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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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Chapter 2 Appointment and Management of Clearing Banks
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12.
A bank may apply to the Bank for appointment as a clearing bank in accordance
with these Directions by meeting the following requirements:
(1) Net worth after the accounting books were closed at the end of the most
recent year is at least NT$15 billion.
(2) The ratio of regulatory capital to risk-weighted assets for the most recent
half year reviewed by a certified public accountant (CPA) is above the
minimum requirement set forth by the competent authority.
(3) Average return on equity before taxes for the most recent three years audited
by a CPA is above 6%.
Under any of the following conditions, a bank may also apply to the Bank for
being appointed as a clearing bank:
(1) A surviving bank or a newly established bank on account of merger/ consolidation
of a clearing bank.
(2) A recipient bank acquiring the clearing business from a clearing bank or a
transferee bank acquiring shares from a clearing bank.
(3) In case of merger/consolidation, a non-clearing bank subsidiary proposed to
be a clearing bank by the financial holding company.
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13.
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A bank shall apply for appointment as a clearing bank by filling out an
“Application for Book-Entry Central Government Securities Clearing Bank” (Form 6)
for submission to Department of the Treasury along with a copy of its financial
statements and other documents required.
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Applications may be approved by the Bank based on need as determined by bond market
developments.
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14.
A clearing bank having been appointed by the Bank, shall contact the Department of
Information Management of the Bank (hereinafter referred to as “Department of
Information Management”) to set up online connections, and shall complete online
tests within one year from the date of appointment. Otherwise, the Bank may revoke
the status of a clearing bank.
Following the successful completion of various tests as set out in the preceding
paragraph, which shall be undertaken jointly with the Department of Information
Management and Department of the Treasury, Department of the Treasury will issue a
letter informing the clearing bank of the date upon which it may commence operation.
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15.
A clearing bank shall establish rigorous internal controls and exercise the diligence of
a good custodian with regard to performing registrations, clearing funds, transmitting
trading messages, and issuing, cancelling and cancelling with ownership transfer of repo
certificates. Except for the information duly provided under relevant laws, a clearing bank
may not divulge any customer information.
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16.
Under any of the following circumstances, the Bank may issue a letter notifying a
clearing bank to effect improvement:
(1) Failure to perform book-entry securities operations in accordance with these
Directions.
(2) Failure to effect transfers of funds in accordance with the CGSS data handling
protocols.
(3) Occurrence of any other events hindering smooth operation of the CGSS.
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17.
Under any of the following situations, and where warranted by the circumstances,
the Bank may terminate a clearing bank’s appointment, suspend its appointment for
a specific period of time, or disallow new branches of the bank to carry out
clearing bank junctions:
(1) Failure to effect improvement following a notification in accordance with the
preceding Direction.
(2) Violation of relevant regulations or material negligence resulting in severe
hindrance to the operations of the CGSS.
(3) Suspension of any department’s operations by the central competent authority,
resulting in inability to perform operations of book-entry CGS.
(4) Appointment of a receiver or conservator by the central competent authority.
(5) An order from the central competent authority to cease operations.
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18.
When requesting for exit from the CGSS, a clearing bank shall give advance written
notice to Department of the Treasury one month prior to the scheduled exit date.
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19.
Where a clearing bank’s appointment is suspended by the Bank, the clearing bank
shall pay off relevant transfer fees and clear any outstanding balance in the
securities account.
Where a clearing bank withdraws from the CGSS or it’s license is terminated by the
Bank, in addition to effecting clearing procedures as set forth in the preceding
paragraph, it shall close its securities account as well.
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Chapter 3 Issuance and Subscription
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20.
Bidding in book-entry bond auctions is restricted to central government bond dealers only
(hereinafter referred to as “bond dealers”); natural persons and other juristic persons
shall submit bids through bond dealers under bond dealers’ names.
Bidding in book-entry treasury bill auctions is restricted to banks, Chunghwa Post Co., Ltd.,
bills finance companies, securities firms, and insurance enterprises only; natural persons
and other juristic persons shall submit bids through bills houses under bills houses’ names.
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21.
Successful bidders shall carry out the following matters prior to the issuance
of the book-entry CGS:
(1)Filling out and submitting the “Application for CGS Subscriptions
Registration ” (Form 7) to correspondent clearing banks to effect
registrations, specifying the aggregate par amount and amount payable for
securities awarded on their own accounts and on customers’ accounts, prior to
the following deadlines:
i. Book-entry bonds: prior to 3:30 p.m. on the next business day following the
auction.
ii. Book-entry treasury bills: prior to 3:30 p.m. on the auction date.
(2) Making payments for securities awarded on their own accounts and on customers’
accounts to correspondent clearing banks prior to the prescribed time on the
issue date.
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22.
Clearing banks shall carry out the following matters prior to the issuance of
book-entry CGS:
(1) Transmitting messages in the “Book-Entry Central Government Securities
Subscription Statement” (Form 8) to the Bank, prior to the following deadlines:
i. Book-entry bonds: prior to 12:00 p.m. on the second business day following the
auction.
ii. Book-entry treasury bills: prior to 5:00 p.m. on the auction date.
