|
[Law Basis]
[Print]
|
Article 1
These Regulations are prescribed pursuant to Article 30 of the Central
Bank the Republic of China Act and Paragraph 2, Article 73 of the Banking Law.
|
|
Article 2
Administration by the Central Bank of the Republic of China (Taiwan)(hereafter
referred to as "the Bank") of financing extended by banks to securities finance
companies or securities firms shall be handled pursuant to the provisions of
these Regulations. Matters not addressed herein shall be handled pursuant to
provisions under other relevant regulations.
|
|
Article 3
|
|
The term "net worth" as used in these Regulations with respect to
securities finance companies and securities firms, refers to net worth at
the end of the previous fiscal year after closing of the books. A capital
increase through cash infusion during the fiscal year may be included in
calculations of net worth for that year,whereas a capital decrease shall
be excluded. The date on which the Financial Supervisory Commission
（hereafter referred to as "the FSC"）issues a certificate verifying
the capital increase/decrease shall be deemed the date of record. Where
a securities firmis operated by a financial institution, the term
"net worth" refers to the working capital allocated to the firm by the
financial institution.
|
|
The term "securities" as used in these Regulations,except where otherwise
provided in Article 6 and Article 7, refers to firms that have been
publicly announced by the FSC according to Article 61 of
the Securities and Exchange Law for the securities industry as being
authorized to engage in margin purchases and short-sale transactions.
|
|
The term "outstanding balance of financing" as used in these Regulations
refers to funds borrowed from banks by securities finance companies and
securities firms for the purpose of providing margin trading services to
clients.
|
|
Article 4
|
|
Where a bank's involvement with a particular securities finance company
matches either of the following descriptions, the bank shall not extend
financing to that company:
|
|
1.The outstanding balance of financing extended by the entire bank to the
firm is more than six times higher than the firm's net worth.
|
|
2.The firm's external debt is more than 11.5 times higher than its net
worth.
|
|
When a securities finance company applies to a financial institution for a
loan, the bank shall not accept the application unless the firm completes
an affidavit certifying that it has not exceeded the limit and ratio set forth
in the preceding Paragraph.
|
|
Article 5
|
|
When the aggregate outstanding balance of financing from all banks in
support of a securities firm's margin trading services exceeds the
securities firm's net worth by a factor of 3.5, the bank shall not extend
financing to that securities firm.
|
|
A bank shall only accept a loan application from a securities firm when
the firmcompletes an affidavit certifying that it has not exceeded the limit
set forth in the preceding Paragraph.
|
|
Article 6
|
|
When a bank extends financing to a securities firm, in the event the firm
uses its own securities as collateral and uses the funds to invest in
securities for its own account, the portion of such investments financed
by the bank shall not exceed the maximum financing ratio adopted by the
FSC with the consent of the Bank, pursuant to Article 61 of the Securities and
Exchange Law.
|
|
When a securities underwriting firm has underwritten stocks on a firm
commitment basis, banks may extend financing to the underwriter to
enable it to bear costs incurred during the underwriting period and
perform its underwriting duties. The financing shall not exceed 60
percent of the total price of the stock underwritten.
|
|
A bank shall only accept a loan application from a securities
underwriting firm when the firm completes an affidavit certifying that
it has notexceeded the limit set forth in the preceding Paragraph.
|
|
Article 7
When a bank extends financing to a securities firm, in the event the firm
uses its own securities as collateral but does not use the funds to invest in
securities for its own account, the bank is not subject to the maximum
financing ratio of Article 6, provided that the bank shall require the
borrower to submit an affidavit certifying that the borrower will not use
the loan to invest in negotiable securities for its own account.
|
|
Article 8
Banks shall submit a monthly itemized report to the Bank's Department of Banking
and Banking Bureau of the FSC concerning financing extended to securities finance
companies and securities firms. If it is found that a securities finance company or
a securities firm has violated Article 4, Article 5, or Paragraph 2, Article 6, the
FSC shall review the matter and render a disposition, and the bank shall immediately
recall the portion of its financing that exceeds the allowed limit.
|
|
Article 9
These Regulations shall take force from the date of promulgation.
|
|
