1. The Development of the Sustainability Bond Market in Taiwan

To develop sustainable financing, to assist companies investing in the ESG, and to cooperate with the Financial Supervisory Commission (FSC) to promote Corporate Governance 3.0 - Sustainable Development Roadmap, Green Finance Action Plan 2.0., and Capital Market Roadmap 2021-2023, the TPEx promulgated “Operational Directions for Sustainability Bonds” on October 6, 2020 and established a sustainability bond market.

2. The Definition of a Sustainability Bond

Sustainability Bonds are bonds where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects. In accordance with the Taipei Exchange Operational Directions for Sustainability Bonds, a bond which has Sustainability Bond Qualifications accredited by TPEx and has applied for TPEx listing is considered as a Sustainability Bond.

3. The Process of Sustainability Bond Issuing and Listing

3.1. Corporate Bonds (excluding professional board international bonds issued by foreign issuers)

3.1. Corporate Bond (excluding pr width=

3.2. Professional Board NTD-denominated foreign straight bonds (for foreign issuers)

3.2. Professional Board NTD-denominated foreign straight bond (for foreign issuers)

3.3. Professional Board International Bonds (for foreign issuers)

3.3. Professional Board International Bond (for foreign issuers)

4. Applying for Sustainability Bond Accreditation

An issuer applying for sustainability bond accreditation shall apply to the TPEx by submitting a Sustainability Bond Accreditation Application Form, along with the required documents, and by specifying the required particulars.

The required documents shall include:

  1. A Sustainability bond framework
  2. An assessment opinion or certification report issued by a domestic or foreign certification body stating that the framework meets the TPEx Operational Directions for Sustainability Bonds or international market financial practices
  3. Documentary proof that the domestic or foreign certification body meets the requirements of the TPEx Operational Directions for Sustainability Bonds
  4. A statement from the Sukuk obligors, who guarantee to perform all public announcements and report obligations pursuant to the regulations of the TPEx
  5. Other necessary documentary proof or materials

5. The Process and Deadlines for Sustainability Bond Accreditation Applications

  1. TPEx should complete the review process within 3 business days after receiving the application documents.
  2. Issuers should apply for trading of the bonds on the TPEx within 2 months after receiving the accreditation certificate.

6. Eligibility of Bond Instruments

The following securities may apply to be sustainability bonds.

  1. Straight corporate bonds
  2. Financial debenture
  3. NTD-denominated foreign straight bonds
  4. International Bonds (excluding the securities with equity characteristics)
  5. Financial Asset Beneficiary Securities
  6. Sukuk

7. Use of Proceeds from Sustainability Bonds

Proceeds of Sustainability Bonds must be exclusively applied to finance or re-finance eligible Green Projects and Social Projects.

  1. Expenditures on green projects or social projects
  2. Paying back debts incurred in green projects or social projects
  3. Loans to green projects or social projects. (If the bond issuer or Sukuk obligor are financial institutions.)

As for beneficial securities or asset-backed securities, all of the assets in the asset pool should come from green projects or social projects.

8. Categories of Eligible Sustainability Projects

In accordance with the Taipei Exchange Operational Directions for Sustainability Bonds, categories of potential eligible Green Projects and Social Projects are listed below.

Green Projects:

  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

Social Projects:

  1. Affordable basic infrastructure
  2. Access to essential services
  3. Affordable housing
  4. Employment generation, and programs designed to prevent and/or alleviate unemployment stemming from socioeconomic crises, including through the potential effect of SME financing and microfinance
  5. Food security and sustainable food systems
  6. Socioeconomic advancement and empowerment
  7. Other matters approved by the TPEx

9. The Requirements of External Review or Certification

Before the issuance of bond Requirement
Sustainability Bond Framework Assessment opinion or certification report issued by certification body for the sustainability bond framework.
After the issuance of bond Requirement
Annual report Assessment opinion or certification report issued by certification body for the annual report.

10. The Information Disclosure of Sustainability Bonds

Before the issuance of bond Requirement
The prospectus Issuers should disclose the Sustainability Bond Framework in their prospectus.
Market Observation Post System (MOPS) Issuers should disclose such information on the MOPS: the Sustainability Bond Framework and the assessment opinion or certification report issued by certification body.
After the issuance of bond Requirement
Annual report During the duration of the sustainability bonds or the period of use of the funds raised by the bonds, the issuer should, within 30 days from the date of public disclosure of the annual financial report, disclose the annual report and the assessment opinion or certification report for the annual report.