| Title： |
Operational Regulations for Securities Firms Handling Margin Purchases and Short Sales of Securities(2005.07.29) |
| Date： |
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Article 8
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A securities firm shall enter into a margin purchase and short sale contract with the customer and open a margin account before accepting any order for margin purchase or short sale of securities.
The margin purchase and short sale contract under the preceding paragraph shall be drafted by the TSEC in conjunction with the GTSM and submitted to the competent authority for ratification.
A put warrant issuer may, to meet hedging needs, open a margin account with which to sell securities short.
An enterprise exclusively or concurrently engaged in futures proprietary trading (dealing) that is also an equity options market maker may, for its offsetting hedging needs, open a margin account with which to short sell securities.
For a privately placed securities investment trust fund managed by a securities investment trust enterprise, the fund custodian institution may apply to open a margin account, for which the amount limit for margin purchase and short sale shall not exceed 50 percent of the fund size, and which shall be controlled by the TSEC as a segregated account. If that amount is exceeded, the TSEC shall notify the securities firm to forward notice to the securities investment trust enterprise, which then shall lower the amount to 50 percent within two business days from the date on which it receives the notice from the securities firm. If it fails to do so within the time limit, the TSEC may, by the mutatis mutandis application of Article 30, paragraph 3, instruct the securities firm to dispose, on the following business day, of the collateral to the extent required to achieve compliance.
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.
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