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

Chapter 5　　Regulation of Central Government Bond Dealers

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
　　　　.

25.Under any of the following circumstances, the Bank may consider requiring a dealer to post a 
　 deposit: 
　 (1) Without positive net income after taxes in the latest fiscal year.
　 (2) Where a dealer’s actual paid-in capital is below NT$1 billion or net worth per share is 
　　　 below par value. 
　 The deposit referred to in the preceding Paragraph shall only be offset by book-entry 
　 central government securities with the performance of public guarantee registration.
　 Where a dealer fails to post a deposit within the prescribed period of time and in the 
　 prescribed manner or a deposit posted is insufficient, the Bank may suspend its 
　 participation in auctions until the deposit is made or replenished.
　 A successful bidder who fails to deliver the payment for central government bonds and thus 
　 causes the price of the second auction being lower than the original price shall be liable 
　 for the difference and any expenses from the second auction. 
　 The difference and any expenses referred to in the preceding paragraph shall be guaranteed 
　 and paid off in a deposit posted pursuant to paragraph 1; if there is any shortfall, a 
　 successful bidder shall still be liable for it.
　 Under any of the following circumstances and without the difference and any expenses 
　 payable, a dealer may request the Bank to return its deposit posted in accordance with 
　 paragraph 1; where there is payment in accordance with the preceding paragraph, the return 
　 of the balance may only be requested： 
　 (1) A dealer having been free of any of circumstances prescribed in the Subparagraphs of the 
　　　 Paragraph 1.
　 (2) The dealer’s commission having been terminated by the Bank.

26.Where any of the following circumstances have occurred with respect to a dealer
　 within the past year, the Bank may impose a one-time suspension of its 
　 participation in auction: 
　 （1）Competitive bids at prices or yields significantly deviating from
　　　　prevailing bond market conditions three times or more. 
　 （2）Failure to submit relevant documents truthfully within the prescribed
　　　　period of time three times or more. 
　 （3）Other failure to handle the business related to government bonds in
　　　　accordance with Central Bank regulations three times or more.

27.Where any of the following circumstances have occurred with respect to a dealer
　 within the past year, the Bank may impose a two-time suspension of its
　 participation in an auction: 
　 （1） Fail to participate in auctions or placements of bonds two times or more. 
　 （2） Participate in auctions with all bids invalid three times or more.

28.In any of the following circumstances, the Bank may terminate the dealer’s 
　 commission:
　（1）Failure to deliver the government bonds or the payment for government bonds 
　　　 on the prescribed date.
　（2）Part of business having been suspended by the central competent authority, 
　　　 rendering it unable to participate in auctions. 
　（3）Having been placed under conservatorship or taken over by personnel sent 
　　　 from the central competent authority.
　（4）Having been suspended by the central competent authority.
　（5）The accumulated annual amount of the accepted competitive bids having not reached
　　　 to the limits announced by the Ministry of Finance. 
　 In any circumstances in Subparagraphs 1 and 5 of the proceeding Paragraph, a dealer may 
　 resubmit an application pursuant to the provisions of these Directions three years 
　 after the termination of its commission.

29.A dealer that intends to terminate commission on its own cause shall notify the
　 Department of the Treasury in writing two weeks prior to the planned date of 
　 withdrawal. 

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.