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Title Taiwan Depository & Clearing Corporation Operation Directions for the Registration of Issuance of Dematerialized Short-term Bills CH
Date 2022.04.19 ( Amended )

Article Content

Article 1     These Directions are adopted pursuant to Articles 15, 19, and 39 of the Regulations Governing Issue Registration, Central Deposit, and Book-Entry Operations for Short-term Bills.
Article 2     The competent authority under the Act Governing Bills Finance Business is the Competent Authority for these Directions.
Article 3     The term "short-term bills" as used in these Directions means short-term beneficial securities, asset-backed securities (ABS), negotiable certificates of deposit, municipal notes, Commercial Paper II (CPII), and foreign currency denominated commercial paper. The term "issuer" as used in these Directions means a trustee of a special-purpose trust or a special-purpose company under the Financial Asset Securitization Act, a bank that issues negotiable certificates of deposit, a local government that issues municipal notes, or a company or government-owned enterprise that issues CPII or foreign currency denominated commercial paper.
Article 4     When an issuer applies to issue dematerialized short-term bills, the issuer shall authorize a bill dealer to submit to the TDCC an application to open an issuance registration account with the TDCC in an official letter, and the application shall include the following documentation:
  1. Participant agreement.
  2. Specimen seal card of the issuer.
  3. Photocopy of the company registration certificate or other document evidencing registration as a juristic person.
  4. Application form for opening/closure/changes of an issuance registration account.
  5. Other documents as required by the TDCC.
    If the issuer referred to in the preceding paragraph is a bank, the issuer may itself send its application to the TDCC for opening of an issue registration account.
Article 5     A bank that issues negotiable certificates of deposit shall appoint one of its business units as the designated central processing unit, which will be responsible for handling the deposit/remittance into exclusive redemption accounts of the mature payables of those certificates of deposits issued by the bank's business units and for compilation and application matters related thereto, or to handle issue registration operations for other business units of the bank.
Article 6     For municipal notes, CPII, or foreign currency denominated commercial paper that need to be guaranteed by a financial institution, if the financial institution intends to carry out guarantee procedures through the TDCC Bills Clearing and Settlement System (BCSS) or the TDCC Short-Term Bills Registration System on its issuance platform (collectively, the "TDCC system"), it shall apply to the TDCC to use the TDCC system by submitting an Application for a Financial Institution to Offer a Guarantee for Short-Term Bills.
Article 7     To apply for closure of its account, an issuer shall send the TDCC an official letter with the application for opening/closure/changes of an issue registration account and other relevant documents for evidence purposes to apply for the cancellation of its issuance registration account.
    After the TDCC has accepted the application under the preceding paragraph, issuance registration operations through the account will be immediately terminated. The account shall then be closed once there is no remaining outstanding issue.
Article 8     When an issuer is ordered by the Competent Authority to suspend business, unless otherwise provided by the Competent Authority, the TDCC shall suspend issuance registration operations by the issuer.
Article 9     An issuer who applies to change basic identifying information of its issuance registration account shall file the application for opening/closure/changes of an issuance registration account and relevant documentary evidence with the TDCC.
    The issuer may carry out the application procedure under the preceding paragraph through the TDCC system.
Article 10     TDCC’s business hours for issuance registration for dematerialized short-term bills are from 8:30 a.m. to 3 p.m. on business days. However, for issuers that carry out the application procedure on a day different from the issue date of their dematerialized short-term bills, where the issuance registration is not done through the written-form procedure described in Article 15, paragraph 1, subparagraph 2, TDCC’s business hours for issuance registration end at 5:30 p.m.
    The business hours under the preceding paragraph may be extended based on a bill dealer’s application to meet its needs.
Article 11     The issuance registration procedures for dematerialized beneficial securities or asset-backed securities are as follows:
  1. The issuer and the bill dealer acting as underwriter shall respectively input issuance registration commands and notify the TDCC of the relevant information.
  2. On receiving the commands from the issuer and the bill dealer acting as underwriter, the TDCC shall immediately examine whether the contents of the commands from the two parties match. If the commands match, the TDCC will immediately process issuance registration, notify the issuer and the bill dealer, and notify the bank responsible for redemption operations of the relevant information. If the commands do not match, the TDCC shall immediately investigate and determine the reason and take necessary measures.
Article 12     The issuance registration procedures for a bill dealer's initial purchase of dematerialized negotiable certificates of deposit are as follows:
  1. The issuer and the bill dealer making the initial purchase shall respectively input issuance registration commands, and notify the TDCC of the relevant information.
  2. On receiving the commands from the issuer and the bill dealer making the initial purchase, the TDCC will immediately examine whether the content of the commands from the two parties match. If the commands match, the TDCC will immediately process issuance registration, notify the issuer and the bill dealer making the initial purchase, and notify the bank responsible for redemption operations of the relevant information. If commands do not match, the TDCC shall immediately investigate and determine the reason and take necessary measures.
