Taipei Exchange

1. Definition

A. What are Book-Entry Central Government Bonds and Municipal Bonds?

1. Book-entry central government bonds refer to central government bonds issued in registered form in accordance with Article 6 of the Central Government Development Bonds and Loans Act. Registration of the bond holders’ related rights is via the “Central Government Securities Settlement System”, which is a computer network linking the central bank and clearing banks; registration institutions will issue a book-entry central government bond passbook. Interest payments and principal redemption for book-entry central government bonds are also processed through the system, and the payments will be transferred to the bank reserve account of the registration institutions directly.
2. Municipal bonds refer to the book-entry bond issued by the government of special municipalities pursuant to related regulations. The managing bank will register related information to the TDCC after issuance.

2. Issuance Market

1. Central government bonds are sold at auctions through the electronic bidding system, using the single rate method. Only government bond dealers are allowed to submit bids at the government bond auctions. Other investors can participate in auctions by submitting their bids to any one of the government bond dealers.
2. The issuance of municipal bonds, pursuant to the related regulations, should processed through managing banks by auction or by issuing 100 % of the principal amount. The managing bank shall open a payment account to deposit, make interest payments as well as principal redemption, and should keep the account by bond name, issuing year as well as tranche.

3. Secondary Market