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[Law Basis]
[Print]
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Chapter 1 General Principles
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1.
These Directions are specially prescribed by the Central Bank of the Republic of
China (Taiwan) (hereinafter referred to as “the Bank”) for the management of book-
entry central government securities (hereinafter referred to as“book-entry CGS”).
Except where otherwise provided by law, management of book-entry CGS shall be
undertaken in accordance with these Directions.
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2.
Particulars of the issuance and buyback of book-entry CGS, such as the issue
name, type, serial number, form, method, date, amount, coupon rate, date for
repayment of principal and interest (method of repayment), the time and place of
auctions, the underlying exchange government held shares, the period, the price and
the procedures for exchange, redemption at holders’ (issuer’s) option of the
Central Government Exchangeable Bonds (hereinafter referred to as “Exchangeable
Bonds”) shall be handled in the manner as publicly announced by the Ministry of
Finance.
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3.
Book-entry CGS are in registered form, and the particulars of purchase, transfer,
trust, lodgement, depository of reserves, pledge, and serving as public guarantee
shall be registered in accordance with these Directions. Unless duly registered,
protestation against a third party shall not be provided.
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4.
Terms in these Directions are defined as follows:
(1)“Book-entry CGS” refers to central government bonds issued in registered form (hereinafter
referred to as “book-entry CGBs”) in accordance with Article 6 of the Central Government
Development Bonds and Loans Act, and treasury bills issued in registered form (hereinafter
referred to as “book-entry treasury bills”) in accordance with Article 5 of the Treasury
Bills and Short-term Loans Act.
(2)“Exchangeable bonds” refer to book-entry bonds which may be exchanged for stocks held by
the central government (hereinafter referred to as “government-held stocks”), the
government repays with government-held stocks or the principal to the bonds holders based
on the terms of the agreement.
(3)“Strippable bonds” refer to interest-bearing government bonds made up of interest and
principal payments that can be separately traded as announced by the Ministry of Finance.
(4)“Separate Trading of Registered Interest and Principal of Securities (STRIPS) ” refers
to “coupon STRIPS” and “principal STRIPS”, that are zero coupon bonds derived from
strippable bonds and traded separately with no interest payment but repaid at par value
at maturity.
(5)“Clearing banks” refer to banks and Chunghwa Post Co., Ltd. appointed by the Bank to
handle registrations, transfers, associated fund settlements, as well as payment of
maturing principal and interest of book-entry CGS.
(6)“Registration institutions” refer to Department of the Treasury and Department of Banking
of the Bank (hereinafter referred to as “Department of the Treasury” and “Department of
Banking”), and clearing banks that perform registration of book-entry CGS.
(7)“Own account” refers to the securities account owned by the Bank or a clearing bank in
its own book.
(8)“Customer account” refers to the securities account owned by a corresponding customer
at the Bank or a clearing bank.
(9)“Transfer registrations” refer to the registrations of inward or outward title transfers
of book-entry CGS carried out due to purchase, trading, succession, gift, trust, or other
reasons.
(10) "Lodgement registrations" refer to the registrations of inward or outward possession
transfers of book-entry CGS when the underlying securities serve as the lodgement objects
deposited with the Court.
(11) "Return registrations" refer to the registrations of inward or outward possession
transfers of book-entry CGS when the underlying securities serving as the lodgement object
deposited with the Court are returned to the original depositor or delivered to a third
party.
(12)“Restricted transfer registrations” refer to the registrations of restricted inward or
outward transfers without changes in book-entry CGS ownership, such as pledge
registrations, public guarantee registrations (where duly deposited in the Bank, the
Treasury, or a bank to serve as a guarantee), or reserves deposit registrations (where
duly deposited in the Bank to serve as trust fund reserves or indemnity reserves).
(13)“Revocations with ownership transfers” refer to a third party applying to a clearing
bank for revocations of original registrations and for registrations of inward or outward
transfers of securities ownership when the securities serve as public guarantees or
depository reserves and should be transferred to the third party under a court order of
compulsory enforcement.
(14)“Cancellations with ownership transfers” refer to a buyer of securities applying to a
clearing bank for cancellations of original certificates and for inward or outward
transfers of securities ownership when the securities are the underlyings of an issued
repurchase transaction (repo) certificate and the repo seller has not carried out
cancellations of the original certificate with the clearing bank prior to the prescribed
time on the maturity date of transactions such that the securities may be transferred
to the repo buyer.
(15)“Intrabank transaction registrations” refer to various registrations performed between
two trading parties whose securities accounts are maintained at the same registration
institution.
(16)“Interbank transaction registrations” refer to various registrations performed between
two trading parties whose securities accounts are maintained at different registration
institutions.
