• TAI FSC, TAI Justice issued orders under article 32 of Regulations governing securities firms, article 10 of Regulations governing securities borrowing and lending (short selling) by securities firms, and article 38 of Regulations governing securities finance enterprises.
• Follows TAI FSC November 2023 issued orders to clarify investment restrictions.
• Also follows TAI FSC Dec. 2023 revised rules re pioneer stock consolidation.
• Follows TAI FSC Aug. 2021 issued rules for day trading stock lending.

Securities Lending Rules

• Specifies conditions under which securities firms handling securities lending business may transfer their loaned securities to their proprietary departments for sale.
• Alternatively, where securities proprietary dealers may borrow securities for sale.
• Conditions include trading domestic/overseas active ETFs for the purpose of trading, handling arbitrage, issuing index investment securities to meet risk hedging needs.
• Specifies the conditions that securities firms are not subject to the restrictions that the borrowed securities or short sold price shall not be lower than previous closing price.
• Securities dealers may borrow securities from securities financing enterprises for the trading needs stipulated above, without being required to enter into a brokerage contract with the securities financing enterprise for a period of 3 months or more.
• The borrowed securities shall not be used to lend in securities lending business.
• Securities firms engaging in day trading of securities shall be limited to listed/OTC securities and shall be subject to the relevant regulations TAI EXC and TAI TPEX.

Investments by Overseas Chinese

• TAI FSC and TAI Justice also stipulated rules under article 21 of Regulations governing investment in securities by overseas Chinese and foreign nationals.
• When a securities firm conducts arbitrage trading in its proprietary capacity, in some situations, the transactions are not subject to the restriction in Regulations governing securities firms, which prohibits selling securities that are not held in inventory.
• Overseas Chinese and foreign investors conducting the same types of arbitrage trading are also not subject to the restriction prohibiting the sale of securities not yet owned.

Securities Firms Standards

• TAI FSC and TAI Justice also stipulated rules under article 45 of Securities and exchange act, article 2 of Standards governing the establishment of securities firms.
• Plus para 1, art 31 and para 2, art 36-1 of Regulations governing securities firms.
• Stipulated rules for securities firms that engage in concurrent consulting business.
• Specifies types of activities for which securities firms are not subject to the restrictions specified in paragraph 2 of article 36-1 of Regulations governing securities firms.
• Such as when the securities firm is serving as primary dealer in central government bonds, liquidity provider of warrants, market maker, or is engaged in hedging activities.

Effectiveness

• All the above stipulations are effective from 19 June 2025.