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Title Taiwan Depository & Clearing Corporation Directions for Book-Entry Operations of Fixed-Income Securities CH
Date 2022.08.19 ( AMENDMENT )

Article Content

Chapter 1 General Principles
Article 1     These Directions are adopted pursuant to Articles 4, 12, 27, 33-1, 35, 55, 56, 57, 57-1, 60, 62, 62-1, 64-1, 65, 65-1, 71-8, 71-9, 86, 88, 91, 100, and 101 of the Operating Rules of Taiwan Depository & Clearing Corporation (TDCC).
Article 2     "Fixed-income securities" in these Directions means New Taiwan Dollar (NTD) denominated corporate bonds, financial bonds, debt-type beneficial certificates and asset-backed securities, municipal bonds, bonds issued in Taiwan by foreign issuers, principal-only or interest-only government strip bonds, and Renminbi (RMB) denominated corporate bonds that have been issued overseas by a public company and are not listed on the Taipei Exchange (TPEx) (hereinafter, "bonds").
Chapter 2 Opening and Management of Book-Entry Depository Accounts
Article 3     Securities firms, custodian institutions, financial institutions that are authorized by customers to handle clearing and settlement of funds and securities in connection with bond transactions ("investor custodian banks"), and other parties with participant qualifications shall enter into a contract with TDCC and open a book-entry depository account to become a participant. The participant may then use the account to carry out various book-entry operations for bonds, including bond deliveries and trades.
Article 4     An issuer that issues dematerialized bonds or cancels physical bonds and converts them to dematerialized form shall sign an account opening agreement with TDCC and submit a specimen seal card in duplicate to open a book-entry depository account and become a TDCC participant. The participant may then use the account to carry out bond registration and book-entry delivery operations. A foreign issuer may authorize a domestic agent to submit a power of attorney and sign an account opening agreement with TDCC.
    An issuer may instruct its institution in charge of principal and interest payment to submit an Application for Receiving and Querying e-Statements to TDCC to receive and query e-statements.
Article 5     A customer shall open a book-entry depository account with a TDCC participant and use the account to carry out various book-entry operations for bonds, including deliveries and trades.
Article 6     The book-entry depository account into which participants and customers deposit bonds, stocks, and other securities are referred to herein as a "securities account"; the book-entry depository account into which bonds and short-term bills are deposited are referred to herein as a "bond and bill account".
Article 7     A bondholder shall use the securities account to handle any of the following matters:
  1. Book-entry settlement of a bond trade made via the TPEx Electronic Bond Trading System.
  2. Book-entry settlement of a negotiated bond trade, in which the two parties handle the payment and receipt of funds themselves.
  3. Matters such as deposit, withdrawal, stripping, reconstitution, direct private transfer, donation, exercise of put provision, creation of pledge, trust, public guarantee, deposit of reserves, and lodgment.
    Where a bondholder carries out a negotiated bond trade and the payment and receipt of funds is handled by TDCC, book-entry settlement of the trade shall be done using the bond and bill account.
    When an heir carries out an inheritance process, it shall be done using the securities account or bond and bill account of the heir at the time of occurrence of the cause of inheritance.
Article 8     A bond dealer or investor custodian bank that intends to authorize TDCC to handle payment and delivery of funds and securities in connection with bond transactions shall sign a Participant Agreement and deliver it to TDCC.
    A customer that intends to authorize an investor custodian bank to handle payment and delivery of funds and securities in connection with bond transactions shall enter into a contract with the investor custodian bank.
Chapter 3 Registration and Book-Entry Delivery Operations for Dematerialized Bonds
Section 1 Registration and Book-Entry Delivery Operations
Article 9     An issuer that intends to apply to register the issuance of dematerialized bonds shall, prior to the designated book-entry delivery date, follow the following procedure:
  1. The issuer shall execute an Application by Issuer for Bond Registration and Issuance Data Maintenance (transaction code C85, processing type 1: New) or an Application by Issuer for Bond Registration and Transmission of Issuance Data Maintenance Computer Media (transaction code C85S) and notify TDCC to register bond issuance data and carry out registration of the dematerialized bonds.
  2. The issuer shall execute an Application by Issuer for Data Maintenance for Principal and Interest Payment on Bond (transaction code C86, processing type 1: New) or an Application by Issuer for Transmission of Data Maintenance Computer Media for Principal and Interest Payment on Bond (transaction code C86S) and notify TDCC to register data on principal and interest payment for bonds.
  3. The issuer may execute a Bond Registration, Issuance Data, and Principal and Interest Payment Data Query (transaction code C87) to check the data it has provided and, if it discovers an error, shall execute the transactions set out in subparagraphs 1 and 2 (processing type 2: Correction) and notify TDCC of the data correction.
  4. The issuer shall, in accordance with the requirements set out in the appendix to these Directions, send related documents and reporting forms to TDCC (with photocopies, if any, stamped by issuer's authorized seal filed at TDCC.
    When TDCC receives any of the notifications set out in the preceding paragraph, after it has been checked against bond issuance as well as principal and interest payment data on the Market Observation Post System (MOPS), or against the related documents and reporting forms submitted by the issuer, and found to be free of errors, it will register the bond issuance as well as principal and interest payment data, register the issued quantity, and issue a proof of registration of the dematerialized bonds to the issuer.
    After TDCC completes registration of the bond issuance and the principal and interest payment data, if the issuer intends to apply to correct the data it shall submit an Application to Register Bond Issuance Data and Carry Out Principal and Interest Payment, stamped by the issuer's authorized seal filed at TDCC, then apply to TDCC to carry out the data correction. TDCC will verify the authenticity of the seal and check the accuracy of the related data, then correct the originally registered data.
    For bonds with a floating coupon rate, the issuer shall, acting in accordance with the provisions of paragraph 1, subparagraph 2, notify TDCC within three business days from the day of any rate adjustment to register the change.
Article 10     When an issuer itself handles the payment and receipt of funds in connection with its offering and issuance of bonds, the issuer shall apply with TDCC for book-entry delivery of the bonds in accordance with the following procedure:
  1. Before the book-entry delivery date, the issuer shall execute a Book-Entry Delivery Data Transmission (transaction code 460) or a Book-Entry Delivery Computer Media Data Transmission (transaction code 460S) and provide TDCC with the computer media data for the list of bondholders for book-entry delivery.
  2. If the issuer wishes to revise the computer media content of the list of bondholders, it shall execute a Notice of Revision of Book-Entry Delivery Data (transaction code 461) or a Notice of Revision of Book-Entry Delivery Computer Media Data (transaction code 461S) before the book-entry delivery date to notify TDCC of the data revision.
  3. Prior to the designated book-entry delivery date, the issuer shall execute a Notice of Book-Entry Delivery (transaction code 462) or a Notice of Book-Entry Delivery Data Transmission (transaction code 462S) and notify TDCC to transfer the bonds into the customer's depository account.
    After TDCC receives the Notice of Book-Entry Delivery of the preceding paragraph, it will transfer the bonds into the customer's depository account. In the case of RMB denominated bonds that have been issued overseas by a public company that are not listed on the TPEx, the customer must be an offshore banking unit, and TDCC, on the first business day after completing the book-entry delivery operation, will also provide a Securities Distribution Book-Entry Transfer List to the participant and the issuer for double-checking. If either the participant or the issuer discovers any inaccuracy, it shall immediately notify TDCC to undertake a joint investigation and handle the problem.
Article 10-1     After an issuer, acting in accordance with the provisions of Article 9, carries out book-entry registration of dematerialized bonds that mature after 31 December 2012, if a bond owner fails to surrender any physical bonds, the issuer shall apply with TDCC for book-entry delivery of the bonds in accordance with the following procedure:
  1. The issuer shall execute an Account Opening Basic Identification Data Filing (transaction code 140) and establish a registration account (account number 3XXX5555555; account type: 80).
  2. The issuer shall, acting in accordance with the provisions of Article 10, paragraph 1, apply with TDCC to transfer the bonds by means of book-entry delivery to the registration account.
    After TDCC receives the Notice of Book-Entry Delivery of the preceding paragraph, it will transfer the bonds into the registration account and, on the first business day after completing the book-entry delivery operation, will also prepare a Securities Distribution Book-Entry Transfer List as well as a Securities Distribution Book-Entry Transfer List–Registration Account and deliver them to the issuer for verification and confirmation.
Article 10-2     After TDCC completes book-entry delivery to the registration account, the issuer shall carry out the bond code data filing operation in accordance with the following procedure:
  1. The issuer shall execute a Bond Code Data File Transfer (transaction code BNO, type 1: New) and notify TDCC of the bond codes and other basic identification data. TDCC will then examine the bond code data file to check the accuracy of the total principal amount and the balance in the issuer's registration account. Once the accuracy of the data is confirmed, TDCC will carry out bond code data filing.
  2. The issuer may execute a Bond Code Query (transaction code K36, query type 1: Filing) to query the bond code filing data.
    After the issuer completes the bond code data filing operation of the preceding paragraph, if it discovers a data error it shall carry out a bond code data correction operation in accordance with the following procedure:
  1. To correct bond code data for all bonds, the issuer shall execute a Bond Code Data File Transmission (transaction code BNO, type 2: Deletion) and repeat all the bond code filing operations in accordance with the provisions of the preceding paragraph.
