| Title： |
Operating Rules for Securities Business Money Lending by Securities Firms(2011.01.07) |
| Date： |
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Article 13
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In securities business money lending conducted by a securities firm, if the customer intends to post collateral in the form of securities that it is purchasing, the customer shall file an application by 11 a.m. on the second business day after the transaction date, and have the securities firm or custodian institution transfer the customer's purchased securities into the loan collateral account opened by the securities firm at the Taiwan Depository & Clearing Corporation (TDCC); the financing period shall be from the second business day after the transaction date to the fifth business day after the transaction date.
When the customer of the preceding paragraph submits the loan application by a method other than in person, it shall submit a written statement of consent for exemption from the use of a signature or seal on the loan application. If the securities firm has verified and kept that consent statement on file, it is not necessary for the customer to sign/seal the application.
When the customer applies to borrow money from a securities firm by personal telephone call, the securities firm shall make a synchronous recording of the call, which shall be kept at its place of business and retained for at least 2 months. In the event of any dispute, the recording shall be retained until the dispute has been eliminated.
The value of the collateral in paragraph 1 shall be confined to 100 percent to 125 percent of the monetary amount of the financing provided to the customer by the securities firm. The value of the collateral shall be calculated as the closing price of the business day preceding the financing date or the GTSM-posted next day's reference price ("reference price") or as 80 percent of the face value of government strip bonds.
The closing price referred to in the preceding paragraph and in Articles 18, 24, and 25 shall be determined pursuant to Article 58-3, paragraph 3 of the TWSE Operating Rules and Article 35, paragraph 3 of the GreTai Securities Market Rules Governing Securities Trading on Over-the-Counter Markets.
When the customer files an application pursuant to paragraph 1 herein and is notified by the securities firm to post collateral in the form of TWSE or GTSM listed securities or government strip bonds that it holds, the application-related provisions of paragraph 1 shall apply mutatis mutandis.
When the customer makes partial repayment prior to the expiration of the financing period, the securities firm shall return to the customer on a proportional basis the securities it originally posted as collateral, provided that increments of less than one trading unit may not be returned.
When the customer has purchased securities for which suspension of margin purchases and short sale transactions has been announced, due to a resolution of the Surveillance Operations Oversight Committee of the TWSE or GTSM or due to other circumstances under which those transactions are inappropriate, then during the effective period of the disposition, that security may not be accepted as the additional financing collateral referred to in paragraph 1 above and in Article 16, paragraph 1.
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Article 19
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When the competent authority approves and announces suspension of trading or termination of the TWSE or GTSM listing of a security that a customer has posted as collateral, or when government strip bonds that a customer has posted as collateral mature, then the suspension date, delisting date, or the maturity date of that security shall be deemed the expiration date of the financing period. After being notified by the securities firm, the customer shall repay the money lent and the interest by the 10th business day before the trading suspension or listing termination date or the government strip bonds' maturity date, provided that this requirement shall not apply if the customer has replaced the collateral, or in cases where the issuing company of a GTSM listed security is applying to convert the security to a TWSE listed security, or where the securities of both the surviving and non-surviving listed (or GTSM) companies in a merger qualify as collateral.
When during the collateral period, the customer replaces collateral it provided with common stock of a component company of the Taiwan 50 Index, Taiwan Mid-Cap 100 Index, or Taiwan Technology Index; common stock of any MSCI Taiwan Index component company announced by Morgan Stanley Capital International Inc. ("MSCI"), or common stock of a component company of an ETF, the securities firm may accept that collateral until the expiration date of the financing period.
When suspension of margin purchases and short sale transactions for a security has been publicly announced due to a resolution of the Surveillance Operations Oversight Committee of the TWSE or GTSM or due to other circumstances under which those transactions are inappropriate, the securities firm may not accept the security as collateral for additional loans; if the above circumstance applies to collateral already provided by a customer, the securities firm may accept that collateral until the expiration date of the financing period.
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