These Rules are adopted in accordance with Article 55, paragraph 2 of the Operating Rules of the Taiwan Stock Exchange Corporation ("TWSE").
The term "Foreign Bonds" referred to in these Rules means bonds that are issued by international organizations, foreign governments, foreign financial organizations, foreign public or private enterprises and permitted by the competent authority to be traded on the market of the TWSE.
Foreign Bonds to be traded on the centralized securities exchange market of the TWSE are limited to non-physical securities that are registered with a centralized securities depository enterprise and delivered through the book-entry system.
Trading of Foreign Bonds is governed by these Rules, provided, however, that the TWSE's rules and regulations shall also be apply if they do not contradict these Rules.
A securities firm may not operate Foreign Bonds brokering or dealing business without the approval of the Central Bank of the Republic of China.
The Closing Price referred to in these Rules means the transaction price of the last transaction of the current session.
The trading order price of Foreign Bonds as well as the transaction price and handling fee of Foreign Bonds after a brokerage trading order placed by a principal therefor is executed shall be calculated and settled by either of the following methods:
- The trading order price, transaction price, and handling fee shall be calculated and settled in New Taiwan Dollars ("NTD").
- The trading order price, transaction price, and handling fee shall be calculated and settled in the foreign currency in which the Foreign Bonds are denominated.
The transaction price in the preceding paragraph shall include its interest calculated under these Rules. The handling fee is calculated pursuant to the TWSE's regulations on the handling fee of bondsif in NTD and is determined by the TWSE if in foreign currency.
The transaction fee that the TWSE charges from securities firms shall be calculated on the basis of the fixed ratio 0.00065% of the transaction amount each month (the transaction amount of bonds in foreign currency shall be converted into NTD on the basis of the average daily middle price of the closing price of the foreign exchange rate of a foreign exchange bank appointed by the TWSE).
Each trading unit of Foreign Bonds has a par value of 100000 if in NTD or Japanese Yen and a par value of 1000 if in USD or EUR; the trading unit of Foreign Bonds in other foreign currency will be determined and publicly announced by the TWSE before listing. However, for Bonds that are serial bonds whose principals have been paid off in installments, the trading units shall be calculated based on the residual value after the repayment.
The trading price of Foreign Bonds shall be registered on a basis of 100 currency units par value, and the unit of increase or decrease always 0.01 currency unit.
Transaction amount = (Transaction price x Trading unit x Execution volume) ÷ 100
The trading price of Foreign Bonds is not subject to restrictions as to price hike or drop.
The principal shall first open a consignment trading account, book-entry account for centrally deposited securities and book-entry payment account before a securities broker may accept its orders to trade Foreign Bonds.
A securities firm trading Foreign Bonds in foreign currency shall open a foreign currency settlement account with a foreign exchange bank appointed by the TWSE.
A principal trading Foreign Bonds shall fill in and sign a brokerage order ticket. In the event of a sale, the entrusted securities broker shall first check whether the principal's central depository account passbook has sufficient Bonds.
The form of and information to be included in the brokerage order ticket in the preceding paragraph shall be as specified by the competent authority.
A Foreign Bonds trading order is valid only for the current session. The hours for trading orders to be placed are the trading hours of the TWSE's centralized securities exchange market.
Trading orders, revocation or other changes, or inquiries about trading orders not executed shall be entered into the TWSE's host computer through the appointed terminals.
Trading orders of Foreign Bonds as in the preceding paragraph shall be keyed in with the code of the securities firm, serial number of the order ticket, account number of the principal, code of the Foreign Bond, and order price, quantity and type of trade included sequential order, provided the TWSE may adjust the above items depending on actual need.
After a trading order is delivered to and accepted by the TWSE's host computer, the securities firm participating in the sale shall print from a trading order confirmation from its own printer.
Trading orders shall be confined to limit orders.
The disclosure of the price and quantity of Foreign Bonds trading orders is governed mutatis mutandis by Article 58, Paragraph 5 of the Operating Rules of the TWSE.
Competitive auction is held individually for each trade ordered in Foreign Bonds. The matching sequence and execution prices shall be determined based on each buy or sell orders entered, according to the following principles:
- Where the buy order price entered is higher than or equal to the lowest sell order price previously entered, the trading orders will be satisfied from the lowest to the highest sell order price. In cases where sell orders are placed at the same price, the trading orders will be satisfied in the order of the offer time until all orders are satisfied or the buy order price entered is lower than the sell order price of an unexecuted trade.
- When the sell order price entered is lower than or equal to the highest buy order price previously entered, the trading orders will be satisfied from the highest to the lowest buy order price. In case where buy orders are placed at the same prices, the trading orders will be satisfied in the order of offer time until all orders are satisfied or the sell order price entered is higher than the buy order price of an unexecuted trade.
Once a trading order of Foreign Bonds is executed, the securities firm participating in the sale shall print an execution confirmation from its own printer.
All trades of Foreign Bonds executed are ex-dividend trading.
The calculation of interest shall be based on the actual number of days between the interest-bearing commencement date and the trade date by way of including the beginning day and excluding the last day.
Where the settlement to be conducted by a principal with a securities firm is postponed due to a natural disaster or the other force majeure, interest shall be assessed during the period of the postponement in accordance with the preceding paragraph.
The date when a principal conducts settlement with a securities firm in the preceding two paragraph is by 10:00 am of the second business day after the completion day of the Foreign Bonds trade.
Foreign Bonds or payments payable by a securities firm to a principal shall be deposited in the principal's book-entry account for centrally deposited securities or book-entry payment account; Foreign Bonds or payments receviable shall be debited from the principal's book-entry account for centrally deposited securities or book-entry payment account.
The TWSE shall be notified of all account error and corrections to account numbers for Foreign Bonds in written writing by 10:00 am of the second business day after the execution day, provided, however, that Article 87 of the Operating Rules does not apply.
TWSE may appoint securities dealers to undertake purchase and sale orders of Foreign Bonds, and publicly announce them; the same applies to any changes made.
No securities dealer may reject the appointment in the preceding paragraph.
For Foreign Bonds traded over the TWSE market, a separate "settlement list" shall be prepared according to the type of currency.
The sale price of Foreign Bonds listed in NTD shall be combined with the sale price of those for regular settlement and sale.
The time limit on the settlement of funds and securities receivable and payable with respect to sales of Foreign Bonds between securities firms and the TWSE is governed by Article 104, Paragraph 5 of the Operating Rules.
Where a securities firm fails to complete the settlement of Foreign Bonds payable to the TWSE in accordance with the preceding article, it shall deposit in an account appointed by the TWSE a bond 120% of the product of the closing price of the execution day of the Foreign Bonds and the quantity to be delivered. The TWSE will then issue a "securities delivery voucher" in lieu of settlement temporarily.
The securities firm shall deliver the Foreign Bonds within five business days and att the latest by the third business day prior to the day of principal and interest payment. If the securities firm still fails to deliver the Bonds, the TWSE shall re-purchase the Bonds from the securities firm receiving the securities delivery voucher after negotiating the price of the Bonds, or forcibly re-purchase the Bonds at 115% of the original transaction price.
These Rules shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.