  2. To correct bond code data for a single bond, the issuer shall execute a Bond Code Data Correction Operation (transaction code K32) and input the bond code-related data to complete the bond code data correction.
Article 11     When an issuer engages TDCC to handle the payment and receipt of funds in connection with its offering and issuance of bonds, the related payment and delivery of funds and securities as well as book-entry operations will be handled in accordance with the provisions of the TDCC Directions for Payment and Delivery of Funds and Securities for Fixed-Income Securities.
Section 2 Voidance or Revocation of Effective Registration
Article 12     If the competent authority voids or revokes the effective registration of bonds offered and issued by an issuer, the issuer shall inform TDCC by sending the competent authority's voidance or revocation document, and at the same time shall designate a date of record for preparation of the register of bondholders.
    On the record date designated by the issuer, TDCC will debit the balances of the depository accounts of the bondholders, and prepare a list of bondholders as well as a statement of change in the securities balance, and within three business days from the designated record date will send these to the issuer, which will return those amounts plus interest. On the basis of the list of bondholders provided by TDCC, the issuer shall deliver to the bondholders any cash distributions—less taxes, additional premiums for National Health Insurance ("additional insurance premiums"), and remittance fees—that were made after voidance or revocation of effective registration.
    With respect to bonds for which effective registration has been voided or revoked as set out in paragraph 1, if any have been placed under attachment by enforcing authorities or under a prohibition of disposition by competent authorities, TDCC will prepare an appendix that lists all enforcing authorities and competent authorities, the case number, and other such data, deliver it to the issuer, and notify each enforcing authority and competent authority of data relating to voidance or revocation of the effective registration of bonds originally under attachment or prohibition of disposition. On the basis of the list of bondholders provided by TDCC, the issuer shall retain any cash distributions—less taxes and additional insurance premiums—to be made after voidance or revocation of effective registration, and await notice from the enforcing authority or competent authority before taking further measures.
    With respect to bonds for which effective registration has been voided or revoked as set out in paragraph 1, if any are under pledge, when TDCC prepares a list of bondholders and delivers it to the issuer, it shall list the names of the pledgor and pledgee, the party to which interest accrues, the bank account number, and other such data. On the basis of the list of bondholders provided by TDCC, the issuer shall deliver to the pledgor or pledgee any cash distributions, less taxes, additional insurance premiums, and remittance fees.
    With respect to bonds for which effective registration has been voided or revoked as set out in paragraph 1, if any have been lodged as surety in court, the list of bondholders prepared by TDCC shall include the names of the lodger and the court, the court surety account, and other such data, deliver it to the issuer, and TDCC shall prepare a reporting form to notify the Treasury agent bank of data relating to voidance or revocation of the effective registration of bonds originally lodged as surety. On the basis of the list of bondholders provided by TDCC, the issuer shall remit any cash distributions—less taxes, additional insurance premiums, and remittance fees—into the court surety account to continue to serve as surety.
Chapter 4 Distribution, and Deposit and Withdrawal, of Physical Bonds by Book-Entry
Section 1 Distribution of Newly Issued Physical Bonds by Book-Entry Transfer
Article 13     When an issuer applies with TDCC to conduct book-entry distribution operations, it shall submit the following documents in accordance with the provisions of the TDCC Directions for Distribution of Securities by Book-Entry Transfer:
  1. Application for Book-Entry Distribution
  2. Computer media data for the book-entry distribution list.
  3. Bonds stamped with a seal confirming that the names of previous owners have been revoked.
    TDCC, acting upon the basis of the data set out in subparagraph 2 of the preceding paragraph to transfer the bonds into the customer's depository account on the transfer date designated by the issuer.
Section 2 Deposit and Withdrawal Operations for Physical Bonds
Article 14     After an issuer carries out the procedures set out below, bondholders shall deposit the physical bonds they own to TDCC for centralized custody:
  1. Provide a list of outstanding securities, bond issuance rules, and data on lost certificate reports and certificate cancellations that date to before the issuer entered into a contract with TDCC. This also applies to amendments to bond issuance rules and new lost certificate reports and certificate cancellations that have arisen after the signing of the contract.
  2. Designate an entity located in the same jurisdiction as TDCC to revoke the names of previous owners from the certificates (i.e. act in TDCC's name to note the names on the bond counterfoil) and handle inheritance/donations, redemption/resale, principal and interest payments, and other related matters related thereto. When the entity is changed, TDCC shall immediately be notified in writing.
    An issuer may instruct its institution in charge of principal and interest payment to submit an Application for Receiving and Querying e-Statements to TDCC to receive and query e-statements.
Article 15     An owner of physical bonds may act via a participant or the issuer to deposit them in TDCC custody. However, participants will be limited to securities dealers and custodian institutions.
Article 16     TDCC does not accept the deposit of such bonds by a participant or issuer during the first and the second business days prior to the date of principal and interest payment of the bonds.
Article 17     A bondholder that intends to deposit bonds via a participant shall submit to the participant a Bond Deposit Application—Substitute for Receipt Voucher and List of Bond Codes together with the bonds. In the case of registered bonds, the title transfer application and the "transferor" space on the backs of the bonds shall be stamped by an authorized seal submitted and filed.
  1. Use the deposit seal to stamp the reverse side of the bonds or (if the bonds are registered bonds) the reverse side of the title transfer application.
  2. Execute a Bond Deposit (transaction code A10) and input the deposit account number, bond codes, original par value, number of pieces of bonds, the total principal balance of the bonds, the bond codes, and other such data (participants located in Taipei City or New Taipei City shall input the data by 10 a.m. on the day of the deposit).
  3. Execute a Bond Deposit Query/Settlement (transaction code A64) and a Bond Deposit List Printout (transaction code A41), then print out a Bond Deposit Query Form and either a List of Current-Day Bond Deposits or (for participants located neither in Taipei City nor New Taipei City) a List of Next-Day Deposits, and deliver them together with the bonds to TDCC by 11 a.m.
    After checking the furnished materials and confirming their accuracy, TDCC will send the bonds on that same day to the institution designated by the issuer to have the names of previous owners revoked.
    The institution designated by the issuer shall revoke the names of previous owners by the first business day after the day on which TDCC delivers them, and shall stamp the reverse side of the bonds with a seal confirming that the names of previous owners have been revoked.
    Bondholders may not use the bonds they have deposited until after TDCC has received back the bonds for which the names of previous owners have been revoked.
Article 18     A bondholder that intends to deposit bonds via a participant and re-register them as dematerialized bonds after an institution designated by the issuer has revoked the name(s) of the previous owner(s) shall follow the following procedure:
  1. When the issuer revokes the names of previous owners and on that same day cancels the physical bonds, it shall deliver the Notification of the Conversion of Bonds to Dematerialized Form and the computer media holding the bond code cancellation data to TDCC to carry out registration of the dematerialized bonds. Bondholders may not use the bonds they have deposited, and TDCC may not carry out registration of the dematerialized bonds, until after TDCC has carried out a computer check and verified the accuracy of the participant's deposit data and the computer media of the bond code cancellation data.
  2. After the issuer revokes the name of the previous owners, the physical certificates shall be placed in TDCC's custody. Thereafter, when the issuer notifies TDCC to carry out registration of the dematerialized bonds, TDCC shall release the bonds from deposit and carry out registration of the dematerialized bonds on the basis of the Notification of the Conversion of Bonds to Dematerialized Form delivered by the issuer.
Article 19     When a bondholder intends to deposit bonds via the issuer, within two business days from the day on which the bondholder delivers them, the issuer shall submit the following documents to TDCC to apply for book-entry distribution.
  1. Application for Book-Entry Distribution
  2. Computer media data for the book-entry distribution list.
  3. Bonds stamped with a seal confirming that the names of previous owners have been revoked.
    TDCC, acting in response to a notification from the issuer, will distribute the bonds to the bondholder's depository account on the book-entry distribution date, and on the first business day after the distribution will prepare a Securities Distribution Book-Entry Transfer List and deliver it to the participant and issuer. If the participant or issuer discovers any inaccuracy, it shall immediately notify TDCC to undertake a joint investigation to determine the cause of the inaccuracy and address it.
Article 20     Before applying to withdraw bonds, a participant shall confirm with the TDCC that there are bonds of the same original par value in vault, or that the issuer consents to stripping of the bonds, after which it shall apply to withdraw the bonds in accordance with the applicable provisions of the Taiwan Depository & Clearing Corporation Directions for the Handling by a Participant of Book-Entry Transfer Procedures for Bonds.
    If TDCC does not have any bonds of the same original par value in vault and the issuer is unable to strip the bonds, TDCC may refuse to accept a participant's application for withdrawal.
Chapter 5 Stripping and Reconstitution of Bonds
Article 21     A dealer that intends to strip interest-bearing corporate bonds or financial bonds to create principal-only strips (POs) and interest-only strips (IOs) shall follow the following procedure:
  1. The dealer shall file an application, accompanied by an Interest Allocation Basis Table and other relevant data, with the TPEx.
  2. After the TPEx verifies the accuracy of the application materials, on the business day before the strip date, it shall execute a TPEx File Transmission (transaction code 551S) and provide TDCC with the dealer's depository account number, the interest-bearing bond codes, the quantity of stripped bonds, the beginning and ending dates of interest accrual, the PO and IO identification numbers and notations, an Interest Allocation Basis Table, and other relevant data.
