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Article 3
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The operation of a securities finance enterprise shall be approved by the competent authority.
A securities finance enterprise shall establish an internal control system pursuant to the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets adopted by the competent authority.
The operation of a securities finance enterprise shall be in accordance with laws and regulations, the articles of incorporation, and the internal control system referred to in the preceding paragraph.
When the competent authority issues any notice requiring amendment of the internal control system under paragraph 2, the amendment shall be made within the specified time limit.
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Article 56
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Securities finance enterprises may obtain capital or stocks for liquidity according to the following methods:
- Obtaining financing from banks or other institutions.
- Issuing commercial paper or corporate bonds.
- Borrowing securities from the TWSE securities borrowing and lending system.
- Borrowing securities through competitive auction lending transactions or negotiated lending transactions.
- Purchasing securities by reverse auction through the TWSE or TPEx.
The issuance amount of commercial paper of subparagraph 2 of the preceding Paragraph shall not exceed 6 times the net worth of that enterprise, and shall be solely for the purpose of funds for use in the operation of the businesses set out in the subparagraphs of paragraph 1 of Article 5. is limited to
If a securities finance enterprise has deficiencies in its financial or business affairs and has been unable to effectively improve within the given time limit, or if there has been a material violation of the regulations, or if its net worth per share is below its par value, the competent authority will adjust the multiple of the rule in the preceding paragraph according to the seriousness of the situation.
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Article 57
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The proprietary capital of a securities finance enterprise may not be loaned to others or used for other purposes except business operating needs. Utilization of this capital is limited to the following:
- Bank deposit.
- Purchase of short-term bills.
- Purchase of government bonds or financial bonds.
- Purchase of securities investment trust fund beneficial certificates.
- Purchase of bank-guaranteed corporate bonds.
- Purchase of real properties for business uses.
- Other uses approved by the competent authority.
The scope, ratio, and amount for Items 4 to 6 of the preceding Paragraph will be set by the competent authority.
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