| Type of Business |
- Over The Counter: Proprietary trade
- Electronic Bond Trading System(EBTS): Proprietary trade
- International Bond Trading System: Proprietary trade
- Automated Trade Matching System: Proprietary trade, brokerage trade
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| Account Opening Formalities |
A customer who buys or sells bonds at a securities firm through over the counter or through the TPEx’s EBTS only needs to provide a photocopy of the identification card or registration certificate without opening an account.
A customer conducting bond RP/RS transactions with a securities dealer for the first time shall enter into a Master Contract for Bond RP/RS Transactions and has to prepare the seal as well as identity documents for application process. If the customer is a natural person, a consent for providing the customer’s name and national identity number to the relevant custodian institution is required.
If a negotiated trade involves a convertible corporate bond, exchangeable corporate bond or bond with warrant, the central securities depository account and fund transfer account opened by the customer are not restricted to the securities firm of that trade and its designated financial institution.
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| Trading Method |
In principle, unless it is otherwise provided, bonds on TPEx may be traded by over the counter (outright trade and repo trade), and may be traded through the following systems depending on the type of bond:
- Electronic Bond Trading System (outright trade and repo trade): Central government bonds, local government bonds, corporate bonds, and financial debentures.
- International bond trading system (outright trade and repo trade): Foreign currency denominated international bonds.
- Automated trade matching system (outright trades): Convertible corporate bonds, exchangeable corporate bonds, and corporate bonds with warrants.
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| Trading Hours |
- Over The Counter:
- 9:00am-3:00pm on business days
- Electronic Bond Trading System:
On business days
- Outright trade: 9:00am-1:30pm
- Designated bond repo trade: 9:00am-1:30pm, 2:00-3:00pm
- General collateral repo trade: 9:00am-9:30am
- Comparison system: 1:30pm-4:00pm
- International bond trading system:
On business days
- Outright trade: 9:00am-1:30pm
- Repo trade: 9:00am-1:30pm, 2:00pm-3:00pm
- Automated trade matching system
- 9:00am-1:30pm on business days
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| Trading Price and Interest Calculation |
Bond trades are cum-coupon that the buyer pays the seller agreed purchase price plus accrued interest. Accrued interest shall be calculated from (and inclusive of) the date on which the interest accrues to (and exclusive of) the date of clearing and settlement based on the actual number of days. The interest of a repo trade is calculated based on the actual number of days on the basis of 365-day year. For foreign currency denominated international bonds, please see its prospectus or TPEx announcement.
In the event the settlement of a bond trade is delayed due to a natural disaster or other force majeure events, interest for the period of delay shall be calculated.
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| Quotation Method and Trading Unit |
- Over The Counter
- Quotes are made based on yield or price per $100.
- Tick size: 1/10,000 of a percentage point (yield 0.0001%) or 0.0001 dollar
- Minimum trading unit: NT$10,000 par value. Foreign currency denominated international bonds for retail and professional investors: Denomination of $1,000 in the currency of USD, EUR, SGD, AUD, NZD, GBP, CHF, or CAD; denomination of $100,000 in JPY; denomination of $10,000 in the currency of RMB, ZAR or HKD; the denomination in other currencies will be set separately by TPEx. Foreign currency denominated international bonds for professional investors only: Denomination of $100,000 in the currency of USD, EUR, SGD, AUD, NZD, GBP, CHF, or CAD; denomination of $10,000,000 in JPY; denomination of $1,000,000 in the currency of RMB, ZAR or HKD; the denomination in other currencies will be set separately by TPEx.
- Electronic Bond Trading System:
- Quotes are made based on yield or coupon rate.
- Tick size: 1/10,000 of a percentage point (yield 0.0001%) or 0.0001 dollar
- Minimum trading unit: Computerized negotiation system - NT$50 million par value; comparison system - NT$100,000 par value.
- International Bond Trading System
- Outright trades are quoted based on price per $100.
- Outright trade tick size: 0.01 dollar
- Minimum trading unit for outright trade: Denomination of $100,000 in the currency of USD, EUR, SGD, AUD, NZD, GBP, CHF, or CAD; denomination of $10,000,000 in JPY; denomination of $1,000,000 in the currency of RMB, ZAR or HKD; the denomination in other currencies will be set separately by TPEx.
- Repo trade are quoted based on interest rate.
- Repo trade tick size: 1/10,000 of a percentage point
- Minimum trading unit for repo trade: Denomination of $100,000 in the currency of USD, EUR, SGD, AUD, NZD, GBP, CHF, or CAD; denomination of $10,000,000 in JPY; denomination of $1,000,000 in the currency of RMB, ZAR or HKD; the denomination in other currencies will be set separately by TPEx.
- Automated Trade Matching System
- Quotes are made based on price per $100.
- Tick size: $0.05 for price under $150, $1 for price $150 - $1,000 (exclusive), $5 for price $1,000 or higher.
- Minimum trading unit: $100,000 par value
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| Margin Trading |
None |
| Price Movement Limit |
No price movement limit for any trading system or over the counter trades, except for the automated trade matching system which is set at 10%. |
| Disclosure of Transaction Information |
TPEx posts bond market information daily on its website. |
| Taxation on Bond Trades |
- Capital gain tax: Exempted
- Business tax: Exempted.
- Interest income: Subject to income tax.
- Individuals: Starting on January 1, 2007, interest earned by individuals from government bonds, corporate bonds or financial debentures will be subject to tax withholding (10%) in accordance with Article 88 of the Income Tax Act. Starting on January 1, 2010, interest earned by individuals from bond repo trades (net amount of sale price at maturity in excess of the original purchase price) shall be subject to tax withholding (10%) in accordance with Article 88 of the Income Tax Act.
The income mentioned above will not be included in the gross consolidated income, nor eligible for the rules on special deduction for savings and investment (that the tax withheld cannot be credited as deduction for savings and investment). That is, the income is taxed separately.
- Corporate entity: On a accrual basis, income received by a profit-seeking enterprise from interests on government bonds, corporate bonds, and financial debentures shall be calculated in accordance with the holding period, the face value and interest rate of bonds. The tax on interest income calculated in accordance with the prescribed withholding rates may be deducted from the amount of income tax payable for the annual income tax return of the profit-seeking enterprise. The gains or losses derived from the bond transaction that is purchased between two interest payment days and sold before the next interest payment day shall be the net amount of the sale price minus the purchase price and interest income. Holding of bonds issued by a foreign financial institution in Taiwan is not subject to any tax.
From January 1, 2010, interest derived from repo (RP/RS) trade (the net amount of the sale price at maturity in excess of the original purchase price) shall be subject to 10% tax withholding in accordance with Article 88 of the Income Tax Act, and added to the amount of income of the profit-seeking enterprise. The tax withheld may be deducted from the amount of income tax payable for the annual income tax return of the profit-seeking enterprise.
- Securities transactions tax:
- Government bonds, NTD-denominated foreign bonds (exempted bonds)： Exempted.
- Corporate bonds, financial debentures, convertible corporate bonds and international bonds: Exempted.
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| Service Fees |
- Proprietary trade: No fees.
- Brokerage trade: The same as fees for TPEx-listed stocks.
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