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In securities business money lending conducted by a securities firm, if the customer applies for a financing period not exceeding 6 months and posts collateral in the form of securities or other commodities or foreign currencies that it purchases or holds, the financing calculation standards for the collateral shall be as listed below, save in the event of fractions of one trading unit or of one unit of beneficial rights:
- The value of TWSE and TPEx traded securities except central book-entry bonds, municipal bonds, common corporate bonds, secured convertible (exchangeable) corporate bonds, and financial bonds is 60 percent, and that of securities not eligible for margin purchase and short sale is 40 percent, of the closing price on the business day immediately prior to the application for financing.
- The value of beneficial certificates of open-end funds traded on the TPEx is 60 percent of their NAV of the business day immediately prior to financing. The value of physical gold is 60 percent of the Closing Average of the business day immediately prior to the application for financing.
- The value of beneficial certificates of open-end securities investment trust funds and those of futures trust funds is 60 per cent of the NAV of the business day immediately prior to the application for financing.
- The value of central book-entry bonds is 80 percent of their face value.
- The value of municipal bonds, common corporate bonds, secured convertible (exchangeable) corporate bonds, and financial bonds is 60 per cent of their face value.
- The value of a foreign currency collateral is the spot rate – buying as at the date of application for financing of the bank with which the foreign currency collateral account is opened. No haircut is applied to the value of an additional collateral.
A securities firm may adjust the calculation standard in the preceding paragraph as a stricter standard subject to the market condition of the collateral and the customer’s credit risk.
With respect to subparagraph 1 of the first paragraph and Article 13, paragraph 4, if there is no closing price of the business day preceding the financing date, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 of the TWSE Operating Rules or Article 57, paragraph 1 of the GreTai Securities Market Rules Governing Securities Trading on the GTSM.
The financing calculation standards for collateral set out in paragraph 1 may be adjusted by the TWSE in consultation with the TPEx based on the circumstances regarding that collateral.
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