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Title: Taipei Exchange Rules Governing Over-the-Counter When-issued Trading of Central Government Bonds
Date: 2008.12.15 ( Announced )
Date: 2008.12.15 ( Amended )

Article Content

 
Article 1     These Rules are adopted in accordance with Article 71-1, paragraph 4 of the Taipei Exchange Rules Governing Securities Trading on the TPEx (the "Trading Rules").
Article 2     A securities dealer ("securities firm") engaging in when-issued trading of central government bonds ("when-issued trading") with its customers shall do so in compliance with these Rules. Matters on which these Rules are silent shall be governed by other applicable rules of the TPEx.
    The trading of book-entry central government bonds between securities firms shall be conducted in accordance with the Regulations Governing the Electronic Bond Trading System.
Article 3     The term "when-issued trading of central government bonds" in these Rules refers to outright trading of to-be-issued government bonds during the period beginning from the 15th and concluding on the 1st business day prior to the issue date, following the announcement of the quarterly plan for bond issuance by the Ministry of Finance. Provided, if TPEx Electronic Bond Trading System (EBTS) trading is suspended under applicable regulations on the business day prior to the originally scheduled date of issue of the government bonds because of a natural disaster or force majeure, the when-issued trading period will be extended to the date of issue of the bonds.
    If the when-issued trading period as calculated in accordance with the preceding paragraph does not reach 15 business days, the commencement date of when-issued trading shall be the business day next following the announcement by the Ministry of Finance.
Article 4     The first time a securities firm undertakes when-issued trading with a customer, it shall retain a photocopy of the customer's identity document or incorporation certificate, and shall set trading limits for individual customers based on each customer's financial and cash management status.
Article 5     When-issued trading shall be fully cancelled if any of the following circumstances occurs during the when-issued trading period of central government bonds:
  1. Cancellation of the issue.
  2. Change of issue date, provided that this rule does not apply to an issue duly postponed as a result of a natural disaster.
  3. Change of principal repayment term or method.
  4. Change of other terms and conditions of issuance, which the TPEx determines to have a material impact on the value of the when-issued government bonds.

Article 6     When a securities firm conducts when-issued trading, the net positions of trading in the bonds shall comply with Article 79-1 of the Trading Rules.
Article 7     The balances of purchases and sales of bonds by a securities firm in when-issued trading shall respectively be added to the balances of bond repurchase and reverse repurchase transactions, and shall be handled in compliance with Article 79 of the Trading Rules.
Article 8     A securities firm shall, on the trade date, perform trade confirmation by a method that both parties agree upon, and shall, on the issue date, have the trade confirmation slip signed by the customer.
Article 9     A securities firm shall, after executing when-issued trading, immediately input the trade information into the TPEx information system in compliance with the time and format prescribed by the TPEx.
Article 10     A securities firm shall, by 3 p.m. on the issue date of the government bonds, perform the delivery and payment of the funds and securities in accordance with the Directions for the Operation of Book-Entry Central Government Bonds or complete the payment and delivery directly with the customers, and duly produce and issue a delivery statement and a performance and settlement statement and have them signed by the customers.
    When the TPEx Electronic Bond Trading System (EBTS) is duly suspended for trading on the business day preceding the scheduled bond issue date as a result of natural disaster or force majeure, the payment and delivery for when-issued trading under the preceding paragraph shall be completed by 3 p.m. on the business day next following the bond issue date.
Article 11     A securities firm shall, on the trade date, record the trades in memorandum entries, and shall provide a summary thereof in its daily and monthly operations statements.
Article 12     The TPEx shall, at the close of business of each business day, publicize the highest, lowest, and average yield rates and amounts of when-issued trading.
Article 13     These Rules, and any amendments hereto, shall come into force upon approval and public announcement by the competent authority after passage by the board of directors of the TPEx.