Section IV Securities Settlement Financing |
| Article 34 | Securities settlement financing refers to the business of a securities financing enterprise in providing cash financing for settlement of purchases of securities by a customer, after having obtained collateral provided by the customer.
The purpose of the financing, the scope of collateral for the financing, the amount of financing, collateral limit, and the financing ratio and financing period that apply when a securities financing enterprise provides securities settlement financing shall be regulated by the competent authority.
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| Article 35 | The securities collateral that a securities finance enterprise receives when it provides securities settlement financing may not be used for purposes other than the following, and shall be delivered to a central depository for deposit:
- As collateral for securities borrowed through the TWSE securities borrowing and lending system.
- As collateral for refinancing from another securities finance enterprise.
A securities finance enterprise utilizing securities collateral in accordance with the preceding paragraph shall obtain a letter of consent from the customer permitting re-hypothecation of collateral.
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| Article 36 | A securities finance enterprise that provides securities settlement financing shall establish operating rules for such business and submit them to the competent authority for approval.
The operating rules referred to in the preceding paragraph shall clearly state the following matters:
- Opening of financing accounts.
- The terms and conditions for opening a financing account.
- Application for and repayment of financing.
- Calculation of the collateral financing ratio.
- Calculation of the collateral maintenance ratio.
- The types of collateral, ratios, and deadline for replenishment of collateral.
- The disposition of collateral.
- Other matters which must be stated in accordance with the regulations of the competent authority.
A securities finance enterprise that provides securities settlement financing shall proceed in accordance with the operating rules under the paragraph 1.
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| Article 37 | The provisions of Article 7 paragraphs 1 and 2, Article 8 paragraph 2, Articles 11 through 14, Article 16 and Article 19 apply mutatis mutandis to the provision of securities settlement financing by securities finance enterprises.
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