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Title	Taipei Exchange Rules Governing Foreign Currency Denominated International Bonds that are Linked to Financial Derivatives or are Structured Bonds CH
Date	2025.06.04 ( Amended )

Article Content

Chapter 1 General Principles

Article 1	These Rules are adopted pursuant to Article 3-1 of the Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds.
Article 2	When a domestic bank, pursuant to the Regulations Governing Issuance of Bank Debentures by Banks, issues a foreign currency denominated international bond that is linked to a financial derivative or is a structured bond (hereinafter, “structured international bond), the examination of the bond for listing on the Taipei Exchange (TPEx) and the trading of the bond on the TPEx shall be handled in compliance with these Rules. Matters for which these Rules make no provision shall be handled in compliance with the TPEx Rules Governing Securities Trading on the TPEx and other relevant bylaws and rules.
Article 3	The term "investor" in these Rules means an investor that meets one of the following criteria: A professional institutional investor as defined in Article 3, paragraph 3, subparagraph 1 of the Regulations Governing Offshore Structured Products. A juristic person that concurrently meets all the following criteria and has applied in writing to a securities firm for the status of a high net worth juristic person investor: It has net worth exceeding NT$20 billion according to its latest CPA-audited or reviewed financial report; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed. It has a dedicated investment unit, staffed by capable professionals and the person in charge of the unit meets one of the following conditions: Has 3 years or more of work experience engaging in financial product investment business at a financial, securities, futures, or insurance institution. Has 4 years or more of work experience related to financial product investment. Possesses other academic or professional qualifications or experience sufficient to show that he or she has professional knowledge and management experience in financial product investment and can soundly and effectively manage the business of an investment department. Holds securities positions or derivatives product portfolios reaching NT$1 billion or above according to its latest CPA-audited or reviewed financial report; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed. Has an internal control system with suitable investment procedures and risk management measures. A juristic person or natural person that concurrently meets all of the following criteria and has applied in writing to a securities firm for the status of a high-asset customer: The juristic or natural person provides proof of financial capacity demonstrating a net value of investable assets and/or value of insurance products equivalent to NT$100 million or above; or has a net value of investable assets with the securities firm equivalent to NT$30 million or above and provides a written statement of financial capacity declaring a holding of a net value of investable assets and/or value of insurance products equivalent to NT$100 million or above. The term "investable assets" above means financial assets such as cash deposits, domestic or foreign securities or short-term bills (including bonds or short-term bills purchased through repo transactions), structured products, and gold passbooks. The term "net value" means the amount of the customer's investment principal after deducting the amount of secured financing or pledged loans. If a financial asset has an open market price or reference price, the net value shall be calculated as the amount of its value measured at its market price or reference price after deducting the amount of secured financing or pledged loans. The term "value of insurance products" means the policy value of investment-linked insurance or non-forfeiture value of non-investment-linked insurance of the person. The natural person or the person(s) authorized by the juristic person to conduct trades possesses adequate professional knowledge and trading experience with respect to financial products and the natural person or juristic person has adequate risk-bearing capacity. The investor has fully understood the liabilities from which the securities firm may be exempted when conducting structured international bond transactions with a high-asset customer and agrees to sign on as a high-asset customer. A juristic person or fund that concurrently meets all of the following criteria and has applied in writing to a securities firm for the status of a professional investor: It has total assets exceeding NT$50 million according to its latest CPA-audited or reviewed financial report; notwithstanding the foregoing, the financial reports of juristic persons outside of the Republic of China need not be CPA-audited or reviewed. The trader authorized by the investor possesses adequate professional knowledge and trading experience with respect to financial products. The investor has fully understood the liabilities from which the securities firm may be exempted when conducting bond transactions with a professional investor and agrees to sign on as a professional investor. A natural person that concurrently meets all of the following criteria and has applied in writing to a securities firm for the status of a professional investor: The natural person provides proof of financial capacity of NT$30 million or more; or, has had a single trade in excess of NT$3 million, and in addition, has total investment assets at the securities firm of in excess of NT$15 million, and provides a written statement of financial resources declaring that his or her total assets exceed NT$30 million or more. The investor possesses adequate professional knowledge and trading experience with respect to financial products. The investor has fully understood the liabilities from which the securities firm may be exempted when conducting bond transactions with a professional investor and agrees to sign on as a professional investor. A customer that already has the status of a natural person or juristic person professional investor under Article 2-1 of the Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds and meets the conditions of items A and B of subparagraph 3 of the preceding paragraph and furthermore is confirmed by the securities firm as having adequate risk-bearing capacity may file an application in writing with the securities firm to become a high-asset customer. With respect to the eligibility requirements that shall be met by high-asset customers and professional investors, a securities firm shall fulfill its responsibility for due diligence and obtain reasonable and credible supporting evidence from a customer and conduct review and grant approval in accordance with the securities firm’s know-your-customer procedures and customer acceptance criteria. The securities firm shall carry out follow-up review at least once every 2 years in accordance with the adopted follow-up review procedures to ensure that a given customer continues to meet the eligibility requirements for the status of the customer and shall regularly evaluate the qualifying criteria that the customer has with it. If the securities firm discovers that the customer is below the standards of financial capacity it is required to meet, it shall obtain the customer's written confirmation on whether the customer wishes it to continue to provide additional financial products or services applicable to the status of the customer. A high-asset customer or professional investor may file an application in writing with the securities firm to terminate the customer's status as such. When an investor under paragraph 1, subparagraph 2 to 5 obtains a structured international bond by either subscription in the primary market or first-time purchase from a securities firm in the secondary market, the securities firm shall present a risk disclosure statement to be signed by the investor and retained by the securities firm on file. The risk disclosure statement under the preceding paragraph shall be prescribed by the TPEx.
Article 4	When a securities firm will provide structured international bond trading services to a high-asset customer or professional investor, it shall explain the following to the customer through face-to-face consultation or video conference: Explain that it is incumbent upon the customer, before deciding to invest in such a product or accept the services, to first gain a full understanding of the potential risks of the product or services and the maximum possible loss that could be incurred. Explain that the customer will be classified as a professional investor or professional customer when receiving structured international bond trading services, and therefore the provisions of the Financial Consumer Protection Act will not apply to the high-asset customer. The securities firm shall retain records in writing and audio recording of the execution of the notification and explanation procedures provided for a high-asset customer or professional investor under the preceding paragraph. Where the customer does not agree to use audio recording, the securities firm shall prepare a written record and ask the customer to sign for confirmation.
Article 5	The types of financial derivatives and linked underlyings to which structured international bonds are linked shall be governed mutatis mutandis by Article 5, paragraph 1, subparagraph 6, items 2 and 3 of the Regulations Governing Banks Conducting Financial Products and Services for High-Asset Customers.