(2) Transmitting payment messages for securities awarded on their own accounts and
on customers’ accounts, classified according to respective successful bidders,
to the Bank to effect payments prior to 3:00 p.m. on the issue date. The Bank
shall debit a clearing bank’s reserve account and credit the clearing bank’s
securities account for the amount specified in the payment instructions
accordingly. In the event that successful bidders fail to effect settlement,
the clearing bank shall notify the Bank to make adjustments.
(3) Upon receiving the Bank’s confirmation of payment messages on the issue date,
clearing banks shall transfer securities to the customers’ securities accounts
according to the customer data listed in the “Application for CGS Subscription
Registration” submitted by the successful bidders.
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Chapter 4 Intrabank Trade Registrations
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23.
Transfer registrations between accounts at the same clearing bank shall be carried out in
accordance with the following provisions:
(1) Delivery-versus-payment transfer: The transferor and transferee shall fill out an
“Outward Transfer Registration (and Request for Collection) Form” (Form 9) and an
“Inward Transfer Registration (and Request for Payment) Form” (Form 10) respectively
for processing by the clearing bank. Following the confirmation of a match between the
transferee’s and the transferor’s trading information, the clearing bank shall effect
the transfers of securities and corresponding funds, and record the same in passbooks for
the transferor and transferee. Confirmation of trade match may be omitted where a customer
has made prior arrangements with the clearing bank.
(2) Free-of-payment transfer: The clearing bank may directly proceed with the transfer of
securities in accordance with the “Outward Transfer Registration (and Request for Funds
Collection) Form” filled out by the transferor except in cases of donations, successions
or trusts, which require the attachment of relevant documents. The transferee may update
the passbook at the clearing bank.
The application for transfer registration mentioned in the preceding paragraph may be
transmitted by secured electronic means, provided it has been so agreed between the customer
and the clearing bank.
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24.
Intrabank Lodgment Registration shall be carried out in accordance with the
following provisions:
(1) The depositor shall submit documents for lodgment request (lodgment statements,
court decrees, etc.) and fill out an "Application for Treasury Custody " (Form
11) for processing by the clearing bank. After having certified the relevant
documents, the clearing bank shall process Lodge-out Registration for the
lodger and Lodge-in Registration for the Court. The clearing bank shall print
the passbook and give it to the lodger together with a "Lodgment Certificate of
Treasury Custody " (Form 11-1), and shall print relevant slips of the " Deposit
Certificate of Treasury Custody " (hereinafter referred to as a " Deposit
Certificate") (Forms 12, 12-1, 12-2, and 12-3).
(2) If several persons (including several persons with joint ownership) apply for
joint lodgement, they shall submit Lodgement Registration request as prescribed
in the preceding Paragraph. The lodgers may use the name of one person in the
group and his/her ID Card number (or profit-seeking enterprise uniform number)
as a representative. The clearing bank shall record the representative’s name
and ID Card number (or profit-seeking enterprise uniform number) of the joint
lodgement and the total number of lodgers in the account name columns of the
relevant slips of the Deposit Certificate. The clearing bank shall print the
Deposit Certificate number on the joint lodgers lists which shall be affixed to
the relevant slips of the Deposit Certificate for filing.
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25.
Intrabank Return Registration and the conversion or sale of the lodged securities
shall be carried out in the following manners:
(1) Full return or recipience:
i. The recipient shall submit the Deposit Certificate with the authorized
signature of the Court to the clearing bank for return or recipience. After
having certified the authorized signature, the clearing bank shall process the
Return-Out Registration for the Court and the Return-In Registration for the
recipient based on the Deposit Certificate, print the passbook and give it to
the recipient. The Court may have its passbook entry updated at the clearing
bank.
ii. If several persons (including several persons with joint ownership) jointly
return or receive the lodged securities, they shall apply in accordance with
the procedures set out in subparagraph 2, Direction 24.
(2) Partial return or recipience:
i. After having certified the authorized signature of the Court, the clearing bank
shall divide the Deposit Certificate into two new Deposit Certificates pursuant
to the Court Letter stating the proportions of the lodged securities to be
reserved and to be received, and print the relevant slips for each new
certificate. Apart from the slip for clearing bank, other slips shall be handed
over to the governing Court.
ii. Recipience procedures shall be processed in accordance with the full return or
recipience procedures.
(3) Conversion of lodged securities:To convert lodged securities by law, the lodger
shall attach the documents for lodgement request (lodgment statements, court
decrees, or certificates of confirmation), and shall apply for Lodgement
Registration with the newly-provided securities as security lodgement in
accordance with Direction 24, and shall apply for Return Registration with the
originally-lodged securities in accordance with this Direction.
(4) Sale of lodged securities:
i. After having certified the authorized signature of the Court, the clearing bank
shall sell outstanding securities recorded on the Deposit Certificate in
accordance with the Court’s compulsory enforcement order.
ii. The clearing bank shall transfer the securities into the security account
assigned by the transferee, total the sum of money remained after sale together
with the principal, interest, and yield of the matured securities, fill out
（copies of）Receipt of Treasury Deposit, and transfer the sum to the custody
account of court enforcement case monies for allocation.
