Creation Link Guide - Taiwan

11.05.2018

Key features

CSD link as defined under CSDRa

Yes

Type of link

Direct operated

a. CSD Regulation (EU) No 909/2014 art. 2 (29)

 

CSD

Account operator

Name

Taiwan Depository & Clearing Corporation (TDCC).

Deutsche Bank AG, Taipei branch

FATCA GIIN

U5357L.99999.SL.158

Y0M5J7.00000.BR.158

LEI

Not available

25490016G0WR60ANOK04

Country of incorporation

Taiwan

Germany

Account type

Participant account

Mirror account

Legal Account name / holder

Clearstream Banking SA

Clearstream Banking SA

Operational arrangements

Yes/NoRemarks
Settlement free of paymentYes 
Settlement against paymentNo 
Settlement against payment in central bank money account of CBL/CBL customersn/aNo DVP settlement
Bridge settlementNo 
Shaping facilityNo 
Partial settlementNoExcept when the local CSD imposes the partial delivery of securities.
Settlement penalty feesNo 
Pre-matchingYesOnly for matched trades, subject to availability of a trade execution report from the broker.
Back-to-back processingNo 
AllegementsNo 
Automatic compensationNo 
Registered securitiesYesRegistration takes place automatically upon settlement.
Multi Market SecuritiesNo 
Lending and borrowingNo 
Proxy votingNoThere is typically no meeting set up for international bonds. Only on very rare occasions will there be a meeting.
Investment FundsNo 
Liquidity Hub ConnectNo 
Sale and purchase of rightsNo 
Repo servicesNo 
Market restrictionsNo 
FTTNo 
Daily reconciliationYes


Bilateral cancellation

Yes

Settlement finality

Once the funds and securities settlements are completed at the CSD, they are final and irrevocable.

Legal arrangements

The below section is based on the legal opinion that was issued on
28 September 2017. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

 

CSD

No insolvency proceedings against the account operator or the CSD

Confirmed

Liability for negligence

The laws of Republic of China (ROC) do not expressly provide for the CSD's liability for negligence. Thus, actions brought against CSD for negligence of CSD would be based on breach of contract.

Book-entry regime with in rem rights

Local law does not clearly define the nature of CBL's right akin to a right in rem.

No entitlement of the account operator/CSD  

Confirmed

Recognition as direct CSD account-holder

Confirmed

Recognition of nominee concept

The regulations governing the operations of CSD do not expressly characterise the Direct CSD Account as nominee account. However, although the Direct CSD Account is opened in the name of CBL, the joint ownership rights of customers would be recognised under general concepts of ROC law.

No right of retention to the account operator/CSD

Statutory liens or right of retentions as may arise from sums due to the account operator or the CSD for such claims as may arise from the purchase, administration or safe custody of these securities. 

Segregation of assets at the CSD

There is no express legal or regulatory requirement that the CSD segregates its own assets from the assets held for its account holders. However, under the agreement with the CSD, the CSD is contractually obligated to do so.

No right of use

Confirmed

No upper-tier attachments

There is no express prohibition under ROC laws and regulations on creditors of CBL's customers to attach securities owned by such customers and credited to the Direct CSD Account. However, such creditor needs to prove that the relevant customers are entitled to the relevant securities.

Insolvency of account operator/CSD with no impact on CBL's rights 

Account Operator: the account operator is not subject to ROC law and insolvecy of the account operator would be determined in accordance with the laws governing the account operator.

CSD: under ROC Bankruptcy Law, CBL's right to act on behalf of its customers to assert legal title over and to recover the securities held in the Direct CSD Account may be exercised during the bankruptcy proceeding in accordance with the procedures set by the relevant bankrupt administrator.

Shortfall pro-rated among holders

There is no express provision under the CSD Rules and applicable laws and regulations that address the handling of shortfall.

Settlement finality in case of insolvency

Local laws and regulations do not provide for finality.