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Article 4
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For non-restricted purpose loan conducted by securities firms, the financing period applied by clients shall be limited within 6 months. Prior to the expiration of the financing period, the client may apply for extension, and a securities firm may grant an extension for 6 months depending on each client's credit status. Prior to the expiration of 1 year, a securities firm may grant another extension of 6 months upon reviewing such client's credit status.
The collaterals provided by the clients of the preceding paragraph may be replaced during the financing period, the application method shall be stipulated by both parties.
If a client makes partial repayment for the loan before the expiration of the financing period, a securities firm may return to the client the collateral it originally provided on a proportional basis, the returning method shall be stipulated by both parties. However, where it is less than one trading unit, the collateral shall not be returned. Notwithstanding, a securities firm and its client may also agree that after the repayment of the loan, a securities firm may be exempted from returning part of or all the collaterals, and the client may apply for non-restricted purpose loan again in respect of such collaterals not returned.
For the non-restricted purpose loan prescribed under Paragraph 1, a securities firm shall notify its client in writing or through communication, electronic methods agreed by its clients 10 business days prior to the expiration of the financing period, the notification methods shall be clearly stated in the non-restricted purpose loan contract.
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Article 6
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The clients of non-restricted purpose loan of a securities firm are limited to the following:
- An R.O.C. national who has reached their 20th year of age with full capacity to make juridical acts.
- Domestic juristic person organized and registered under the R.O.C. law.
- Onshore overseas Chinese and foreign nationals.
Before applying for non-restricted purpose loan, a client shall already open a securities trading account with the securities firm and shall open a securities depository account with TDCC (hereinafter as Centrally Deposited Account) or open a central government securities account with central government securities settlement bank to proceed with book-entry transfer of the collaterals.
In case that the client in the first paragraph is a director, supervisor, manager of a TWSE or TPEx listed company, or a shareholder holding more than 10% of the total outstanding shares of the company (hereinafter as Insider) and the client intends to use the shares of the company he/she belongs to as financing collateral or provide these shares as additional collateral, pledge shall be created over these share for the above purpose.
Shares held by the Insider shall include such shares held by his/her spouse, minor child/children or those held in another's name.
In case where a client becomes an Insider after he/she has signed the non-restricted purpose loan contract, the provisions of paragraph 3 shall apply to all transactions that take place subsequently as well as the collateral he/she has provided.
Matters relating to creation of pledge, removal of pledge, and exercise of pledge under paragraph 3 shall all be processed in accordance with the Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC) and the TDCC Instructions on Participant's Pledge and Delivery of Securities for Book-Entry Transfer.
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Article 17
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For the collateral in the form of securities or other commodities provided by a client applying non-restricted purpose loan, a securities firm or custodian institution shall transfer the client's collateral to the collateral account opened by the securities firm at the TDCC or central government securities settlement bank. Such collateral account, excluding that for securities on which pledge shall be created under Article 6, paragraph 3, may be shared with the loan collateral account of Article 16, paragraph 1 of the Operating Rules for Securities Business Money Lending by Securities Firms. If a collateral is purchased in the securities firm's name, the authorized securities firm shall keep a registration log for management purposes.
After a securities firm completes the process set forth in the preceding paragraph, it shall transfer the financing amount to the client's designated financial institutes account. The account shall be the client's own account and the transfer fee shall be born by the client.
The financial institutes account of the preceding paragraph shall be stated clearly in the non-restricted purpose loan contract. If there is any change to such financial institutes account, Article 13 of these Operating Rules shall apply.
For the transfer of the financing amount set forth in paragraph 2, a securities firm may make in a lump sum or separately per client's application by calculating, once or separately, the finance limit for the collateral provided by the client according to Article 16 and the transfer method shall be stipulated by both parties.
For the application of paragraph 1, if a client submits the loan application by a method other than in person, the client shall submit a consent letter for exemption from affixing signature or seal on the loan application. If a securities firm has verified and retained the record of the consent letter on file, the securities firm may proceed with loan application related matters accordingly without requiring the client to affix signature or seal on the loan application.
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