  3. On the strip date, the dealer shall submit an Application to Strip/Reconstitute Bonds, execute an Application to Make Account Transfer to Strip/Reconstitute Bonds (transaction code B50 option 1: Strip), and notify TDCC of relevant data by inputting the account number, the interest-bearing bond codes, and the quantity of stripped bonds.
  4. After TDCC has received the data sent by the TPEx and the dealer, and has checked and confirmed the accuracy of the registration data provided by the issuer, it will debit the interest-bearing bonds from the dealer's depository account. At the same time, it will register the PO and IO strips, transfer them via book-entry delivery to the dealer's depository account, and treat the book-entry delivery date as the date from which interest begins to accrue on the bonds.
  5. The dealer may execute a Bond Stripping/Reconstitution Statement Query (transaction code B51), print out a Bond Stripping/Reconstitution Statement Query Form, and submit a query regarding the crediting and debiting of interest-bearing bonds, POs, and IOs.
  6. On the first business day after applying to strip the bonds, TDCC will provide a Delivery List of Stripped/Reconstituted Bonds (CT62) and supply it to the issuer and its designated institution in charge of principal and interest payment.
  7. When the institution in charge of principal and interest payment carries out the first distribution of principal and interest payments for the IO bonds, unless it is withholding taxes for interest income on the IO bonds, with respect to interest income earned (from the day previous interest payment date through the day before the strip date) by the party holding the interest-bearing bonds before they were stripped, the institution shall comply with the current provisions governing tax withholding for the interest income on the interest-bearing bonds.
Article 22     A holder of interest-bearing government bonds that intends to apply to strip them into POs or IOs shall follow the following procedure:
  1. TDCC shall open a bond account and a demand deposit account at a clearing bank with which it has entered into a contract ("clearing bank"), and that bank shall register the POs and IOs.
  2. The clearing bank shall provide TDCC with data on the account for withholding of income tax on interest to facilitate the participant's remittance of tax on the interest income generated by the POs and IOs.
  3. Three business days before the issuance of strippable government bonds, the clearing bank shall notify TDCC of the code codes and names of the interest-bearing government bonds, the PO and IO codes, the dates of principal and interest payment, the interest rates, and the amounts.
  4. Two business days before the issuance of strippable central government bonds, the TPEx will execute a TPEx File Transmission (transaction code 551S) and provide TDCC with an Interest Allocation Basis Table and other relevant data.
  5. After the clearing bank verifies the accuracy of the Central Bank's bond stripping documentation, it will credit TDCC's bond account with the increased quantity of the POs and IOs, and will notify TDCC of the stripping of the bonds.
  6. After TDCC receives PO and IO credit notices from the clearing bank, and verifies their accuracy, it will transfer the POs and IOs into the depository account designated by the holder of the interest-bearing government bonds, and notify the TPEx.
  7. After the POs and IOs have been credited to TDCC's bond account, the PO and IO stripholder's participant may execute a Bond Stripping/Reconstitution Statement Query (transaction code B51), print out a Bond Stripping/Reconstitution Statement Query Form, and submit a query regarding the debiting of the POs and IOs.
  8. When stripping of the bonds cannot be completed because of failure of the holder to meet applicant qualification requirements, a depository account number error, or another such problem, the participant may execute a Government Bond Stripping/Reconstitution Message Notification Data Query (transaction code B61, transmission status option 2: Irregularity), print out a Government Bond Stripping/Reconstitution Message Notification Data Query Form, and double-check it. The holder, after revising the pertinent data, may then re-apply with the correspondent clearing bank to strip the interest-bearing government bonds.
Article 23     A dealer that intends to reconstitute POs and IOs as interest-bearing corporate bonds or financial bonds shall follow the following procedure:
  1. The dealer shall file an application, accompanied by relevant documentation, with the TPEx to reconstitute the POs and IOs.
  2. After the TPEx verifies the accuracy of the application materials, on the business day before the reconstitution date, the dealer shall execute a TPEx File Transmission (transaction code 551S) and notify TDCC of the dealer's depository account number, PO and IO identification numbers and notations, the interest-bearing bond codes, and the quantity of reconstituted bonds.
  3. On the reconstitution date, the dealer shall submit an Application to Strip/Reconstitute Bonds, execute an Application to Make Account Transfer to Strip/Reconstitute Bonds (transaction code B50 option 2: Reconstitution), and notify TDCC of relevant data by inputting the account number, the interest-bearing bond codes, and the quantity of reconstituted bonds.
  4. After TDCC has received the data sent by the TPEx and the dealer, and has checked and confirmed the accuracy of the registration data provided by the issuer, it will debit the POs and IOs from the dealer's depository account. At the same time, it will register the reconstituted interest-bearing bonds and transfer them via book-entry delivery to the dealer's depository account.
  5. The dealer may execute a Bond Stripping/Reconstitution Statement Query (transaction code B51), print out a Bond Stripping/Reconstitution Statement Query Form, and submit a query regarding the crediting and debiting of POs, IOs, and interest-bearing bonds.
  6. On the first business day after applying to reconstitute the bonds, TDCC, in addition to preparing a Delivery List of Stripped/Reconstituted Bonds (application type: Reconstitution) and supplying it to the issuer and the institution in charge of principal and interest payment, will also prepare a strip bond interest income tax withholding and exemption roll and deliver it to the institution responsible for principal and interest payment so these may be used to issue a withholding exemption certificate.
Article 24     A holder of POs and IOs that intends to apply to reconstitute them as government bonds shall follow the following procedure:
  1. The holder of the POs and IOs shall submit to the participant an Application to Reconstitute Stripped Bonds to reconstitute the POs and IOs as interest-bearing government bonds.
  2. After the participant verifies the accuracy of the application materials, it shall execute an Application to Reconstitute Stripped Bonds (transaction code B60) and notify TDCC of the code number and quantity of the interest-bearing government bonds, the code numbers of the POs and IOs, the head office code of the holder's correspondent clearing bank, and the holder's bond account number.
  3. After TDCC verifies the accuracy of the data and debits the account, it will send a reconstitution message to the clearing bank.
  4. After the clearing bank verifies the accuracy of the message, it will debit the quantity of POs and IOs in TDCC's bond account, and will notify TDCC when it receives a message from the Central Bank regarding the reconstitution.
  5. After TDCC receives notice from the clearing bank that the reconstitution has been completed, it will provide an interest income tax withholding and exemption roll to that bank so the latter can carry out the interest income withholding exemption, and will notify the TPEx.
  6. The TPEx may execute a Bond Stripping/Reconstitution Data Receipt (transaction code B51F) to carry out receipt of reconstitution data.
  7. After reconstitution of the POs and IOs has been completed, the participant may execute a Bond Stripping/Reconstitution Statement Query (transaction code B51), print out a Bond Stripping/Reconstitution Statement Query Form, and submit a query regarding the debiting of POs and IOs.
  8. When TDCC receives notice from the clearing bank of the holder's failure to meet applicant qualification requirements, a bond account number error, or another such problem, the participant may execute a Government Bond Stripping/Reconstitution Message Notification Data Query (transaction code B61, transmission status option 2: Irregularity), print out a Government Bond Stripping/Reconstitution Message Notification Data Query Form, and double-check it. The holder, after revising the pertinent data, may then re-apply with the participant to reconstitute the POs and IOs.
Article 25     To provide trade statistics and holder data on PO and IO government strips to a clearing bank for reporting to the Central Bank, a participant shall follow the procedures below to carry out registration of account type:
  1. When a holder of interest-bearing government bonds applies to strip them but the participant fails to register the bond trading account type, TDCC on the next business day after the strip date will prepare an Itemized Statement of Failure to Register Bond Trading Account Type and deliver it to the participant.
  2. After the participant receives the Itemized Statement of Failure to Register Bond Trading Account Type of the preceding subparagraph, it shall execute a Bond Trading Account Type Serial Number Registration (transaction code B41) and notify TDCC of relevant data by inputting the customer's account number and account type.
  3. When the holder of the POs and IOs carries out a transfer of securities on deposit, negotiated trade, creation of pledge, inheritance, donation, placement in trust, or some other type of book-entry operation, if registration of account type is not carried out for the outward-transfer or inward-transfer account, the participant shall not carry out any account transfer until after it has carried out registration of account type for the government bond trading account in accordance with the provisions of the preceding subparagraph.
Chapter 6 Bond Trade Clearing and Settlement and Book-Entry Transfer
Section 1 (deleted)
Article 26     (deleted)
Article 27     (deleted)
Article 28     (deleted)
Article 29     (deleted)
Article 30     (deleted)
Article 31     (deleted)
Article 32     (deleted)
Article 33     (deleted)
Section 2 Trades Negotiated at Securities Firms
Article 34     For bonds that are traded outright through a negotiated trade between a customer and a participant, or between participants, and in which the parties handle payment and receipt of funds themselves, they shall follow the following procedure:
  1. The seller shall submit an Application for Account Transfer for a Negotiated Bond Trade－Substitute for Expense Voucher, then the seller's participant shall execute a Notice of Data about Account Transfer for a Negotiated Bond Trade (transaction code A72), and notify TDCC of relevant data by inputting the outward-transfer account number, inward-transfer account number, bond codes, face value of the transaction, and transaction type.
  2. TDCC, after verifying the accuracy of the balance in the seller's account, will transfer the bonds from the proprietary account or customer account under the seller's participant's depository account into the proprietary account or customer account under the buyer's participant's depository account.
