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〈Purpose of Establishment〉
1. The Central Bank of the Republic of China (Taiwan) (hereinafter referred to as
the "Bank" ) prescribes these Directions to clearly stipulate matters to be
complied with by banks when issuing foreign-currency denominated negotiable
certificates of deposit (hereinafter referred to as "foreign-currency NCDs")
pursuant to Article 36 of the Regulations Governing Foreign Exchange Business
of Banking Enterprises.
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〈Par Value〉
2. Foreign-currency NCDs shall be issued with a par value of 100,000 USD, 100,000
Euros, 100,000 AUD, 500,000 Renminbi, 10 million JPY, or any integral multiples
thereof.
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〈Term〉
3. Foreign-currency NCDs shall have a term from one week to one year.
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〈Rates and Rules〉
4. The rates of foreign-currency NCDs may be decided by the issuing bank in
consideration of market conditions; however they shall not be linked to
any derivative.
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〈Reserves〉
5. When a bank issues foreign-currency NCD, it shall set aside reserves in accordance
with Article 4 of the Regulations Governing the Audit and Adjustment of Deposit
and Other Liability Reserves of Financial Institutions.
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[Related Regulations]
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〈Issuance and Interest Accrual〉
6. Foreign-currency NCDs shall be issued at par value and redeemed along with
interest accrued in one lump sum payment at maturity.
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〈Additional Interest〉
7. When an issuing bank is unable to carry out redemption of foreign-currency NCD at
maturity in the event of force majeure, it shall pay additional interest on the
NCD.
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〈Issuance Conditions〉
8.Foreign-currency NCDs shall not be redeemed before maturity and their terms and
conditions shall not be negotiable.
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〈Registration of Issuance, Book-entry transfer and Settlement Operation〉
9. Foreign-currency NCDs shall be issued in non-physical form and registered with the
short-term bills central depository custody institution. Matters regarding the
registration of issuance, central custody, book-entry transfer, and clearing and
settlement shall be carried out in accordance with the Regulations Governing
Book-Entry Operations for the Issuance, Registration, and Central Custody of
Short-Term Bills.
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〈Trading and Settlement〉
10. The transactions of foreign-currency NCDs shall be settled on a delivery versus
payment (DVP) basis through a foreign-currency clearing institution and a
short-term bills central depository custody institution.
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〈Fund Management〉
11. When a bank issues foreign-currency NCDs, it shall retain funds raised therefrom
in the denominated currency; if necessary , the issuing bank may convert the
funds into NTD by SWAP or cross-currency swap (CCS).
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〈Receipts and Payment〉
12. Settlements for foreign-currency NCD shall be made in the denominated currency
of the NCD. When the payment involves an exchange against NTD, the NCD
investor shall comply with the Regulations Governing the Declaration of Foreign
Exchange Receipts and Disbursements or Transactions and other relevant
regulations.
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[Related Regulations]
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〈Issuance Management〉
13. When a bank applies to the Bank for approval to issue foreign-currency NCDs in
accordance with Paragraph 1, Article 6 of the Regulations Governing Foreign
Exchange Business of Banking Enterprises, the bank shall submit an annual
issuance plan that contains information on planned issue amount for the year
and fund utilization plan, and report the issue amount and terms to the Bank
for record within one week after the first issue.
A bank may issue NCDs within the issue amount approved by the Bank in accordance
with the preceding paragraph on a revolving basis within one year. The
unultilized portion of the quota will be invalidated at the end of the one
year period.
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〈Filing〉
14. Banks shall file relevant reports and statements in a format prescribed by
the Bank.
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〈Internal Rules〉
15. Banks that issue foreign-currency NCDs shall establish relevant operating rules
in accordance with these Directions.
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