(17)“Par value” refers to the registered value of book-entry CGS. The minimum registration
unit is NT$100,000 and other units used must be multiples of NT$100,000.
(18)“Transferable balance” refers to the balance of a clearing bank securities account at
Department of the Treasury after subtracting the balance of interbank restricted outward
transfer registrations.
(19)“Disposable balance” refers to the balance in a clearing bank’s own securities account
or its customer’s securities account after subtracting the balance of restricted outward
transfer registrations, repo certificates issued by the clearing bank, and other intrabank
deductible balances.
(20)“Transactions accompanied by payment” refer to book-entry CGS transactions accompanied
by payment made for awarded securities, buybacks, delivery-versus-payment transfers,
payment of principal and interest, as well as the collection of interbank transfer fees
and disbursement of payment processing fees by the Bank.
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5.
Registrations carried out by a Registration Institution shall be as follows:
(1) Aggregate registration by Department of the Treasury of all Registration Institution
securities accounts, and registration of restricted transfers on their customer accounts.
(2) Transfer registration and restricted transfer registration processed by Department of
Banking for its own accounts in connection with open-market operations, deposits for
reserve (bonds), and short-term accommodation.
(3) Various registrations processed by a clearing bank for its owned accounts and its
customers’ accounts.
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6.
The representative office of a Registration Institution shall process with
registrations for its own accounts and customer accounts; branches of the
Registration Institution may perform registration operations [for the Bank]
given prior reporting to the Bank for approval and recordation.
The Registration Institution shall issue a written notice containing information
on its representative office and branches to Department of the Treasury for
filing reference. Any changes in the above items shall likewise be reported.
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7.
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In order to perform various securities registrations, a natural person or a
juristic person shall open a securities account and a demand deposit account at a
clearing bank；A clearing bank shall open a securities account at Department of the
Treasury.
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When applying to open a securities account or a cash account, amend basic
information of an account, or close an account, the applicant shall fill out an
Application for Opening/ Amending / Closing CGS Account Form (Form 1); When
applying to open an account, a Seal Impression Card (Form 2) shall also be filled
out.
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For the purpose of performing trust registration of the Securities, a trustee shall
open an extra securities trust account and an extra deposit trust account with the
clearing bank.
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8.
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A Registration Institution shall issue a book-entry central government securities
passbook to customers for all registration in connection with the securities, and
may, at the customer’s request, provide an Account Verification Statement (Form 3).
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Customers may select either booklets or loose-leaf passbooks for their use (Form
4), but shall obtain approval from the Registration Institution prior to switching
from one type to another. The use of the passbooks shall be dictated by the
“Directions for (Loose-leaf) Passbook Use” (Appendices 1 and 2).
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9.
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The “Central Government Securities Settlement System” (hereinafter referred to as
the “CGSS”) is a computer network linking the Bank and clearing banks, with the
Bank as interbank online center (hereinafter referred to as “CGSS Center”) to
effect real-time interbank transfers of securities.
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The Taiwan Depository & Clearing Corporation (hereinafter referred to as“TDCC”),
with a linkage to the Bank, shall effect the real-time book-entry transfers of the
underlying stocks according to the information transmitted by the CGSS. The TDCC,
with links to its correspondent clearing banks（hereinafter referred to as “TDCC-
correspondent clearing bank”）, shall effect real-time book-entry transfers of
STRIPS.
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Any participants in the Securities System shall observe such matters and procedures
for data security as set forth in the relevant provisions in the “Central Bank
Computer Communications Services System.”
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10.
A clearing bank shall use the services of CBC Interbank Funds Transfer and
Settlement System (hereinafter referred to as “ CIFS”) operated by Department of
Banking, and its bank funds-Type I reserve account (hereinafter referred to as
“bank reserve account”) opened at Department of Banking to effect interbank funds
settlement associated with transactions processed by the CGSS.
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11.
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The cut-off time for acceptance of interbank transfers by the CGSS Center shall be
5:00 p.m. (see table 1 for details of CGSS Operation Schedule). No late transfers
will be accepted. This provision shall not apply, however, in case of system
malfunction or policy support.
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When requesting an extension of CGSS operating hours, a clearing bank shall notify
Department of the Treasury by telephone prior to the cut-off time set forth in the
preceding paragraph, and shall fax an Application for Extension of CGSS Operating
Hours (Form 5) to Department of the Treasury within thirty minutes after the
scheduled cut-off time.
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A clearing bank that requests for extension of CGSS operating hours shall report,
no later than three business days from the date of request, to Department of the
Treasury in writing, stating the cause of system failure, operating status and
improvement measures thereof; Department of Banking shall also be notified if the
aforementioned extension of CGSS operating hours in the preceding paragraph
involves the support of the CIFS.
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