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Article 41
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When a securities finance enterprise engages in securities borrowing and lending transactions, the borrowing and lending parties shall sign a securities borrowing and lending agreement, and open accounts for securities borrowing and lending transactions.
The content of the securities borrowing and lending agreement of the preceding paragraph shall be formulated by the securities finance enterprise and submitted to the competent authority for approval.
The following matters shall be expressly stated in the securities borrowing and lending agreement:
- The term of the loan.
- Loan fees.
- The use of the loaned securities.
- The methods of custody and redelivery of the securities and terms and conditions in regard to early redelivery.
- The types of collateral, substitution of collateral, and calculation of collateralization rates and maintenance levels.
- The return of collateral when value exceeds requirements and the offsetting of excess collateral against other requirements.
- The calculation and payment of interest on cash collateral.
- Compensation of entitlements.
- The handling of defaults.
- Handling of customer information.
- Causes for termination of the agreement.
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