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Loans are provided to investors, allowing them to purchase listed securities. Moreover, Loans can be used for investors’ refinancing from other brokers’ CB accounts.
At least once a month, TSFC will announce list of marginable securities including with initial margin, call margin and force margin on TSFC website. Besides, the securities on marginable list will be analyzed on their liquidity , fundamental, and other risk factors (if any). Likewise, monitoring closely of each CB account to ensure that they maintain enough collateral against its margin. In case of collaterals drop to the trigger point, TSFC can call for top-up or implementing force selling and will be operated on a case by case basis.
TSFC provides credit facilities to brokers for their companies’ liquidity and it might be used for companies’ credit balance financing or an other brokerage financing to their own customers. Brokers’ loan is not collateral and it allows to set up loan period by call or term type.
However, a loan that TSFC lends to brokers can not be over the TSFC’s Equity (following to Notification of the Securities and Exchange Commission : SEC)
TSFC offers loans to directors and employees for purchasing their own company shares under “an employee stock option program (ESOP)”. Employees must apply this loan type through their employers who have received the loan proposal from TSFC. The repayment loan to TSFC will be deducted from their own salary by instalment.
The Securities borrowing and lending will be placed/received collaterals within condition defined by TSFC under SEC regulation. The lender agrees to transfer securities to the borrower on the agreed date and the borrower will transfer the borrowed securities back to the lender on the due date. To protect the risk that the borrower cannot deliver back the borrowed securities, the borrower agree to pledge company assets, at the same time, as collateral for the lender.
The collateral can be cash, or other types of securities as agreed by both parties. Generally, the minimum value of the collateral should be at least equivalent to the value of securities borrowed.
Currently, this SBL Service provides to institutional client. The objection of this can be prevented for any Cover Fail occur or for Prop Trade Management.
The product is for the short-term loans, the borrower will send securities as collateral to lender within agreement of repurchase. This agreement will be specified of purchased securities, purchased price, repurchase date, and sell back price which is purchase price plus interest.
After lender receive the securities, lender can use that securities to be lent or for sale to other parties. However, the securities need to be returned to borrower on maturity date and lender will receive loan back from borrower on the same day.