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[Law Basis]
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Chapter 5 Interbank Trading Registration
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32.
When registration institutions perform interbank transaction registration, the
party that initiates the transmission of transaction message is the transferor
bank, the party that receives the message is the transferee bank. Registration
institutions shall be responsible for any errors in the execution of transfer
orders that result in injury to the rights and interests of its customers.
The information flows for interbank transfer, exchange for government-held stocks,
bond stripping or reconstitution are as follows:
(1) Delivery-versus-payment transfer:
i.The transferor bank and the transferee bank shall transmit messages to the CGSS
Center. After the transaction message is matched and confirmed, it is sent to
the CIFS for settlement of the transaction.
ii.The CGSS Center shall reject the message, if the disposable balance of the
securities account of the transferor bank is insufficient to cover the trade,
or if the securities data transmitted by the transferor bank is inconsistent
with that in the CGSS Center.
iii When the CIFS executes payment settlement, a transaction for which the clearing
bank does not have sufficient fund to cover shall not be rejected immediately,
but shall be subject to queuing, with payment for awarded securities at level
one priority, with other payments at level four.
iv.The transferor bank may initiate an instruction to cancel a transaction message
still queuing for a match. Once the instruction is accepted by the CGSS Center,
the cancellation shall be confirmed and the original transaction message shall
be returned, unless otherwise matched.
v. Once the CIFS completes the settlement of the transaction, the CGSS Center shall
effect securities transfers between the transferor bank and the transferee bank,
and send the results to the transferor bank and the transferee bank respectively.
(2)Free-of-payment transfer, restricted transfer registration, lodgment
registration, and return registration: The transferor bank transmits the message
tothe CGSS Center. Upon the receipt of such message, the CGSS Center will
proceed with the transfer of securities between the transferor bank and the
transfee bank according to the instruction of the transferor bank and sends the
message to the transferee bank. The transferee bank should send the Bank the
processing result, which will be forwarded to the transferor bank.
(3)Exchangeable bonds for government-held stocks: the CGSS Center processing the
exchange of exchangeable bonds for government-held stocks through the CGSS
Center shall debit the securities account of the transferor bank as instructed
by the transferor bank and transmit the message to TDCC.
(4)Bond stripping: Once a bond stripping transaction performed by a clearing bank
is received by the CGSS Center, the CGSS Center shall effect transfers, in
accordance with the instruction of the transferor bank, debiting the interest-
bearing government bonds from the transferor bank account for the amount to be
stripped and crediting STRIPS to the account of the TDCC correspondent clearing
bank by the same amount, and transmit the message to the TDCC correspondent
clearing bank.
(5)Bond reconstitution: Once a bond reconstitution transaction performed by the
TDCC correspondent clearing bank is received by the CGSS Center, the CGSS Center
will effect transfers, in accordance with the instruction of the TDCC
correspondent clearing bank, debiting STRIPS from the TDCC correspondent
clearing bank account for the amount to be reconstituted and crediting the
interest-bearing government bonds to the transferee bank account by the same amount.
The provisions in item (ii), subparagraph 1 of the preceding paragraph shall apply
mutatis mutandis to the method for transmitting transaction messages involving no
payment specified in subparagraphs 2–5 of the preceding paragraph.
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33.
The transferor bank and the transferee bank for interbank transfer, exchange for
government-held stocks and bond stripping or bond reconstitution as listed in the
previous direction are defined as follows:
(1) Transfer registrations: The registration institution which the assignor
corresponds with is the transferor bank (assignor bank); the registration
institution which the assignee corresponds with is the transferee bank
(assignee bank).
(2) Lodgment registrations: The registration institution which the depositor
corresponds with is the transferor bank (depositor bank); the registration
institution which the Court corresponds with is the transferee bank
(custodian bank).
(3) Return registrations: The registration institution which the Court
corresponds with is the transferor bank (custodian bank); the registration
institution which the guarantee recipient corresponds with is the transferee
bank (recipient bank).
