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

Ⅳ.　　Interbank Funds Settlement

Section 1:　　Electronic payment and settlement

50.Prior to the stipulated time for settlement, a Clearing Institution shall notify each 
　 participant entity of the net-credit or net-debit positions for verification, and then 
　 transmit the same to the Bank or the agent bank designated by the Bank for the 
　 execution of settlements.
　 In executing settlements as referred to in the preceding Paragraph, all participant 
　 entities with net-debit positions shall supplement those net settlement positions, 
　 after which the Bank or the agent bank designated by the Bank will transfer net-credit 
　 positions into their accounts.
　 A Clearing Institution may transfer funds several times during the daily settlement 
　 period, while transmitting and managing transfers initiated by itself.
　 Where the balance in the settlement account of a participant entity is insufficient to 
　 effect payment of amounts payable, the Clearing Institution shall be responsible for 
　 notifying the participant entity to make up the shortfall.
　 The stipulated time for settlement referred to in Paragraph 1 shall be separately 
　 prescribed by the Bank.

51.Where a participant entity is unable to perform the settlement of debt at the 
　 stipulated settlement time, the Clearing Institution shall perform a 
　 supplementary settlement to complete settlement procedures within the time 
　 stipulated by the Bank as per Subparagraph 4, Direction 26 herein.
　 Neither the Bank nor its designated agent banks shall bear liability for the 
　 compensation of any loss resulting from the inability to complete daily 
　 settlement on time due to the participant entity's delay in the settlement of 
　 net-debit positions.

Section 2:　　Negotiable instruments clearing and settlement

52.Where the available balance of an "interbank funds account" is insufficient to 
　 cover the payment for negotiable instruments presented for clearing, the Bank 
　 shall process the transaction through the queuing mechanism and simultaneously 
　 notify the online institution that issued the said negotiable instruments. The
　 online institution is required to immediately make up the difference upon 
　 receiving the notification.
　 For dishonored negotiable instruments, if sufficient funds are not replenished 
　 by 3:30 in the afternoon, they shall be returned in accordance with pertinent
　 rules.

53.For daily clearance and settlement of negotiable instruments, Participant Entities shall 
　 immediately replenish sufficient funds for payment upon receiving an advance notification 
　 of their balance payable; check clearing institutions shall, at the designated time, deduct 
　the balance payable from the non-interest-bearing reserve account of the Participant Entity 
　and transfer the funds into its settlement account opened at the Bank. 
　The “Designated Time” as referred to in the preceding paragraph shall be coordinated and 
　determined by and between the check clearing institution and the Participant Entity, and 
　reported to the Bank for record.
　Check clearing institutions shall monitor whether any Participant Entity fails to replenish 
　sufficient funds for balance payable, promptly remind and urge such Participant Entity to 
　replenish funds, and keep track of whether the Participant Entity has funds to be 
　transferred in. 
　Check clearing institutions shall not post the balance receivable of a Participant Entity to 
　its non-interest-bearing reserve account until having completed the deduction and transfer 
　procedures in accordance with Paragraph 1 hereof.   
　If a Participant Entity is unable to pay the balance payable in whole or in part, check 
　clearing  institutions shall complete the day’s settlement operation in accordance with 
　Article 18 of the “Regulations Governing the Business of Negotiable Instruments Exchange 
　and Clearance of Accounts among Banks.” 

Section 3　　Securities Funds Settlement

53-1.Paragraphs 1,3,4,5 of Direction 50, and Direction 51 shall apply mutatis mutandis to 
　　 securities funds settlement.

53-2. A Clearing Institution applying to the Bank for settlement of funds under 
　　delivery-versus-payment arrangements for securities transactions in accordance 
　　with subparagraph 2, paragraph 1, Direction 28 shall transmit transaction-by–
　　transaction or the netting balance of each transaction cleared in accordance 
　　with the offsetting mechanism to the Bank for settlements.