On May 7, TAI FSC proposed to revise rules re stock lending business.
TAI FSC proposed to amend partial provisions of Regulations governing borrowing or lending money in connection with securities business by securities firms.
Amendments
Allow securities firms to engage in stock subscription lending business.
Add categories that are not accepted as collateral, including new restricted employee shares, new shares that are restricted from being transferred by employee for certain period of time, and employee stocks that are subject to deferral of income tax.
Amend contents of lending contracts, including matters agreed upon when issuance of new shares in cash has not been established, or when revoked by competent authority.
Stipulate that the operating procedures for securities firms' handling of securities lending business shall be formulated by TAI EXC, TAI TPEX, as well as TAI DCC.
Consultation Date
Consultation paper will be published soon; consultation open for 60 days from then.
On Aug. 19, 2024, TAI EXC published amendments of Regulations governing borrowing or lending money in connection with securities business by securities firms.
Sep. 2024 TAI EXC Rule Revision
On Sep. 5, 2024, TAI EXC amended Operating rules for securities business money lending by securities firms; provisions related to the lending for new share subscriptions by employees and original shareholders are amended.
Also revised Operating rules for securities firms handling margin purchases and short sales of securities, the amendments aim to address issues such as investor violations or breaches of contract, both within their own firms and other securities firms.
The amendments are effective from Sep. 5, 2024.
Document dated Sep. 5, 2024, received from TAI EXC Sep. 6, summarized on Sep. 10.
Sep. 11, 2024, TAI SITCA Letter
On Sep. 11, 2024, TAI SITCA issued letter informing members re amendment of rules.
Oct. 9, 2024 TAI DCC
On Oct. 9, 2024, TAI DCC amended its Book entry operations manual to align with the TAI EXC's operating rules above; issued new application form, checklist, statement.
The application process for filing basic information for subscription of stock lending, matters regarding the purchase and replacement of application forms, and related amendments to business operating procedures will be announced separately.
Oct. 23, 2024 TAI DCC Further Adjustment
On Oct. 23, 2024, TAI DCC further adjusted rules to align with stock lending business.
Amends TAI DCC's operation manual to facilitate the stock lending by comparing borrower's identity information stated in the securities firm's subscription loan details with the registration and account books provided by the issuer and collateral handling.
It also revises its participants handling securities and loan book transfer operations.
That include procedures for enquiry, notification, filing and change of basic information on stock subscription, lending and borrowing securities, procedures for customers to apply for stock subscription loans, and securities firm’s operating procedures.
The relevant application forms (3568, K10, K11) will be available from Nov. 4, 2024.
The above amendments will be effective from Nov. 11, 2024.
