||Regulations Governing Securities Firms(2005.05.06)
Unless a securities firm is concurrently operated by a financial institution and subject to the Banking Act, its funds not required for business operation shall not be loaned to other persons or used for other purposes; the funds shall be used for the following purposes only:
1. Bank deposits;
2. Purchase of government bonds or financial bonds;
3. Purchase of treasury bills, transferable certificates of deposit, or commercial papers;
4. Purchase of Commission-approved securities of a specific ratio, or transfer of investment in an Commission-approved securities, futures, banking, finance or other related institution of a specific ratio; and
5. Other purposes approved by the Commission.
The total combined amount of funds utilized under Subparagraph 4 and Subparagraph 5 of the preceding paragraph shall not exceed 40 percent of the firm's capital net worth, and the total amount of equity investments of such funds shall not exceed 40 percent of the firm's paid-in capital, unless approved by the Commission.
Asecurities firm may operate derivative financial product trading business at its business premises, and shall do so in accordance with the provisions of the GreTai.
"Derivative financial product trading" in the preceding paragraph includes convertible bond asset swaps, structured notes, interest rate derivatives, and bond derivatives transactions.
"Structured notes" in the preceding paragraph refers to principal-guaranteed contracts and equity-linked contracts.
Securities firms operating derivative financial product trading business that involves foreign exchange operations shall obtain approval from the Central Bank of China.
Securities firms operating business referred to in the preceding paragraph and engaging in related hedge trades shall handle exchange settlement matters in accordance with the Regulations Governing the Reporting of Foreign Exchange Receipts and Disbursements or Transactions and related provisions.
For a securities firm operating business referred to in paragraph 1, matters relating to settlement of funds, payment and receipt of fees, and payment of funds upon early rescission or expiration of contracts shall be carried out according to the following:
1. When denominated in New Taiwan Dollars, all settlement of funds and payment and receipt of fees with a customer shall be carried out in New Taiwan Dollars.
2. When denominated in a foreign currency, all settlement of funds and payment and receipt of fees with a customer shall be carried out in foreign currency. The customer's payment of funds may be carried out by transfer from its own foreign exchange deposit account. Where foreign exchange settlement is required, it shall be carried out by the customer at a designated foreign exchange bank in accordance with the Regulations Governing the Reporting of Foreign Exchange Receipts and Disbursements or Transactions.
3. Upon early rescission by the customer or expiration of the contract, the securities firm shall deposit the funds receivable by the customer in its New Taiwan Dollar or foreign exchange deposit account on the settlement date based on the currency stipulated in the contract.
Asecurities firm operating business referred to in paragraph 1 shall submit a monthly operations statement and statement of payables remitted into clients' designated accounts to the foreign exchange authority and the GreTai by the fifth day of the following month.