  3. When the transaction subject is a PO or IO, the seller's participant shall, by the second business day after the date of application for transfer, follow the following procedure:
    1. The selling securities firm may execute a Principal and Interest Payment Institution Query (transaction code A19) to query data on the account designated by the issuer or the clearing bank for income tax on interest.
    2. The selling securities firm shall execute a Strip Bond Interest Income Tax Withholding Statement Query (transaction code B52), print out a Strip Bond Interest Income Tax Withholding Statement Query Form, perform income tax withholding on the interest from the period of holding by the seller, and remit the withholding tax into the account designated by the issuer or the clearing bank for income tax on interest.
    3. TDCC will provide a strip bond interest income tax withholding and exemption roll to the institution responsible for principal and interest payment, for that institution to double-check whether taxes have been withheld by the securities firm, and to perform associated tax reporting matters.
    For bonds that are traded outright through a negotiated trade between a customer and a participant, or between participants, when the payment and receipt of funds is handled by TDCC, the related payment and delivery of funds and securities as well as book-entry operations shall be handled in accordance with the provisions of the TDCC Directions for the Handling of Payment and Delivery of Funds and Securities for Fixed-Income Securities.
Article 34-1     When a dealer trades bonds via the TPEx Electronic Bond Trading System, the payment and settlement operation shall be carried out in accordance with the following procedure:
  1. When the dealer has net bonds deliverable:
    1. The dealer shall execute an Electronic Bond Trading System Payment and Settlement of Certificate Transfer (transaction code C98) and notify TDCC of relevant data by inputting the payment and settlement date, securities firm code, securities code, and transacted quantity.
    2. TDCC, after verifying the accuracy of the balance of the dealer account and checking it against the payment and settlement data provided by the TPEx, will transfer the bonds from the dealer's depository account into the TPEx's depository account, and notify the TPEx.
  2. If the dealer has net bonds receivable:
    1. The TPEx shall notify TDCC of the account transfer data.
    2. TDCC, after verifying the accuracy of the balance of the TPEx account and checking it against the payment and settlement data provided by the TPEx, will transfer the bonds from the TPEx account into the dealer's depository account, and notify the TPEx.
    The dealer and the TPEx may execute an Electronic Bond Trading System Payment and Settlement of Certificate Transfer Query (transaction code C99) and print out a Bond Certificate Transfer Query Report to double-check whether the transfer has been made.
Article 35     For bonds that are traded in a negotiated repo-style bond trade between a customer and a participant, or between participants, when the bonds are delivered by means of book-entry transfer and the parties to the transaction handle payment and receipt of funds on their own, the following procedure shall be followed:
  1. Execution of repo-style transactions
    1. The seller and its participant shall submit an application form and execute a transaction in accordance with the provisions of paragraph 1, subparagraph 1 of Article 34.
    2. TDCC, after verifying the accuracy of the balance in the seller's account, will carry out account transfer in accordance with the provisions of paragraph 1, subparagraph 2 of Article 34.
    3. When the transaction subjects are POs or IOs, the buyer shall not transfer them again, but may only do so by issuing a bond passbook, and the interest income generated during the repo-style transaction period shall accrue to the original seller. In addition, the participant may execute a Negotiated Repo-Style Strip Bond Transaction Data Query (transaction code A79), and input the participant codes, account number, and bond codes to submit a query for data on its unmatured repo-style transactions.
  2. When a repo-style transaction matures or is terminated early:
    1. The original buyer and its participant shall submit an application form and execute a transaction in accordance with the provisions of paragraph 1, subparagraph 1 of Article 34.
    2. TDCC, after verifying the accuracy of the balance in the original buyer's account, will transfer the bonds from the proprietary account or customer account under the depository account of the original buyer's participant into the proprietary account or customer account under the depository account of the original seller's participant.
    3. When the transaction subject is a PO or IO, if the original seller has not called them by the maturity date, the current-period principal and interest as well as interest income generated during the original seller's holding period shall accrue to the party registered as the owner one business day before the date of principal and interest payment.
    For bonds that are traded in a negotiated repo-style trade between a customer and a participant, or between participants, when the bonds are delivered by means of book-entry transfer and the payment and receipt of funds is handled by TDCC, the related payment and delivery of funds and securities as well as book-entry operations shall be handled in accordance with the provisions of the TDCC Directions for the Handling of Payment and Delivery of Funds and Securities for Fixed-Income Securities
Article 36     When a dealer and a customer carry out a negotiated repo-style bond trade and the dealer issues a hard-copy bond passbook to the customer, the following procedure shall be followed:
  1. The selling dealer shall submit an Application for Issuance of Bond Passbook－Substitute for Expense Voucher, execute a Notice of Issuance of Bond Passbook (transaction code A73), and notify TDCC of relevant data by inputting the seller's account number, the buyer's account number, the buyer's name, the buyer's national ID number or its profit-seeking enterprise or tax withholding entity uniform ID number, bond codes, the face value of the transaction, the trade confirmation statement number, and the repo maturity date and type.
  2. TDCC, after verifying the accuracy of the account's disposable balance or repo balance, will credit the quantity of bonds in the passbook opened under the account and debit the same quantity in the disposable balance or repo balance.
  3. The selling dealer shall fill out a Bond Passbook Issuance (transaction code A74), input the seller's account number, original transaction date, original transaction number, the type of issuance, and other relevant data, print out a passbook to which TDCC computer system has assigned a code number, affix its seal, and then deliver it to the customer; this passbook may only be printed out once, and shall not be printed out multiple times. When the selling dealer, after executing that transaction, discovers that the passbook has been damaged, if the next transaction has not been executed it may execute a Reprint of Previously Printed Data (transaction code 901) and reprint the bond passbook (with a note that it is a reprint of a damaged passbook); if the next transaction has already been executed, the customer shall apply in accordance with the provisions of Article 39, subparagraph 2 for reissuance of the passbook.
  4. After the selling dealer prints out the bond passbook, the securities firm or custodian institution with which the customer does business may execute a Repo Data Query (transaction code A76), input the participant code, account serial number, original transaction date, repo maturity date, trade type, and query type, then query, print out, and verify the content of the bond passbook; the customer may also use the online query system provided by TDCC to submit queries regarding the content of the bond passbook and check the accuracy of the transaction data.
Article 36-1     When a dealer and a customer carry out a negotiated repo-style bond trade and the dealer issues an electronic bond passbook to the customer, the following procedure shall be followed:
  1. The selling dealer shall obtain a Customer Consent Form for Receipt of Electronic Trade Certificate for Bond Trade and Signature/Seal Waiver completed by the customer and execute a Customer Consent for Receipt of Electronic Trade Certificate for Bond Trade Data Maintenance and Query (transaction code G81), and input the participant code, the customer's national ID number or profit-seeking enterprise or tax withholding entity uniform ID number, operation type, customer's name, designated email address for receiving trade notices, and access code, to notify TDCC. However, if the customer is a dealer, custodian institution, or other participant, it shall itself execute a Statement of Consent for Receipt of Electronic Trade Certificate for Bond Trade (transaction code G80) and input the participant code and operation type, signed with a certificate-based electronic signature, to notify TDCC.
  2. The selling dealer shall execute a Notice of Issuance of Electronic Bond Passbook (transaction code G74), and input the seller's account number, the buyer's account number, the buyer's national ID number or its profit-seeking enterprise or tax withholding entity uniform ID number, bond codes, the face value of the transaction, the trade confirmation statement number, and the repo maturity date and type, signed with a certificate-based electronic signature, to notify TDCC.
  3. TDCC, after verifying the accuracy of the account's disposable balance or repo balance, will credit the quantity of bonds in the passbook opened under the account and debit the same quantity in the disposable balance or repo balance.
  4. After the selling dealer transmits the electronic bond passbook, the buying customer may query the content of the bond passbook and check the accuracy of the transaction data by the following methods:
    1. Use the online query system provided by TDCC, and input the required data such as their national ID number or profit-seeking enterprise or tax withholding entity uniform ID number.
    2. If the customer is a dealer, custodian institution, or other participant, it may execute an Electronic Bond Passbook Data Query (transaction code G76) to input information such as the participant code, account serial number, original transaction date, repo maturity date, trade type, and query type.
    3. A customer that is not a dealer, custodian institution, or other participant may use a designated email address to receive and click on the electronic bond passbook link URL provided by TDCC and enter their national ID number or profit-seeking enterprise or tax withholding entity uniform ID number and access code, or log into the TDCC iQuery Platform and enter the required information such as the trade date, dealer code, trade status, and bond passbook number.
Article 37     When a dealer carries out a negotiated bond trade as provided for in Article 36, once the repo-style transaction matures or is terminated early, the following procedure shall be followed:
  1. When a repo-style transaction matures:
    1. The original selling dealer may submit a Notice of Repo Maturity and Application to Cancel Bond Passbook, execute a Notice of Repo Maturity and Application to Cancel Bond Passbook (transaction code A75), and input the relevant data including the original seller's account number, original transaction date, original transaction number, bond passbook number, and whether there are amounts payable, to notify TDCC to cancel the bond passbook; if there are amounts payable, the data shall also include the amount of the remittance, the remittance method, and the time the bank was notified to make the remittance.
