| Title： |
Terms for Establishment of Margin Accounts With Securities Firms for Margin and Stock Loans(2005.07.29) |
| Date： |
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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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