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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 proof of assets 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, a securities firm or bank engaging in structured notes business and the trading of equity derivatives, or an enterprise exclusively or concurrently engaging 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 outstanding balance of long and short positions may not exceed 50 percent of the fund size.
The combined total of the outstanding balance of short positions under the preceding paragraph and actual sales with borrowed securities may not exceed 50 percent of the fund size.
In the case of a discretionary investment account managed by a securities investment trust enterprise (SITE) or a securities investment consulting enterprise (SICE), or of discretionary investment business conducted by a securities broker concurrently operating an SICE, the custodian institution for discretionary investment assets may open a margin account on behalf of its customer, and the provisions of paragraph 1, subparagraph 1, with the exclusion of paragraph 1, subparagraphs 2 and 3, shall apply to the customer of the discretionary investment account; the outstanding balance of long and short positions for the margin account may not exceed 50 percent of the net asset value of the discretionary investment account.
The combined total of the outstanding balance of short positions under the preceding paragraph and actual sales of borrowed securities may not exceed 50 percent of the net asset value of the discretionary investment account.
A securities firm may raise the percentage under paragraph 1, subparagraph 3 or 4 as it deems necessary after assessment.
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