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Article NO. Content


Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities  CH

Amended Date: 2021.04.01 
Categories: Securities Exchange Market > Margin Transaction
Article 66     During the period when a securities finance enterprise is engaging in a competitive bid borrowing, negotiated borrowing, or purchase by tender offer to cover a security that falls short of short sale needs, a securities firm may temporarily suspend the short selling of that security, and may also refrain from processing cash settlement of any margin purchase of that security, except in the case of settling a margin purchase at maturity, or where a customer is applying to settle a margin purchase with cash and will use the receivable securities to settle a short sale.
    Where a securities firm conducts securities margin purchase and short sale business, and the combined total balance of short sales of any given type of securities plus the balance of loans of that type of securities extended in securities lending business and the Lending Balance in Article 7, paragraph 2, subparagraphs 5 to 7 reaches the combined total balance of margin purchases and the sum of Borrowed Securities and Proprietary Securities, the securities firm, during the resulting period of cessation of provision of short sales, may not withdraw the Proprietary Securities that have been used as a source of securities for short sale business.
    A securities firm that has provided Borrowed Securities or Proprietary Securities to a customer for short selling may not request the customer to repay the short sale upon the lender’s request for early repayment.