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26.
Intrabank restricted transfer registration shall be carried out in accordance
with the following:
(1) The pledgor (guarantee provider) shall fill out an “Application for Pledge
Registration” (Form 13) ( “Application for Public Guarantee
Registration ” (Form 14)) and submit to the clearing bank for
registration. The clearing bank shall perform outward restricted transfer
registration for the pledgor (guarantee provider) and inward restricted
transfer registration for the pledgee (guarantee recipient) in accordance
with the application, print a passbook together with a “Certificate of
Pledge Registration” (Form 13-1) (Certificate of Public Guarantee
Registration” (Form 14-1)) and provide them to the pledgor (guarantee
provider); the pledgee （guarantee recipient） may update his passbook at
the clearing bank.
(2) To register a pledge default agreement on the pledged securities, the
pledgor shall fill out an “Application for Registration of Pledge Default
Agreement” (Form 13-2) together with the contract of pledge default
agreement and submit to the clearing bank for processing. The clearing bank
shall register the pledge default agreement in accordance with the
application, print a “Certificate of Book-Entry CGS Pledge Default
Agreement” (Form 13-3), and provide it to the pledgor; the pledgee may
update his passbook at the clearing bank or obtain a pledge default
agreement certificate from the clearing bank.
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27.
Intrabank revocation of restricted transfer registration, exercise of pledge, and
revocation of public guarantee registration with ownership transfer under court
order for compulsory execution shall be carried out in accordance with the following:
(1)Revocation of restricted transfer registration:
i. The pledgor (guarantee provider) shall fill out an “Application for
Revocation of Pledge Registration or Public Guarantee Registration” (Form 15),
with the pledgee’s (guarantee recipient’s) seal affixed as proof of consent
for processing by the clearing bank.
ii. According to the documents prescribed in the preceding item, the clearing
bank shall revoke the restricted transfer registration for the pledgor
(guarantee provider) and the pledgee (guarantee recipient), print a passbook
together with a “Certificate of Revocation of Pledge Registration or Public
Guarantee Registration” (Form 15-1), and provide them to the pledgor
(guarantee provider); the pledgee (guarantee recipient) may update his
passbook at the clearing bank.
(2) Exercise of pledge:
i. Based on the actual result of thepledgee’s exercise of pledge, the transferee
shall fill out a “Notice of Exercise of Pledge of Book-Entry CGS" (Form 16)
with the pledgee’s seal affixed as proof of consent for processing by the
clearing bank. The following documents shall be also attached depending on
the circumstances:
(i)Petition for court auction: Documents related to court auction shall be attached.
(ii)Realization by the pledgee: Certificates which conform to Article 19 of the
Enforcement Act of the Part of Rights In Rem of the Civil Code (certified by
a notary public or commercial groups, showing sale at market price) shall be
attached.
(iii)Agreement with the pledgor that the pledgee shall obtain the pledge: The
contract between the pledgor and pledgee shall be attached.
(iv) Other forms of disposal: The contract between the pledgor and pledgee shall
be attached. Where a third party is involved, the relevant contract shall
be attached.
ii. Unless not being requested to deduct funds from the transferee’s cash account
to settle the transaction, the clearing bank shall, in accordance with the
documents prescribed in the preceding item, carry out a simultaneous revocation
of the pledgor and pledgee’s restricted transfer registration and a transfer
of securities between the pledgor and the transferee, print a passbook together
with a “Certificate of Exercise of Pledge” (Form 16-1), and provide them to
the transferee; the pledgor and pledgee may update their passbooks at the
clearing bank.
iii. If requested to deduct funds from the transferee’ s cash account to settle
the transaction, the clearing bank shall carry out securities transfers as
set forth in the preceding item, as well as carry out funds transfers between
the transferee and the pledgor.
iv. The provisions in item ii hereof apply mutatis mutandis to the exercise of
pledge that does not involve the transfer of funds.
(3) Revocation of public guarantee registration with ownership transfer under
court order for compulsory execution shall be carried out in accordance
with the following:
i. The transferee shall fill out a “Notice of Revocation of Public Guarantee
Registration With Ownership Transfer” (Form 17) with the guarantee
recipient’s seal affixed as proof of consent for processing by the clearing bank.
ii. The clearing bank shall, based on the information in the preceding item,
carry out a simultaneous revocation of the guarantee provider’s and the
recipient’s restricted transfer registrations and a transfer of securities
between the guarantee provider and transferee, print a passbook together
with a “Certificate of Revocation of Public Guarantee Registration With
Ownership Transfer” (Form 17-1), and provide them to the transferee.
The guarantee provider and the recipient may update their passbooks at the
clearing bank.
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28.
Qualified central government bond traders or securities dealers may apply to strip strippable
bonds (hereinafter referred to as “bond stripping”) or to reconstitute stripped bonds
(hereinafter referred to as “bond reconstitution”).
