Terms and Conditions for Internet Credit Balance Account

As Credit Balance Account is an account that client can loan fund from company to buy shares and/or borrow share for short selling, so customers with Credit Balance Account have obligation differ than normal Cash Account.


In order to buy or borrow shares for short selling, customers need to deposit money or pledged shares which will be use for calculate customers’ Purchasing Power.

       
 

Purchasing Power

=

Excess Equity / Initial margin required

 

Excess Equity

=

Customer’s Net asset value – Margin required

 

Customer’s net asset value

=

Customer’s asset - Debt

 

Customer’s asset

=

Cash balance + Long Market Value

 

Debt

=

Margin loan + Short Market Value

 

Margin required

=

Long market Value * initial margin required

       


Explanations

  1. Customer’s asset is Cash Balance together with pledged shares and/or shares in Credit Balance Account which listed in company’s Marginable Securities List, Long Market Value (LMV).
  2. Customer’s Debt is Margin Loan and Short Market Value (SMV).
  3. Customer’s net asset value is customer’s asset minus customer’s debt (3=1-2)
  4. Margin Required is value of shares which is counted for customer’s asset in Credit Balance Account multiply by initial margin rate which is announced in company Marginable Securities List.
  5. Excess Equity is customer’s net asset value minus Margin Required (5=3-4). Excess Equity will use to calculate customer’s Purchasing Power by dividing Excess Equity with Initial Margin rate.
  6. Currently, there are 4 groups of securities in company Marginable Securities List, which are

Group I : Initial margin rate is 50%.
Group II : Initial margin rate is 60%.
Group III: Initial margin rate is 70%.
Group IV: Initial margin rate is 85%.

As in number 4, Purchasing Power is varies by securities that client intend to buy.
• If customer wants to buy group I securities, he can buy twice as much as his Excess Equity.
• If customer wants to buy group II securities, he can buy about 1.667 times of his Excess Equity.
• If customer wants to buy group III securities, he can buy about 1.428 times of his Excess Equity.
• If customer wants to buy group IV securities, he can buy about 1.176 times of his Excess Equity.

  1. Since there is no margin required for cash collateral, using cash collateral can create more purchasing power than using stocks collateral at the same value. In addition, securities with lower initial rate can create more purchasing power than securities with higher initial margin rate.
  2. Since customers can buy shares amount higher than his asset, customers are required to maintain his account position to be in line with SET regulations.

a. If Maintenance Margin lower than 35% or 40 % , in case of short selling, customer have to deposit more collateral within 5 days from the called date which company will inform customer in written. At the due date, if customer fails to top up and the Maintenance Margin is still lower than required position, the shares will be forced sell or return, in case of borrow stock, on the next working day. On another word, if customers have losses from buying share about 25% or about 8% from short selling, customers will be forced sale or return.

b. If Maintenance Margin is lower than 25% or 30%, in case of short selling, customers need to deposit more collateral within the called date. Otherwise, there will be forced sale or return within that day also. On another word, if customer losses about 35% form buying shares or about 15% from short selling, customers will be forced sale or return.

Buying Shares on Credit Balance Account

Terms and Conditions
  1. Customers can buy shares in company Marginable Securities List up to his Purchasing Power.
  1. Customers can buy shares which is not in company Marginable Securities List equal to customers’ Cash Balance, which means that there is no loan for non-marginable securities. If customers use Cash Balance from short selling, customers’ position will be lower and might be called for more collateral or forced sale or return borrowed shares.

Selling Shares on Credit Balance Account


Terms and Conditions

  1. Customers are able to sell shares which already deposited in customers’ account only.
  1. Customers who want to short sell have to borrow those shares and can sell only borrowed shares which already deposited in to customers’ account.

Cash Withdrawal from Credit Balance Account

Customers need to withdraw money from their Credit Balance Account, please follow these procedures.

  1. Fill in information in Cash Withdrawal Request Form.
  2. Maximum withdrawal amount is equal to Excess Equity as of the previous working day and comply with SEC regulation.
  3. Please inform company before 11.30 a.m. of the day before the withdrawal date. Any request that submitted to company later than that will be proceed on the next day. 
    For example: If requests come in Feb 2, 2006 at 10.00 a.m., customers will receive fund on Feb 2, 2006. If request come in at 12.00 p.m., customers will receive fund on Feb 3, 2006. In addition, if customer sold pledged shares and/or shares in Credit Balance Account, it might take 3-4 day for customers to receive fund, as is required by SEC regulation.
  4. Company will only transfer fund or sending check to customers using the method customers inform company, which are transfer fund to bank account as mention to company, transfer to other type of account customers have with company, or to settle customers’ Cash Account balance. If customers’ available position is not as much as withdrawal request amount, company will transfer fund to customers as much as customers’ available position or customers will receive fund later as mention in number 3.

Cash Available for Withdrawal Criteria.

  1. Maximum cash that customers can withdraw is equal to Excess Equity but it has to be Excess Equity from,

• Cash Balance.
• Increasing value of stocks which purchase in Credit Balance Account.

