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Relevant Laws

Title：Rules Governing the Lending of Book-Entry Central Government Bonds by Securities Firms (2006.11.21)
Article 26     Customers are considered to be in default if they do not reimburse shortfalls according to Paragraph 2 of the preceding Article. In such a case, the securities firm has a duty to report the default to TPEx, thereby allowing TPEx to notify TSEC and other securities firms.
    The securities firm may impose a penalty totaling 10% of the agreed lending rate over the amount of shortfall payable by the customer, starting from the date of default until the shortfall is settled.
Article 28     A securities firm may not lend book-entry central government bonds totaling more than NT$20 million (in face value) or 1% of the firm's net worth to any single natural person, and may not lend totaling more than 5% of the firm's net worth to any single company. Lending of book-entry central government bonds to a group of related borrowers (in face value) may not exceed 10% of the firm's net worth, in which case the total face value of book-entry central government bonds lent to natural persons may not exceed 2% of the firm's net worth.