Clearing bank bond stripping or bond reconstitution shall be performed as follows:
(1) Bond stripping: The applicant shall fill out an “Application for Stripping Form”
(Form 18) and submit it to the clearing bank. The clearing bank shall strip, in
accordance with the application form, the interest-bearing government bonds into
coupon STRIPS and principal STRIPS and transmit the message to TDCC, which shall
transfer coupon STRIPS and principal STRIPS into the applicant’s centralized
depository securities account. The clearing bank shall print the passbook and issue
a“Certificate of Stripping”(Form 18-1) to the applicant.
(2) Bond reconstitution: The Applicant applying for reconstitution of principal STRIPS
and coupon STRIPS into interest-bearing government bonds shall comply with the relevant
regulations of TDCC, through which messages are transmitted to the TDCC correspondent
clearing bank and reconstituted bonds are transferred to the securities account of
the applicant. The applicant may update the passbook at the clearing bank.
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29.
When carrying out issuance, cancellations or cancellations with ownership transfer of repo
certificates, a clearing bank shall proceed in accordance with the following provisions:
(1) Issuance of repo certificates:
The applicant shall fill out an “Application for Issuance of Repo Certificates” (Form 19)
and submit it to the clearing bank. The clearing bank shall print the passbook and issue a
certificate to the applicant.
(2) Cancellations of repo certificates:
When a repo certificate comes due or for early annulment of contract, the applicant shall
apply for the cancellation at the clearing bank by submitting the original certificate
issued by the clearing bank, relevant application form and proof of payment with the
applicant’s registered seal affixed. The clearing bank shall print the passbook for the
applicant.
(3) Cancellations of repo certificates with ownership transfers:
When a repo comes due but the repo seller has not presented proof of payment prior to the
prescribed time on the maturity date, the applicant (repo buyer) may apply to the clearing
bank for cancellations of certificates, and transfers of securities by submitting the
original certificate issued by the clearing bank, identity document, and an “Application
for Cancellations of Repo Certificates with Ownership Transfers” (Form 19-1). The clearing
bank shall print the passbook for the applicant, and the transferor (repo seller) may
update the passbook at the clearing bank.
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30.
When exchangeable bonds are redeemed at holders’option, the applicant shall fill
out an “Application for Exchange of Central Government Exchangeable Bonds for
Government-held Stocks/Redemption at Holders’ Option of Central Government
Exchangeable Bonds” (Form 20) for processing by the clearing bank. The clearing
bank shall print the passbook to the applicant.
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31.
A clearing bank, when performing the registrations, stripping, reconstitution of book-entry
CGS, and issuance, cancellations, cancellations with ownership transfers of repo certificates
and redemption at holders’ option of exchangeable bonds, shall proceed in accordance with the
following provisions:
(1) Verifying that the seal on the application form matches the registered seal of the
applicant.
(2) Verifying that the information in the application form matches that originally filed with
the clearing bank.
(3) Verifying that the disposable balance of the applicant’s securities account or the balance
of cash account is greater than or equal to the amount of the outward transfers applied for
or the repo certificate to be issued.
(4) Verifying whether the par value of the reconstituted or stripped coupon STRIPS is
consistent with the minimum registration unit or its integral multiples; whether the par
value of the principal STRIPS corresponds with that of the coupon STRIPS.
(5) Performing transfer registration:
i.Delivery-versus-payment transfer: debiting the amount from the transferor’s securities
account and crediting the amount to the transferee’s securities account; at the same
time, crediting the amount to the transferor’s cash account and debiting the amount to
the transferee’s cash account.
ii.Free-of-payment transfer: debiting the amount from the transferor’s securities account
and crediting the amount to the transferee’s securities account.
(6) Performing lodgement registration: debiting the amount from the depositor's securities
account and crediting the amount to the Court’s securities account.
(7) Performing return registration: debiting the Court’s securities account and crediting the
recipient 's securities account by the same amount.
(8) Performing restricted transfer registration: crediting the amount of restricted outward
transfers to the pledgor’s (guarantee provider’s) securities account and debiting the
disposable balance from the pledgor’s (guarantee provider’s) securities account by the
same amount, and crediting the amount of restricted inward transfers to the pledgee’s
(recipient’s) securities account.
(9) Performing revocations of pledge registrations (general revocations of public guarantee
registrations): debiting the amount of restricted outward transfers from the pledgor’s
(guarantee provider’s) securities account and crediting the disposable balance to the
pledgor’s securities account by the same amount, and debiting the amount of restricted
inward transfers to the pledgee’s (recipient’s) securities account.
(10) Performing exercise of pledge (revocations of public guarantees registration with
ownership transfers): debiting the amount of restricted outward transfers from the
pledgor’s (guarantee provider’s) securities account while crediting the disposable
balance to the pledgor’s securities account by the same amount, and debiting the amount
of restricted inward transfers from the pledgee’s (recipient’s) securities account and
debiting the amount and the disposable balance from the pledgor’s (guarantee provider’s)
securities account while adding up the amounts to the transferee’s securities account.
