Market infrastructure - Taiwan
Institutions and organisation
Central Bank of the Republic of China (Taiwan) (www.cbc.gov.tw)
The Central Bank of China (CBC) is the sole monetary policy-making and policy-executing entity in the Republic of China. The decision-making body is composed of three parts, namely, the Board of Directors, the Board of Supervisors and the Governor and Deputy Governors.
According to the Central Bank of China Act, the CBC's operational objectives include promoting financial stability, ensuring sound banking operations, maintaining the stable internal and external value of the currency and, within the scope of the above three objectives, fostering economic development. In order to achieve its operational objectives, the CBC performs the following operations:
- Monetary management;
- Foreign exchange management;
- Financial inspection;
- Payment and settlement services;
- Currency issuance;
- Fiscal agency functions;
- Participation in international activities;
- Statistics and research.
Taiwan Stock Exchange (TWSE) (www.twse.com.tw)
Established on 23 October 1961, TWSE is a private corporation with 15 board directors and three supervisors. At least one third of the board directors and supervisors are appointed by the securities authority to represent the public interest.
The TWSE provides the following services:
- Listing of securities;
- Corporate governance;
- Trading of securities;
- Clearing and settlement;
- Information services and safety;
- Market surveillance;
- TWSE Securities Borrowing and Lending System;
- Internationalisation of the securities market;
- Monitoring of securities firms;
- Investors service;
- Securities information;
- Rules and regulations directory.
The trading hours of the centralised market trading session are, Monday-Friday, as follows:
Regular Trading: | 09:00-13:30 |
Off-hour Trading: | 14:00-14:30 |
Odd-lot Trading: | 13:40-14:30 |
| Block Trading (paireda and non-paired): | 09:00-17:00 |
a. For paired trades, an additional "pre-opening" session is run 08:00-08:30.
Taipei Exchange (TPEx) (www.tpex.org.tw)
Established on 1 November 1994, the TPEx provides a central exchange market for the trading of listed stocks. Additionally, the TPEx offers over-the-counter trading mechanisms for the TPEx emerging stock market, government and corporate bonds, and derivatives.
The board of directors is the highest executive body of the TPEx . The chairman convenes and presides over board meetings and represents the organisation as a whole. Under the board of directors, one president and CEO manage the organisation business, while one or two deputy CEOs along with one secretary general, assist the president and CEO.
The TPEx has departments for Startup Incubation, Listing Examination, Listing Supervision, Trading, Market Surveillance, Bond, Information, Intermediaties Service, Administration, Strategy and International Relations as well as an Internal Audit Office that reports directly to the Board of Directors.
The trade hours of the TPEx are, Monday-Friday, as follows:
Over-the-counter negotiation: | 09:00-15:00 |
| Automated Trade Matching System: | 09:00-13:30 |
| Odd-lot Trading System: | 13:40-14:30a |
a. Transactions will be completed on the day of the bid.
Taiwan Futures Exchange (TAIFEX) (www.taifex.com.tw)
Established in 1998 as a company pursuant to the Futures Trading Act, TAIFEX offers futures and options contracts on the major Taiwan stock indices, government bonds, equities, interest rates and commodities.
TAIFEX's shareholders consist of futures, securities, banking and securities/futures-related institutions, with each type of institution holding a 25% stake. Each shareholder must be approved by the competent authority and no individual shareholder's holdings are permitted to exceed 5% of TAIFEX's total outstanding shares.
Taiwan Depository & Clearing Corporation (TDCC) (www.tdcc.com.tw)
The TDCC was established on 27 March 2006 following the merger of Taiwan Securities Central Depository Co., Ltd (TSCD) and Debt Instruments Depository and Clearing Co., Ltd Taiwan (DIDC).
The TDCC provides the following services:
- Custody and safekeeping of fixed income securities;
- Registration;
- Book-entry and settlement services;
- Corporate action services;
- Short-term bill services;
- Mutual fund services;
- Information services;
- Valued-added services (STOCKVOTE Platform, Taiwan Bills Index Rate (TAIBIR), Offshore Structured Notes Market Observation Post System, Virtual Matching Utility (VMU)).
