Notification/Redemption

Notification of maturity presentation notice, redemption, and payment processing of short-term bills

Introduction

A. Notification of maturity presentation notice, redemption, and payment processing of short-term bills

Short-term bills registered or in custody with the TDCC shall be presented for redemption by the TDCC on behalf of the bearer or holder at the stated maturity date. TDCC will handle the maturity presentation notice and redemption of short-term bills registered with or under the custody of TDCC on behalf of the holders on the date of maturity.

For CPI and banker’s acceptance (BA), the redemption payment will be deposited into TDCC’s dedicated “redemption account” after the bill has been exchanged at the Taiwan Clearing House (TWNCH).

For NCDs, the redemption payment will be transferred into TDCC’s dedicated “redemption account” through the pre-arranged transfer transaction of the CBC’s Inter-bank Fund Transfer System.

For CPII, short-term beneficial securities and ABCP, the issuer will deposit the redemption payment into TDCC’s dedicated “redemption account”.

B.After receiving the payments described above, TDCC will swiftly carry out the distribution operation.

C.Issuing a withholding certificate

From January 1, 2010, the portion of the pecuniary amount realized by short-term commercial papers at their maturity in excess of the selling price at their initial issuance is deemed as income from interest, shall be withheld at the rate of 10%. TDCC shall issue a withholding certificate by 10th, February annually.

D.E-SERVICES

Bill dealers, guarantors and issuers may check the short-term bills’ redemptions at maturity’s process through internet by submitting the application forms to the physical securities deposit bank through TDCC.

E. Redemption of Short-Term Bills at Maturity

An issuer may engage the underwriting bills dealer to apply to the TDCC for presentment of short-term bills issued by it for redemption prior to their stated maturity date.

F. When short-term bills are not presented for redemption

When short-term bills are not presented for redemption, the TDCC will transfer the number of bills not presented for redemption from the bearer or holder's proprietary position into their restricted (not presented for payment) position in accordance with the notification of the bills dealer or the investor custodian bank, and issue notification to the bills dealer or the investor custodian bank when the procedure has been completed.

The notice of non-presentment of the preceding paragraph, for Commercial Paper II (CP II) and foreign currency denominated commercial paper, may be made on the stated maturity date; for beneficial securities and asset-backed securities, 1 business day prior to the stated maturity date; and for other short-term bills, notification shall be made, at the latest, 3 business days prior to the stated maturity date.

G.Non-payment or insufficient payment of Short-term bills

TDCC will issue a claim certificate for dematerialized short-term bills that are registered with the TDCC and which have passed the stated maturity date without being redeemed.

H.Withdraw The Redemption Funds for Short-Term Bills

An issuer may engage the underwriting bills dealer to apply to the TDCC to withdraw the redemption funds for short-term bills issued by it.

If the issuer applies electronically, it shall transmit the application content and related fund deposit or remittance or other evidentiary information to the underwriting bills dealer through the TDCC Short-Term Bills Registration System on its issuance platform, and the underwriting bills dealer shall notify the TDCC after confirmation of the content through the BCSS. If the issuer applies in writing, it shall fill out an Issuer's Letter of Authorization to Apply for Withdrawal of Funds from the Redemption Account and instruct the underwriting bills dear to send the letter of authorization and photocopies of related documentation to the TDCC.

TDCC, after reviewing and verifying that the application of the preceding paragraph is correct, will notify the physical securities deposit bank to deposit (or remit) the redemption funds of the issuer, after deducting the relevant processing fees, into the issuer's designated account.

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