(11) Performing bond stripping: debiting the interest-bearing government bonds from the
applicant’s securities account for the amount to be stripped and crediting STRIPS to the
TDCC’s securities account by the same amount.
(12) Performing bond reconstitution: debiting STRIPS for the amount to be reconstituted from
the TDCC’s securities account and crediting interest-bearing government bonds to the
applicant’s securities account by the same amount.
(13) Issuing repo certificates: crediting the amount of repo certificates issued to the
applicant’s securities account and debiting the disposable balance from the applicant’s
securities account by the same amount.
(14) Cancellations of repo certificates: debiting the amount of repo certificates from the
applicant’s securities account and crediting the disposable balance to the applicant’s
securities account by the same amount.
(15) Cancellations of repo certificates with ownership transfers: debiting the amount of repo
certificates issued from the transferor’s securities account while crediting the
disposable balance to the transferor’s securities account by the same amount; in
addition, debiting the amount and the disposable balance from the transferor’s securities
account while crediting the amount to the applicant’s securities account.
(16) Processing of application(s) for redemption at holders’ option of exchangeable bonds:
crediting the amount of application for redemption at holders’option to the applicant’s
securities account and debiting the disposable balance from the applicant’s securities
account by the same amount.
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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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Chapter 6 Interest and principal repayment
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36.
Interest payments and principal redemption for book-entry CGS shall be processed in
accordance with the following provisions:
(1) Maturity of the book-entry CGS (STRIPS excluded):
i. Department of the Treasury shall calculate the amount of principal and interest
payable, based on the records of the securities accounts of registration
institutions, as of the close of business day prior to the date of principal
and interest payment. These payments shall be transferred to the bank reserve
account of the registration institutions prior to 10：00 a.m. on the date of
principal and interest payment.
ii. Based on the book balances in its own securities accounts and customers’
securities accounts on the record date as described in the preceding
subparagraph, registration institutions shall calculate the amount of principal
and interest payable, and following the transfer of principal and interest by
Department of the Treasury, transfer the net amount, after the deduction of
withholding taxes, to its own cash accounts and customers' cash accounts prior
to 12:00 p.m. on the date of principal and interest payment.
iii. Where it is agreed that interest payment shall be received by the transferors
who provide the securities as a guarantee or margin deposit, the clearing bank
and the transferee may enter an agreement, that the clearing bank shall
transfer, in accordance with the list of transferors list provided by the
transferee, the net amount after the deduction of withholding tax to the cash
accounts of the transferors on the date of principal and interest payment; if
the transferor is an interbank customer, the amount shall be remitted to the
cash account of the interbank customer.
(2) Maturity of STRIPS:
i. Department of the Treasury shall calculate the amount of principal payable
based on the book balances in the securities accounts at the TDCC correspondent
clearing bank as of the close of the business day before maturity date of the
coupon STRIPS and the principal STRIPS, and shall transfer the principal to the
bank reserve account of TDCC correspondent clearing bank prior to 10：00 a.m.
on the maturity date.
ii.TDCC correspondent clearing bank will transfer, in accordance with the STRIPS
holders list provided by TDCC, the net amount after withholding tax to the cash
accounts of the STRIPS holders prior to 12:00 p.m. on maturity date; if the
holder is an interbank customer, the amount shall be remitted to the deposit
account of the interbank customer.
(3) Exchangeable Bonds Redeemed at Holders’ (Issuer’s) Option:
i. Department of the Treasury shall calculate the amount of principal and interest
payable based on the book record accumulated amount to be redeemed at holders’
option (the records of balances in securities accounts) at the clearing banks
at the end of the announced record date. These payments shall be transferred to
the bank reserve accounts of the registration institutions prior to 10：00 a.m.
on the fifth business day after the date.
ii. Based on the accumulated amount to be redeemed at holders’ option (final
balances in own accounts and customers’ accounts) on the same record date as
in the preceding subparagraph, registration institutions shall calculate the
amount of principal and interest payable, and following the transfer of
principal and interest by Department of the Treasury, will transfer the net
amount after withholding taxes to the various cash accounts for own accounts
and customers’ accounts prior to 12:00 noon on the fifth business day after
the record date of redemption at holders’(Issuer's) option.
When securities mature or if exchangeable bonds are redeemed at holders’
(Issuer's) option, after Department of the Treasury has transferred the principal
and interest in accordance with subparagraph 1, item 1, subparagraph 2, item 1, or
subparagraph 3, item 1 of the preceding paragraph registered information shall be
closed in whole or in part. The exchange of exchangeable bonds for government-held
stocks shall be handled in the same way.
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37.
When book-entry CGS registrations are carried out for the purpose of the
establishment of pledge, public guarantee or depository of reserves, interest at
maturity orinterest due to redemption of exchangeable bonds at issuer’s option
shall be transferred to the bank reserve account of the pledgor bank (guarantee
provider bank) by Department of the Treasury, and shall be transferred by the
pledgor bank (guarantee provider bank) to the cash account of the pledgor
(guarantee provider or reserves depositor) or the pledgee (recipient) based on the
agreement between the applicant and the pledgee (recipient) at the time of
application for registration. If the recipient of the interest is an interbank
customer, the pledgor bank shall remit the interest to the cash account of the
interbank customer.
