| Title： |
Regulations Governing Borrowing or Lending Money in Connection with Securities Business by Securities Firms(2015.01.21) |
| Date： |
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Article 3
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A securities firm that applies to conduct securities business money lending shall possess the qualifications listed below:
- In the most recent financial report audited and certified by a certified public accountant (CPA), its net worth per share is not lower than par value, and its financial condition is in compliance with the Regulations Governing Securities Firms.
- Its regulatory capital adequacy ratio has not been lower than 150 percent in the half-year prior to the application date.
- It has not been subject to any warning sanction imposed by the competent authority under Article 66, subparagraph 1, of the Act in the past 3 months.
- It has not been subject to any sanction imposed by the competent authority ordering dismissal of a director, supervisor, or managerial officer of the securities firm, or any disposition to dismiss and replace its responsible person or other relevant personnel in the most recent half year.
- It has not been subject to any sanction imposed by the competent authority requiring the suspension of business in the past year.
- It has not be subject to any sanction imposed by the competent authority voiding any portion of its business permission in the past two years.
- It has not been subject to any sanction imposed by the TWSE, TPEx, or the Taiwan Futures Exchange Corporation pursuant to the bylaws of those exchanges suspending or restricting its trading in the past year.
- Other qualifications as required by the competent authority.
Where a securities firm fails to meet a qualification in subparagraphs 3 through 7 of the preceding paragraph, but the violation has been specifically corrected and the correction is recognized by the competent authority, it may be exempted from the requirements of the subparagraph in question.
After a securities firm has been approved by the competent authority to conduct securities business money lending, if its regulatory capital adequacy ratio falls below 150 percent for 2 consecutive months, it shall suspend such lending, which may resume only after the securities firm is in compliance with regulations for 3 consecutive months and is approved by the competent authority; the same requirement shall apply to a securities firm that has already received approval to conduct such lending but has not yet commenced it.
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Article 8
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Where a securities firm conducts securities business money lending and its customer uses securities it owns as collateral, that customer's financing period may not exceed 6 months; the ratio between the value of such collateral and the amount of money lending by the securities firm to that customer may not fall below a certain ratio.
Prior to the expiration of the period in the preceding paragraph, a securities firm may, depending on the customer's credit standing, grant an extension of 6 months. Prior to the expiration of the one-year period, the securities firm may, depending on the customer's credit standing, again allow the customer to apply for an extension of 6 months.
Collateral referred to in paragraph 1 shall be limited to the following:
- Securities eligible for margin purchases and short sales.
- Central government bonds.
- Other collateral approved by the competent authority.
A securities firm shall mark to market on a daily basis the ratio of collateral value to customer debt in each lending account; when that ratio is below the prescribed percentage, it shall immediately notify the customer to make up the difference by a deadline with collateral of the types prescribed in the preceding paragraph.
The ratio referred to in paragraph 1 and the preceding paragraph shall be jointly drafted by TWSE and TPEx, and submitted to the competent authority for final approval.
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Article 16
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When a securities firm conducts securities business money lending under Article 8 herein, the combined total of money lending financing limits, plus the limits on margin financing in margin purchase and short sale business, that it extends to a same person or same related parties, may not exceed a certain percentage of that securities firm's net worth, or a certain amount.
"Same person" in the preceding paragraph means a same natural person or same juristic person; the scope of "same related parties" means that person, their spouse, blood relatives within the second degree, and any enterprise of which that person or spouse is a responsible person. A same person or same related parties shall include those using the names of others.
The "certain percentage of that securities firm's net worth" of paragraph 1 means that for a natural person, it may not exceed 1 percent of the securities firm's net worth, or NT$80 million; for a juristic person, it may not exceed 5 percent of its net worth, or NT$1 billion; for same related parties, the limit on total financing is 10 percent of the securities firm's net worth, of which the limit on financing extended to natural persons may not exceed 2 percent of the securities firm's net worth.
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