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Article NO. Content

Title:

Operation Directions for Agency Services Operated by Securities Firms Engaged by Customers to Invest Their Securities Trading Balances  CH

Amended Date: 2015.03.31
Article 10     Where the securities firm conducts a repo transaction of government bonds on behalf of the customer, the customer and the counterparty shall sign a repurchase/resale master agreement.
    The counterparty in the above paragraph shall be obtain a long-term credit rating of at least twBBB or short-term credit rating of twA2 from Taiwan Rating Corporation.
    The securities firm conducting repo transactions of government bonds on behalf of the customer shall obtain the customer's authorization to determine the individual trading conditions of the conditional transactions during the investment period on behalf of the customer.
    The securities firm conducting a repo transaction of government bonds on behalf of the customer shall follow the rules indicated below:
  1. The duration of the repo transaction shall be no longer than 180 days.
  2. The bonds obtained from the repo transactions may not be subject to outright sale to others anymore.
  3. The trading amount of a single repo transaction shall not exceed the market price of the traded bond by 110%.
  4. For delivery purposes, the subject government bond in a repo transaction shall be replaced by the bond passbook issued by the custodian designated by the counterparty of the trade or the certificate of conditionally traded book-entry central government bonds issued by the book-entry central government bonds clearing bank; such passbook or certificate shall be delivered to and kept by the securities firm.
    The securities firm shall stipulate the method of safekeeping trade confirmation slips, delivery statements, settlement statements, bond passbooks or certificates of conditional trading of conditional bond transactions in the internal control system.