    2. TDCC, after verifying the accuracy of the data on maturity and bond positions, will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance or repo balance. The dealer shall bear responsibility for checking the accuracy of data on amounts payable that it has input.
  2. When a repo-style transaction is terminated early:
    1. The selling dealer shall submit a declaration together with the original of the bond passbook to TDCC in applying for cancellation of the bond passbook. If it is not possible to furnish the original of the bond passbook, the customer shall sign or stamp the declaration and the selling dealer shall submit proof of payment to the customer. (If a new transaction is undertaken with the customer under the original terms and conditions, and a separate passbook is issued, and furthermore no funds need to be returned, a proof of payment need not be submitted. The declaration and proof of payment may first be faxed to TDCC, but the original of the declaration and the bond passbook must be submitted to TDCC within five business days from the day of early termination).
    2. After TDCC has confirmed the accuracy of the data set out in the preceding item, it will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance or repo balance.
Article 37-1     When a dealer carries out a negotiated bond trade as provided for in Article 36-1, once the repo-style transaction matures or is terminated early, the following procedure shall be followed:
  1. When a repo-style transaction matures:
    1. The original selling dealer executes an Application to Cancel Electronic Bond Passbook (in Lieu of Declaration) (transaction code G75, cause of cancellation 0: execution upon maturity), and inputs the relevant data including the original seller's account number, original transaction date, bond passbook number, and whether there are amounts payable, signed with a certificate-based electronic signature, to notify TDCC to cancel the bond passbook; if there are amounts payable, the data shall also include the amount of the remittance, the remittance method, and the time the bank was notified to make the remittance.
    2. TDCC, after verifying the accuracy of the data on maturity and bond positions, will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance or repo balance. The dealer shall bear responsibility for checking the accuracy of data on amounts payable that it has input.
  2. When a repo-style transaction is terminated early:
    1. The selling dealer executes an Application to Cancel Electronic Bond Passbook (in Lieu of Declaration) (transaction code G75, cause of cancellation 1: early termination), and inputs the relevant data including the original seller's account number, original transaction date, bond passbook number, bond codes, and whether there are amounts payable (and if there are amounts payable, the data shall furthermore include the amount of the remittance, the remittance method, and the time the bank was notified to make the remittance), signed with a certificate-based electronic signature, to notify TDCC to cancel the bond passbook, and to notify the buying customer to perform confirmation.
    2. Upon notification from the selling dealer, the buying customer may confirm the early termination by the following methods:
      1. If the customer is a dealer, custodian institution, or other participant, it may execute a Confirmation of Cancellation of Electronic Bond Passbook (in Lieu of Declaration) (transaction code G77, processing type 1: early termination), and verify the accuracy of the early termination data using the certificate-based electronic signature.
      2. A customer that is not a dealer, custodian institution, or other participant may log into the TDCC iQuery Platform and verify the accuracy of the early termination data using the certificate-based electronic signature.
      3. The buying customer may notify the dealer, whereupon the dealer shall submit a declaration to TDCC to apply for cancellation of the bond passbook. The declaration shall be signed or sealed by the customer, and a proof of payment to the customer shall be submitted along therewith. (If a new transaction is undertaken with the customer under the original terms and conditions, and a separate passbook is issued, and furthermore no funds need to be returned, a proof of payment need not be submitted. The declaration and proof of payment may first be faxed to TDCC, but the original of the declaration must be submitted to TDCC within five business days from the day of early termination). TDCC will verify the accuracy of the relevant data.
    3. After confirmation or verification of the result in accordance with the preceding item, TDCC will cancel the bond passbook entry and debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance or repo balance.
Article 37-2     If the maturity date of the repo transaction is before the date of the principal and interest payment and the selling dealer does not cancel the bond passbook in accordance with the provisions of the preceding article by 5 p.m. on the date of maturity, the customer may transfer the bonds recorded in the bond passbook in accordance with the following procedure:
  1. The customer shall complete an Application for Cancellation of Bond Passbook and Transfer of Bonds, stamp the application using an authorized seal submitted and filed, and submit to the participant the application, together with the original of the hard-copy bond passbook or the Electronic Bond Passbook Data Query Report printed out by the participant, to apply for handling of the cancellation and transfer.
  2. The participant, after verifying the accuracy of the data set out in the preceding subparagraph, shall execute a Notice of Repo-Style Transaction Bond Passbook Balance Transfer (transaction code C38, processing type 1: New), and notify TDCC of relevant data by inputting the dealer's account number, the customer's account number, the customer's national ID number or it profit-seeking enterprise or tax withholding entity uniform ID number, bond codes, face value, and the bond passbook number. In addition, the participant shall also stamp the third copy of the Application for Cancellation of Bond Passbook and Transfer of Bonds using an authorized seal submitted and filed and submit the application, together with the original of the hard-copy bond passbook or the Electronic Bond Passbook Data Query Report printed out by the participant, to TDCC.
  3. TDCC, after verifying the accuracy of the data provided by the participant pursuant to the preceding subparagraph, will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance. In addition, on the basis of the data input by the participant, TDCC will also transfer the bonds from the proprietary account under the selling dealer's depository account into the customer's depository account.
    After the participant has input the data set out in subparagraph 2 of the preceding paragraph, the selling dealer is not allowed to execute a Notification of Repo Maturity and Application to Cancel Bond Passbook (transaction code A75) or Application to Cancel Electronic Bond Passbook (in Lieu of Declaration) (transaction code G75) to notify TDCC to cancel the bond passbook.
    Before TDCC completes the operation set out in paragraph 1, subparagraph 3, the customer may apply with the participant to cancel the transfer of the bonds recorded in the bond passbook, in which case the participant shall execute a Notice of Repo-Style Transaction Bond Passbook Balance Transfer (transaction code C38, processing type 2: Cancellation) and input the notice data set out in paragraph 1, subparagraph 2.
Article 38     The selling dealer agrees that, after delivering the bond passbook to the customer, when transferring to the customer the quantity of bonds recorded in the bond passbook, it shall follow the following procedure (not applicable to POs or IOs):
  1. The selling dealer shall submit an Application for Transfer of Bond Passbook Balance－Substitute for Expense Voucher, execute a Notice of Bond Passbook Balance Transfer (transaction code A78), and notify TDCC of relevant data by inputting the outward-transfer account number, inward-transfer account number, bond codes, the face value of the transaction, and the bond passbook number.
  2. TDCC, after verifying the accuracy of the data input by the selling dealer, will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance. In addition, on the basis of the data input by the participant, TDCC will also transfer the bonds from the proprietary account under the selling dealer's depository account into the customer's depository account.
Article 39     After the selling dealer delivers the hard-copy bond passbook to the customer, if—upon discovering a discrepancy between the content of the bond passbook and the transaction data, or that the bond passbook is damaged or lost—it applies to TDCC for correction or reissuance of the hard-copy bond passbook, it shall follow the following procedure:
  1. If applying to make a correction:
    1. The selling dealer shall submit an Application for Correction of a Bond Passbook and submit the original of the bond passbook in applying with TDCC in applying for cancellation of the bond passbook. If it is not possible to furnish the original of the bond passbook, the customer shall sign or stamp the Application for Correction, which may first be faxed to TDCC, but the original of the application and the bond passbook must be submitted to TDCC within five business days from the day of application.
    2. After TDCC has confirmed the accuracy of the data set out in the preceding item, it will cancel the bond passbook entry then debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance.
    3. The selling dealer shall reapply for the issuance of a bond passbook in accordance with the method prescribed for the repo-style transaction.
  2. If applying for reissuance:
    1. The selling dealer shall submit an Application for Reissuance of a Bond Passbook (if the cause for reissuance is damage or loss of the bond passbook by the customer, the application shall be signed/sealed by the customer), execute a Bond Passbook Issuance (transaction code A74) and input the relevant data including the seller's account number, original transaction date, original transaction number, the type of issuance, and the original bond passbook number to notify TDCC to carry out the operations for cancellation of the original bond passbook and reissuance.
    2. The selling dealer, after printing out and stamping the bond passbook, shall deliver it to the customer. The passbook shall be marked and noted as a reissued version.
    3. After the selling dealer reissues the bond passbook, it shall execute a Repo Data Query (transaction code A76), input the relevant data including the participant code, original transaction date, reissuance date, trade type, and query type, and then print out and verify the bond passbook reissuance data and keep it on file.
Article 39-1     After the selling dealer delivers the electronic bond passbook to the customer, if—upon discovery of a discrepancy between the content of the bond passbook and the transaction data or upon cancellation of the transaction for any reason—it applies to TDCC for voidance of the electronic bond passbook, it shall follow the following procedure:
  1. The selling dealer executes an Application to Cancel Electronic Bond Passbook (in Lieu of Declaration) (transaction code G75, cause of cancellation 3: voidance), and inputs the relevant data including the original seller's account number, original transaction date, and bond passbook number, signed with a certificate-based electronic signature, to notify TDCC, and to notify the buying customer to perform confirmation.
  2. The buying customer, upon the notification from the selling dealer, may confirm the voidance by the following methods:
    1. If the customer is a dealer, custodian institution, or other participant, it may execute a Confirmation of Cancellation of Electronic Bond Passbook (in Lieu of Declaration) (transaction code G77, processing type 3: voidance), and verify the accuracy of the voidance data using the certificate-based electronic signature.