(4) Restricted transfer registrations: The registrations institution which the
pledgor, the guarantee provider, or the reserves depositor corresponds with
is the transferor bank (pledgor bank, guarantee provider bank or depositor
bank); the registration institution which the pledgee or the guarantee
recipient corresponds with is the transferee bank (pledgee bank or recipient
bank).
(5) Revocation of restricted transfer registrations, exercise of pledge, and
revocation of public guarantee (reserves deposit) with ownership transfer:
The registration institution which the pledgee or the recipient corresponds
with is the transferor bank (pledgee bank or recipient bank); the
registration institution which the pledgor or the guarantee provider or the
reserves depositor corresponds with is the transferee bank (pledgor bank or
guarantee provider bank or reserves depositor bank).
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34.
The transferor bank, when sending instructions such as interbank transaction
transfer, exchange for government-held stocks and bond stripping or bond
reconstitution, shall proceed in accordance with the following instructions：
(1) Transfer registration: The messages shall be classified into delivery-
versus-payment and free-of-payment, and shall include the transaction
serial number, the transferor bank, the securities account number of the
transferor, the account name of the transferor, personal ID number (profit-
seeking enterprise uniform number) of the transferor, the transferee bank,
the securities account number of the transferee, the account name of the
transferee, personal ID number (profit-seeking enterprise uniform number)
of the transferee, the securities code, and the amount of securities;
delivery-versus-payment transfers shall include additional information on
cash account number of the transferor, cash account number of the
transferee, and the amount of funds. Transfer registrations arising from a
trust, shall also include relevant information on the establishment or
termination of the trust.
(2) Restricted transfer registration: In addition to the provisions on free-of-
payment transfer messages prescribed in the preceding subparagraph apply
mutatis mutandis to restricted transfer registration, messages of whether
there is a pledge default agreement, interest beneficiary and the type of
restricted transfer registration shall be also included.
(3) Lodgment registration and return registration: The provisions on free-of-
payment messages prescribed in subparagraph 1 hereof shall apply mutatis
mutandis to information to be included in the message.
(4) Exchange of government-held stocks: The messages shall include transaction
serial number, the transferor bank, the securities account number of the
transferor, the account name of the transferor, personal ID number (profit-
seeking enterprise uniform number) of the transferor, centralized
depository account number of the transferor, the securities code, the
amount of the securities, the exchange price, the securities code of the
underlying stocks, the number of stocks exchanged, and the amount payable
for odd stocks.
(5) Bond stripping or bond reconstitution: The messages shall include
transaction code, transferor bank, securities account number of the
transferor, profit seeking enterprise uniform number of the transferor,
centralized depository account number of the transferor, the security code,
the amount of the securities, and attached coupon series；Bond stripping
shall also include other relevant information such as the interest income
accrued before stripping and the amount of tax withheld.
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35.
Interbank transaction registration, exchange for government held stocks, bond
stripping or bond reconstitution, except for the manner of registration and
relevant forms to which the provisions for intrabank transactions shall apply
mutatis mutandis, shall be processed in accordance with the following
provisions：
(1) Interbank transfer registrations:
i. Delivery-versus-payment transfers: The transferor shall apply at the
transferor bank, the transferee shall apply at the transferee bank; the
transferor bank and the transferee bank shall, according to the processing
results of the Bank, carry out outward transfer registration and
corresponding funds transfer for the transferor, as well as inward transfer
registration and corresponding funds transfer for the transferee. However,
in the case of open market operations involving the purchase or sale of book-
entry CGS, relevant funds transfers shall be initiated by the Bank.
ii.Free-of-payment transfers: The transferor shall apply at the transferor
bank；the transferor bank shall perform outward transfer registrations for
the transferor, and then shall transmit relevant messages to the transferee
bank, which shall perform inward transfer registrations for the transferee.
