New Regime Takes Effect on the 31st, Targeting Cross-Market Leverage
Cross-sector joint credit inquiry between banks and securities firms is about to take effect, making customers' cross-market liabilities more transparent. The FSC confirmed on 29日 that the new regime will be implemented on 10月31日, with securities firms to begin inquiries from the first business day on 11月2日, allowing financial institutions to more fully assess customers' repayment capacity and investment leverage. The new regime only expands the scope of joint-credit data, and does not impose separate lending restrictions.
The FSC noted that although banks and securities firms already have a cross-sector inquiry channel, it previously focused on negative records such as defaults and delinquencies, making it difficult to grasp the actual borrowing scale even when customers paid normally. In the future, through system linkage between the Financial Joint Credit Information Center and the stock exchange, both sides will be able to obtain more complete credit information, helping to grasp the full picture of customers' overall liabilities.
Securities Firms Must Check When Threshold Is Met, Banks Must Check for Investment Loans
For securities firms, when credit extended to an individual natural person reaches NT$300 million or 1% of the securities firm's net worth, whichever is higher, the firm must query the customer's bank credit data. The data will include the number of financial institutions dealt with, total credit limits, and the balances and overdue amounts of 4 categories of borrowings for purchasing real estate, purchasing movables, corporate investment and working capital, no longer only confirming whether there are adverse records.
The scope for banks is different. For any newly originated personal loan for investment and wealth-management purposes, regardless of amount, banks must query the applicant's 4 categories of securities-firm data, including margin financing and securities lending, securities business loans, securities borrowing and lending, and unrestricted-purpose loans. The FSC explained that query results are only for credit-approval reference, and banks will still review under the 5P principles of credit, weighing borrower conditions, fund purpose, repayment sources, claim protection and future outlook.
Customer Consent Required, Existing Credit Not Affected
Cross-sector credit data inquiries are subject to conditions. Before inquiring, banks and securities firms must obtain customer consent and inform them of the data scope; if a customer refuses, the firm may not inquire without authorization, and securities firms may decide whether to proceed based on risk-control policies. The new regime mainly targets new applications, and people with existing credit without increased limits will in principle not be affected.
The market is watching the leverage practice of borrowing from banks and then repeatedly expanding positions through pledging stocks or bond ETFs. Securities industry participants assess that after gaining visibility into cross-sector liabilities, they can re-examine credit risk at maturity or renewal, and adjust financing ratios, interest rates or renewal terms where necessary; however, higher borrowing does not mean immediate repayment. As for data-update lags, bank data is mainly reported monthly, while securities data is mainly daily, and the FSC assesses the risk as within a controllable range.