    2. A customer that is not a dealer, custodian institution, or other participant may log into the TDCC iQuery Platform and verify the accuracy of the voidance data using the certificate-based electronic signature.
    3. The buying customer may notify the dealer, whereupon the dealer shall submit a declaration to TDCC to apply for cancellation of the bond passbook. The declaration shall be signed or sealed by the customer, and may first be faxed to TDCC, but the original of the declaration must be submitted to TDCC within five business days from the date of cancellation of the transaction). TDCC will verify the accuracy of the relevant data.
  3. After confirmation or verification of the result in accordance with the preceding item, TDCC will cancel the bond passbook entry and debit the quantity in the passbook opened under the dealer's account and credit the same quantity in the dealer's disposable balance or repo balance.
Article 40     After the selling dealer delivers the hard-copy or electronic bond passbook, the dealer and the participant with which the customer deals may—in order to submit a query for data on unmatured, matured, and early-terminated repo-style transactions as well as data corrections, reissuance and voidance of passbooks, and other relevant data—execute a Repo Data Query (transaction code A76) by inputting the seller's account number, bond codes, original transaction date, and query type.
    If the selling dealer delivers an electronic bond passbook, the dealer and the participant with which the customer deals, in addition to querying of the data under the preceding paragraph, the certificate-based electronic signature, and the status of handling, also may execute an Electronic Bond Passbook Data Query (transaction code G76) by inputting the seller's account number, bond codes, original transaction date, and query type.
Section 3 Account Transfer Operations
Article 40-1     After a bondholder surrenders physical bonds, an issuer that intends to carry out book-entry delivery of securities from the registration account into the bondholder's depository account shall follow the following procedure:
  1. The bondholder shall submit the physical bonds and securities passbook and submit an Application for Issuance of Dematerialized Bonds to Replace Physical Bonds to the issuer to handle the replacement operation.
  2. After confirming the accuracy of the documentation, the issuer shall execute a Bond Code Cancellation (transaction code K33S, processing type: New) or a Transmission of Computer Media for Bond Code Cancellation (transaction code K33S, processing type 1: New) and notify TDCC, which, after verifying the accuracy of the data, will cancel the bond codes.
  3. The issuer shall execute a Bond Code Query (transaction code K36, query type 2: Cancelled) to query whether the bond code has been cancelled.
  4. The issuer shall submit an Application by Bond Issuer to Execute Restricted Online Transaction, the third copy (Notice of Issuance of Dematerialized Bonds to Replace Physical Bonds) of the Application for Issuance of Dematerialized Bonds to Replace Physical Bonds, and related documentation, and shall stamp these with an authorized seal submitted and filed in applying with TDCC for release of the bonds.
  5. After TDCC has confirmed the accuracy of the data, the issuer shall execute a Transfer of Dematerialized Bonds Issued to Replace Physical Bonds (transaction code K35) and notify TDCC, which will check the data for this transaction against the receiving account numbers, the principal balances, and the IDs for the Bond Code Cancellation and the Transfer of Dematerialized Bonds Issued to Replace Physical Bonds. After the accuracy of the data is verified, TDCC will transfer the quantity of the replaced bonds from the registration account into the bondholder's depository account.
  6. The issuer shall execute a Bond Code Query (transaction code K36, query type 4: Transfer completed) to query the bond transfer data.
  7. The issuer may execute a Query of Registration Account Transfers and Itemized Changes (transaction code A54) or a Query of Registration Account Statement Data (transaction code 672, query type 1: Registration of statement), print out a Query Report for Registration Account Transfers and Itemized Changes or a Registration Account Itemized Data Query Form, and double-check the bond replacement and balance data.
  8. The issuer shall execute a Registration Account Daily Settlement Data Query (transaction code 677), print out a Registration Account Daily Settlement Data Query Form, and double-check the daily settlement data.
Article 41     Transfers of bond balances between the securities account and the bond and bill account of a single bondholder shall be carried out in accordance with the following procedure:
  1. To transfer the bond balance from the securities account to the bond and bill account:
    1. The bondholder shall submit an Inter-System Bond Transfer Application, stamped with a seal matching the originally submitted seal impression, to the outward-transfer participant to make the remittance.
    2. The participant shall execute an Inter-System Transfer of Bonds (transaction code B35, transaction type 1: Transfer between accounts with the same account name) and notify TDCC of relevant data by inputting the outward- and inward-transfer account numbers, the bond codes, and bond quantities and types.
    3. After TDCC has confirmed the accuracy of the transfer data set out in the preceding item, it will transfer the quantity of bonds from the outward-transfer account to the inward-transfer account.
    4. After TDCC completes the account transfer operation, the outward-transfer participant may execute an Inter-System Bond Transfer Data Query (transaction code B36, query type 1: Outward transfer), print out an inter-system bond transfer data statement to query the crediting and debiting of the bonds.
    5. When TDCC discovers an error in the participant's transfer data in the course of its examination and therefore does not carry out the transfer, the participant may execute an Inter-System Bond Transfer Data Query (transaction code B36, query type 1: Outward transfer), print out an inter-system bond transfer data statement to query the reason why the transfer was not possible, and then notify the bondholder to revise the related data and then redo the transfer.
  2. To transfer the bond balance from the bond and bill account to the securities account:
    1. The customer shall do as provided for in item A of the preceding subparagraph.
    2. The participant shall send an inter-system bond transfer instruction to notify TDCC of the outward- and inward-transfer account numbers, the bond codes, and bond quantities and types, and other relevant data.
    3. TDCC, after verifying the accuracy of the transfer data, will transfer the outward-transfer quantity from the outward-transfer account to the inward-transfer account, and notify the participant.
    4. After TDCC completes the account transfer operation, the inward transfer participant may execute an Inter-System Bond Transfer Data Query (transaction code B36, query type 2: Inward transfer), print out an inter-system bond transfer data statement to query the crediting and debiting of the bonds.
Article 42     When a participant handles operations for a direct transfer between private parties or for inheritance/donation shall do so in accordance with the Directions for the Handling by Participants of Book-Entry Transfer Operations for Transfer of Securities.
Article 43     (deleted)
Article 44     In the event a bond issuer calls bonds and acts on its own in handling the payment of funds, it shall follow the following procedure:
  1. By two business days prior to the starting date of the call operation, the issuer shall provide call data to TDCC.
  2. On the date of delisting or termination of TPEx trading, or on the issuer's publicly announced call date or designated date of record, TDCC will, upon notification by the issuer, debit the balances of the depository accounts of the bondholders, then prepare a list of bondholders as well as a statement of change in the securities balance and deliver these to the institution in charge of principal and interest payment, which will carry out the call operation. On the basis of the list of bondholders provided by TDCC, the institution will remit any cash distributions—less taxes, additional insurance premiums, and remittance fees—to the bondholders' fund accounts. A bondholder who fails to provide a fund account, or provides incorrect account data, shall redeem the bonds by furnishing proof of ownership and identity to the institution in charge of principal and interest payment.
  3. If any bonds have been placed under attachment by an enforcing authority or under a prohibition of disposition by a competent authority, TDCC will compile an appendix listing all enforcing authorities and competent authorities, the case number, and other such data, deliver it to the institution in charge of principal and interest payment, and notify each enforcing authority and competent authority of data relating to the calling of bonds originally under attachment or prohibition of disposition. On the basis of the list of bondholders provided by TDCC, the issuer shall retain any cash distributions to be made after voidance or revocation of effective registration, and await notice from the enforcing authority or competent authority before taking further measures.
  4. If any bonds have been placed under pledge, when TDCC prepares a list of bondholders and delivers it to the institution in charge of principal and interest payment, it will list the names of the pledgor and pledgee, the party to which interest accrues, the fund account, and other such data. On the basis of the list of bondholders provided by TDCC, the institution will remit any cash distributions—less taxes, additional insurance premiums, and remittance fees—to the pledgor's or pledgee's fund account.
  5. With respect to bonds lodged as surety in court, the list of bondholders prepared by TDCC will list the names of the lodger and the court, the court surety account, and other such data, deliver it to the institution in charge of principal and interest payment, and TDCC will prepare a reporting form to notify the Treasury agent bank of data relating to the calling of bonds originally lodged as surety. On the basis of the list of bondholders provided by TDCC, the institution will remit any cash distributions—less taxes, additional insurance premiums, and remittance fees—into the court surety account to continue to serve as court surety.
Article 45     When an issuer calls its bonds and engages TDCC to handle payment of funds on its behalf, the issuer shall provide call data to TDCC in accordance with the provisions of subparagraph 1 of the preceding article; the related funds payment and book-entry operations shall be handled in accordance with the provisions of the TDCC Directions for the Handling of Payment and Delivery of Funds and Securities for Fixed-Income Securities.
Article 45-1     When the issuer of debt-type beneficial certificates terminates its trust agreement with the originator prior to maturity, the issuer may apply with TDCC to debit the securities balance in the depository accounts of the beneficial owners, submitting the following documents:
  1. An official letter of notice to TDCC with a copy to the Financial Supervisory Commission.
  2. Photocopies of the letter of notice, to be sent to the beneficial owners.
  3. An Application to Register Bond Issuance Data and Carry Out Principal and Interest Payment, specifying debit dates, reasons, and amounts.
  4. A photocopy of the trust agreement.
  5. In the case of publicly issued beneficial certificates, an applicant shall submit a Market Observation Post System announcement, while in the case of bonds listed on the Taiwan Stock Exchange (TWSE) or the TPEx, the applicant shall additionally submit a photocopy of documentary proof of delisting or termination of trading on the TPEx.
