| Title： |
Terms for Establishment of Margin Accounts With Securities Firms for Margin and Stock Loans(2005.07.29) |
| Date： |
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Article 1
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These Terms are prescribed under Article 11 of the Regulations Governing Margin and Stock Loans by Securities Firms.
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Article 2
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A customer applying to establish a margin account and entering into a margin agreement shall meet the following thresholds, except in case of renewing an existing agreement at its expiration:
1. The customer is an ROC national of at least 20 years of age and with disposing capacity, or a juristic person organized and registered under the laws of the ROC.
2. Three months have elapsed since the customer established a brokerage account.
3. At least ten trade orders have been executed for the customer's account during the most recent year, with an aggregate amount of at least 50% of the applied maximum loan value; the same also applies where a period of less than one year has elapsed since the customer established a brokerage account.
4. The customer's income and assets for the most recent year aggregate at least 30% of the applied maximum loan value, save that the applied maximum loan value does not exceed NT$500,000.
In the case of a customer applying to establish margin accounts in an aggregate number of five or more, the calculation of the applied maximum loan value under subparagraph 3 or 4 of the preceding paragraph shall include the maximum loan values approved for previously established margin accounts, and, where the property certificate is a certificate of deposit issued by a financial institution under Article 3, paragraph 1, subparagraph 2, the calculation shall be made based upon the average balance for the most recent month.
A customer renewing a margin agreement during its term or at its expiration shall meet the requirements set out in paragraph 1, subparagraph 4.
A put warrants issuer and an enterprise exclusively or concurrently engaged in futures proprietary trading that is also an equity options market maker may apply to establish a margin account without being subject to the requirements set out in paragraph 1 and paragraph 2.
For a privately placed securities investment trust fund managed by a securities investment trust enterprise, the fund custodian institution may apply to establish a margin account without being subject to the requirements set out in paragraph 1, subparagraphs 1, 2, and 3, for which the amount limit for margin purchase and short sale may not exceed 50 percent of the fund size.
The combined total of the amount limit for short sale under the preceding paragraph and actual sales with borrowed securities may not exceed 50 percent of the fund size.
A securities firm may raise the percentage under paragraph 1, subparagraph 3 or 4 as it deems necessary after assessment.
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Article 3
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The property certificate under paragraph 1, subparagraph 4 of the preceding Article shall be limited to the following paper or document of the customer or his or her spouse, parent or adult child:
1. photocopy of certificate of real property ownership or tax return.
2. certificate of deposit for the most recent month issued by a financial institution.
3. certificate of holdings in securities.
Where the customer is not the owner of the property shown on the provided property certificate, the property owner shall be the joint and several guarantor.
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Article 4
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Where a customer of a securities firm extending margin and stock loans has entered into a margin agreement with a securities finance enterprise via the securities firm, and where such agreement is not yet terminated, if such customer enters into a separate margin agreement with the securities firm within six months starting from the date on which it commences the margin and stock loaning business, the restrictions imposed by Article 2 in relation to account opening thresholds do not apply.
The same shall apply to a customer of a securities firm that is extinguished as a result of a merger/consolidation or transfer of the whole of its business or property where the customer enters into a new margin agreement with the surviving securities firm within six months starting from the next day of the record date for the merger/consolidation or of the last business day of the transferring securities firm.
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Article 5
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These Terms, and any amendments hereto, shall be formulated by the Taiwan Stock Exchange Corporation together with the GreTai Securities Market and shall take force per public announcement after ratification by the competent authority.
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