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Title: Taipei Exchange Operational Directions for Green Bonds
Date: 2020.07.01 ( Amended )

Article Content

 
Article 1     These Operational Directions are specially adopted to help green energy technology industries raise funds, promote sustainable environmental development, and establish a mechanism for TPEx trading of green bonds in Taiwan.
Article 2     For the purposes of these Operational Directions, green bonds mean securities that have been accredited by the TPEx as green bonds.
Article 3     An issuer issuing the following securities may apply to the TPEx for green bond accreditation if the securities meet the requirements set out in Article 4.
  1. Straight corporate bonds or financial debentures for which the issuer applies for TPEx trading pursuant to Article 6, 7, or 15 of the TPEx Rules Governing the Review of Securities for Trading on the TPEx.
  2. New Taiwan dollar (NTD) denominated foreign straight bonds for which the issuer applies for TPEx trading pursuant to Article 36 of the TPEx Rules Governing the Review of Foreign Securities for Trading on the TPEx.
  3. Securities for which the issuer applies for TPEx trading pursuant to Article 3 of the TPEx Rules Governing Management of Foreign Currency Denominated International Bonds, with the exception of securities having equity characteristics.
  4. Beneficial securities or asset-backed securities for which the issuer applies for TPEx trading pursuant to Article 7-1 of the TPEx Rules Governing the Review of Securities for Trading on the TPEx.
Article 4     An issuer applying for green bond accreditation shall comply with the following requirements according to the type of the securities:
  1. Straight corporate bonds: All of the funds raised by the issuer are to be used for expenditures on green investment projects, or to pay back debts incurred in green investment projects. All of the funds raised by a foreign financial institution are to be used for loans to green investment projects, for expenditures on green investment projects, or to pay back debts incurred in green investment projects.
  2. Financial debentures: All of the funds raised by the issuer are to be used for loans to green investment projects, for expenditures on green investment projects, or to pay back debts incurred in green investment projects.
  3. Beneficial securities or asset-backed securities: All of the assets in the asset pool come from green investment projects.
  4. Sukuk (Islamic fixed income security): All of the funds obtained by the Sukuk obligor(s) are to be used for expenditures on green investment projects, or to pay back debts incurred in green investment projects. If the Sukuk obligor is a foreign financial institution, all of the funds obtained by it are to be used for loans to green investment projects, for expenditures on green investment projects, or to pay back debts incurred in green investment projects.
    The meaning of "asset pool" referred to in subparagraph 3 of the preceding paragraph shall be determined in accordance with the Financial Asset Securitization Act.
Article 5     For the purposes of the preceding article, green investment project means investment in the following matters, with substantial benefit for improving the environment:
  1. Development of renewable energy and energy technology.
  2. Improvement of energy efficiency and energy conservation.
  3. Greenhouse gas reduction.
  4. Waste recycling or reuse.
  5. Agricultural and forestry resource conservation.
  6. Biodiversity conservation.
  7. Pollution prevention and control.
  8. Water resource conservation, purification, or reclamation, recycling, and reuse.
  9. Other climate change adaptation or matters approved by the TPEx.
    A green investment project under the preceding paragraph requires documentary proof issued by a government agency stating that the project meets green investment project criteria, or an assessment opinion or certification report issued by a domestic or foreign certification body stating that the project meets green investment project criteria. However, if the issuer is a domestic bank or a Taiwan branch of a foreign bank, and furthermore all of the funds raised thereby are to be used for loans to green investment projects, or is a state-owned energy supply enterprise, it may issue its own assessment opinion that the project meets green investment project criteria in accordance with green bond principles adopted in customary practice in international financial markets.
     The "however" proviso in the preceding paragraph does not apply to an issuer applying for green bond accreditation pursuant to paragraph 1, subparagraph 3 of the preceding article.
    For the purposes of these Operational Directions, an energy supply enterprise means an energy supply enterprise as defined in Article 4 of the Energy Administration Act.
