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Amendments

Title：

Operation Directions for the Control of Margin Purchase and Short Sale Limits Relative to the Net Worth of Securities Firms  CH

Repeal Date： 2016.12.30 
Categories： Securities Exchange Market > Margin Transaction
Article Content Content Search Article No. Search Legislative History Chinese

Title： Operation Directions for the Control of Margin Purchase and Short Sale Limits Relative to the Net Worth of Securities Firms(2007.03.05)
Date：
2     The total amount of margin purchases or short sales of securities conducted by a securities firm may not exceed 250% of its worth.
    Where a securities firm maintains a regulatory capital adequacy ratio of 250% or above for three consecutive months, the total amount of margin purchases or short sales of securities which it conducts from and to customers may not exceed 400% of its net worth.
    Where, after the preceding paragraph is complied with, a securities firm maintains a regulatory capital adequacy ratio lower than 250% for two consecutive months and the total amount of its margin purchases from or short sales to customers exceeds 250% of its net worth, it shall cease to conduct margin purchases from or short sales to customers. When such total amount falls below 250% of its net worth or its regulatory capital adequacy ratio remains 250% or above for three consecutive months, the preceding two paragraphs will apply.
    When a securities firm conducts margin purchases and short sales of securities, the sum of the total amount of its margin purchases from customers plus the total financing amount of money lent in connection with securities business may not exceed 400% of its net worth; the sum of the total amount of short sales to customers plus the total dollar amount of securities lent in connection with securities business may not exceed 400% of its net worth.
3     When a securities firm conducts margin purchases and short sales of securities, the total amount of its margin purchases of each security may not exceed 10% of its net worth.
    When a securities firm conducts margin purchases and short sales of securities and securities lending and borrowing, the sum of the total amount of its short sales and the total dollar amount lent with respect to each security may not exceed 5% of its net worth.