Chapter 2 TPEx Trading Review

Article 6	An issuer of structured international bonds that applies for TPEx trading of a structured international bond shall submit an Application for TPEx Trading of Structured International Bond to the TPEx, filling out all required particulars and including the required attachments.
	Application for TPEx Trading of Structured International Bond
Article 7	The issuer of a structured international bond shall specify the following matters in any sales documents including the prospectus, investment memorandum, or product brochure: Basic information on the bonds. Possible risks associated with the bonds. Investment risk warning. Method of calculating the investment income, including the probability of principal loss and scenario analysis explaining the maximum possible profit and loss and the average annualized rates of return under other circumstances. The parties to which the bonds may be sold and to which they may be transferred after sale are limited to investors as defined in these Rules. The matters in subparagraphs 3 and 5 of the preceding paragraph shall be specified in conspicuous print.
Article 8	The issuer of a structured international bond shall register the bond issue with a domestic or foreign securities depository enterprise recognized by the TPEx. If a structured international bond at the time of issuance is registered with a domestic securities depository enterprise, physical certificates will not be produced under any circumstances, and securities firms trading that structured bond shall be limited in their delivery method to book-entry delivery through a domestic central securities depository enterprise.
Article 9	After accepting an application for TPEx trading of a structured international bond, the TPEx shall commence a document review of the application documents and the attachments. The review guidelines, procedures, and deadlines are as follows: The application documents: The TPEx shall complete the relevant checklists. If its review reveals any 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. Conditions for TPEx trading: Based on the Application for TPEx Trading of Structured International Bonds and the attachments, the application shall be reviewed for compliance with the conditions for TPEx trading set out in these Rules. When the document review shows that all required documents have been submitted and the conditions for TPEx trading are met, TPEx trading of the bonds shall be announced. If it is the initial time that the issuer applies for TPEx trading, the TPEx shall separately prepare relevant documents, including the contract for TPEx trading entered into with the given issuer, and submit them by mail to the competent authority for recordation. The review period: The TPEx shall complete the review within 3 business days from the day on which it accepts an application for processing or the day on which supplementation of all required information has been completed. Notwithstanding the above, under special circumstances the TPEx may file for approval of an extended review period.
Article 10	The issuer of structured international bonds shall pay to the TPEx on a yearly basis for the bonds of each maturity a TPEx listing fee equal to 3/10,000 of the total nominal value of the structured international bond issue, or the balance of outstanding shares, capped at a maximum of NT$300,000 for the bonds of each maturity. The issuer of structured international bonds shall pay to the TPEx an administrative fee for the TPEx trading of the structured international bonds that shall be capped at NT$25,000 for the bonds of each maturity. The issuer of a structured international bond shall pay to the TPEx a TPEx listing fee at the rate specified in paragraph 1 either by a lump-sum payment at the time of application or once every year before the end of January; after payment is made, however, a refund may not be requested upon the approval of suspension or termination of trading. The TPEx fees set out above may be paid in New Taiwan dollars, or foreign currency equivalents, using the denominating currency of the bond issue. The TPEx listing fee mentioned in paragraphs 1 and 3 shall be calculated pro rata based on the actual period of TPEx listing, with partial months counted as whole months.
Article 11	The issuer of a structured international bond shall enter the following information into the TPEx-designated information reporting website prior to the date on which TPEx trading of the structured international bond begins: Basic issuer data. Bond issue data. Other required announcements.
Article 12	The provisions of Articles 12-1 and 12-2 of the TPEx Trading rules apply to the suspension or termination of TPEx trading of a structured international bond issued by an issuer. Upon the full repayment of the principal of a structured international bond at maturity, or upon the occurrence of a cause for early redemption as specified in a sales document such as the prospectus, investment memorandum, or product brochure, the TPEx may immediately announce termination of TPEx trading of the structured international bond.

