Account Book-Entry Transfer

Book-entry operation for pledges short-term bills

Introduction

TDCC has offered the book-entry operation for pledges short-term bills, including creation of pledge, closing of pledge, exercise of pledge, transfer of pledge and transfer of pledge Balance, since April 2nd, 2004.

1.Investors pledge short-term bills from its proprietary position to other investors or clearing banks

The clearing bank of pledger sends a pledge instruction to TDCC. TDCC then transfers the bills to clearing bank of pledgee and makes the pledge footnote on the clearing bank of pledger’s account bills position.

2.Investors pledge short-term bills to bill dealers

Bill dealers send a pledge instruction to TDCC. TDCC then transfers bills from the investor’s proprietary position or reverse repo position in the clearing bank to investor’s settlement position, and notifies clearing bank to confirm the settlement. After receiving settlement confirmation from the clearing bank, TDCC then transfers bills from investor’s settlement position in the clearing bank to the pledge holding position of pledgee dealer and record the number of pledged bills in investor’s pledged position.

3.Bill dealers pledge short-term bills to other bill dealers

Pledger and pledgee bill dealers send pledge instructions to TDCC. After checking the instructions, TDCC then transfer bills from pledger bill dealer’s proprietary position into the pledge holding position of pledgee bill dealer, and record the number of pledged bills in pledger bill dealer’s pledged position.

4.Investors purchase OP short-term bills together with pledge from the same bill dealer

The bill dealer send an instruction of investor’s purchase and pledge, and notify clearing banks to confirm settlement.When dealer completed payment notification and transfer the bills.

5.Close the pledge of short-term bills between investors

Upon receipt of pledgee’s application for closing the pledge, TDCC transfers pledgee’s bills from their accounts into pledger’s bill accounts (proprietary position) with deductions of the pledger’s pledged position.

6.Close the pledge of short-term bills by Investors to the Bill Dealers

Upon receipt of pledgee’s application for closing the pledge, TDCC transfers pledgee’s bills from their accounts into pledger’s bill accounts (proprietary or reverse repo positions) with deductions of the pledger’s pledged position.

7.Close the pledge of short-term bills by bill dealers to other bill dealers

Upon receiving pledgee dealer’s application for closing the pledge, TDCC transfers bills from pledgee’s accounts into pledger’s proprietary positions with deductions from pledger’s pledged position.

8.Acquisition of short-term bills through exercise of pledge

Upon receiving a pledge exercise instruction from a pledge bank, TDCC then transfers the given amount of bills from pledgee’s pledge position into the pledgee’s proprietary position or the reverse repo position, with deduction of pledged amount from the pledged position of pledger’s bank accounts.

9.Acquisition of short-term bills by bill dealers from other bill dealers through exercise of pledge

Upon receiving a pledge exercise instruction from a pledgee dealer, TDCC verifies relevant documents and then transfers the given amount of bills from pledgee’s pledge position into the pledgee’s proprietary position with deduction of pledged amount from the pledged position of pledger dealer.

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