| Title： |
Operating Rules for Securities Business Money Lending by Securities Firms(2019.02.12) |
| Date： |
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Article 9
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A securities firm conducting securities business money lending, when processing a customer's application, may commence such lending only after reviewing that customer's credit and agreeing to sign a loan contract with that customer.
The securities firm's signing of a loan contract with a customer under the preceding paragraph shall be conducted in accordance with the following provisions:
- A customer that is a domestic natural person shall present, in person, the original of their national ID card and submit relevant documents to verify their income and assets.
- A customer that is a domestic juristic person shall have its authorized person submit a power of attorney, the original national ID cards of customer's authorized person and representative, the customer's original corporate registration (or registration amendment) card, and its original certification of incorporation.
- An onshore overseas Chinese or foreign national intending to sign a loan contract shall obtain an ID number and submit an application to the securities firm accompanied by relevant documents verifying their income and assets as well as the documents listed below:
- A natural person that is an overseas Chinese or foreign national: passport, and Overseas Compatriot Identity Certificate (or Alien Resident Certificate).
- Foreign institutional investor (FINI): Documentation evidencing company registration with the domestic competent authority, and the responsible person's national ID card (or Alien Resident Certificate, or passport).
- An offshore overseas Chinese or foreign national intending to sign a loan contract shall have their designated domestic agent or representative obtain an ID number and submit an application to the securities firm accompanied by photocopies of their national ID card or Alien Resident Certificate, or up-to-date documentation of corporate registration (or amendment registration).
The photocopies of the identity verification documents and corporate registration (or amendment registration) cards and the original power of attorney referred to in the preceding paragraph shall be retained, and those that are photocopied shall be stamped with an official seal bearing the words, "The application is confirmed to have been made in person by the applicant or by the applicant's authorized person; this is a true and faithful copy of the original."
Where the conditions for application in the second paragraph are met, a securities firm may accept an application of a client for signing a loan contract, by correspondence or electronic means that is sufficient to identify the client as the applicant itself or its indication of intent, if a transaction account has been opened.
The Taiwan Securities Association shall draft a template loan contract referred to in paragraph 1.
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Article 33
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In securities business money lending conducted by a securities firm, the sum of the total amount of financing to customers plus the total financing amount of borrowing and lending of funds for unrestricted purposes and margin purchases and short sales of securities may not exceed 400 percent of the securities firm's NAV.
When a securities firm conducts securities business money lending, the combined total of money lending financing limits that it extends to each customer shall be regulated by the securities firm. The securities firm shall adopt its own internal procedures for credit extension operations and risk management, in order to appropriately assess customer credit limits and manage credit extension risks. Such procedures shall at least incorporate the following:
- Means of assessment of the maximum lending amount to individual customers. The assessment shall take the loan amounts extended to approved customers in other loan businesses into consideration. The percentage by which the total value of funds or securities loaned to individual customers in the overall loan business may not exceed the net worth shall be prescribed. Approval of the board of directors is required if the financing amount to individual persons reaches the higher of NT$300 million and 1% of the securities firm's NAV.
- Means of assessment of the maximum lending amount of a single security to individual customers. The assessment shall take the loan amounts extended to approved customers in other loan businesses into consideration.
- Means of identification of securities or customers with a high risk. Special monitoring and approval procedures shall be established in regard to the amount of high-risk securities or the lending limit to high-risk customers.
- The lending limit to customers shall be determined according to principles that are both fair and reasonable. Lending of such whole amount to a single customer shall be avoided.
- If the assessment of the maximum financing amount to individual customers indicates certain individual customers are known or can be determined to be related accounts, which means the credit risks of such customers are related (for example, the risk of providing trading service to such customers), the lines of credit of all such related customers are subject to combined regulations in consideration of the credit risks and apply to renewals and adjustments of credit lines by customers which have opened an account and to new accounts, provided in the event of a change in respect of a related account of a customer, such as credit line adjustment or addition of related accounts, the financing amounts of the customer and its related accounts are still subject to combined regulation.
A securities firm conducting securities business money lending shall file the data in the preceding paragraph with the TWSE on a daily basis.
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