Chapter 3 Market Trading

Article 13	A securities firm engaging in proprietary trading of structured international bonds shall do so through negotiated transactions over the counter at its place of business. The negotiated transaction methods include outright transactions and repo transactions.
Article 14	When a securities firm trades structured international bonds over the counter, the trading counterparties shall be limited to investors as defined in Article 3; at the same time, the securities firm shall expressly inform buyers that any further sale of the bond shall be limited to investors as defined in Article 3. However, this rule does not apply to repo transactions.
Article 15	Trading hours for structured international bonds are from 9 am to 3 pm. However, if a securities firm has already adopted internal operating rules for extended trading hours, it may extend its trading hours and publicly announce the extended hours at its place of business or on its website. Internal operating rules adopted by a securities firm under the preceding paragraph, and any amendments to those rules, shall be approved by the chairman of the board of directors.
Article 16	When a securities firm trades structured international bond, it shall do so in the currency of their denomination, and the quotation units are as follows: Outright transactions shall be quoted on a price-per-hundred basis with a tick size of 1/10,000 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.
Article 17	The duration of a structured international bond repo transaction begins from the date on which the seller delivers the subject security to the buyer and continues until the resale date. When a securities firm conducts structured international bond repo transactions, it may not convert into New Taiwan Dollars for the purposes of receiving or making foreign currency payments.
Article 18	For a structured international bond repo transaction settled by book entry through a domestic central securities depository enterprise, the price receivable and price payable for a transaction in which payment is made on the record date of interest and redemption payments shall include the amount of the principal repayment and interest payment, while the current-period principal and interest shall still belong to the person as registered in the account of the central securities depository enterprise at close of business on the record date of interest and redemption payments. "Record date of interest and redemption payments" as used in these Rules means the business day before the date of interest and redemption payments; provided, if the record date for interest and redemption payments is otherwise specified in a sales document such as the prospectus, investment memorandum, or product brochure for the structured international bond in question, that stipulation shall govern.
Article 19	The method of calculation of interest in repo trading of structured international bonds shall be as provided in Article 22, paragraph 2 of the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds. In the trading of a structured international bond, the business day before the bond maturity date is the last trading day for that bond.
Article 20	When a securities firm, during the period from 9 am to 3 pm on a given business day, executes an outright transaction of a structured international bond over the counter, then within 60 minutes after the transaction is executed, the securities firm shall enter the transaction information into the TPEx information system in the format prescribed by the TPEx. If the transaction is executed during the period from 3 pm on the given business day to 9 am of the next business day, the transaction information shall be reported by 10 am of the next business day.
Article 21	The issuer shall itself serve or appoint another securities firm(s) to serve as liquidity provider to provide trading quotes during the period of TPEx trading of its structured international bonds. Operation directions related to such liquidity providers will be separately prescribed by the TPEx. When an issuer changes liquidity provider(s), it shall report the change to the TPEx in writing.
Article 22	When a structured international bond trade is executed over the counter at the business place of a securities firm, then except where these Rules provide otherwise, a trade confirmation statement, delivery statement, and performance and settlement statement shall be produced at the time of transaction, and after transfer to the customer for signing, payment and delivery of the bonds and funds shall be completed directly with the customer by the third business day following the transaction date. However, if the customer has already signed a Consent Form and a record of the payment is retained, the trade confirmation statement, delivery statement, and performance and settlement statement for the trade shall be delivered to the customer’s designated address or sent by email. The documents are not required to be signed by the customer, but a record of the delivery or email transmission shall be retained. If the trade confirmation statement, delivery statement, and performance and settlement statement are to be sent by email, the customer’s written consent shall be obtained, and appropriate measures shall be taken to ensure the correct and secure delivery of the materials. The provisions of the preceding paragraph notwithstanding, where the securities firm applies to and receives approval from the TPEx on a case-by-case basis, it may be allowed until the seventh business day following the transaction date to complete payment and delivery with the customer. Where a structured international bond is registered with a foreign securities depository, a securities firm that engages in an over-the-counter transaction in that structured international bond with an overseas customer may apply to a domestic central securities depository enterprise to carry out a cross-border wire transfer to complete delivery of the bonds with the overseas customer. When a securities firm conducts a transaction with an offshore professional institutional investor, it may observe international market conventions for payment and settlement and retaining the transaction and payment and settlement records.
Article 23	A securities firm shall pay a monthly service fee for structured international bond business, assessed at 5/10,000,000 of its total over-the-counter trading business volume for the month: The total business volume referred to in the preceding paragraph shall be converted to New Taiwan Dollars based on the average of the daily mid-market exchange rates during the given month at TPEx-designated foreign exchange banks.

