Article 8
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Where a securities firm conducts securities business money lending and its customer uses securities it owns as collateral, that customer's financing period may not exceed sixth months; the ratio between the value of such collateral and the amount of money lending by the securities firm to that customer may not fall below a certain ratio.
Prior to the expiration of the period in the preceding paragraph, a securities firm may, depending on the customer's credit standing, grant a one-time only extension of 6 months.
Collateral referred to in paragraph 1 shall be limited to the following:
- Common stock of component companies of the Taiwan 50 Index, Taiwan Mid-Cap 100 Index, or Taiwan Technology Index; exchange-traded fund (ETF) beneficial interest certificates and common stock of the component companies of those funds, offshore ETFs.
- Common stock of MSCI Taiwan Index component companies as announced by Morgan Stanley Capital International (MSCI).
- Government strip bonds.
- Other collateral approved by the competent authority.
A securities firm shall mark to market on a daily basis the ratio of collateral value to customer debt in each lending account; when that ratio is below the prescribed percentage, it shall immediately notify the customer to make up the difference by a deadline with collateral of the types prescribed in the preceding paragraph.
The ratio referred to in paragraph 1 and the preceding paragraph shall be jointly drafted by TSEC and GTSM, and submitted to the competent authority for final approval.
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