Securities Margin Account

 

FLRSL Securities Margin Account Rules
 
 
Financing condition

Margin ratio

5% - 80% of the market value of designated securities

Marginable securities

Designated securities listed in the [FLRSL Margin Ratio]

Marginable value

Marginable value= market value of stock X margin ratio

Total marginable value

The total value of marginable value

Approved value

The maximum amount of facility that FLRSL Securities grants its Client, which can be extended at the company's discretion.

Borrowing Limit

The lower of total marginable value and approved value.

Financing Cost

Margin account lending rate

Annual interest rate is HSBC prime rate (P) + 3%

Cash account lending rate

Annual interest rate is HSBC prime rate (P) + 8%

Margin Call

Margin call

If the debit balance of client accounts exceeds the borrowing limit, we will make margin call statement to clients by phone or email.

Margin call amount

Margin loan – borrowing limit

Margin top up methods

Receiving margin call from us, the clients should either:

Deposit additional cash equivalents to margin call amount and inform FLRSL of selling stocks to make the balance of loan less than the borrowing limit

Deposit additional marginable securities designated by FLRSL as listed in stock margin list 

Deadline for margin top up

Within one business day after receiving margin call.

Forced liquidation

If clients fail to meet margin call within required deadline, clients’ securities may be sold without their consent.

Addition: FLRSL will update the margin table from time to time without informing clients. The right of the final version belongs to FLRSL.


 

Other terms and conditions

1. If their margin accounts are still owed money, clients are not allowed to withdraw any fund or securities even their accounts

    have credit.

2. Clients have to make their account balances more than initial margin requirements before they place orders.

3. Receiving margin call, Clients are not allowed to further purchase any securities until they make payment for margin top up.

4. FLRSL will not accept any suspended securities, GEM securities, derivative warrants as collaterals.

5. FLRSL has the right to repledge your securities collateral in your margin account to "Qualified Domestic Institutional Investors"

    for financial accommodation.


Authorization letter for margin securities accounts

Clients with margin securities account should sign the Authorization Letter to authorize FLRSL to use securities deposited by clients as the collateral. 

The authorization is valid for 12 months after the letter is signed, and the clients have to re-sign the Letter to continue the authorization or notify FLRSL to stop the authorization.

 

Risk of margin securities account

Using margin financing to invest has probabilities of earning higher return as well as bearing higher downside risk due to leverage. Thus it is more suited to professional and other sophisticated investors.