|
[Law Basis]
[Print]
|
III. Repo transactions on bonds (bills)
|
〈Counterparties of repo transactions〉
14. Counterparties of repo transactions include banks, bills finance
companies, Agricultural Bank, Chunghwa Post, securities firms
designated by the Bank as dealers for open market operations
(hereafter referred to as "designated dealers"), and other financial
institutions approved by the Bank.
Financial institutions, mentioned in the preceding paragraph,
that are not proprietaries will entrust designated dealers to
issue confirmations for repos transactions undertaken.
|
|
〈Eligible bonds (bills) and tenors〉
15. Eligible bonds (bills) for repo transactions include CDs,
government issued or guaranteed bonds, bank debentures, bank
accepted or guaranteed bills.The Bank may buy eligible bonds
(bills) in a repo transaction at a discount. The tenor of a
repo transaction shall not be longer than 30 days.
|
|
〈Means of repo transactions〉
16. Repo transactions of bonds (bills) will be conducted in the
following means:
(1) By application: The Bank shall set the repo date, eligible
collaterals, tenor, yield and other relevant conditions with
reference to the funding situation of the banking system and
interest rate level in the financial market and announce the
information through the Online Operation System or by other
means.
(2) By auction: The Bank will announce the repo date, eligible
collaterals, tenor, total offering amount, maximum allocation
for each individual bid and other relevant information via
press release before the Bank conducts the auction.Between
the announcement of repo transactions and the notification of
application or auction results, the Bank reserves the right
to cancel or modify the terms and conditions of repo transactions.
|
|
〈Application of repo transactions〉
17. In consideration of the funding situation in the financial markets
and the monetary policy issues, the Bank shall decide the amount
of repo transactions that each financial institution can undertake.
The number and amount of transactions undertaken by individual
financial institution are as follows:
(1) For repo of the same tenor and with the same category of
eligible collaterals, a financial institution shall only
undertake one transaction.
(2) The amount of each transaction shall be in multiples of
NT$5 million.
|
|
〈Auction of repo transactions〉
18. The repo transactions auction shall be made on a multiple yield
basis. The allocation of repo transaction shall depend on the
yield submitted by individual financial institutions. The
determination of auction allocation is based on the following
rules:
(1) For bids higher than the minimum bid yield set by the Bank,
rates ranked from high to low.
(2) If the remaining amount offered by the Bank is insufficient
to lower bids of the same rate, the allocation will be pro
rata based on the sizes of the bids submitted. NT$5 million
is the smallest allocation unit.
The number, amount and yield bid by each financial institution
are as follows:
(1) A maximum of five bids for each tenor of repo and with the
same categories of eligible collateral.
(2) The total value of all bids submitted for each tenor of repo
shall not exceed the total amount and shall be in multiples
of NT$5 million.
(3) The bidding yield shall be limited three digits after the
decimal point.
|
|
〈Notification of repo transactions〉
19. The Bank will notify each applicants or bidders the approved
amount or the allocation and the allocation information of repo
transactions through the Online Operation System or by other means.
|
|
〈Settlements of repo transactions〉
20. Financial institutions shall be in accordance with the approved
or allocated amount, prepare a repurchase agreement, trade
confirmation, and other relevant documents to settle DVP with
the Department of Banking in the following methods:
(1) The financial institution shall transfer the eligible bonds
(bills) into a Bank designated account before a designated
time on the trade date, and the Bank will transfer the proceeds
into the account of the financial institution at the Department
of Banking.
(2) The Bank will deduct the amount from the account of the financial
institution opened at the Department of Banking at a designated
time on the repo maturity date as agreed, and return the previously
delivered bonds (bills) to the financial institution.
(3) For a financial institution which does not have an account at the
Department of Banking, it may submit a document issued by another
financial institution which agrees to make or collect payment on
its behalf, and with the consent of the Bank, make or receive repo
transactions related payments through the account of the agent
opened at the Department of Banking.
|
|
〈Extraordinary circumstances of repo transactions〉
21. If a financial institution has contingent liquidity needs under extraordinary
economic or financial circumstances, the financial institution may apply to
the Bank to undertake repo transactions, and proceed with the transaction after
the Bank deliberates the situation and gives its consent.
The counterparty, tenor, manner and operation of repo transactions mentioned
in the preceding paragraph are not subject to the restrictions set forth in
Direction 14, Paragraph 3 of Direction 15, or Directions 16 to 18 herein.
|
|
|