Article 13     The issuance registration procedures for dematerialized foreign currency denominated negotiable certificates of deposit purchased from the issuer by an investor or a foreign depository or clearing institution are as follows:
  1. The issuer shall input an issuance registration command, and notify the TDCC of the relevant information.
  2. On receiving the issuer's command, the TDCC shall immediately notify the investor's custodian bank or the foreign depository or clearing institution to carry out confirmation procedures.
  3. The investor's custodian bank or the foreign depository or clearing institution shall notify the TDCC after completing the confirmation procedures.
  4. On receiving the confirmation notice referred to in the preceding subparagraph, the TDCC will immediately carry out issuance registration and notify the issuer, and the investor's custodian bank or the foreign depository or clearing institution of the completion of the procedures, and notify the bank responsible for redemption operations of the relevant information.
Article 14     The issuance registration procedures for dematerialized municipal notes are as follows:
  1. The issuer shall input an issuance registration command, and notify the TDCC of the relevant information.
  2. If municipal notes need to be guaranteed by a financial institution, the TDCC shall notify the guarantor of the information in the preceding subparagraph, and the guarantor shall notify the TDCC after its confirmation.
  3. The bill dealer acting as underwriter shall input an issuance registration command, and notify the TDCC of the relevant information.
  4. On receiving a notification under subparagraph 1 or 2, the TDCC shall immediately examine the commands issued by the underwriter and guarantor. If the above mentioned commands match, the TDCC will immediately carry out issuance registration, notify the issuer, the guarantor, and the underwriter, and notify the bank responsible for redemption operations of the relevant information. If the commands do not match, the TDCC shall immediately investigate and determine the reason and take necessary measures.
Article 15     The issuance registration procedures for dematerialized CPII and foreign currency denominated commercial paper are as follows:
  1. Issuance registration done electronically:
    1. The issuer shall input an issuance registration command, and notify the TDCC of the relevant information.
    2. If commercial paper needs to be guaranteed by a financial institution, the TDCC shall notify the guarantor of the information of the preceding item, and the guarantor shall notify the TDCC after its confirmation.
    3. The bill dealer acting as underwriter shall input an issuance registration command, and notify the TDCC of the relevant information.
    4. On receiving the notification under item A or B, the TDCC will immediately examine the above-mentioned commands. If the commands match, the TDCC will immediately carry out issuance registration, notify the issuer, guarantor, and underwriter, and notify the bank responsible for redemption of the relevant information. If the commands do not match, the TDCC shall immediately investigate and determine the reason and take necessary measures.
  2. Issuance registration done in written form:
    1. The issuer shall complete a hard copy application form for issuance registration of commercial paper. After the application form has been inspected by the bill dealer acting as underwriter and found to be without error, it shall be submitted to the bank responsible for redemption operations designated by the TDCC.
    2. The bill dealer acting as underwriter shall input an issuance registration command, and notify the TDCC of the relevant information. On receiving the command, the TDCC shall immediately notify the bank responsible for redemption operations.
    3. The bank responsible for redemption operations shall examine whether the TDCC's issuance registration command matches with the content of the application form submitted by the underwriter. After the information is checked and confirmed to match, the TDCC shall be notified of the confirmation and keep the application form. If the commands do not match, the TDCC shall be notified of the failure to confirm.
    4. Upon receipt of confirmation notification from the bank responsible for redemption operations, the TDCC shall immediately register the commercial paper, and notify the underwriter of the completion of the registration operations. Upon receipt of notification of failure to confirm, the TDCC shall notify the underwriter of the failure of the submission.
    When issuance registration is done electronically for dematerialized CPII or foreign currency denominated commercial paper, as described in subparagraph 1 of the preceding paragraph, the issuance documents, transaction vouchers, and other relevant materials among the bill dealer acting as underwriter, the issuer, and the guarantor may be transmitted through the TDCC system starting from the second business day before the issue date.
Article 16     Unless the issuing bank of NT Dollar denominated negotiable certificates of deposit is the bank responsible for redemption operations, the issuing bank, on the next business day following the completion of registration, shall activate a scheduled transfer through the Central Bank’s CBC Interbank Funds Transfer System, and notify the TDCC of the system-verified sequence number of the scheduled transfer.
Article 17     Three business days before the maturity of floating rate foreign currency denominated negotiable certificates of deposit, the issuer shall submit the information on the amount of the principal and interest at maturity and the last pricing interest rate to the TDCC and notify it to carry out the redemption operations.
Article 18     Where registered beneficial securities, asset-backed securities, CPII, or foreign currency denominated commercial paper fail to be fully underwritten by the second business day after the underwriting date designated by the issuance registration command, the TDCC shall directly cancel the issuance registration.
Article 19     The TDCC's settlement procedures for short-term bills under Articles 11, 12, 14, and 15 shall be in accordance with the Directions for the Handling by Bills Dealers of Account Opening and the Deposit, Settlement, and Withdrawal of Short-Term Bills and the Directions for the Handling by Investor Custodian Banks of Account Opening and the Settlement and Withdrawal of Short-Term Bills.
