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Article 8
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Where a securities firm conducts securities business money lending and the financing period does not exceed 6 months, the securities or other instruments that the customer purchases or holds shall be used as collateral; the ratio between the value of such collateral and the amount of money lending by the securities firm to that customer may not fall below a certain ratio.
Prior to the expiration of the period in the preceding paragraph, a securities firm may, depending on the customer's credit standing, grant an extension of 6 months. Prior to the expiration of the one-year period, the securities firm may, depending on the customer's credit standing, again allow the customer to apply for an extension of 6 months.
When a securities firm lends money to its customer to pay for the settlement price, and the customer has yet to obtain the securities that it has purchased, the other securities or instruments that the customer holds shall be used as collateral.
Collateral referred to in paragraph 1 shall be limited to the following:
- TWSE or TPEx listed securities.
- Beneficial certificates of securities investment trust funds or futures trust funds that are domestically offered and that invest domestically.
- Central government bonds.
- Physical gold that is registered for trading over the counter.
- Other collateral approved by the competent authority.
A securities firm shall mark to market on a daily basis the ratio of collateral value to customer debt in each lending account; when that ratio is below the prescribed percentage, it shall immediately notify the customer to make up the difference by a deadline with collateral of the types prescribed in the preceding paragraph.
The ratio referred to in paragraph 1 and the preceding paragraph shall be jointly drafted by TWSE and TPEx, and submitted to the competent authority for final approval.
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