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38.
When book-entry CGS registrations are carried out for the purpose of the
establishment of pledge, public guarantee and depository of reserves, then
principal at maturity or principal due to redemption of exchangeable bonds at
issuer’s option, prior to the revocation of the aforementioned registrations,
shall be handled in accordance with the following provisions:
(1) Pledge registration: Department of the Treasury shall transfer the principal
amount to the bank reserve account of the pledgor bank, which shall make
payment only after notifying the interested parties first and retaining a
record of the original registrations, and after the presentation by the
interested party of documents demonstrating the consent of the other party
or other valid documents as required by law.
(2) Public guarantee and depository of reserves registration: Department of the
Treasury shall transfer the principal to the bank reserve account of the
recipient bank, which shall transfer the amount to the recipient’s cash
account to serve as public guarantee or depository of reserves.
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39.
During lodgement period, the principal and interest on securities matured or exchangeable bonds
redeemed at issuer’s option, or principal and interest on securities that are the underlying
securities for repo certificates issued where the registrations of the certificates have not
yet been cancelled prior to the repo maturity date shall be respectively handled in accordance
with the following provisions:
(1) Securities are mature or exchangeable bonds are redeemed at issuer’s option during the
lodgement period:
i.Department of the Treasury shall transfer the principal and interest on securities
matured, or exchangeable bonds redeemed at issuer’s option to the bank reserve account
of the clearing bank (custodian bank). The clearing bank shall withhold tax and keep
custody of the after-tax sum as lodgement object.
ii.The clearing bank (custodian bank) shall pay the accrued interest on principal and
interest of the securities matured or exchangeable bonds redeemed at issuer’s option,
which are reserved as lodgement objects. When processing the return registration at the
request of the recipient, the clearing bank shall calculate the principal, interest,
accrued interest, and tax payable of the securities originally in its custody, and shall
pay the net amount after withholding tax to the recipient.
(2) A repo becomes due but the underlying certificate is not yet cancelled:
Department of the Treasury shall transfer the principal and interest on matured securites
to the bank reserve account of the clearing bank of the repo seller. The clearing bank
shall withhold tax, record the original registered item and retain such record, and
disburse payment to the repo buyer after the repo buyer has submitted the repo certificate
and relevant proof documents.
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Chapter 7 Buyback
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40.
Bidding in book-entry bond buybacks is restricted to bond dealers only; natural
persons or other juristic persons shall submit bids through bond dealers under the
bond dealers’ names.
Bidding in book-entry treasury bill buybacks is restricted to banks, Chunghwa Post
Co.,Ltd., bills finance companies, securities firms, and insurance enterprises only
; natural persons or other juristic persons shall submit bids through bills houses
under the bills houses’ names.
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41.
Successful bidders shall carry out the following matters prior to the sellback
of book-entry CGS:
(1) Filling out and submitting the “Application for CGS Sellback Registration ”
(Form 21) to correspondent clearing banks to effect registrations, specifying
the aggregate par amount and amount receivable for securities sold back on
their own accounts and on customers’ accounts, prior to the following
deadlines:
i. Book-entry bonds: prior to 3:30 p.m. on the next business day following the
auction.
ii. Book-entry treasury bills: prior to 3:30 p.m. on the auction date.
(2) Delivering the securities sold on their own accounts and on customers’
accounts to correspondent clearing banks prior to the prescribed time on the
buyback date.
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42.
Clearing banks shall carry out the following matters prior to selling back book-
entry CGS:
(1) Transmitting messages in the “Book-Entry Central Government Securities
Sellback Statement ” (Form 22) to the Bank, prior to the following
deadlines:
i. Book-entry bonds: prior to 12:00 p.m. on the second business day following the
auction.
ii. Book-entry treasury bills: prior to 5:00 p.m. on the auction date.
(2) Transmitting delivery messages for securities sold back on their own accounts
and on customers’ accounts, classified according to respective successful
bidders, to the Bank to effect delivery prior to 3:00 p.m. on the buyback date.
The Bank shall debit a clearing bank’s securities account and credit the
clearing bank’s reserve account for the amount specified in the delivery
instructions accordingly. In the event that successful bidders fail to effect
delivery, the clearing bank shall notify the Bank to make adjustments.
(3) Upon receiving the Bank’s confirmation of delivery messages on the buyback
date, crediting the net settlement amounts (after the deduction of withholding
tax) to the customers’ funds accounts in accordance with the customer data
listed in the “Application for CGS Sellback Registration” submitted by the
successful bidders.
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43.
Following the disbursement of buyback settlement amount by the Department of the
Treasury, the original registrations of book-entry CGS shall be cleared in whole or
in part.
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Chapter 8 Account Affairs and Reporting of Data
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44.
