Section III Subscription Loans and Underwriting Loans |
| Article 30 | For securities finance enterprises handling subscription loans and underwriting loans, the scope of such loans shall be regulated by the competent authority.
The financing ratios and financing time limits for subscription loans and underwriting loans handled by securities finance enterprises shall be governed mutatis mutandis by Article 61 of the Securities and Exchange Act.
The dollar amount for loans referred to in Paragraph 1 may not exceed the issuance price of the securities financed by such loans, and the collateral shall consist of all the securities, certificates of payment of share prices, and other exchange listed or OTC listed securities obtained through the loan.
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| Article 31 | The securities obtained by a securities finance enterprise through handling subscription loans and underwriting loans may not serve as the source of securities for short sales, for refinancing provided to securities firms or other securities finance enterprises, or for securities borrowing and lending.
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| Article 32 | Securities finance enterprises handling subscription loans and underwriting loans shall establish operating rules for such business and report them to the competent authority for approval.
The operating rules referred to in the preceding paragraph shall expressly state the following items:
- The opening of loan accounts.
- The terms or conditions for opening the account.
- The application for and repayment of loans.
- The calculation, replenishment, and disposition of collateral.
- When using other listed or OTC securities as collateral, the types of securities used for collateral and the standard for collateral settlement.
- The payment of securities as collateral.
- The title transfer of collateral securities and additional collateral securities.
- Other items required to be included by the competent authority.
Securities finance enterprises handling subscription loans and underwriting loans shall follow the operating rules of Paragraph 1.
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| Article 33 | The regulations in Paragraphs 1 and 2 of Article 7, Paragraph 2 of Article 8, Articles 11 through 14, Article 16, and Article 19 apply mutatis mutandis to securities finance enterprises handling subscription loans and underwriting loans.
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