|
3
|
Calculation Principles
- Basic calculation principles
Securities finance enterprises or securities firms shall calculate the number of shares of margin buyers based on the following formula. The number of shares each margin buyer can purchase shall be calculated by the ratio derived from his or her margin loan balance against the total margin loan balance of the securities finance enterprise or securities firm, rounded up to the nearest number of full shares. Remainder shares shall be arranged by decimal in descending or ascending order, and in the event of a tie, the securities finance enterprise or securities firm shall distribute the remainder shares by drawing lots. Each margin buyer can purchase the number of shares up to a maximum equivalent to his or her margin loan balance.
(Margin loan balance + Balance of proprietary securities + Balance of borrowing securities) - Balance of short sales - (Balance of lending securities - Balance of securities in the dedicated account for securities borrowing and lending)
- Securities finance enterprises and securities firms' calculation principles for the number of shares of margin buyers where there is a balance for refinancing of funds or balance for refinancing of securities:
- Securities firms
- For securities firms re-financing securities for a short sale, the number of shares transferable to its margin buyers shall be zero. (NB: The financing securities shall be returned if the sum of the balance transferred as the source of securities from a securities firm's own account, the Stock Exchange securities lending center, securities borrowed by a securities firm or securities finance enterprise engaging in securities borrowing and lending business or securities margin purchase and short sale business, and securities borrowed from customers for securities borrowing and lending business, plus margin loan balance plus balance for refinancing of securities is greater than the sum of the balance of short sales, balance of securities for borrowing and lending securities, balance of securities lent to a securities firm or securities finance enterprise engaging in securities borrowing and lending business, securities lent by the Stock Exchange securities lending center, and balance of securities lent for participation in lending auction and lending negotiation.)
- Upon receipt of notification from a securities finance enterprise of the "number of shares transferable for re-financing for margin loans", a re-financing securities firm shall, based on the "margin loan balance" + "balance of propriety securities" + "balance of borrowing securities" - "balance of short sales" - "balance of lending securities" + "balance of securities remained in the dedicated account for securities borrowing and lending" - "balance for refinancing of funds" + "the number of shares transferable for re-financing for margin loans", calculate the number of shares each margin buyer can purchase by the ratio derived from his or her margin loan balance against the total margin loan balance of the securities firm (the basic calculation principles apply to the above formula and likewise to the following).
- Securities finance enterprises
- When the "sum of "a securities finance enterprise's "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending" is greater than the "sum of the balance of short sales and balance of lending securities", and the "balance for refinancing of funds" is greater than the "balance for refinancing of securities":
- The number of shares transferable to its margin buyers shall be the same as those specified in the basic calculation principles.
- A securities firm's "number of shares transferable for re-financing for margin loans" shall be calculated based on the difference by subtracting the "balance for refinancing of securities" from the "balance for refinancing of funds", and by the ratio derived from such securities firm's margin loan balance against the total margin loan balance of the securities finance enterprise.
- When the "sum of" a securities finance enterprise's "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending" is greater than the "sum of the balance of short sales and balance of lending securities", and the "balance for refinancing of funds" is less than the "balance for refinancing of securities", as well as when the "sum of" its "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending minus the sum of the balance of short sales and balance of lending securities" plus the "balance for refinancing of funds minus the balance for refinancing of securities" leads to a positive number:
- The number of shares transferable to its margin buyers shall be calculated based on the value derived by the "sum of the margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending minus the sum of the balance of short sales and balance of lending securities" plus the "balance for refinancing of funds minus the balance for refinancing of securities", and by the ratio derived from the margin buyer's margin loan balance against the total margin loan balance of the securities finance enterprise.
- A securities firm's "number of shares transferable for re-financing for margin loans" shall be zero.
- When the "sum of" a securities finance enterprise's "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending" is less than the "total of balance of short sales and balance of lending securities", and the "balance for refinancing of funds" is greater than the "balance for refinancing of securities", as well as when the "sum of" its "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending minus the sum of the balance of short sales and balance of lending securities" plus the "balance for refinancing of funds minus the balance for refinancing of securities" leads to a positive number:
- The number of shares transferable to its margin buyers shall be zero.
- The "number of shares transferable for re-financing for margin loans" for each securities firm shall be calculated based on the value derived by the "sum of the margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending minus the sum of the balance of short sales and balance of lending securities" plus the "balance for refinancing of funds minus the balance for refinancing of securities", and by the ratio derived from such securities firms' margin loan balance against the total margin loan balance of the securities finance enterprise.
- When the "sum of" a securities finance enterprise's "margin loan balance, balance of proprietary securities, balance of borrowing securities and balance of securities in the dedicated account for securities borrowing and lending minus the sum of the balance of short sales and balance of lending securities" plus the "balance for refinancing of funds minus the balance for refinancing of securities" leads to a negative number:
- The number of shares transferable to its margin buyers shall be zero.
- A securities firm's "number of shares transferable for re-financing for margin loans" shall be zero.
- A securities finance enterprise shall conduct competitive bid transactions or negotiated transactions.
A securities finance enterprise shall give prompt notice to a securities firm upon completion of its calculation of the "number of shares transferable for re-financing for margin loans" for the said securities firm.
|