Registration institutions shall establish formal memorandum ledgers for book-entry
CGS transactions; Department of the Treasury shall establish a “government book-
entry securities management” assets memorandum ledger to control the number of
securities issued by the Treasury, as well as a “government book-entry securities
consigned management” liabilities memorandum ledger to control the amount of
securities in own and customer accounts at the various registration institutions.
Registration institutions shall establish a “government book-entry securities
management” assets memorandum ledger for the purpose of cross-checking with the
Bank's assets memorandum ledger, and shall also establish a “government book-entry
securities consigned management” liabilities memorandum ledger in order to control
the balances of securities in own and customers’ accounts.
Accounting ledgers listed in the preceding paragraph shall be managed according to
the provisions of the “Central Public Debts Accounting System.”
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45.
Each day at the close of operations, a clearing bank shall print a “Trading of
CGS” (Form 24), a “Trust of CGS”(Form 24-1), a “Balance of CGS” (Form 25), a
“Daily Statement for the Exchange of Exchangeable Bonds” (Form 26), a “Daily
Statement for Redemption at Holders’ (issuer’s) Option of Exchangeable Bonds”
(Form 27), and a “Holding Analysis of Exchangeable Bonds” (Form 28), and a“
Daily Statement for Bond Stripping/Reconstitution” (Form 29) to be sent to the
Bank for its files; the Bank will compile and print an “Aggregate Statement of
Trading of CGS” (Form 30), an “Aggregate Statement ” for Trust of CGS”(Form 30-
1), an “Aggregate Statement for Balance of CGS”(Form 31), an “Aggregate
Statement for Exchange of Exchangeable Bonds” (Form 32), an Aggregate Statement
for the Redemption at Holder’s (Issuer’s) Option of Exchangeable Bonds” (Form
33), a “Aggregate Holding Analysis of Exchangeable Bonds ”(Form 34), and an
“Aggregate Daily Statement for Bond Stripping/ Reconstitution” (Form 35).
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46.
.Clearing banks shall print “CGS Payment of Principal and Interest” (Form 36),
“Monthly Statement for Exchangeable Bonds” (Form 37) and“ Monthly Statement for
Bond Stripping/Reconstitution” (Form 38) for filing on a monthly basis.“Monthly
Statement for CGS Disbursement and Collection of Principal and Interest Funds”
(Form 39), “Holding Analysis of CGS” (Form 40), “Financial Institutions Holdings
of CGS” (Form 40-1), and “Monthly Statement Disbursement and Collection of
Exchangeable Bonds Odd Stocks Repayment Fund” (Form 41) should be printed and
transmitted to the Bank for filing prior to the second business day of the
following month. The Bank will compile a “Aggregate Monthly Statement for CGS
Disbursement and Collection of Principal and Interest Funds” (Form 42), a“
Strippable Bonds Disbursement and Collection of Principal and Interest Funds”
(Form 42-1), “Aggregate Monthly Statement for the Exchange of Exchangeable Bonds”
(Form 43), a “Aggregate Monthly Statement Disbursement and Collection of
Exchangeable Bonds Odd Stocks Repayment Funds” (Form 44) and “Aggregate Monthly
Statement for Bond Stripping/Reconstitution” (Form 45) for Ministry of Finance
records. A “Aggregate Holding Analysis of CGS” (Form 46) will be printed.
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47.
Clearing banks shall produce a “Semi-annual Principal and Interest Payment
Settlement Statement” (Form 47) once every six months, and the Bank will produce
“Comprehensive Semi-annual Principal and Interest Payment Settlement Statement”
(Form 48) and submit it together with the aforementioned Statement to the Ministry
of Finance for the disbursement of processing service fees.
The statements that are required of to be printed by clearing banks, as prescribed
in Direction 45 to the preceding paragraph shall, if needed, be stored in
electronic media, and may be printed at any time.
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Chapter 9 Management of System Failure and Correction of Account Errors
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48.
In the event of malfunction or line interruption of the CGSS mainframe system
resulting in full-scale online failures, the Department of Information Management
shall immediately notify the Department of the Treasury, the Department of Banking
and all online participants, and take appropriate actions depending on the
circumstances of the contingency:
(1) In case of system interruption：
i. Payment for awarded securities and buyback:A clearing bank shall produce
electronic medium that contain information on payments for awarded securities
and the delivery of soldback securities,and submit the underlying
electronic medium to Department of the Treasury for processing. The Bank shall
produce electronic medium for the results of securities transfer against payment
and funds transfer against delivery of soldback securities and give such
electronic medium to the clearing bank for processing.
ii.Free-of-payment transfer, restricted transfer registration, lodgment
registration, and return registration: operations shall be carried out in manual
backup procedures. The transferor banks shall deliver all accepted transactions
to Department of the Treasury on the [electronic] medium in whole batches；
Department of the Treasury shall contact the Transferee banks to get the Bank
serial numbers of the last received transactions and produce the information on
the [electronic] medium for processing by the transferee banks. Transferee banks
shall report the results of processing to Department of the Treasury by fax and
telephone, and Department of the Treasury shall notify the relevant departments.
iii.The provisions in item
(i) hereof shall apply mutatis mutandis to delivery-versus-payment transfer; the
provisions in item
(ii)hereof shall apply to exchange for government-held stocks, and bond stripping
or reconstitution.
iv.The [electronic] medium produced by clearing banks according to the three
preceding items shall be delivered in a sealed envelope attached with a detailed
list and affixed with the authorized signature of the securities account.
