To provide Taiwan market with full mechanism for shareholders to execute their voting rights, TDCC has completed the implementation of e-voting platform, STOCKVOTE in 2009 by following the order of competent authority.
Issuers, after signing contracts with TDCC, will be able to offer electronic voting services to their shareholders through the platform, which will have the same effect as attendance in person at general meetings. By utilize the Internet as its user interface, STOCKVOTE allows investors to log in to the system for voting with secure ID check mechanism, i.e., identification by user’s CA (Certificate of Authentication). Following the launch of this new platform, shareholders will be able to exercise their voting rights regardless of distance, and concentration of general meetings. Each voting record is embedded with a digital signature of CA. There will also be a full audit trail for those e-voting record.
On receiving a notice of general meetings, shareholders would be advised whether the company has provided electronic voting services. Alternatively, the shareholder may access the website of STOCKVOTE (https://www.stockvote.com.tw/) to get to know if the company adopts TDCC’s “STOCKVOTE” for their general meetings. After logging in to the system with CA, the shareholder may choose the specific company and input his/her/its Shareholder Account Number to access the agenda and related details of the general meetings, and then exercise their rights through electronic voting for those proposals.
For foreign institutional investors and mutual funds, e-voting can be done through their agents or representatives such as custodian banks and securities investment trust firms (SITEs), etc. Apart from using CA to verify the identity of these agents/representatives, TDCC also designed the confirmation mechanism of voting contents for these agents/representatives to meet their internal control. Furthermore, online voting and batch voting are also available for these agents/representatives to make the operation more convenient.
Taiwan Bills Index Rate (TAIBIR)
As the floating interest rates for numerous domestic financial instruments including interest rate derivatives, notes issuance facilities (NIF), fixed rate commercial paper (FRCP), syndicated loans, and bonds are linked to the interest rate index on commercial paper, to make the bills interest rate index to which financial markets are linked more accountable, representative, and manipulation-resistant, the R.O.C. Bills Finance Association plans to establish an interest rate index for short-term bills. The Association set up a task force to study and discuss the relevant issues, and has also engaged TDCC to handle the relevant compilation operations. Key points in TDCC's index compilation plan are as follows:
The name is the Taiwan Bills Index Rate ("TAIBIR").
TDCC select 20 or more members of the R.O.C. Bills Finance Association as co-calculation agents based on the following criteria:
- Bills houses exclusively engaged in bills business are ipso facto calculation agents.
- Any bank or securities firm concurrently engaged in bills business, whose market share of secondary market short-term bills trading volume has reached a certain percentage in the most recent year.
- Well-funded domestic banks.
- Any foreign bank that has conducted short-term bills transactions in the most recent year, or that is selected by TDCC.
The scope of quotes is the interest rates quoted each day for short-term bills in the primary and secondary markets.
Quote input schedule: from 9 a.m. to 12 noon each day.
- Compilation of the index rate: the fixing rate is calculated once per day, at 11 a.m. on the hour.
- Monitoring system: TDCC conducts real-time, on-line monitoring every business day, and provides real-time information to the competent authority and the Central Bank of the Republic of China (Taiwan, CBC) for reference.
- Handling of irregularities: The R.O.C. Bills Finance Association performs an evaluation of any irregularity on the part of a calculation agent, and issues a warning, require corrective action, or cancel the calculation agent's qualification, as merited by the circumstances.
The calculation agents described above primarily were drawn from enterprises exclusively engaged in bills business, with an aggregate secondary market share that already exceeds 80 percent. Their information will be representative and not easily distorted, and leave little room for price collusion or interest rate interference, thus providing a definite degree of fairness.