(2)Interbank lodgment registration: The depositor shall apply at the depositor
bank；the depositor bank shall perform outward transfer registration for the
depositor, and then transmit the relevant message to the custodian bank,
which shall perform inward transfer registration for the Court and print
relevant slips of Deposit Certificate. If several persons (including several
persons with a joint ownership relationship) apply for joint lodgement, the
depositor bank shall also fax the list of depositors to the custodian bank.
(3)Interbank return registration: The recipient shall apply at the custodian
bank; the custodian bank shall perform outward transfer registration for the
Court and then shall transmit relevant message to the recipient bank, which
shall perform inward transfer registration for the recipient. If several
persons (including several persons with a joint ownership relationship)
apply for joint return or collect, the custodian bank shall also fax the
list of recipients to the recipient bank.
(4)Interbank restricted transfer registration: The pledgor (guarantee provider
or reserves depositor) shall apply to the pledgor bank (guarantee provider
bank or reserves depositor bank)；the pledgor bank shall perform restricted
outward transfer registration and then shall transmit relevant message to
the pledgee bank (the recipient bank), which shall perform restricted inward
transfer registration for the pledgee (recipient).
(5)Revocation of interbank restricted transfer registration, the exercise of
pledge, and revocation of public guarantee (reserves deposits) with
ownership transfer:
i. Revocation of pledge registration, public guarantee registration, and
reserves depository registration: The pledgor (guarantee provider or
reserves depositor) shall apply at the pledgee bank (recipient bank); the
pledgee bank (recipient bank) shall perform revocation of restricted inward
transfer registration for the pledgee (recipient) and then shall transmit
the relevant message to the pledgor bank (guarantee provider bank), which
shall perform revocation of restricted outward transfer registration for the
pledgor (guarantee provider or reserves depositor).
ii.Exercise of pledge: The transferee shall open a securities account at the
pledgor bank, and shall apply at the pledgee bank based on the result of the
pledgee’s exercise of pledge. The pledgee bank shall perform revocation of
restricted inward transfer registration for the pledgee and then shall
transmit the relevant message to the pledgor bank, which shall perform
revocation of restricted outward transfer registration for the pledgor and
the securities transfer between the pledgor and the transferee.
iii.Revocation of public guarantees （reserves deposits）with ownership
transfer: The transferee shall open a securities account at the guarantee
provider bank (reserves depositor bank), and shall apply for revocation at
the recipient bank based on the results of the Court’s mandatory execution.
The recipient bank shall perform revocation of restricted inward transfer
registration for the recipient and then shall transmit relevant message to
the guarantee provider bank (reserves depositor bank), which shall perform
revocation of restricted outward transfer registration for the guarantee
provider (reserves depositor), and perform the securities transfer between
the guarantee provider (reserves depositor) and the transferee.
(6) Exchange of government-held stocks: The applicant shall fill out an
“Application for Exchange of Central Government Exchangeable Bonds for
Government-held Stocks/Early Sell Back of Central Government Exchangeable
Bonds” (Form 20) and submit it to the clearing bank. The clearing bank
shall, after confirming the par value of the securities slated for exchange
and the number of government-held stocks to be received by the applicant to
be correct, debit the amount from the applicant’s securities account and
transmit the relevant message to TDCC. TDCC shall then transfer the stocks
to the applicant’s centralized depository securities account.
(7) Bond stripping: The applicant shall apply at the transferor bank；the
transferor bank shall debit the interest-bearing government bonds from the
applicant’s securities account for the amount to be stripped and transmit
the message to TDCC correspondent clearing bank; the TDCC correspondent
clearing bank shall credit that amount of STRIPS to TDCC securities account
and transmit the message to TDCC, which shall credit STRIPS to the
applicant’s centralized depository securities account by the same amount.
(8) Bond reconstitution: The applicant shall apply in accordance with the
relevant regulations of TDCC and shall transmit the message through TDCC to
TDCC correspondent clearing bank；the TDCC correspondent clearing bank shall
debit STRIPS from TDCC securities account for the amount to be reconstituted
and transmit the message to the transferee bank, which shall credit that
amount of interest-bearing government bonds to the applicant’s securities
account.
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