| Title： |
Operating Rules for Securities Business Money Lending by Securities Firms(2011.10.17) |
| 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 one year. 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 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 the GTSM.
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 halting 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. However, this rule shall not apply to a customer that posts collateral in the form of the securities that it purchases, if the halting of margin purchases and short sale transactions for those securities has not been announced on the trade date.
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