Taiwan Depository & Clearing Corporation

Taiwan Depository & Clearing Corporation (TDCC) and Clearstream held a commemorative ceremony for Clearstream’s participation in TDCC, which was witnessed by Vice Chairperson Wang of the Financial Supervisory Commission (FSC) and Deputy Governor Yang of the Central Bank, on Tuesday, April 15. Clearstream has become the first international central securities depository (ICSD) to open a direct account at TDCC and the two institutions are now officially participants in each other’s services. The ICSD can link up to the international bond market in Taiwan in different ways, which, in addition to linking the back-office settlement operations in Taiwan with an international custody mechanism, makes the operating procedures more complete and efficient.

According to Vice Chairperson Wang of the FSC said that Clearstream was a subsidiary of the internationally renowned German exchange group, Deutsche Brse Group, and has maintained a strong relationship with Taiwan's capital market. In addition to these two companies signing an agreement, another subsidiary of the group, Eurex, had been approved to hold shares in Taiwan Futures Exchange (TAIFEX). TAIEX Futures and TAIEX Options traded on TAIFEX are expected to be listed on Eurex in mid-May. The FSC always places an emphasis on the development of the cross-strait financial market and business needs. When the ECFA was signed in June 2010, the financial service sector was included in the early harvest list for trade in services. With respect to promoting the internationalization of Formosa Bonds, in addition to simplifying the restrictions on foreign investment in foreign current-denominated bonds, adopting a new grade management system, lowering the issuance requirements for issuers of Formosa Bonds, and simplifying the application procedure, the FSC has been making plans to further lift the restrictions on Formosa Bonds for professional investors in order to expand the investor base and encourage more diversified RMB denominated asset allocation for professional investors in Taiwan.

Deputy Governor Yang of the Central Bank said: “ The fourth phase of the plan for the foreign currency clearing platform has been activated with the objective to provide DVP (delivery-versus-payment) mechanism for foreign currency-denominated securities. TDCC and Clearstream becoming participants in each other’s services will make Taiwan’s foreign currency clearing and settlement mechanisms closer to international investors. With such a partnership that bridges the Taiwan market and the globe, Taiwan joins world’s major financial centers to facilitate transactions via the same platform. Cross-border transactions between international investors and domestic brokers can be settled on the platform on a DVP basis. Not only will it bring worldwide visibility for Taiwan’s offshore RMB market, but it will support the government's policy to encourage the development of Taiwan’s offshore RMB center.

Mr. Jeffrey Tessler, CEO of Clearstream, said: “International investors are getting increasingly interested in the Asian markets, in which Taiwan plays a very important role. Clearstream would like to take the opportunity offered by the commemorative ceremony with TDCC to celebrate Clearstream's first step in establishing international bond settlement services in Taiwan. This partnership between Clearstream and TDCC will increase the attractiveness of the Taiwanese market for international investors and create a crucial connection between Asian bond issuers and investors worldwide. We look forward to working with TDCC and to offering the best investment channel in the international bond market.

According to Chairman Ding of TDCC, TDCC has been committed to laying a solid foundation for book-entry transfer procedures, including back-office custody, clearing and settlement services, and reinforcing information exchange and actual collaboration with international securities institutions for years. TDCC has signed memorandums of understanding (MOU) with 14 foreign securities depository and clearing institutions in major markets such as the United States, Japan, Germany, Singapore, and Hong Kong. With Clearstream having opened an account in Taiwan and the two companies becoming each other’s participant, international collaboration in back-office operations in Taiwan's capital market has reached the new milestone. Chairman Ding stressed that TDCC will continue its missions to serve companies and investors in the market and respond to government policies and business needs by planning to provide DVP services for international bonds and relevant services for securities firms’ OSU.