    The TDCC's delivery procedures for short-term bills under Article 13 are as follows:
  1. When an investor's custodian bank receives a purchase notification from the TDCC, it shall provide the content of the notification to the investor to confirm settlement. When a foreign depository or clearing institution receives a purchase notification from the TDCC, it shall confirm settlement by itself.
  2. When notified by the investor of any doubts about the content of the purchase notification, the investor's custodian bank shall notify the TDCC of non-confirmation, and the TDCC shall notify the issuer to handle the matter.
  3. After the investor has confirmed the settlement, the investor's custodian bank shall deduct the investor's payables, and then notify the TDCC of the confirmation of settlement. The same procedure applies in cases in which the investor's custodian bank performs settlement confirmation on the investor's behalf.
  4. When a foreign depository or clearing institution has any doubts about the content of purchase notification, it shall notify the TDCC of non-confirmation, and the TDCC shall notify the issuer to handle the matter.
  5. The foreign depository or clearing institution shall notify the TDCC of its confirmation of settlement after the foreign depository or clearing institution performed settlement confirmation by itself.
  6. Upon receipt of the settlement confirmation from the investor's custodian bank or the foreign depository or clearing institution, the TDCC shall immediately notify the Financial Information Service Co., Ltd. to handle the payment and receipt of funds between the deposit accounts held by the issuer and by the investor's custodian bank, or between the deposit accounts held by the issuer and by the agent clearing bank designated by the foreign depository or clearing institution, except in the case that the issuer's bank is the same bank as the investor's custodian bank or as the agent clearing bank designated by the foreign depository or clearing institution.
  7. After the payment and receipt of funds referred to in the preceding subparagraph are completed, the TDCC shall immediately commence the book-entry operations for the purchase, and notify the investor's custodian bank, or the foreign depository or clearing institution of the completion of settlement.
  8. When notified by the TDCC of the completion of settlement, the investor's custodian bank shall record the purchased quantity of securities in the proprietary position in the investor's account.
  9. If the payment and receipt of funds are handled by the Financial Information Service Co., Ltd., the TDCC shall notify the bank responsible for redemption operations to remit the funds to the deposit account designated by the issuer.
Article 20     When payment is not received in full for dematerialized short-term bills redeemed at maturity, the TDCC shall issue a certificate of claim. If the dematerialized short-term bills are CPII or foreign currency denominated commercial paper, the TDCC shall issue both a certificate of claim and a certificate of presentment and dishonor, and deliver those documents to the bill dealer, investor's custodian bank, foreign depository or clearing institution by registered mail with advice of delivery. Those organizations also may apply to collect the documents in person.
    If the bearer or holder of not fully-paid short-term bills is an investor, when the investor's custodian bank receives a certificate of claim or a certificate of presentment and dishonor via registered mail with advice of delivery from the TDCC, the investor's custodian bank shall notify the investor to collect the documents in person at the investor's custodian bank.
    After the investor's custodian bank has finished the procedure specified in the preceding paragraph, it should deduct the amount specified in the above certificates received by the investor from the restricted (dishonored bills) position in the investor's account book, and notify the TDCC to remove the balance of dishonored bills from the account.
Article 21     A bill dealer, investor's custodian bank, or foreign depository or clearing institution that applies to collect documents in person as specified in the preceding article shall notify the TDCC by 9:30 a.m. on the next business day following the non-receipt of full payment, and submit an Application for a Certificate of Claim and Certificate of Presentment and Dishonor of Dematerialized Short-Term Bills to collect the documents from the TDCC.
    If the bill dealer, investor's custodian bank, or foreign depository or clearing institution specified in the preceding paragraph is located in the same county or city as the TDCC, it shall collect the certificates in person by 5 p.m. on the notice day. If not in the same county or city, it shall collect the certificates in person by 5 p.m. on the third business day after the notice day.
    If the certificates are not picked up by the deadline under the two preceding paragraphs, the TDCC shall deliver the relevant certificates to the bill dealer, investor's custodian bank, or foreign depository or clearing institution via registered mail with advice of delivery.
Article 22     Where redemption procedures for dematerialized short-term bills have not been carried out by the maturity date, and the relevant taxes and National Health Insurance supplementary premium thereon have already been paid, the bearer or holder thereof may submit an Application for a Certificate of Claim and Certificate of Presentment and Dishonor of Dematerialized Short-Term Bills to apply to the TDCC to acquire a certificate of claim.
    Where the bearer or holder under the preceding paragraph is the investor, the investor's custodian bank shall be engaged to submit the application on its behalf.
Article 23     Any matters not set forth herein shall be governed by applicable laws and regulations and the bylaws and rules of the TDCC.
Article 24     These Directions, and any amendments hereto, shall take effect after having been submitted to and approved by the Competent Authority and submitted to the Central Bank of the Republic of China (Taiwan) for recordation.
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