1.Definition

A. What are corporate bonds and financial debentures?

  1. Corporate bonds are debt securities issued by a public or private company in accordance with the Company Act to raise medium to long term funds for the purposes of improving its financial structure or business expansion. The credit ratings of corporate bonds vary due to the credit quality of their issuers.
  2. Financial debentures are bonds issued by a savings bank, a bank for a special business purpose or a commercial bank.。

B. Corporate bonds and financial debentures come in different types based on the terms of issue:

  1. Guarantee: Bonds may be secured or unsecured. Secured bonds are secured by bank guarantee or securities or backed by real estate holdings. Financial debentures are commonly unsecured.
  2. Coupon Rate:A bond pays a fixed rate or floating rate of interest. The coupon rate of the former is fixed at a certain level, while the latter resets the coupon rate periodically based on the pre-agreed indicators or criteria.
  3. Tenor: A bond may have a term from one year to several years or a perpetual bond without a finite maturity date.
  4. Principal Repayment: A bond’s principal may be paid back in a single payment at maturity or in installments.
  5. Interest Accrual and Payment: A bond may have single interest or compound interest. A bond may pay interest once a year or half a year or every quarter etc.

2.Issuance Market

A. Corporate Bond Issuance and the TPEx Listing Procedures

  1. Submit a corporate bond registration form and appendices, and apply for corporate bond trading on TPEx separately after receiving the registration letter.
  2. Issuance and TPEx listing should be completed in seven business days after registration coming into effect.
    1. Professional Applicants: After receiving the registration letter, submit TPEx trading application four business days before the intended TPEx trading start date.
    2. General Applicants: After receiving the registration letter, submit TPEx trading application five business days before the intended TPEx trading start date.

B. Financial Debentures Issuance and the TPEx Listing Procedures

  1. Apply for financial debenture trading on TPEx separately after receiving the registration letter from Banking Bureau, Financial Supervisory Commission.
  2. Issuance should be completed in one year after registration comes into effect

C. Information Disclosure

  1. Issuer Information:To learn more about the bond issuer, investors can visit the Market Observation Post System (mops.tse.com.tw) to inquire an issuer’s basic information, financial statements and material information.
  2. Terms and conditions of issuance:To learn more about the terms and conditions of an issued bond, investors can visit the “Bonds section” of the Market Observation Post System. (mops.tse.com.tw)
  3. Trading Information:Investors can visit the “Bond Market Info” section of Taipei Exchange website.

3.Secondary Market

Trading Avenues Electronic Bond Trading System (EBTS) Over The Counter
Bond Type Corporate bonds and financial debentures that may be traded
through the EBTS must offer a fixed rate and its per-hundred
reference price can be converted in the system.
Corporate bonds and financial debentures that list
on the TPEx
Trading Hours Computerized Negotiation
System:9:00 ~ 13:30
Comparison System:13:30 ~ 16:00
Ordinary-Collateral Repo-Style
Transactions:9:00 ~ 9:30
Outright
Purchases/Sells:
9:00~15:00
Repo/ Reverse Repo:
9:00~15:00
Minimum Trading Units Computerized Negotiation
System:NT$50 million par value
Comparison System:NT$100,000 par value
NT$10,000 par value
Settlement Date Computerized Negotiation
System:T+2
Comparison System:T+1 or T+2
Ordinary-Collateral Repo-Style
Transactions:T+0
Within T+2
Settlement Method Money:CBC Interbank Funds Transfer and Settlement System
Bond:Transferred on a book-entry basis through the TDCC
The settlement method is negotiated and
agreed between the two parties