Chapter IV Risk Control |
| Article 40 | A securities firm using funds from the cash management account to engage, with the securities firm itself or with a company that is an interested party of the securities firm, in transactions involving eligible instruments specified in Article 10 may not engage in such transactions in a total amount exceeding 50% of the total amount invested.
A securities firm using funds from the cash management account to invest in subject instruments under outright transactions may not invest in such instruments in a total combined amount exceeding 20% of the total amount invested.
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| Article 41 | When a securities firm conducts business relating to custody and investment of funds on behalf of customers, the total amount of the funds handled for custody and investment by the securities firm may not exceed 200% of the securities firm's net worth. Any interest accrued on custodied funds and any income or loss incurred on investment, however, shall not be included in the calculation of the aggregate custody and investment amount.
The securities firm shall calculate the following information on each business day and transmit the same to the TWSE by the next business day:
- The aggregate custody and investment amount described in the preceding paragraph.
- Information on the credit rating of the counterparty to a repo transaction as described in Article 27 and on the combined outstanding balance of repo transactions with a single counterparty and the counterparty's net worth as described in Article 28.
- The percentage of investment in beneficial certificate units of any single securities investment trust fund to the net asset value of the fund, as described in Article 36.
- The percentage of investment in beneficial certificate units of securities investment trust fund(s) offered and issued by any single securities investment trust enterprise to the total amount of invested funds, as described in Article 36.
- The percentage of the total investments in quasi-money market funds within the category of bond funds to the total amount of invested funds, as described in Article 36.
- The percentage of the securities firm's total combined investments in subject instruments under outright transactions to the total amount of invested funds, as described in Article 40.
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| Article 42 | A securities firm conducting business relating to custody and investment of funds on behalf of customers shall set aside an operation bond in the amount of 1% of the total amount of funds entrusted by customers for custody and investment, current as of the end of each month. Any interest accrued on custodied funds, and any income or loss incurred on investment, shall not be included in the calculation of the total amount of funds entrusted by customers for custody and investment.
The securities firm shall at the end of each month calculate the total amount of funds entrusted for custody and investment as referred to in the preceding paragraph and shall by the 10th business day of the next month either set aside an additional amount of operation bond or, as the case may be, withdraw any surplus amount upon approval by the competent authority.
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