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Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities(2010.10.05) |
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Article 26-1
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Where a customer applies by means other than in person to use securities in its central securities depository account established and maintained with a securities firm to deposit as additional collateral to offset against a short sale margin requirement or a deficiency it is required to cover under Article 23, the provisions of Article 26 shall still apply, and it is required that the customer sign a letter of consent for carrying out the operation of depositing securities as additional collateral by means other than in person and that the securities firm keep it on record after verification.
When a customer who may submit an application by means other than in person under the preceding paragraph applies by telephone to use its securities to deposit as additional collateral to offset against a short sale margin requirement or a deficiency it is required to cover under Article 23, the securities firm shall verify the identity of the customer and synchronously record the telephone call. The telephone recording shall be kept at its place of business and preserved for at least 1 year, or in the event of any dispute, until the dispute has been resolved.
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Article 31-1
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Where a customer applies to settle a margin purchase with cash or a short sale with spot securities by means other than in person, the provisions of Article 31 shall still apply, except that the customer's signature or seal is not required on the settlement application form if the customer has already submitted a signed Letter of Consent That Applications to Settle with Cash or Spot Securities Do Not Require a Signature/Seal, and if the securities firm has kept it on record after verification.
When a customer who may submit an application by means other than in person under the preceding paragraph applies by telephone to use cash or spot securities to settle a margin purchase or short sale, the securities firm shall verify the identity of the customer and synchronously record the telephone call. The telephone recording shall be kept at its place of business and preserved for at least 1 year, or in the event of any dispute, until the dispute has been resolved.
Where a customer has submitted a signed Letter of Consent That Applications to Settle with Cash or Spot Securities Do Not Require a Signature/Seal under paragraph 1, the short sale collateral price and short sale margin returnable by the securities firm to the customer shall be deposited into the same bank deposit account used for book-entry settlement of the customer's trading orders, and the securities bought on margin and/or the securities deposited as collateral returnable by the securities firm to the customer shall be transferred into the customer's book-entry custody account. Securities deposited as collateral that are not owned by the customer shall be returned through book-entry transfer.
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