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Operating Rules for Securities Lending by Securities Firms(2013.03.07) |
| Date： |
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Article 7
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When applying to open a securities lending account, a customer that is an ROC citizen shall present in person their original national ID card and sign an account opening application and securities lending agreement on the spot.
A customer organized and registered as a juristic person under ROC law shall conduct the account opening procedures of the preceding paragraph by having its authorized person submit originals of the power of attorney, national ID cards of its authorized person and representative, corporate registration (or registration amendment) card, and evidentiary documentation of corporate registration.
When applying to open an account, a customer other than those specified in paragraphs 1 and 2 shall conduct the account opening procedures by presenting the relevant proof of identity documents in accordance with the TWSE Operating Rules or the relevant provisions regarding the opening of a brokerage account prescribed by the GTSM.
Photocopies of the relevant proof of identity documents and the original power of attorney used to apply to open an account shall be retained; the following statement shall be stamped on the photocopied portion, "It has been verified that the account opening application has been made in person by the applicant or by the authorized person thereof and that the photocopies are true and faithful copies of the original."
A securities firm processing the opening of a securities lending account shall decide whether to open that account based on a detailed and faithful credit check in accordance with its internal control system. It shall record the detailed credit check method, information, and results on the account opening application, and record the account opening date. It shall transmit the account opening information that same day to the TWSE or GTSM computer database, and shall do likewise for account cancellation information. If the customer is a juristic person, it shall separately notify the customer in writing to confirm that the account is being opened with its authorization, provided that this requirement shall not apply if the customer has engaged a custodian institution to open the account on its behalf, or submits proof that settlement is to be handled on its behalf by a custodian institution.
A securities firm shall approve a customer's authorized loan limit based on that customer's credit check results. If the customer, prior to opening the securities lending account, has already applied and received approval for a specific amount of credit in connection with other credit business handled by the securities firm, the customer's authorized loan limit shall be calculated in the aggregate with the already approved amount of credit, and the proof of financial capacity provided by the customer must equal at least 30 percent of the total amount of credit after calculation of the aggregate amount of the applications made by the customer. If the customer, after opening the securities lending account, applies to the securities firm for a specific amount of credit in connection with other credit business, that amount shall also be included as part of the aggregate.
The securities firm shall provide the customer with a risk disclosure statement, disclosing the possible risks of securities lending transactions. A model template for the risk disclosure statement shall be drafted by the Taiwan Securities Association.
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Article 7-1
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The proof of financial capacity that a customer must provide with respect to the total amount of credit calculated in aggregate, pursuant to paragraph 6 of the preceding article, means provision by the customer of information on income and all types of assets for the preceding year.
The proof of financial assets of the preceding paragraph shall consist of only the following vouchers and documents of the customer or the customer's spouse, parents, or adult children:
- A photocopy of the certificate of title to real property, a transcript of the registration for the real property, or a receipt for payment of property tax on it. The securities firm shall calculate the value of the property after inquiring about any other encumbrances on it.
- Documentary evidence of deposits at a financial institution (such as a certificate of deposit balance, bankbook, or certificate of deposit). The basis of calculation will be the average balance for the most recent month.
- Documentary evidence of securities holdings.
- A certificate of balance for a gold account issued by a financial institution (a gold account passbook, or a certificate of gold account passbook balance or certificate of gold account balance).
- Documentary evidence of trust assets in a trust of money, a securities trust, or a real estate trust (such as a reconciliation statement, list of trust assets, or certificate of trust assets). The beneficiary of the trust must be the same person as the trustor, and trust assets may only be real estate, deposits with a financial institution, securities, or the balance in a gold account at a financial institution.
If the customer provides proof of financial assets not owned by the customer, the actual owner of the assets must be a joint and several guarantor of the customer.
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