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Article 5
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A securities finance enterprise may operate the following businesses:
- Margin purchases and short sales in securities trading.
- Re-financing for other securities firms or other securities finance enterprises.
- Loans for rights issues and subscriptions to underwritten shares ("subscription loans").
- Loans to securities firms for underwriting ("underwriting loans").
- Financing for securities transaction settlement purposes.
- Securities borrowing and lending.
- Other related business approved by the competent authority.
Securities obtained by securities finance enterprises in the process of operating the businesses in the preceding paragraph shall be sent to a centralized securities depositary enterprise for custody.
A securities finance enterprise applying to operate business under paragraph 1 shall submit an application, along with the following documents, to the competent authority for approval:
- Minutes of the relevant board of directors meeting.
- An operations plan.
- A description of the internal control system.
- A set of operating rules.
- A set of any contracts required for the business.
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