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Article NO. Content

Title:

Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities  CH

Amended Date: 2019.02.12 
Categories: Securities Exchange Market > Margin Transaction
Article 85     When a securities firm deals with margin purchases and short sales, the total amount of margin purchases or short sales of securities provided to its customers, plus securities lent to the securities firms or securities finance enterprise engaging in borrowing of securities, or securities lent at the TWSE securities lending system, or securities lent for lending auction or lending negotiation ("Lent Securities") may not exceed 250% of its worth, respectively.
    Where a securities firm maintains a regulatory capital adequacy ratio of 250% or above for three consecutive months, the total amount of margin purchases or short sales of securities which it conducts from and to customers, plus the Lent Securities, may not exceed 400% of its net worth, respectively.
    Where, after the preceding paragraph is complied with, a securities firm maintains a regulatory capital adequacy ratio lower than 250% for two consecutive months and the total amount of its margin purchases from or short sales to customers, plus the Lent Securities, exceeds 250% of its net worth, it shall cease to conduct margin purchases from, short sales to or lending securities to customers. When such total amount falls below 250% of its net worth or its regulatory capital adequacy ratio remains 250% or above for three consecutive months, the preceding two paragraphs will apply, respectively.
    When a securities firm conducts margin purchases and short sales of securities, the sum of the total amount of its margin purchases from customers plus the total financing amount of money lent in connection with securities business may not exceed 400% of its net worth; the sum of the total amount of short sales to customers plus the total dollar amount of securities lent in connection with borrowing of securities business may not exceed 400% of its net worth.