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Title Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds CH
Date 2006.06.07 ( Amended )

Article Content

Article 1
Article 2
Article 3
Article 4
Article 5 When an international bond is offered and issued, or privately placed, by a foreign issuer and meets the criteria of paragraph 4 as well as the following conditions, the bond may also be approved by the GTSM for OTC trading: 1. The issuer's stock is listed on a foreign securities exchange or securities market approved by the competent authority. 2. The bond has received a credit rating of BBB or higher from a credit rating agency approved or recognized by the competent authority. When an international bond offered and issued, or privately placed, by a domestic issuer or financial institution meets the criteria of paragraph 3, paragraph 1 and paragraph 4 as well as the conditions of subparagraph 2 of the preceding paragraph, the bond may be approved by the GTSM for OTC trading. For overseas convertible corporate bonds or overseas corporate bonds with warrants that meet the criteria of Article 3 paragraph 1 and Article 4, application may not be submitted for OTC trading until one month after their issuance overseas.
Article 6 An issuer of international bonds that applies for OTC trading of an international bond shall submit an Application for OTC Trading of International Bonds (Appendix 1) to the GTSM, filling out all required particulars and including the required attachments. The GTSM shall review the application pursuant to the provisions of these Rules and other applicable acts, regulations, and rules.
Article 7 After accepting an application for OTC trading of one of the bonds under Article 3, paragraph 1, subparagraphs 2 to 4, the GTSM case handler shall commence a document review of the application and its attachments. Review guidelines, procedures, and deadlines are as follows: 1. The application form: If, after completion of the relevant checklist by the case handler, the review reveals omission or incomplete disclosure of any required information, the applicant shall be requested to supplement the information within a prescribed period. If the applicant fails to make supplementation within that period, a notice of rejection shall be issued, with a copy sent to the competent authority. 2. Conditions for OTC trading: (1) Based on the Application for OTC Trading of International Bonds and its attachments, the application shall be reviewed for compliance with each of the conditions for OTC trading set out in Article 5 of these Rules. (2) When the document review shows that all required documents have been submitted and conditions for OTC trading are met, relevant documents, including the contract for OTC trading entered into with the given issuer, shall be submitted by mail to the competent authority for recordation and OTC trading of the bonds announced. 3. The review period: The GTSM shall complete review within three business days from the day on which it accepts an application for processing. Notwithstanding the above, under special circumstances the GTSM may file for approval of an extended review period.
Article 8
Article 9 An international organization or a foreign issuer shall engage an agent institution within the territory of the ROC to handle matters in connection with its international bond issue, and shall report the agent institution's place of business and the name of its responsible person, and any amendment thereto, to the GTSM.
Article 10
Article 11
Article 12
Article 13 A securities firm shall engage in proprietary international bond trading business only after obtaining permission from the Central Bank.
Article 14 No physical certificates will be produced for any international bond issue; issuers shall register their bond issues with a foreign or domestic securities depository enterprise recognized by the GTSM. If an international bond is registered at issuance with a domestic securities depository enterprise, a securities firm trading that bond shall be restricted to book-entry delivery through a domestic centralized securities depository enterprise. If an international bond is registered at issuance with a foreign securities depository enterprise, a securities firm trading that bond shall carry out the relevant book entries through an account established at that foreign securities depository enterprise by a domestic centralized securities depository enterprise.
Article 15
Article 16
Article 17 A securities firm trading bonds through participation in the TSIB shall enter into a Contract for Securities Firm Participation in the Trading System for International Bonds adopted by the GTSM (Appendix 2) and pay a bond transaction performance and settlement reserve to the GTSM. Setting aside, supplementation, and application for withdrawal of the bond transaction performance and settlement reserve set forth in the preceding paragraph shall be made in compliance with applicable provisions of the GTSM Securities Market Regulations Governing Bond Payment Settlement Reserves for the Electronic Bond Trading System.
