Regulatory Alerts2018-01-01
Instructions of Margin Finance (2018)
The Securities Commission’s Board of Commissioners issued these Instructions to regulate margin finance activities by licensed Financial Brokers, establishing capital and guarantee requirements for licensing alongside strict exposure limits relative to net ownership rights. The framework mandates detailed Margin Finance Agreements, daily Maintenance Margin calculations, and a two-business-day deficit coverage period, while granting brokers the right to liquidate securities if clients fail to meet margin calls. Additionally, Financial Brokers must submit weekly reports on outstanding finance and portfolio capitalization to the Commission and are prohibited from dealing in securities issued by their affiliates or accepting guarantees that distort financial ratios.