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Article NO. Content

Title:

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 83     A securities firm to which the TWSE or TPEx has forwarded a message that a customer is in default with a securities finance enterprise, another securities firm, or a futures commission merchant shall take the following measures as the circumstances merit:
  1. Where a customer is in default under Article 80, paragraph 1 hereof, Article 76, paragraph 3, subparagraph 1 or 3 of the TWSE Operating Rules, or Article 47, paragraph 2, subparagraph 1 or 3 of the TPEx Trading Rules, the securities firm shall immediately notify the customer (provided that if the default information is forwarded by the TWSE or the TPEx at 11:30 a.m. on the given morning, the securities firm shall notify the customer on the next business day) to close out all outstanding margin purchases and short sales on the next business day and thereafter cancel the margin account. Where the customer fails to close out all outstanding margin trades within the time limit, the securities firm shall, by the mutatis mutandis application of Article 81, paragraph 3, close out the trades for the customer starting the next business day.
  2. Where a customer is in default under Article 81, paragraph 1 or 2 hereof, or in any of the circumstances listed below, the securities firm may not accept any order from the customer to carry out a margin purchase or short sale, and shall cancel the customer's margin account promptly after the customer has closed out all outstanding margin purchases and short sales:
    1. Default under Article 33 of the Operating Rules for Securities Lending by Securities Firms.
    2. Violation under Article 28 of the Operating Rules for Securities Business Money Lending by Securities Firms.
    3. Default or violation under the securities finance enterprise's operating rules for margin purchases and short sales, operating rules for securities settlement financing, or operating rules for securities lending.
     If a customer's participation in securities borrowing and lending transactions is halted or terminated due to any event under Article 42, 45, or 49 of the Taiwan Stock Exchange Corporation Securities Borrowing and Lending Rules, the securities firm shall handle the matter pursuant, mutatis mutandis, to subparagraph 2 of the preceding paragraph.
    Unless the cause is unauthorized trading and handling measures are not required to be taken, if any event of default under the preceding two paragraphs occurs to a discretionary investment account or to a customer's own account, the provisions of the preceding two paragraphs shall apply to the customer' own account and any other discretionary investment account of the customer.