Laws and Regulations Database of the Central Bank of the Republic of China(Taiwan)

1. These Directions are prescribed by the Central Bank of the Republic of China
　 (Taiwan) (hereafter referred to as "the Bank") to implement a system of 
　 designated dealers in open market operations for the purpose of strengthening 
　 the efficiency of open market operations and promoting the sound development 
　 of financial markets.

2.Designated dealers for open market operations (hereafter referred to as 
　 "designated dealers") of the Bank are classified into the following two 
　 categories:
　 (1)General designated dealers: Financial institutions with healthy business 
　　　operations that are able to comply with the Bank's management of market 
　　　liquidity.
　 (2)Primary central government bonds dealers: Financial institutions with 
　　　qualifications for trading central government bonds that are able to 
　　　provide liquidity in government bond trading and promote the sound 
　　　development of the government bonds market.
　 With the approval of the Bank, a financial institution may concurrently 
　 operate as a general designated dealer and as a primary central government 
　 bonds dealer.

4.A general designated dealer shall
　(1)Participate in the Bank's open market operations and offer two-way price 
　　 quotations and make transactions in the interbank call loan market;
　(2)Comply with the  " Matters Requiring Implementation by General Designated 
　　 Dealers for Open Market Operations";
　(3)Provide market information to the Bank when necessary.
　The "Matters Requiring Implementation by General Designated Dealers for Open 
　Market Operations" as referred to in Subparagraph 2 of the preceding Paragraph 
　shall be drafted by the Taipei Interbank Money Center, Bankers Association of 
　the Republic of China and submitted to the Bank for approval.

7.A primary central government bonds dealer may participate in the Bank's open 
　market operations as a counterparty and shall 
　(1)Engage in auction bids for central government bonds, when-issued trading of 
　　 central government bonds, and two-way price quotations in central government 
　　 bonds secondary market;
　(2)Comply with relevant rules established in the "Matters Requiring 
　　 Implementation by Primary Central Government Bonds Dealers";
　(3)Provide the Bank with information on its central government bonds position 
　　 and relevant trading details, and with market information when necessary.
　The "Matters Requiring Implementation by Primary Central Government Bonds 
　Dealers" in Subparagraph 2 of the preceding Paragraph shall be drafted by 
　Taipei Exchange and submitted to the Bank for approval.

8.A primary central government bonds dealer may apply to the Bank for 
　assistance in case of funding needs arising from compliance with the Bank's 
　policies. 
　Taipei Exchange may provide related privileges for primary central government 
　bonds dealers.

9.The Bank may award those designated dealers that perform well in implementing 
　items specified in Directions 4 and 7.

11.When a financial institution applies for designated dealership, it shall submit 
　 an official letter with application documents, photocopies of relevant 
　 certification and proof of financial status to the Department of Banking of the 
　 Bank. 
　 Applicants deemed qualified under both Directions 3 and 6 may apply to serve 
　 concurrently as a general designated dealer and a primary central government 
　 bonds dealer. 
　 The Bank may re-select designated dealers when necessary. Previously 
　 qualified designated dealers shall re-apply in accordance with the relevant 
　 rules. Designated dealers that fail to re-apply or are not approved by the 
　 Bank shall be disqualified.

13.The Bank may suspend or rescind the status of designated dealers under any of 
　 the following conditions on their part:
　 (1)Failure to meet the criteria specified in Directions 3 and 6.
　 (2)Violation of rules in Paragraph 1, Direction 4; Paragraph 1, Direction 7; 
　　　or Paragraph 1, Direction 10.