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Article 34
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A securities firm undertaking structured instrument transactions shall allocate 3 percent of the total outstanding balance of its structured instrument contracts each month and pay that sum to the TPEx as a performance bond. A securities firm whose regulatory capital adequacy ratio is below 250 percent, however, shall pay 5 percent of the above balance to the TPEx as a performance bond.
A securities firm may pay the performance bond of the preceding paragraph in cash, bank certificates of deposit, or central government bonds, and shall supplement the bond amount or obtain a refund from the TPEx on or before the tenth of each month in accordance with monthly changes in the outstanding balance of the structured instrument and its regulatory capital adequacy ratio.
The TPEx shall open a segregated deposit account for the custody of performance bonds received by the TPEx, and reimburse any accrued interest, after deducting taxes and required fees, to the securities firms by the end of January and July each year.
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