(2) In case of CGSS mainframe system malfunction: CGSS operations shall be relocated to
the off-site backup center of the Bank. If the off-site backup center is also inoperative,
all online operations of interbank securities transaction shall be suspended and shall
be reactivated after the CGSS is recovered.
When the CIFS experiences disruptions while the CGSS operates normally: Except in
case of payment for awarded securities, buy back and repayment of principal and
payment of interest, operations shall be backed up manually, in accordance with the
Guidelines for Central Bank Electronic Interbank Funds Transfer and Settlement
Procedures, all other payment-related transactions shall be executed after the CIFS
is recovered.
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49.
In the event of malfunction or line interruption of an online participant’s
mainframe system, the participant shall immediately notify the Department of the
Treasury and the Department of Information Management. Manual backup procedures
shall be put in place if operations are not recovered by 5:00 p.m. When the cause of
failure lies with a transferor bank, the transferor bank shall produce a medium
containing accepted transaction data in a batch and send it, before the recovery of
the system, to the Department of the Treasury prior to 6:30 p.m. The Bank shall in
turn produce a medium containing the processed transactions received from the
transferee bank and provide it to the transferor bank for processing. When the cause of
failure lies with the transferee bank, the Bank shall produce a medium containing
accepted transaction data to the transferee bank for processing. The transferee bank shall
report the processing results to the Department of the Treasury by facsimile and telephone.
The Department of the Treasury shall in turn forward the results to the relevant parties.
The medium referred to in the preceding paragraph, shall be delivered in a sealed
envelope attached with a detailed list and affixed with the authorized signature of
the securities account.
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50.
Where the Bank, due to a system breakdown, causes interbank security transactions
or funds transfers to be inconsistent with the original documentation of the
clearing bank, the Bank shall make the necessary correction in accordance with the
relevant accounting regulations.
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51.
When a system participant discovers an error while reviewing its same-day
transaction statement or through checking the comprehensive trading information
for the given day, it shall immediately notify the relevant department of the Bank
and take part in the investigation.
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52.
When the transmission of an interbank transaction instruction of free-of-payment
transfer, restricted transfer registration, lodgment registration, return
registration, or exchange for government-held stocks does not conform with the
original documents, a transferor bank shall transmit a message requesting for
return of transfer upon obtaining approval from the transferee bank, which shall
make a reversal transfer for correction accordingly.
The transferee shall offer its full cooperation in making the aforementioned
correction when notified. If the balance of securities, stocks or funds of a
transferee bank’s customer account is insufficient to cover a reverse correction
transfer, the transferor bank shall negotiate with the customer to resolve the
problem by itself.
The preceding two paragraphs do not apply to STRIPS.
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53.
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For transactions not conforming with the original documentation as under Direction
51 and item 1, Direction 52, which are not processed by the transferor bank on the
same day but corrected at a later date, and where delay adversely affects the
interest of the transferee bank, it may request the transferor bank to pay
compensation interest incurred from the date of the transaction until the date of
correction for any securities pending transfer during that period or for a
shortfall in the transfer. The transferor bank shall not be liable for any other
damages.
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With the exception of previous agreements between the parties to a transfer,
payment interest as per the preceding paragraph, shall be calculated, per diem, at
the weighted average of the overnight interbank call loan rate, for the number of
days of delay.
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54.
Where a registration institution discovers an error connected with any type of
book-entry CGS registration which makes the transaction invalid, it shall
immediately investigate the source of the error and re-enter the transaction data.
Interbank transactions that have not been effected before the cut-off time of the
CGSS operation shall be rejected by the CGSS Center.
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Chapter 10 Fees
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55.
The Bank may charge transfer fees for carrying out interbank securities or funds
transfers (Interbank Securities Transfer fees Schedules are in Appendix 2,
Interbank Fund Transfer fees Schedules are provided in relevant rules for the
CIFS). The fees shall be collected from customers by clearing banks and deducted
per month from the bank reserve accounts of those clearing banks by the Bank.
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56.
A clearing bank handling securities or funds transfers or issuance of repo certificates may
charge transfer, issuance, or account maintenance fees. Assessment of charges and rates for
intrabank trades shall be determined by clearing banks.
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Chapter 11 Supplementary Provisions
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57.
Matters relating to book-entry CGS, such as methods of opening and closing
accounts, changing seals or reporting lost seals, use of passbooks and reporting
lost passbooks, shall all be handled in accordance with relevant regulations of
the Bank and clearing banks.
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58.
Payment and withholding of the tax in relation to the transfer of book-entry CGS or
repayment of principal and payment of interest shall be handled in accordance with
relevant laws and regulations.
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