Chapter III Finance |
| Article 55 | A securities and finance enterprise shall provide bond equivalent to 5 percent of its capital in cash, government bonds, financial bonds, or bank-guaranteed corporate bonds for deposit in the Central Bank of China.
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| Article 56 | Securities finance enterprises may obtain capital or stocks for liquidity according to the following methods:
- Obtaining financing from banks or other institutions.
- Issuing commercial paper or corporate bonds.
- Borrowing securities from the TWSE securities borrowing and lending system.
- Borrowing securities through competitive auction lending transactions or negotiated lending transactions.
- Purchasing securities by reverse auction through the TWSE or TPEx.
The issuance amount of commercial paper of subparagraph 2 of the preceding Paragraph shall not exceed 6 times the net worth of that enterprise, and shall be solely for the purpose of funds for use in the operation of the businesses set out in the subparagraphs of paragraph 1 of Article 5. is limited to
If a securities finance enterprise has deficiencies in its financial or business affairs and has been unable to effectively improve within the given time limit, or if there has been a material violation of the regulations, or if its net worth per share is below its par value, the competent authority will adjust the multiple of the rule in the preceding paragraph according to the seriousness of the situation.
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| Article 57 | The proprietary capital of a securities finance enterprise may not be loaned to others or used for other purposes except business operating needs. Utilization of this capital is limited to the following:
- Bank deposit.
- Purchase of short-term bills.
- Purchase of government bonds or financial bonds.
- Purchase of securities investment trust fund beneficial certificates.
- Purchase of bank-guaranteed corporate bonds.
- Purchase of real properties for business uses.
- Other uses approved by the competent authority.
The scope, ratio, and amount for Items 4 to 6 of the preceding Paragraph will be set by the competent authority.
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| Article 58 | Securities finance enterprises shall not provide guaranty, endorsement of negotiable instruments or provision of assets as security for others.
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| Article 59 | Where a securities finance enterprise handles the business described in Article 5 for the same person, the same related person, or the same related business and interest-related person, the relevant credit limit, credit total balance, credit terms or conditions, and rules for providing credit to persons within the same category are to be set by competent authority.
The securities finance enterprises shall set guidelines for allocating the risks involved in the credit business referred to in the preceding paragraph and in every type of securities credit, and shall establish a credit investigation file for the same person, same related person, or same related business and interest-related person to be inspected.
The same person, same related person, same related business, and interest-related person referred to in Paragraph 1 and 2 are defined as in the Banking Act.
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| Article 60 | Securities finance enterprises shall, within 3 months of the end of each fiscal year and 2 months of the end of each semi-annual fiscal year publicly announce and report to the competent authority financial reports certified by a certified public accountant, approved by the board of directors and recognized by the supervisor.
Securities finance enterprises shall, within the first 10 days of each month report to the competent authority the monthly accounting report for the previous month.
The format of the financial reports and monthly report referred to in the preceding two Paragraphs shall be prescribed by the competent authority.
Where a securities finance enterprise has any of the following conditions, it shall report to the competent authority within 2 days of the occurrence of the event:
- The annual financial report recognized by the shareholders meeting is inconsistent with the financial report publicly announced and reported to the competent authority.
- Occurrence of any event with material impact to the rights of shareholders.
Securities finance enterprises shall report daily the itemized information on transactions, balances, collateral, and customer financing amounts for each type of business to the competent authority for its records, and print and send the information to the TWSE and the TPEx.
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