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Article 7
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In conducting securities trading margin purchase and short sale operations, a securities firm may not use retained short sale proceeds and short sale margins except for the purposes listed below:
- As a source of funds for conducting margin purchase business.
- As collateral for refinancing of securities from securities finance enterprises.
- As a source of funds for conducting money lending in connection with securities business.
- As collateral for borrowing securities through the TWSE securities lending system.
- For deposit with bank.
- To purchase short-term bills.
In conducting securities trading margin purchase and short sale operations, a securities firm may not use securities received from such operations except for the purposes listed below and shall deposit the securities with a central securities depository:
- As a source of securities for conducting short sale business.
- As collateral for refinancing of funds or securities from securities finance enterprises.
- As a source of lendable securities in conducting securities lending business.
- As collateral for borrowing securities through the TWSE securities lending system.
- To lend to a securities firm or securities finance enterprise conducting securities borrowing and lending business 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 a securities finance enterprise.
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