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

4. Eligible CDs holders are banks, credit cooperatives, bills finance companies, Agricultural Bank of Taiwan Co., Ltd. (hereafter referred to as “Agricultural Bank”), Chunghwa Post Co., Ltd. (hereafter referred as “Chunghwa Post”), and other financial institutions as approved by the Bank.

Credit cooperatives shall entrust Taiwan Cooperative Bank Co., Ltd. with subscribing CDs or submitting bids at CDs auctions.

5. The CDs shall be registered, and issued in book-entry form.The maximum tenor of CDs shall be three years.

The CDs issued in non-negotiable form shall not be transferred without the prior consent of the Bank.

CDs shall not be transferred until account transfer procedures have been completed at the Department of Banking of the Bank (hereafter referred to as “Department of Banking”).

6. CDs shall be issued in the following manners:

(1) By Subscription: The Bank shall set the CDs issue date, tenors, interest rates 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 shall announce the issue date, tenors, total offer amount, maximum allocation for each bidder and other relevant terms via press release before the Bank conducts the auction.

Between the announcement of issuance and the notification of subscription or auction results, the Bank reserves the right to cancel or modify the terms and conditions of CDs issuance.

7. In consideration of the funding situation in the financial markets and the monetary policy issues, the Bank shall decide the amount of CDs that each financial institution can purchase of subscriptions.

The number and amount of each subscription for each financial institution are as follows:

(1) For each tenor of CDs, each financial institution shall submit only one subscription.

(2) The amount of each subscription shall be in multiples of NT$5 million.

8. The CDs auction shall be made on a multiple rate basis. The allocation of CDs shall depend on the bidding rates submitted by individual financial institutions. The determination of auction is based on the following rules:

(1) For bids lower than the maximum rate set by the Bank, rates are ranked in ascending order from low to high.

(2) If the remaining amount offered by the Bank is insufficient to cover 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 of bids, amount and rate for each bid submitted by each financial institution shall comply with the following rules:

(1) A maximum of five bids for each tenor of CDs.

(2) The total value of all bids submitted for each tenor of CDs shall not exceed the total issue amount and shall be in multiples of NT$5 million.

(3) The bidding rate shall be limited three digits after the decimal point.

9. With regard to the results of CD subscription or auction, the Bank shall notify each subscriber or bidder the approved purchase amount and the allocation information through the Online Operation System or by other means.

10. Payments related to CD purchases, repayment of principal and interest upon maturity, and early termination will be handled as follows:

(1) The settlement for subscription or successful bids, will be deducted directly from the account of the financial institution at the Department of Banking at a designated time on the CD issue date.

(2) When a CD matures or is terminated early, the Bank shall transfer the amount payable into the account of the holding financial institution at the Department of Banking.

(3) For a financial institution which does not have an account at the Department of Banking, it shall 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 CD-related payments through the account of the agent opened at the Department of Banking.

11. After a financial institution has completed payment for CDs, the Department of Banking shall issue letters of confirmation of CDs through the Online Operation System or in written form.

12. The principal and interest of the CDs will be repaid in one lump sum upon maturity. Early termination of CDs is not allowed unless with the Bank's consent.

The calculation of accrued interest on early terminated CDs will be based on the actual number of days held and the lower value of the coupon rate or the offer rate of a CD with the nearest but shorter tenor as announced by the Bank at the time the early terminated CD was issued.No interest will be accrued for a holding periods less than 28 days.

13. For pledged CDs, pledgers must cancel the pledge no later than 12:00 noon one business day before the maturity date.