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Article 80
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Failure by a customer to make timely deposit of margin purchase margin or short sale margin under Article 19 constitutes an event of default, in which case the securities firm shall immediately proceed by the mutatis mutandis application of Article 19 of the Taiwan Stock Exchange Corporation Rules Governing Brokerage Contracts of Securities Brokers and Article 7 of the GreTai Securities Market Account Opening Contract for Trading of Securities on the TPEx; also, on the basis of the securities firm's report, the TWSE or TPEx will forward notice to all securities finance enterprises and securities firms.
In the event of any default by the customer as specified under the preceding paragraph, and a balance remains in the customer’s margin account, the securities firm shall, at the latest on the following business day, proceed by the mutatis mutandis application of the handling method under Article 81, paragraph 3 hereof to settle the account, and shall cancel the margin account; if there is no balance, the margin account shall be cancelled.
If any of the following circumstances applies to a customer, and a balance remains in the customer's margin account, the securities firm shall immediately notify the customer to close out all margin purchase and short sale trades on the next business day, after which it shall cancel the customer's margin account; if the customer fails to close out all margin trades within this time limit, the securities firm shall, by the mutatis mutandis application of Article 81, paragraph 3, close out the trades for the customer starting from the next business day:
- Failure to perform a settlement obligation on time under Article 91 of the TWSE Operating Rules or Article 87 of the TPEx Trading Rules; provided that this does not apply to an event of default under paragraph 1.
- Default under Article 58 of the Operating Rules of the Taiwan Futures Exchange Corporation.
- Default under Article 33 of the Operating Rules for Securities Lending by Securities Firms.
- Violation under Article 28 of the Operating Rules for Securities Business Money Lending by Securities Firms.
If an event of default under paragraph 1 or 3 occurs to a discretionary investment account, the preceding three paragraphs shall apply, unless the cause is unauthorized trading, in which case the provisions of Article 91-1 of the TWSE Operating Rules or Article 87-5 of the TPEx Trading Rules shall be followed.
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