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[Law Basis]
[Print]
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2.Particulars of issues and buybacks of central government bonds such as the issue
name, type, form, serial number, method, date, amount, coupon rate, face value,
as well as maturity terms and method for payment of principal and interest shall
be handled pursuant to the offering announcement provided by the Ministry of
Finance.
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3.Banks, Chunghwa Post Co., Ltd., bills finance companies, securities firms, and
insurance enterprises which meet the following criteria may, in accordance with
these Directions, apply to the Department of the Treasury of the Bank
(hereinafter called “the Department of the Treasury ") for being delegated as
central government bond dealers (hereinafter called “dealers") to participate in
auctions,placements and buybacks of central government bonds:
（1）The applicant, unless an insurance enterprise, has received approval from the
competent securities authority to trade government securities in an over-the-
counter market on its own account.
（2）Net income after taxes in the latest fiscal year.
（3）Paid-in capital equals to or more than NT$1 billion and net worth per share
above par value.
Any financial institution having been delegated by the Bank to handle bond
operations prior to the adoption of these Directions may apply to the Bank in
writing for being delegated as a dealer.
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5.After being delegated by the Bank, a dealer shall fill out an“Application
for Participation in On-line Bidding for Central Government Bonds and Treasury
Certificates" and submit it to the Department of the Treasury along with a sample
seal impression card. The institution shall also immediately prepare system on-
line connections and complete testing of on-line connections within two months
from the date of being delegated as a dealer. Where an institution fails to
complete the preparations within the prescribed time period, the Bank may revoke
its qualification as a dealer.
The applicant shall immediately apply by letter for amendments in the event of
any change in the information contained in the materials referred to in the
preceding Paragraph.
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6.Central government bonds are issued principally through auctions, and are open to
dealers only. However, the Bank may notify dealers to handle placements, when
necessary.
Individuals and juristic persons may engage dealers to submit bids under the dealers’
names. The small investor may apply to buy Central government bonds in accordance
with the offering announcement provided by the Ministry of Finance and the Directions
for Consigned and Sub-consigned Sales of Central Government Bonds by the Chunghwa
Post Co., Ltd.
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9.Dealers will be restricted to submitting one tender for each offering, on which
there may be no more than ten competitive bids, and to only one subscription
hrough a non-competitive bid. Competitive bidding and non-competitive
subscriptions may use only the tender document prescribed by the Treasury
Department, which shall be placed in a sealed envelope for submission.
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14.The distribution of auction awards to individual dealers in competitive or non-
competitive auctions may not exceed the limits announced by the Ministry of
Finance.
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17.Successful bidders shall settle on the prescribed date.
The settlement of book-entry government bonds shall be performed in accordance
with applicable provisions of the Directions for the Operation of Book-Entry
Central Government Securities.
For the settlement of government bonds in physical forms, dealers shall make out
a collection list and shall draw a check with the Department of Banking of the
Bank as the drawee or a promissory note payable by the Department of Banking of
the Bank (with the maturity date corresponding to the issue date of government
bonds), or transfer funds into the account of the Department of the Treasury in
the Department of Banking through the Central Bank Interbank Funds System, and
collect the bond certificates from the Bank.
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18.The buybacks of central government bonds are open to dealers only. Individuals
and other juristic persons may engage dealers to submit bids under the dealers’
names.
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20.Dealers shall use only the sellback tender document prescribed by the
Department of the Treasury and submit the bids in a manner prescribed in
Direction 9 for competitive bidding.
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23.Dealers shall abide by the following provisions:
（1）Participate in each central government bond auction.
（2）Participate in placements of government bonds pursuant to the Bank’s
notification.
（3）Submit bids at prices or yields in line with the market conditions at
central government bond auctions.
（4）File the following documents to the Department of the Treasury in accordance
with the prescribed deadline. The Bank may, when necessary, dispatch
personnel to perform on-site inspections:
i. Submit bidding status reports on the second business day after each auction
of central government bonds（ Form 2 ）.
ii. Submit monthly statements of central government bond holdings in the
preceding month before the second business day of each month （ Form 3 ）.
iii. With the exception of insurance enterprises, submit yearly statements of
government bond trading each year by the end of January （Form 4 ）.
iv. Submit yearly financial reports with a letter within four months after the
end of each accounting year.
Financial reports of private institutions must
be duly audited and certified by certified public accountants, approved by
the board of directors and acknowledged by the supervisors. However, public
institutions may submit their reports with a letter on a provisional basis
pending finally approved by the auditing agency and then resubmit their
reports when approved.
（5）Perform matters relating to electronic on-line bidding in accordance with
the applicable regulations.
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24.Under any of the following circumstances, the Bank may issue a letter of
notification to dealers requesting rectification:
（1）Failure to participate in auction or placement of bonds.
（2）Participate in auctions with all bids invalid.
（3）Submit Competitive bids at prices or yields significantly below or above
prevailing bond market conditions.
（4）Failure to submit relevant documents truthfully within the prescribed
period of time.
（5）Failure to perform matters relating to electronic on-line bidding in
accordance with the applicable regulations.
（6）Failure to comply with Central Bank regulations related to government bonds
.
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30.The Bank may assess dealers on a non-periodic basis with regard to
matters carried out pursuant to these Directions through use of the Form for
Assessment of Dealers Performance in Government Bond Matters (Form 5), and issue
commendations to those with outstanding performance records.
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