Offshore Structured Notes Market Observation Post System
To enhance the transparency of the offshore structured product market and protect the rights and interests of investors, the Financial Supervisory Commission (FSC) on 23 July 2009 issued the Regulations Governing Offshore Structured Products. Key points of the Regulations include distinguishing professional and non-professional investors, establishing a master agents system, prescribing the credit ratings that must be held by investing institutions and the structured products themselves, setting the conditions for accepting orders or making sales, establishing a review system that operates through self-regulatory channels, and clearly prescribing investor protection measures and disclosure obligations. In addition, to put into effect the self-regulatory functions and to provide for timely review procedures, the FSC has authorized the Taiwan Financial Services Roundtable to set out the “Rules for the Review and Administration of Offshore Structured Products”, according to which, a review panel formed by the trade associations of trust enterprises, securities firms, and insurance enterprises and trustee institutions or sub-distributors will be in charge of the review of offshore structured products.
The FSC also designated Taiwan Depository & Clearing Corporation (TDCC) for the task of setting up an Offshore Structured Notes Market Observation Post System to fully disclose relevant information on complex financial instruments such as structured products, thereby helping reduce the risks to investors. TDCC has developed the related information systems with reference to the Regulations Governing Offshore Structured Products, thereby providing the competent authority, issuers, and master agents with the value-added functions they need for preparation of various statements, automatic reviews, single-currency conversions, market-price calculations, and net foreign-currency payments and receipts calculations. To meet the needs of the structured products review mechanism and to enhance related review operations, the System provides functions that the review groups can use to access information reported by the aforementioned enterprises.
The Offshore Structured Notes Market Observation Post System is comprised of the following two operating platforms:
- Reporting platform: This platform is provided to issuers and master agents for reporting information to TDCC, including basic information on the structured products they issue or for which they are agent, sales information such as daily subscriptions and redemptions, reference prices, and material information, which is then subsequently available for access by the competent authority and general investors. Issuers and master agents must compile monthly reports within 10 days after the conclusion of each month for transmission through this platform to the FSC and the Central Bank of the Republic of China (Taiwan).
- Public announcement platform: This platform is for disclosure by issuers and master agents when carrying out public announcement of the basic information on structured products, reference prices, product prospectuses, investor guides, publicly announced information, and interest information. Whether an enterprise or an individual, any investor has to do is go online, find the public announcement platform, and use TDCC's user-friendly interface, with its multifunctional, cross-query system, to easily and quickly find the aforementioned information on offshore structured instrument vehicles. The system greatly enhances the transparency of those products and serves as a convenient reference for use by investors in managing their assets.
The TDCC’s Offshore Structured Notes Market Observation Post System is located at: (http://structurednotes.tdcc.com.tw)，which has the following reporting and announcement system framework:
Virtual Matching Utility (VMU)
To enhance market efficiency and help participants reduce their back-office processing costs, TDCC has established a virtual matching utility (VMU) for the transfer, matching and confirmation of trade settlement information between securities firms and custodian banks. This system replaces the manual operation where securities firms send staff to the custodian banks daily for settlement confirmation, and through the automated information service, provides back-office operations with a straight through processing (STP) environment.? TDCC continually expands the scope and functions of the VMU. Currently, the dealers, custodian banks and securities investment trust firms (SITEs) can obtain settlement information through the VMU for them to proceed with the settlement operation. TDCC’s VMU system offers the following services:
(1) Information transfer between dealers and custodian banks Securities firms, bond dealers and bill dealers can send the trade settlement information of the stock, bond DVP and bills to the custodian banks through VMU and the VMU system provides the matching function. Custodian banks can also send settlement confirmation information to securities firms through VMU by batch confirmation or trade-for-trade confirmation after verifying customers’ settlement instructions.
(2) Inquiries of SITEs TDCC expanded the services for SITEs and starting 2009, SITEs may inquire via online transaction the stock, bond DVP and bills trade settlement information reported by securities firms, bond dealers and bill dealers to facilitate the settlement matching operation between them and the custodian banks.
The VMU system provides convenient trade matching services for dealers, custodian banks and SITEs and establishes the automated and standard operating environment to help participants reduce their operating costs.