|
Article 10
|
A securities firm may not entertain an application to open a margin account from any customer to whom any of the circumstances below applies. If an account has already been opened, the securities firm shall promptly notify the customer to close out all outstanding margin purchases and short sales on the next business day and thereafter cancel the margin account; if the customer fails to close out all outstanding margin trades within this time limit, the securities firm shall, by the mutatis mutandis application of Article 39, paragraph 3, close out the trades for the customer starting from the next business day.
- The customer does not meet the account opening threshold requirements.
- The customer applies to open a margin account using the name of another person.
- Any circumstance under Article 76, paragraph 1 or 3, of the TWSE Operating Rules or Article 47, paragraph 1 or 2, of the GTSM Trading Rules applies to the customer. However, if any circumstance under Article 76, paragraph 3, subparagraph 1 of the TWSE Operating Rules or Article 47, paragraph 2, subparagraph 1 of the GTSM Trading Rules applies to the customer, and the information has been forwarded by the TWSE or the GTSM at 11:30 a.m. the given morning, the securities firm shall notify the customer on the following business day.
- A brokerage account previously opened by the customer at the securities firm has been cancelled, or, after a trading order is executed, funds and/or securities payable are not delivered and the case remains pending.
- (deleted)
- The customer has previously breached a margin agreement entered into with a securities firm or securities finance enterprise, where the case remains pending.
- The customer is the subject of a court petition for reorganization, composition, or bankruptcy under the Company Act or the Bankruptcy Act.
- A clearinghouse for negotiable instruments has blacklisted the customer.
- (deleted)
The provisions of the preceding paragraph apply mutatis mutandis where money and/or securities in a margin account are the subject of a court ruling for provisional attachment, provisional injunction, or compulsory execution.
Where any circumstance in the preceding two paragraphs applies to a juristic person or its responsible person, the responsible person or any juristic person represented thereby is also prohibited from opening a margin account. An account that has already been opened shall be subject to the provisions of paragraph 1.
|
|
Article 41
|
A securities firm to which the TWSE or GTSM has forwarded a message under Article 38, paragraph 1 or Article 39, paragraph 1 or 2 that a customer is in default with a securities finance enterprise or with another securities firm, shall take the following measures as the circumstances merit:
- Where a customer is in default under Article 38, paragraph 1 hereof, Article 76, paragraph 3, subparagraph 1 or 3 of the TWSE Operating Rules, or Article 47, paragraph 2, subparagraph 1 or 3 of the GTSM Trading Rules, the securities firm shall immediately notify the customer (provided that if the default information is forwarded by the TWSE or the GTSM at 11:30 a.m. on the given morning, the securities firm shall notify the customer on the next business day) to close out all outstanding margin purchases and short sales on the next business day and thereafter cancel the margin account. Where the customer fails to close out all outstanding margin trades within the time limit, the securities firm shall, by the mutatis mutandis application of Article 39, paragraph 3, close out the trades for the customer starting the next business day.
- Where a customer is in default under Article 39, paragraph 1 or 2 hereof, the securities firm may not accept any order from by the customer to carry out a margin purchase or short sale, and shall cancel the customer's margin account promptly after the customer has closed out all outstanding margin purchases and short sales.
Unless the cause is unauthorized trading and handling measures are not required to be taken, if any event of default under the preceding paragraph occurs to a discretionary investment account or to a customer's own account, the provisions of the preceding paragraph shall apply to the customer' own account and any other discretionary investment account of the customer.
|