A securities firm conducting securities borrowing and lending business shall enter into a securities lending agreement with each customer, and shall open one and only one securities borrowing/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 conducting securities borrowing and lending business shall set up a separate account ledger for each customer and record therein on a daily basis the following:
- Subject matter of securities borrowing and lending transactions and outstanding balances.
- Itemized collaterals and their values.
- Margin calls for and disposal of collaterals.