Title:
Announced Date:May 22, 1998
Date:Amended on January 17, 2014(effective from January 22, 2014)
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 .
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.