  1. In case customers want to withdraw money greater than customers’ excess equity, that amount will be treated as Margin Loan which customers have to pay interest for.
  2. Company may deduct interest and borrowing fee from customer equity before calculating Cash Available for Withdrawal.

Please noted that,

  • Excess Equity from pledged shares in Credit Balance account can use to calculate Purchasing Power but cannot use to calculate Cash Available for Withdrawal.
  • Excess Equity from selling pledged or deposited shares will be available for withdraw at the settlement date (T+3).

  • How to calculate Net Excess Equity available for withdrawal :

Excess Equity as of withdrawal date (T+1)

xxxxx

Deduct

Excess Equity from pledged shares

xxxx

Un-due amount of selling pledged/deposited shares

xxxx

Interest payable

xxx

Borrowing fee

xxx

xxxxx

Net Excess Equity available for withdrawal

xxxxx

Deposit Fund to your Credit Balance Account via ATS

Terms and conditions

  1. Fill in company Cash Deposit Request Form.
  2. Please inform company before 11.00 a.m. of a working day before deposit date. Any request submitted to company later than that will be proceed the next day.
  3. Customers purchasing power will be up the next day.
    For example: Requests come in Feb 1, 2006 at 10.00 a.m., the fund will be transferred on Feb 1, 2006. If the transfer is successful, customers’ Purchasing Power will be up on Feb 2, 2006. If request come in at 12.00 p.m., customers’ purchasing power will be up on Feb 3, 2006.

Stock Withdrawal from Credit Balance Account

Terms and conditions

  1. Customers are able to withdrawal shares value not greater than customers’ Excess Equity as of the end of the day before withdrawal date (T-1).
  2. Please fill in Shares Transfer Request Form. Please specify that the withdrawal is for transfer to customers other account with company only.
  3. In case customers want to withdraw stocks value greater than customers’ Excess Equity, customers have to clear the short amount before withdraw those stocks. In case customers’ position is not enough to the withdrawal request, company will transfer shares to customers as much as customers’ available position. Any Request Form proceed will not be re-proceed, even tough company transfer shares lass than what mentioned in the request form. If customer still wants to transfer the remaining amount, customers need to fill in a Shares Transfer Request Form again.
  4. Withdrawal of non-collateral shares, which are deposited shares or non-Marginable Securities, can be done if customers’ position is not call margin position.

Deposit shares as collateral in Credit Balance Account**

Terms and conditions

  1. Shares which can be deposited as collateral are shares listed in Company Marginable Securities List.
  2. Please fill in Shares Transfer Request Form and specify that those transferred shares are for pledge purpose.**
  3. Customers have to pledge collateral shares. Shares that can be pledged are shares that already in customers Cash Account only. Customers are required to open Securities Pledged account with Thailand Securities Depository Co., Ltd. (TSD) and signing Application for Registration of Pledge of Securities with TSD. For assisting, please contact NOMURA DIRECT 0-2638-5500.
  4. When the pledging process is done, customers’ Purchasing Power will be up the next day.

Shares Deposited for Sell in Credit Balance Account.**

  1. Customers can transfer shares from customers’ Cash Account or from other brokers for sell in Credit Balance Account. Shares deposited from Cash Account have to be cleared from settlement before transfer to Credit Balance Account.
  2. Please fill in Shares Transfer Request Form.
  3. Customers can sell deposited shares on the day after transferred dated.
  4. By selling those deposited shares, Purchasing Power will be increase immediately after confirmed selling order.
  5. If customer wants to withdraw selling amount, please follow Cash Withdrawal procedure.

Interest Related to Credit Balance Account

Customers shall receive interest from Cash Balance portion that is greater than Short Selling value. On the other hand, customers shall pay for Margin Loan interest. Interest will be calculated at month end and will be net between interest receivable and payable before recorded to customers’ Credit Balance Account. If customers’ net interest position is receivable and account position is Cash Balance, customer Cash Balance will increase on the next day. In contrast, if those customers account position is Credit Balance, the net received interest will decrease customers’ Margin Loan. On the other hand, the net paid interest will decrease Cash Balance if customers’ account position is Cash Balance and will increase Credit Balance if customers’ position is Credit Balance.

Interest Rate for Cash Balance and Margin Loan will be announced monthly at the first working day of the month. Cash Balance‘s interest rate will be effected on the first day of the previous month. For Margin Loan, it will be effected on the month announced.

For Example: Company announces interest on Apr 1, 2006. Interest for Cash Balance is 2% per annum and margin Loan is 6% per annum. It means that customers receive interest from Cash Balance during period of Mar 1 – 31, 2006 at rate of 2% per annum and pay interest for Margin Loan at rate 6% during Apr 1-30, 2006. 

To settle buy amount, the amount will be deducted from customer’s Cash Balance before recorded as Margin Loan.

Selling shares or short selling amount will be recorded in Cash Balance or reduce Margin Loan but the short selling amount will be deducted from Cash Balance when calculate interest.