to advise customers for which securities firms are bound to provide as stipulated under this policy shall be delivered by mail, courier, or other method agreed upon between the two parties.
Notifications served by mail are deemed effective from the day the postal service makes its first delivery, if it does not reach the customer on time for reasons attributable to the customer.
Where notifications are served by courier, the customer's signature must be dated and be consistent with the one printed on the lending agreement.
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