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Article 3
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A securities firm applying for conducting margin purchase and short sale operations in securities trading shall fill out an application form and submit relevant documentation to the TWSE. The TWSE will forward the application to the competent authority for approval upon verifying that all qualification requirements and applicable provisions of these Rules are conformed to.
Upon approval by the competent authority to conduct securities trading margin purchase and short sale business, a securities firm shall submit the following documents by letter to the TWSE for recordation two days before commencing such business:
- A photocopy of the permit from the competent authority.
- A description of the system of internal controls over securities trading margin purchase and short sale operations.
- A roster of the responsible and associated persons of the department in charge of these operations and documents certifying their qualifications.
The responsible and associated persons under the third subparagraph of the preceding paragraph shall be registered with the TWSE before they may engage in such business. Any change of personnel in such positions shall be registered within five days.
A securities firm which has been approved by the competent authority to conduct securities trading margin purchase and short sale business shall cease to engage in such business if its capital adequacy ratio is lower than 150% for 2 continuous months. However, repayment and satisfaction is not included. Until 3 months of continuous compliance and obtain the competent authority's further approval, a securities firm may re-open its business; for securities firms which have obtained the approval but yet to commence its business, the aforesaid rules shall also apply.
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