    The issuer shall stamp the documents listed under subparagraphs 2 to 5 of the preceding paragraph using an authorized seal submitted and filed by the participant.
    TDCC, after verifying the accuracy of the items set out in the preceding paragraph, will debit the balance in the depository accounts of the beneficial owners on the date designated by the issuer, will prepare a list of bondholders and other data, deliver it to the institution in charge of principal and interest payment, separately prepare a statement of change in the securities balance, and within three business days from the designated date of record will send these to the issuer.
Article 46     A bondholder intending to exercise a put provision shall follow the following procedure:
  1. The issuer shall provide TDCC with the redemption data in accordance with the provisions of Article 44, subparagraph 1.
  2. On the redemption date, the issuer shall execute a Bond Redemption Data Transmission (transaction code B58) or a Bond Redemption Data Computer Media Transmission (transaction code B58S) and notify TDCC of the redemption data, and may also execute a Bond Redemption Operation Query (transaction code B64) to query the result of the transmission of the bond redemption itemized data.
  3. The bondholder may, within the period designated by the issuer, submit to the participant a bond redemption application, stamped with a seal, to have participant handle the redemption.
  4. The participant, after verifying the accuracy of the data, shall execute a Bond Redemption (transaction code B63) and notify TDCC of the application data. After TDCC will checks this data against the redemption data provided by the issuer and verify its accuracy, it will debit the bondholder's depository account and make the entries in the accounts of the participant and its customer. The participant may execute a Bond Redemption Operation Query (transaction code B64) to query the bond redemption itemized data.
  5. The issuer shall execute a Bond Redemption Operation Query (transaction code B64) to query the bond redemption statement data, and print out a bond redemption operation query form. After confirming the quantity of bonds redeemed, it shall keep the date on file.
  6. On the first business day after the date of the bondholder's application, TDCC will deliver to the issuer a statement of change in the securities balance and a bond redemption list.
  7. If it becomes necessary to strip bonds as the result of the bondholder's exercise of a put provision, the issuer shall strip the bonds in the quantity requested by TDCC.
Article 47     A participant that intends to create pledge on bonds shall do so in accordance with the applicable provisions of the Directions on Handling by Participants of Book-Entry Transfer Procedures for Pledge and Delivery of Securities.
    When the subject of the pledge is POs and IOs, TDCC will calculate interest income tax withholdings in accordance with the following procedure:
  1. Interest income for the pledge period will accrue to the pledgor.
  2. Where the pledge period has expired and the date of presentment has arrived, TDCC will close the balance of POs and IOs in the pledge account of the pledgee's participant, then prepare a list of bondholders as well as a strip bond interest income tax withholding and exemption roll and deliver these to the institution responsible for principal and interest payment. This institution will handle principal and interest payment, withholding of income tax on interest, and the issuance of withholding and exemption certificates.
  3. When the pledgee applies in court for auction and transfer, the creditor's participant shall, by the second business day after the date of application for transfer, remit the withholding tax into the account designated by the issuer or the clearing bank for income tax on interest in accordance with the provisions of Article 34, paragraph 1, subparagraph 3. The institution responsible for principal and interest payment will then perform account reconciliation and associated tax reporting matters.
  4. If the pledgee applies in court for auction and transfer and the price is not paid through its participant, or if the pledgee, due to having obtained ownership of the pledged subject, applies for transfer, TDCC, on the first business day after the date of application for transfer, will prepare a strip bond interest income tax withholding and exemption roll and deliver it to the institution responsible for principal and interest payment to issue a withholding exemption certificate.
Article 48     A participant that intends to handle the placement of bonds in trust shall act in accordance with the applicable provisions of the TDCC Directions on Book-Entry Transfer Procedures for Securities in Trust.
  1. Self-benefit trust:
    1. TDCC, after completing the trust transfer, shall post to the trustee account any interest accrued prior to the settlor's creation of the trust, and when the trustee sells the POs and IOs, TDCC will treat the trustee as the receiver of interest income in calculating its interest income and tax withholding amount.
    2. When a trustee sells POs and IOs, the trustee's participant shall, by the second business day after the date of the sale and transfer, remit the withholding tax into the account designated by the issuer or the clearing bank for income tax on interest in accordance with the provisions of Article 34, paragraph 1, subparagraph 3. The institution responsible for principal and interest payment will then perform account reconciliation and associated tax reporting matters.
  2. Third-party benefit trust:
    1. The participant, when executing the Trust Transfer (transaction code 543), shall also input the date of the occurrence of the fact (the date of gift as reported to the tax authority, or—in the case of a testamentary trust—the settlor's date of death); on the first business day after completion of the trust transfer operation TDCC will, with respect to interest accrued during the period when the settlor held the bonds, prepare a strip bond interest income tax withholding and exemption roll and deliver it to the institution responsible for principal and interest payment so it may be used to issue a withholding exemption certificate.
    2. When the trustee sells the POs and IOs, TDCC will treat the trustee as the receiver of interest income in calculating its interest income and tax withholding amount, and the trustee's participant shall, by the second business day after the date of the sale and transfer, remit the withholding tax into the segregated account designated by the issuer or the clearing bank for income tax on interest in accordance with the provisions of Article 34, paragraph 1, subparagraph 3. The institution responsible for principal and interest payment will then perform account reconciliation and associated tax reporting matters.
  3. Distribution of trust interest:
    1. In the case of a self-benefit trust, TDCC will accumulate in the settlor's account all interest income accrued prior to the settlor's creation of the trust and during the trustee's holding period.
    2. In the case of a third-party benefit trust, TDCC will accumulate in the beneficial owner's account all interest income accrued during the trustee's holding period.
  4. Where the trust period has expired and the date of presentment has arrived: TDCC shall treat the trustee as the receiver of interest income in calculating the interest income accrued during the trustee's holding period, and the tax withholding amount, and shall also prepare a list of bondholders as well as a strip bond interest income tax withholding and exemption roll and deliver these to the institution responsible for principal and interest payment so they may be used to issue a withholding statement.
Article 48-1     A participant that intends to use corporate bonds, financial bonds, or municipal bonds as non-cash collateral for margin trading shall do so in accordance with the applicable provisions of the Directions on the Handling by Participants of Book-Entry Procedures for Margin Purchasing and Short Selling Operations and the Directions on the Handling by Participants of Book-Entry Procedures for Margin Purchasing and Short Selling Agency Services.
    A participant that intends to use corporate bonds, financial bonds, or municipal bonds as non-cash collateral for money lending in connection with securities business, settlement lending, lending of funds for unrestricted purposes, or secured lending shall do so in accordance with the applicable provisions of the Directions on the Handling by Participants of Book-Entry Operations for Securities Transactions and Borrowing and Lending of Funds.
Article 48-2     A participant that intends to handle the lodgment of bonds as surety in court shall do so in accordance with the applicable provisions of the TDCC Directions on the Handling by Participants of Book-Entry Procedures for the Lodgment of Securities as Surety in Court.
    When the property lodged as surety in court is POs and IOs, TDCC will calculate interest income tax in accordance with the following procedure:
  1. Interest income generated during lodgment as surety in court will accrue to the lodger.
  2. Where the pledge period has expired and the date of presentment has arrived, TDCC will close the balance of POs and IOs in the court's lodgment account, then prepare a list of bondholders as well as a strip bond interest income tax withholding and exemption roll and deliver these to the institution responsible for principal and interest payment to conduct principal and interest payment, withholding of income tax on interest, and the issuance of withholding and exemption certificates.
  3. When an enforcing court or administrative enforcement agency issues an enforcement order instructing the lodgment office to transfer the lodged securities into the depository account of the purchaser at auction, TDCC, on the first business day after the date of application for transfer, will prepare a strip bond interest income tax withholding and exemption roll and deliver it to the institution responsible for principal and interest payment to issue a withholding exemption certificate.
Chapter 7 Principal and Interest Payment, and Taxation
Article 49     When the time arrives for principal and interest payment on bonds in central custody, TDCC will check the accuracy of bondholder data and prepare a list of bondholders in accordance with the following procedure:
  1. From the fourth business day to the second business day prior to the date of principal and interest payment on bonds, TDCC will prepare a Table of Basic Data on Bondholders that covers the remaining balance in the securities account and provide it to the participant to check the accuracy of the customer fund account data, domicile address, and other data. If any omission or error is discovered, the participant shall notify the customer as soon as possible to supplement or correct the data
  2. The participants, one business day before the date of principal and interest payment, shall prepare and deliver to TDCC a list containing the data of the holders of bonds under TDCC custody; provided, however, that if the selling dealer fails to cancel the bond passbook in accordance with the provisions of Article 37, subparagraph 1 or Article 37-1, subparagraph 1, the list shall be prepared in accordance with the following procedure:
    1. If the maturity date of a repo transaction is before the date of the principal and interest payment, in the preparation of the list, the selling dealer shall be treated as the bondholder and the customer shall be treated as the redeemer. The content of the list shall include the customer's personal or business name, its national ID number or its profit-seeking enterprise or tax withholding entity uniform ID number, and other data.
    2. If the maturity date of a repo transaction is the same as the date of the principal payment, the list shall not include the bondholder, but shall only list the total dollar amount of the uncancelled bond passbook.
