Taiwan Bond Market Investment for Foreigners
General Information
(1) Laws and Regulations:
Offshore overseas Chinese and foreign investors should appoint a domestic agent representative (custodian bank) to apply to TSEC for registration. Only after registration, the domestic agent representative, with related documents, shall apply to the securities brokerage firm for account opening and securities trading.
The onshore overseas Chinese and foreign investors who invest in the domestic securities should enclose the relevant documents and appoint a securities brokerage firm to apply to TSEC for registration in advance, and after completing registration, they can apply to the securities firm for account opening and trade the securities. However, they do not need to register if they only invest in government bonds, corporate bonds and financial debentures without equity right, and open beneficiary certificates.
Laws and regulation applied:
Ø Foreigner Investment Law (Competence Authority: Department of Economic Affairs)
Ø According to Article 10 of Regulations Governing the Investment in Securities by Overseas Chinese and Foreign Nationals
Ø Article 77-4 of the Operation Rules of Taiwan Stock Exchange Corporation.
(2) Account Opening
Foreign investors do not need to open an account with bond dealers to invest Taiwan’s government bond.
Ø Registered Government Bond: Overseas Chinese and foreign investors should appoint a domestic clearing bank to process bond registration issues.
Ø Non-Registered Government Bond: Overseas Chinese and foreign investors could appoint a custodian bank to execute trade confirmation and settlement.
If foreign investors want to trade registered government bonds, they need to open a book-entry account and fund account with a clearing bank. The book-entry account should be under the name of “ XXX fund under trust of XYZ custodian institution”.
If foreign investors want to conduct repo trades, they are obligated to sign a Master Repurchase Agreement.
(3) Regulators
Primary Market:
Ø National Treasury Agency of Ministry of Finance is responsible for treasury issuance.
Ø Central Bank of China is in charge of government securities auction and registration job.
Secondary Market:
Ø Financial Supervisory Commission of Executive Yuan regulates and supervises secondary bond market.
Ø GreTai Securities Market is a public agency that is authorized to manage secondary bond market.
(4) Reference and Download:
Bond Primary Market Regulation: http://www.cbc.gov.tw/EngHome/defau lt.asp
Bond Secondary Market Regulations: http://eng.selaw.com.tw/general.asp?fltype=org&ftype=04
Ministry of Finance: http://www.mof.gov.tw/engweb/mp.asp?mp=2
Tax and Remittance: http://investintaiwan.nat.gov.tw/en/faq/
Central Bank: http://www.cbc.gov.tw/
Central Government Bond Dealers List: http://www.cbc.gov.tw/treasury/cbank_04.asp
Book-entry Government Bond Clearing Banks List: http://www.cbc.gov.tw/treasury/cbank_05.asp
Primary Dealer List Total 15
Ø (5 Banks) Taishin International Bank, Chinatrust Commercial Bank, Citibank Taipei Branch, Taipei Fubon Bank, Taiwan Post
Ø (3 Bills Finance)Mega Bills Finance, China Bills Finance, International Bills Finance
Ø (7 Securities firms) Grand Cathay Securities, President Securities, Yuanta Securities, Polaris Securities, Chinatrust Securities, Capital Securities, SinoPac Securities
GreTai Securities Market Master Purchase Agreement (Only Chinese version is available)
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