|
Article 15
|
A securities finance enterprise that handles securities trading margin purchases and short sales may not utilize the securities collateral it obtains for any purpose but the following:
- As a source of securities for short sales or refinancing.
- As collateral for refinancing with another securities finance enterprise.
- As a source of securities to be loaned in a securities borrowing and lending transactions.
- As collateral for securities borrowed through the TWSE securities borrowing and lending system.
- To lend to a securities firm or another securities finance enterprise as a source of securities for conducting securities borrowing and lending business or securities margin purchase and short sale business.
- To lend through the TWSE securities borrowing and lending system.
- To participate in competitive auction lending transactions or negotiated lending transactions conducted by another securities finance enterprise.
A securities finance enterprise that handles margin purchases and short sales of securities may not use proceeds from short sales or margins for short sales that it retains on deposit for any purpose other than those listed below:
- As a source of funds for margin purchase or refinancing business.
- As collateral for refinancing with another securities finance enterprise.
- As a source of funds for financing for settlement of securities trades.
- As collateral for securities borrowed through the TWSE securities borrowing and lending system.
- Bank deposit.
- For the purchase of short-term bills.
Where utilizing securities pursuant to the provisions of paragraph 1, the securities finance enterprise shall be responsible for delivering the same category of securities when the margin purchase or short sale position is closed.
Securities finance enterprises shall pay interest to short sellers on the proceeds from short sales and on short sale margin. The interest rate shall be prescribed by the securities finance enterprise and reported to the competent authority for approval.
|