Taiwan Depository & Clearing Corporation

The mechanism of issuing dematerialized commercial papers (CP) came online officially on September 18, 2017, in order to achieve dematerialization of short-term bills in the primary market and to streamline the issuing process for companies, consequently reducing operational risks. The advent of a new era of CP dematerialization will not only improve substantially the efficiency and safety of CP issuance, but also fulfill the last piece of puzzle for securities dematerialization in Taiwan’s capital market.

In his remarks at the CP dematerialization ceremony, Mr. Wellington Koo, Chairman of the Financial Supervisory Commission (FSC), noted that the dematerialization of securities is a global trend, and has always been one of the government’s major endeavors. With an issuance volume of over NT$10 trillion per year, financing commercial papers have consistently accounted for more than 90% of the bill market turnover. Indeed, CP plays an important role in the development of Taiwan’s money market. The dematerialization of CP was made possible only after the amendment of the 26th article of the Act Governing Bills Finance Business, which specifies the debt settlement of dishonored dematerialized CP. Chairman Koo recognized the collective efforts of TDCC and the ROC Bills Finance Association to create an efficient platform of direct financing for businesses.

Sherman Lin, Chairman and CEO of TDCC, explained to all participants the results and benefits of CP dematerialization, and extended his special thanks to competent authorities, which contributed to the amendment of laws, and the collective support and assistance of ROC Bills Finance Association, bill dealers, commercial banks and CP issuers. Mr. Lin noted that the dematerialization of securities is in line with the government’s objective to build a digitized financial environment. The electronic operations can save human labor and reduce the risks of manual processing, ultimately enhancing market efficiency by a significant extent. Companies that choose to issue dematerialized CP will no longer be limited by the face value of paper-based bills. This will also give bill dealers more flexibility in promoting their businesses, which should be conducive to the development of the bill market.

FSC Chairman Wellington Koo (5th from the right), FSC Vice Chairman Cheng Cheng-Mount (5th from the left), TDCC Chairman & CEO Sherman Lin (4th from the right), Director General of the Department of Banking, Central Bank, Chen E-Dawn (4th from the left), Director General of Banking Bureau, FSC, Jean Chiu (3rd from the right), ROC Bills Finance Association Chairman Yang Li-Yen (3rd from the left), Director General of Financial Examination Bureau, FSC, Wang Li-Chuan (2nd from the right), former DIDC Chair Kuo Huei-Yu (2nd from the left), TDCC President Meng Ching-Li (1st from the left) and China Steel Group Vice President Wu Ming-Hsian (1st from the right) attending the CP dematerialization ceremony.