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Article 16
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A securities firm conducting securities lending business shall enter into a securities lending agreement with each customer, and shall open one and only one securities lending account for each customer.
The securities firm shall approve a line of credit to a customer based on the result of a credit check against such customer, and furnish a risk disclosure statement disclosing therein the risks associated with securities lending transactions.
A securities firm may lend securities to the following persons only:
- A person who has a brokerage contract with the securities firm that has been in effect for a period of more than three months.
- Such other persons as may be approved by the competent authority.
A securities firm conducting securities lending business, unless otherwise provided by the competent authority, may not engage in such business with another securities firm as the counterparty.
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