Short-Term Bill Services
TDCC provides Negotiable Certificates of Deposit (NCD), Commercial Paper I (CPI), Commercial Paper II (CPII), Banker's Acceptance (BA), Beneficial Securities and Asset-Backed Commercial Paper (ABCP), Municipal Notes and other short-term bills approved by the competent authorities. The services include physical securities depository, registration and book-entry delivery for dematerialized securities, clearing and settlement for both payments and securities, book-entry service for pledged bills, presentation notice and redemption for maturity bills.
Bills finance companies and investors can use the transmission interface provided by TDCC to execute trading, settlement and pledge operations via electronic means.
Operation Flow Chart
Operations for registration, physical custody, and underwriting and initial purchase of short-term bills
(1) Issuance and registration of short-term bills
When an issuer issues book-entry short-term bills, the issuer should deliver related documents to TDCC for registration through a bill dealer.
(2) Operations for custody of physical short-term bills
For the convenience of bill dealers, TDCC has appointed Taiwan Cooperative Bank (NTD bills) and Mega International Commercial Bank (foreign currency bills) as the depository bank for physical short-term bills. Bill dealers may deposit physical bills at a nearby branch of those depository banks for central custody and connection management. The short-term bills deposited with TDCC as described above are put under fungible custody and the holding balance will be recorded on the participants' passbooks.
(3) Operations for underwriting and initial purchase of short-term bills
Bill dealers shall deposit or register short-term bills before handling underwriting or initial purchase. They shall advise the Central Bank of the Republic of China (Taiwan, CBC) for payment settlement, except in the case of internal trade in the same custodian bank or no payment for the trade.
Clearing and settlement operation
(1) Transactions between bill dealers and investors
- Investors must open a book-entry account with a clearing bank and use a NTD or USD demand deposit account opened with the clearing bank for payment settlement.
- Once an investor completes a negotiated trade of short-term bills with a bill dealer, the bill dealer will inform TDCC of the settlement information.
- The investor shall confirm the settlement with the clearing bank in person or via other services provided by the clearing bank (e.g. voice or online banking).
- After the settlement is confirmed, TDCC will inform the Department of Banking of the CBC to proceed with payment settlement.
- TDCC will transfer the bills after the CBC has completed the payment operation. ?
(2) Transactions between bill dealers
- After verifying the settlement notice from buying and selling bill dealers, TDCC will inform the Department of Banking of the CBC to proceed with payment settlement.
- TDCC will transfer the bills after the CBC has completed the payment operation.
Notification of maturity presentation notice, redemption, and payment processing of short-term bills
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”. After receiving the payments described above, TDCC will swiftly carry out the distribution operation.
Clearing, settlement, and confirmation of short-term bills transactions
TDCC implements internal settlement and verification for participant accounts every business day; the reconciliation statements are submitted to the bills finance companies, the settlement and clearing banks, plus banks where all physical bills are located to be deposited for their reference.