Participants of the TDCC include:
- Ministry of Finance;
- Central Bank of the Republic of China (Taiwan);
- Stock Exchange;
- GreTai Securities Market;
- Futures Exchange;
- Securities firms;
- Futures firms;
- Securities finance enterprises;
- Custodians providing custody service for mutual funds, securities investments of overseas Chinese, foreigners, discretionary accounts, insurance companies or Mainland China Area investors;
- Government bond dealers;
- Financial institutions;
- Insurance enterprises;
- Asset management companies;
- Domestic agents designated to conduct the conversion of overseas corporate convertible bonds to domestic stock ("Domestic Conversion Agents");
- Foreign custodian, transfer or settlement entities;
- Exchangeable corporate bond issuers;
- Issuers who deliver dematerialised securities via book-entry method;
- Issuing companies that are required to deposit securities at TaiwanClear by Securities and Futures Commission, Taiwan Stock Exchange Corporation or GreTai Securities Market;
- Entrusted agents for tender offers;
- Trust companies;
- Entities approved by SFB to operate the Civil Servant Retirement and Pension Fund, Workers' Retirement Funds, Post Fund, Labor Insurance Fund or other governmental funds;
- Bill dealers, clearing banks and issuers of short-term bills;
- Other entities approved by supervisory authorities.
Central Government Securities Settlement (CGSS) System
Since the introduction of the CGSS in September 1997, central government bonds have been issued in book-entry form. In October 2001, Treasury bills were added to the system and have been issued in the book-entry form since then.
The CGSS is a real-time gross settlement system (RTGS) for the issuance, transfer, redemption and interest payment of central government bonds in the form of accounting entries on computer records.
Ownership of book-entry central government securities is recorded in a two-tier system of accounts. Only the clearing banks are eligible to have book-entry bond accounts and fund accounts (which also serve as reserve balances) directly with the Treasury Department of the CBC; all other individuals or entities are required to hold such accounts with the clearing banks.
Regulatory Structure
Financial Supervisory Commission (FSC) (www.fsc.gov.tw)
The FSC was established on 1 July 2004 under the Executive Yuan as the competent authority responsible for development, supervision, regulation and examination of financial markets and financial service enterprises in Taiwan.
The chairperson of the FSC is a minister appointed by the President on the recommendation of the Premier. The FSC has two vice chairpersons, both appointed by the President on the recommendation of the Premier, and between six and 12 commissioners. The Minister of Finance, the Minister of Economic and Energy Affairs and the Minister of Justice serve as ex officio commissioners, as do FSC commissioners who were appointed before the amendment to “Organic Act Governing the Establishment of the Financial Supervisory Commission” enters into force (until the terms of their original appointments expire after the amendment to this Act enters into force).
The other commissioners are appointed (or retained) by the Premier from among the heads of related government agencies, as well as persons with academic expertise or work experience in a relevant field, to serve in a concurrent capacity. The term of any commissioner serving as the representative of a government agency begins and ends when his or her position at that agency begins and ends.
The FSC comprises four departments, four offices, four bureaus, a government-owned business and two Representative Offices, as follows:
- Departments: Planning; International Affairs; Legal Affairs; Information Management.
- Offices: Secretariat; Personnel; Accounting; Civil Service Ethics.
- Bureaus: Banking; Securities and Futures; Insurance; Financial Examination.
- Government-owned business: Central Deposit Insurance Corporation.
- Representative Offices: New York; London.
Securities & Futures Bureau (SFB) (www.sfb.gov.tw)
The SFB is responsible for the administration and supervision of securities issuance, securities trading and futures trading; facilitating national economic development; protecting investors' interests; and developing the futures market and maintaining futures trading orders.
The SFB is organised with the following divisions/offices:
- Corporate Finance Division;
- Securities Firms Division;
- Securities Trading Division;
- Securities Investment Trust and Consulting Division;
- Accounting and Auditing Supervision Division;
- Futures Trading Division;
- Information Systems Office;
- Secretariat;
- Personnel Office;
- Accounting Office;
- Civil Service Ethics Office.