  3. If, after the bondholder sell bonds in a repo-style transaction, an unscheduled business closure delays the maturity date of the repo transaction until the date of the principal payment, its preparation of the list shall be subject mutatis mutandis to item B of the preceding subparagraph.
  4. On the date of the principal payment, the selling dealer shall prepare a list of the bondholders left unlisted pursuant to the provisions of subparagraph 2, item B and the preceding subparagraph, and in doing so shall act in accordance with the following provisions:
    1. If a bond passbook has already been cancelled by 2:30 p.m. on the date of the principal payment in accordance with the provisions of Article 37, subparagraph 1 or Article 37-1, subparagraph 1, in the preparation of the list, the selling dealer shall be treated as both the bondholder and the redeemer; if the bond passbook has not yet been cancelled, the total dollar amount of the uncancelled bond passbook shall still be listed.
    2. If a bond passbook has already been cancelled by 5:00 p.m. on the date of the principal payment in accordance with the provisions of Article 37, subparagraph 1 or Article 37-1, subparagraph 1, in the preparation of the list, the selling dealer shall be treated as both the bondholder and the redeemer; if the bond passbook has not yet been cancelled, the selling dealer shall be treated as the bondholder and the customer shall be treated as the redeemer. The content of the list shall include the customer's personal or business name, its national ID number or its profit-seeking enterprise or tax withholding entity uniform ID number, and other data.
Article 50     When the time arrives for principal and interest payment on bonds and the issuer has not engaged TDCC to process principal and interest payments on its behalf, the compilation and preparation of the bondholder list and the handling of principal and interest payment operations shall be carried out in accordance with the following procedure:
  1. On either the last business day prior to the date of principal and interest payment, or on the principal payment date, TDCC will compile the bondholder list prepared by the participant in accordance with the provisions of preceding article; when TDCC intends to handle account transfer operations in accordance with the provisions of Article 40-1, on the business day prior to the date of principal and interest payment, TDCC will prepare a List of Bond Codes of Surrendered Physical Bonds.
  2. The bondholder list and the List of Bond Codes of Surrendered Physical Bonds compiled and prepared by TDCC on the last business day prior to the date of principal and interest payment, will be delivered to the institution in charge of principal and interest payment, and when the time arrives for payment of principal, TDCC will debit the balance of the bondholders' depository accounts and provide a statement of change in the securities balance to the issuer with instructions to check its accuracy. At the time of the final principal and interest payment, TDCC will deliver the statement of change in the securities balance to the institution in charge of principal and interest payment, and will also deliver the statement of change in the securities balance to the issuer with instructions to check its accuracy; when the bonds are POs and IOs, TDCC will separately prepare a strip bond interest income tax withholding and exemption roll and deliver it to the institution responsible for principal and interest payment.
  3. The bondholder list compiled and prepared by TDCC on the principal payment date, shall not be delivered to the institution in charge of principal and interest payment until 2:30 p.m. and 5:00 p.m. on the principal payment date, respectively.
  4. On that same day, the issuer shall check the accuracy of the statement of change in the securities balance of subparagraph 2 and, after verifying its accuracy shall inform TDCC. If it discovers any inaccuracy, it shall immediately notify TDCC to undertake a joint investigation to determine the cause of the inaccuracy and address it.
  5. For any bonds that have been placed under attachment by an enforcing authority or under a prohibition of disposition by a competent authority, TDCC will compile an appendix listing all enforcing authorities and competent authorities, the case number, and other such data, deliver it to the institution in charge of principal and interest payment, and notify each enforcing authority and competent authority of data relating to the principal redemptions for bonds originally under attachment or prohibition of disposition. For any bonds under pledge, the list of bondholders prepared by TDCC will list the names of the pledgor and pledgee, the party to which interest accrues, the fund account, and other such data. For any bonds that have been lodged as surety in court, TDCC will list the names of the lodger and the court, the court surety account, and other such data in the bondholder list that it has prepared.
  6. The institution in charge of principal and interest payment shall calculate the principal and interest due to bondholders on the basis of the list of bondholders provided by TDCC, with amounts calculated in units of 1 New Taiwan dollar. If there are any remainders, the bondholders may be ranked in sequential order from largest to smallest based on the amount of each one's unpaid portion of less than 1 New Taiwan dollar, and will receive 1 New Taiwan dollar in order of their ranking until all of the remainders have been distributed. If two or more bondholders are owed an equal portion, one of them will be randomly selected to receive a distribution.
  7. Where the bondholder list shows the redeemers' fund accounts, the institution in charge of principal and interest payment, on the date of principal and interest payment, shall remit the amounts due—less taxes, additional insurance premiums, and remittance fees—to the redeemers' fund accounts; where the deduction of taxes and fees leaves nothing due to a redeemer, or where a bondholder fails to provide a fund account, or provides incorrect account data, the bondholder shall redeem the bonds by furnishing proof of ownership and identity to the institution in charge of principal and interest payment.
  8. When the institution in charge of principal and interest payment is required, in preparing a bondholder list, to treat the selling dealer as a bondholder and the customer as redeemer, before handling the payment of funds it shall first examine the original of the hard-copy bond passbook, the Electronic Bond Passbook Data Query Report printed out by the participant, or the electronic bond passbook printed by the customer and proof of identity submitted by the redeemer.
  9. For any bonds that an enforcing authority has placed under attachment, or a competent authority has placed under a prohibition of disposition or barred them from being pledged or lodged as surety in court, the institution in charge of principal and interest payment will follow the following procedure:
    1. For bonds that have been placed under attachment or a prohibition of disposition, any cash distributions—less taxes and additional insurance premiums—will be retained, and further measures will be taken only after notice is received from the appropriate authorities.
    2. For bonds that have been placed under pledge, on the basis of the list of bondholders provided by TDCC, any cash distributions—less taxes, additional insurance premiums, and remittance fees—will be remitted to the pledgor's or pledgee's fund account.
    3. For bonds that have been lodged as surety in court, on the basis of the list of bondholders provided by TDCC, any cash distributions—less taxes, additional insurance premiums, and remittance fees—will be remitted into the court surety account to continue to serve as court surety.
  10. When the date of principal and interest payment is changed, by seven business days prior to the date of principal and interest payment, the issuer shall notify TDCC of the changed date; when the dollar amounts of principal redemptions and interest payments are not fixed, the issuer shall notify TDCC of the principal and interest payment data by 4:00 p.m. on the last business day prior to the upcoming principal and interest payment.
  11. The participant may execute a Principal and Interest Payment Institution Query (transaction code A19) to query the name, address, and other data on the institution in charge of principal and interest payment.
Article 50-1     When the quantitative data that an issuer has provided to TDCC for handling of principal payment is in error, if correction of this error requires the assistance of TDCC, on the day the error is discovered the issuer shall submit and first fax a Reporting Form for Data Error Involving Issuer's Principal Payment, stamped with an authorized seal submitted and filed at TDCC.
    The issuer shall apply to TDCC to carry out the data correction by submitting: (a) an official letter—stamped with its company seal and the seal of its responsible person, both of which have been registered with the competent authority—that explains the reason for the correction; (b) an Application to Register Bond Issuance Data and Carry Out Principal and Interest Payment, corrected and stamped with the issuer's dedicated seal on file with TDCC; (c) a Fixed-Income Securities Principal Balance Distribution Statement and a Reporting Form for Data Error Involving Issuer's Principal Redemption, both stamped and checked by the supervisor and the chief internal auditor; (d) a declaration; and (e) the original of the pre-correction bondholder list. The participant holding the bonds in question will also be copied.
    TDCC, after confirming the authenticity of the seal on the application of the preceding paragraph as well as the accuracy of the related materials and the balance in the bondholders' accounts, will—on the basis of the Fixed-Income Securities Principal Balance Distribution Statement provided by the issuer—correct the balances in the depository accounts by recording credits and debits in offsetting amounts.
    If the balance in any bondholder account is insufficient to allow for the offsetting debit of the preceding paragraph, TDCC will not carry out the correction, and will notify the issuer to address the situation. After the balance has been replenished, TDCC, upon notice by the issuer, will carry out the correction as requested. After completing the correction, TDCC will notify the issuer and the related participant.
Article 51     When an issuer engages TDCC to handle principal and interest payment, the funds payment and book-entry operations related to principal and interest payment shall be handled in accordance with the provisions of the TDCC Directions for Payment and Delivery of Funds and Securities for Fixed-Income Securities.
Article 52     After the end of each fiscal year, TDCC shall, with respect to the previous year's accrued interest income and tax withholding data for holders of POs or IOs, compile and prepare a strip bond interest income withholding and exemption roll and submit it to the institution in charge of principal and interest payment, for it to carry out the issuance and delivery of withholding and exemption certificates.
    When a bondholder, pledgee, or trustee sells PO and IO government strips in accordance with the provisions of Articles 30, 42, 47, or 48, the participant may carry out the remittance operations for the withholding tax on the bondholder's, pledgor's, or trustee's interest income by the fifth business of the month following the transaction, notwithstanding any tax remittance deadlines set out elsewhere.
Chapter 8 Supplementary Provisions
Article 53     When TDCC handles book-entry transfer operations for bonds, it will charge fees in accordance with TDCC fee schedule.
Article 54     Any matters not set forth herein shall be governed by the TDCC Operating Rules and other applicable regulations.
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