Article 6     For the purposes of these Operational Directions, a certification body means a body that, in accordance with customary practice in the international financial markets or with domestic practice, possesses the professional expertise to assess and certify green investment projects, fund use plans, or fund use status, and that has relevant assessment or certification experience.
    If there is any misrepresentation or non-disclosure in an assessment opinion or certification report issued by a certification body, the TPEx may void or revoke the green bond qualification as assessed or certified by the body, and refuse within a period of 1 year to accept assessment opinions or certification reports issued by the body.
Article 7     An issuer applying for green bond accreditation shall apply to the TPEx by submitting a Green Bond Accreditation Application Form (Form 1, 2, or 3), along with the required documents, and specifying the required particulars.
Article 8     When an issuer applies for green bond accreditation, the TPEx shall complete the review process within 3 business days from the date the application documents are delivered. Notwithstanding the above, under special circumstances the TPEx may file for approval of an extended review period.
    Once the application documents under the preceding paragraph has been reviewed and found by the TPEx to be complete and in compliance with these Operational Directions, the TPEx may issue a green bond accreditation certificate. If the review finds the application documents to be incomplete or to contain inadequate information, the TPEx shall request the applicant to supplement the documents or information within a time prescribed period. If the applicant fails to make the supplementation within that period, the TPEx shall issue a notice of rejection.
    An issuer shall, within 2 months from the issuance date of the accreditation certificate under the preceding paragraph, apply to the TPEx for TPEx trading of the bonds. The accreditation certificate shall become invalid if the issuer fails to do so within that period. However, if an application for extension with good cause is filed and the application is approved by the TPEx, a 2-month, one-time-only extension may be made.
Article 9     An issuer applying for green bond accreditation shall adopt a plan for the use of the funds raised by the green bonds, and shall be required to obtain an assessment opinion or certification report issued by a certification body stating that plan is feasible, reasonable, and effective for the purposes of the green investment project. If, however, the issuer is a state-owned energy supply enterprise, it may submit its proposed budget that has been reviewed and passed by the Executive Yuan or the Legislative Yuan, and a statement explaining the relevance between the budget plan and the plan for the use of the funds raised by the green bonds, and issue its own assessment opinion.
Article 10     An issuer shall disclose in the prospectus information on matters including the green investment project or the loan to a green investment project, the determination standards, the environmental benefits assessment, the fund use plan, and the certification body.
Article 11     During the life of the green bonds or the period of use of the funds raised by the bonds, the issuer shall, within 30 days from the date of public disclosure of the annual financial report, have a certification body issue an assessment opinion or certification report addressing whether the status of use of the funds conforms to the fund use plan. If, however, the issuer is a state-owned energy supply enterprise, it may issue its own assessment opinion based on the itemized accounting of the implementation of the relevant budget.
    The issuer shall, within the time limit in the preceding paragraph, enter the status of use of the funds and the assessment opinion or certification report into the Internet information reporting website designated by the TPEx.
Article 12     If there is any misrepresentation or non-disclosure in a relevant application document submitted or information reported by an issuer under Article 7, Article 10, or the preceding article, the TPEx may void or revoke the green bond qualification.
    If an issuer fails to carry out the reporting procedures under the preceding article or the use of the funds does not conform to the fund use plan, the TPEx may notify the issuer to remedy or correct the failure within a prescribed time period. If the issuer fails to remedy or correct the failure within that period, the TPEx may revoke the green bond qualification.
    If there is a change in the use of the funds, resulting in any noncompliance with the provisions of Article 4, the issuer shall apply to the TPEx for revocation of the green bond qualification.
Article 13     These Operational Directions, and any amendments hereto, will be publicly announced and enter into force after submission to and approval by the competent authority. Any addition, deletion, or amendment to the forms annexed to these Operational Directions will enter into force after approval by the president of the TPEx.