Chapter I General Provisions
Article 1
These Regulations are adopted in accordance with Article 18, paragraph 2 of the Securities and Exchange Act.
Article 2
The term "securities finance enterprise" as used in these Regulations shall mean an enterprise which provides financing or stock loans to securities investors, securities firms, or other securities finance enterprises in accordance with these Regulations.
Article 3
The operation of a securities finance enterprise shall be approved by the competent authority.
A securities finance enterprise shall establish an internal control system pursuant to the Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets adopted by the competent authority.
The operation of a securities finance enterprise shall be in accordance with laws and regulations, the articles of incorporation, and the internal control system referred to in the preceding paragraph.
When the competent authority issues any notice requiring amendment of the internal control system under paragraph 2, the amendment shall be made within the specified time limit.
Article 4
The formation of a securities finance enterprise shall be limited to a company limited by shares, whose paid-in capital shall not be less than NT$4 billion.
Article 5
A securities finance enterprise may operate the following businesses:
1.Margin purchases and short sales in securities trading.
2.Re-financing for other securities firms or other securities finance enterprises.
3.Loans for rights issues and subscriptions to underwritten shares ("subscription loans").
4.Loans to securities firms for underwriting ("underwriting loans").
5.Financing for securities transaction settlement purposes.
6.Securities borrowing and lending.
7.Other related business approved by the competent authority.
Securities obtained by securities finance enterprises in the process of operating the businesses in the preceding paragraph shall be sent to a centralized securities depositary enterprise for custody.
A securities finance enterprise applying to operate business under paragraph 1 shall submit an application, along with the following documents, to the competent authority for approval:
1.Minutes of the relevant board of directors meeting.
2.An operations plan.
3.A description of the internal control system.
4.A set of operating rules.
5.A set of any contracts required for the business.