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Article 33
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A securities firm conducting book-entry central government bond borrowing and lending business shall collect collateral from the customer, or require the customer to provide a bank guarantee, and only the following types of collateral are accepted:
- Cash.
- Book-entry central government bonds.
The collateral under the preceding paragraph may not be used for purposes other than:
- As collateral to borrow securities through the securities lending system of an over-the-counter securities market.
- Bank deposits.
- Purchase of short-term bills.
A securities firm shall pay interest on cash collateral it collects from a borrower at a rate agreed between the two parties.
A securities firm borrowing book-entry central government bonds from customers shall allocate on a monthly basis a performance bond that accounts for a certain percentage of the total monetary amount of the borrowed book-entry central government bonds.
The performance bonds under the preceding paragraph shall be deposited with the TPEx. The regulations governing the deposit, custody, payment, and return of the performance bonds shall be drafted by the TPEx, and submitted to the competent authority for final approval.
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