Chapter 4 Information Reporting

Article 24	The issuer of a structured international bond shall regularly report the following information: Any change in issuance data for the preceding month shall be entered into the TPEx-designated information reporting website within 10 days after the end of each month. An electronic file containing the issuer’s annual report shall be transmitted to a TPEx-designated information reporting website by the deadline specified in Article 24 of the Regulations Governing Information to be Published in Annual Reports of Banks.
Article 25	The issuer of a structured international bond shall report the following information on a non-regular basis: The issuance, maturity, or repurchase of bonds. Any change in the credit rating of the issuer or the bond. Information related to the liquidity provider(s). Any change in the value of a linked underlying resulting in a material effect on investors’ equity. Any other matter having a material effect on the price or value of the bond.
Article 26	Upon the occurrence of any of the matters in the preceding article with respect to the issuer of a structured international bond, the issuer of the structured international bond shall enter the information into the TPEx-designated information reporting website prior to the beginning of trading hours on the next business day following the date of the event's occurrence.
Article 27	When information reported by the issuer of a structured international bond is found to contain an inaccuracy, upon such a discovery or upon receipt of notification from the TPEx, the issuer shall promptly make correction by entering accurate information. The TPEx may, as it deems necessary, make inquiries with the issuer or request it to submit related information.

Chapter 5 Penal Provisions

Article 28

When any of the following circumstances applies to the issuer of a structured international bond, the TPEx may, depending on the circumstances, impose a penalty of NT$30,000, or suspend it from trading and report to the competent authority for recordation:

Violation of any provision of these Rules.
Willful release of any unconfirmed information, or public disclosure of inaccurate information.

If the issuer of a structured international bond violates a provision of the preceding paragraph and is required to make a supplementary disclosure of information, the TPEx shall issue a letter notifying the issuer to do so within 2 days counting from the date of receipt of the letter, and should the issuer fail to do so within that period, the TPEx may impose a penalty of NT$10,000 per day until the day on which the issuer effects disclosure.

Article 29

If a securities firm violates any provision of these Rules, the TPEx may, according to the circumstances, issue a warning to the securities firm, or impose a penalty of not more than NT$300,000 and not less than NT$100,000.
If a securities firm is in violation of a provision under the preceding paragraph and needs to take countermeasures, the TPEx shall issue a letter notifying the securities firm to do so by a specified deadline. If it fails to do so by the deadline, the TPEx may impose a penalty of NT$10,000 per day until the day on which it has taken the measures.

Chapter 6 Supplementary Provisions

Article 30

These Rules, and any amendments hereto, shall enter into force after their review and recordation by the competent authority. Any additions, deletions, or amendments to the attachments to these Rules shall enter into force after ratification by the president of the TPEx.