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Article 2
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A customer applying to establish a margin account and entering into a margin agreement shall meet the following thresholds, except in case of renewing an existing agreement at its expiration:
- The customer is an ROC national of at least 20 years of age and with disposing capacity, or a juristic person organized and registered under the laws of the ROC.
- Three months have elapsed since the customer established a brokerage account.
- At least ten trade orders have been executed for the customer's account during the most recent year, with an aggregate amount of at least 50 percent of the applied maximum loan value; the same also applies where a period of less than 1 year has elapsed since the customer established a brokerage account.
- The customer's income and assets for the most recent year aggregate at least 30 percent of the applied maximum loan value, save that the applied maximum loan value does not exceed NT$500,000.
In the case of a customer applying to establish margin accounts under either of the following circumstances, the calculation of the applied maximum loan value under subparagraph 3 or 4 of the preceding paragraph shall include the maximum loan values approved for previously established margin accounts.
- The application includes a total of five or more margin accounts.
- The application includes a total of two or more margin accounts, and the sum of the applied maximum loan values plus the maximum loan values approved for previously established margin accounts amounts to NT$300 million or more.
In the case of a customer applying to establish margin accounts, the applied maximum loan value calculated under paragraph 1, subparagraph 4 shall include the customer's authorized credit lines in other credit extension business at the same securities firm.
A customer adjusting the maximum loan value during the term of the agreement or renewing the agreement at its expiration shall meet the requirements set out in paragraph 1, subparagraph 4, paragraph 2, and paragraph 3. A securities firm may handle such matter by correspondence or electronic means that is sufficient to identify the customer as the applicant itself or its indication of intent.
A call (put) warrants issuer, a securities firm or bank engaging in structured notes business and the trading of equity derivatives, or an enterprise exclusively or concurrently engaging in futures proprietary trading that is also a market maker for equity options or single-stock futures, may apply to establish a margin account without being subject to the requirements set out in paragraph 1 and paragraph 2.
For a privately placed securities investment trust fund managed by a securities investment trust enterprise, the fund custodian institution may apply to establish a margin account without being subject to the requirements set out in paragraph 1, subparagraphs 1, 2, and 3, and for which neither the outstanding balance of margin purchase positions nor the outstanding balance of short sale positions, combined with the outstanding balance of sales of borrowed securities, may exceed 50 percent of the fund size.
(Deleted)
In the case of a discretionary investment account managed by a securities investment trust enterprise (SITE) or a securities investment consulting enterprise (SICE), or of discretionary investment business conducted by a securities broker concurrently operating an SICE, or of discretionary futures trading business operated by a managed futures enterprise, the custodian institution for discretionary investment assets may open a margin account on behalf of its customer, and the provisions of paragraph 1, subparagraph 1, with the exclusion of paragraph 1, subparagraphs 2 and 3, shall apply to the customer of the discretionary investment account. For the margin account, neither the outstanding balance of margin purchase positions nor the outstanding balance of short sale positions, combined with the outstanding balance of sales of borrowed securities, may exceed 50 percent of the net asset value of the discretionary investment account, except in the case of discretionary futures trading business operated by a managed futures enterprise, for which neither the outstanding balance of margin purchase positions nor the outstanding balance of short sale positions, combined with the outstanding balance of sales of borrowed securities, may exceed 20 percent of the net asset value of the discretionary investment account.
(Deleted)
A securities firm may raise the percentage under paragraph 1, subparagraph 3 or 4 as it deems necessary after assessment.
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