Article 18 Trading hours for international bonds are as follows: 1. For outright sale/purchase transactions made through the IBTS, hours are 9:00 am to 1:30 pm; for repo/reverse repo transactions, 9:00 am to 1:30 pm and 2:00 to 3:00 pm. 2. For negotiated transactions at securities firms, hours are 9:00 am to 3:00 pm.
Article 19 Where international bonds are traded through the TSIB, they shall be traded in the currency of their denomination, and trading and quotation units are as follows: 1. Outright transactions shall be quoted on a price-per-hundred basis with a tick size of 1/100 of a currency unit; repo transactions shall be quoted on an interest rate basis, with a tick size of 1/10,000 of a percentage point. 2. A trading unit is 100,000 US Dollars, 100,000 Euros, or 10 million Japanese Yen par value. Trading units of bonds denominated in other currencies will be separately prescribed by the GTSM. 3. Quotes must be in volumes of one trading unit or integral multiples of that amount. No individual quote may exceed nine trading units in volume. Where international bonds are traded at a securities firm's place of business, they shall be traded in the currency of their denomination, and quotation and trading units are as follows: 1. Outright transactions shall be quoted on a yield basis or on a price-per-hundred basis, with a tick size of 1/10,000 of a percentage point or 1/10,000 of one currency unit; repo transactions shall be quoted on an interest rate basis, with a tick size of 1/10,000 of a percentage point. 2. The minimum trading unit is 100,000 US Dollars, 100,000 Euros, or 10 million Japanese Yen par value. Minimum trading units for bonds denominated in other currencies will be separately prescribed by the GTSM.
Article 20 The maturity of an international bond repo/reverse repo transaction means the period from the date the seller delivers the subject of the transaction to the buyer until the date of repurchase. Prior to the date of repurchase, ownership of the subject of an international bond repo/reverse repo transaction rests with the buyer; a buyer who obtains a bond in an international bond repo/reverse repo transaction may sell the bond outright to another. The initial value of an international bond repo/reverse repo transaction carried out through the IBTS is the price, including interest, calculated from the next day's reference price of the subject of the transaction in hundreds of New Taiwan Dollars. Maturities of international bond repo/reverse repo transactions carried out through the IBTS are either one, five, or ten business days, provided that the repurchase date may not fall within the period from five business days prior to and up through the date of repayment of principal and payment of interest for the subject of the transaction.
Article 21
Article 22
Article 23
Article 24
Article 25
Article 26
Article 27
Article 28
Article 29
Article 30 The TSIB performance and settlement date is the third business day after the transaction date. On the performance and settlement date, a securities firm participating through the TSIB shall carry out performance and settlement with the GTSM of the net amount, after offsetting of the payable and receivable amounts for the bonds and transaction prices shown in the Performance and Settlement Statement prepared by the GTSM for each currency, in accordance with the following provisions: 1. When there are net funds payable, the securities firm shall directly deposit such amount into the GTSM funds settlement account for international bonds by 1:30 pm on the performance and settlement date. 2. When there are net bonds deliverable, the securities firm shall perform the bond transaction in accordance with a domestic centralized securities depository enterprise's rules by 1:30 pm on the performance and settlement date. 3. When there are net funds receivable, after verification by the GTSM pursuant to subparagraph 2, the GTSM will directly deposit the amount to the securities firm's funds settlement account at 1:30 pm or later on the performance and settlement date. 4. When there are net bonds receivable, after verification by the GTSM pursuant to subparagraphs 1 and 2, the GTSM will at 1:30 pm or later on the performance and settlement date notify the domestic securities depository enterprise to make a book-entry transfer. When a securities firm's branch units trade bonds through the TSIB, the head office shall first aggregate their trades and proceed as in the preceding paragraph.
Article 31
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Article 33
Article 34
Article 35
Article 36
Article 37
Article 38
Article 39
Article 40
Article 41
Article 42
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Article 47
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