Directions for the Central Bank of the Republic of China (Taiwan) to Govern Electronic Interbank Funds Transfer and Settlement

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Title：

Directions for the Central Bank of the Republic of China (Taiwan) to Govern Electronic Interbank Funds Transfer and Settlement

Announced Date： March 20, 1995

Amended Date： Amended on February 5, 2021;effective from February 5, 2021

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Ｉ. General Provisions

1.

1. The Central Bank of the Republic of China (Taiwan)(hereafter referred to as "the Bank") has prescribed these Directions for the purpose of governing electronic interbank funds transfer and settlement.

2.

2. The term "Interbank funds" as referred to in these Directions shall mean deposits in the following accounts opened at the Department of Banking of the Bank:

(1) Bank funds- reserve accounts A.

(2) Other financial institution funds.

Funds in internal operating accounts opened at the Department of Banking by the Bank's various units will be deemed "interbank funds" as referred to in the preceding paragraph.

3.

3. The term "Electronic Interbank Funds Transfer and Settlement Operations" as referred to in these Directions shall mean the use of the "CBC Interbank Funds Transfer and Settlement System" (hereafter referred to as "CBC Interbank Funds Transfer System") established by a computer connection between the Bank and the following participating institutions consented by the Bank in order to carry out transfers and settlements of funds:

(1) Financial institutions.

(2) Clearing Institutions.

The term "Clearing Institutions" as referred to in the second subparagraph of the preceding paragraph shall cover clearing institutions for the clearance of checks, electronic payments, and securities.

The term "securities" as referred to in the preceding paragraph shall include bills, bonds, and stocks.

4.

4. The term "clearance" as referred to in these Directions shall mean the process of transmitting and processing payment instructions or securities exchange instructions between financial institutions and calculating the resulting net-credit or net-debit positions.

5.

5. The term "settlement" as referred to in these Directions shall mean the procedures by which the Bank credits or debits designated accounts to eliminate the debtor/creditor relationship, based on net credit or net debit positions as per payment instructions or securities exchange instructions between financial institutions.

Settlements may be executed by means of one of the following methods:

(1) Real-time gross settlement: payment instructions will be settled in real time on a transaction-by-transaction basis.

(2) Deferred net settlement: payment instructions will first be offset against each other and performed at designated times based on the resulting net credit and net debit positions.

(3) Other methods of settlement consented by the Bank.

6.

6. The term "Clearing Systems" as referred to in these Directions shall mean the systems for carrying out the clearance of checks, electronic payments or securities between financial institutions.

7.

7. The term "Online institutions" as referred to in these Directions shall mean institutions performing operations online through the "CBC Interbank Funds Transfer System" referred to under Direction 3.

8.

8. The term "Transferor bank" as referred to in these Directions shall mean an institution making an outward transfer of interbank funds; "transferee bank" shall mean an institution receiving an inward transfer of interbank funds.

8-1.

8-1. The term "securities settlement funds transfer" as referred to in these Directions shall mean transactions in which securities firms entrust a designated bank to transfer settlement funds to Clearing Institutions by using the CBC Interbank Funds Transfer System or in which Clearing Institutions transfer settlement funds to the bank designated by securities firms by using the CBC Interbank Funds Transfer System.

8-2.

8-2. The term "credit card settlement funds transfer" as referred to in these Directions shall mean transactions in which issuers of credit cards or the designated banks by issuers transfer payables to Clearing Institutions or in which Clearing Institutions transfer receivables to acquirers or the designated banks by acquirers by using the CBC Interbank Funds Transfer System.

9.

9. Interbank funds account balances fall into the following two categories:

(1) Book balance: refers to the resulting book amount after a transaction has been executed and completed; if the book balance is negative, it indicates intraday overdraft.

(2) Available balance: refers to the total of book balance plus intraday overdraft granted by the Bank.

The term "intraday overdraft" as referred to in the preceding paragraph shall mean advances that the Bank provides to interbank funds accounts of financial institutions during daily business hours in accordance with the "Directions for the Conduct of Intraday Overdrafts of the Central Bank of the Republic of China (Taiwan)"; the term "intraday overdraft limit" refers to the intraday overdrafts credit that the Bank grants to a financial institution as per application in accordance with the said Directions.

10.

10. The term "queuing mechanism" as referred to in these Directions shall mean an operating mechanism, in case the available balance of a financial institution is insufficient to cover the payment specified in payment instructions, through which the Bank may base on the nature of transactions to assign them a class of priority and place them in the queue for processing, where they will be executed in order as soon as the available balance becomes sufficient for the deduction of payment.

11.

11. Participants in the Clearing Institutions' Clearing Systems (hereafter referred to as "Participant Entities") shall be limited to the following institutions:

(1) Financial institutions required to deposit reserves under the Central Bank of the Republic of China (Taiwan) Act.

(2) Securities firms approved under the Securities and Exchange Act that have applied to participate in the securities clearing system in accordance with Clearing Institutions operating rules.

(3) Other financial institutions or government bodies approved by the Bank.

12.

12. Interbank fund transfer transactions fall into the two following categories:

(1) Real-time transfer: refers to a transaction that shall be executed immediately at the time it is received.

(2) Forward transfer: refers to a transaction that is held pending acceptance and shall be executed at the designated time.

The forward transfer as refrred to in the preceding paragraph shall mean a transaction that the transferor bank may initiate a payment instruction to be executed on any business day within one year following the initiating date.

13.

13. Interbank funds settlement operations refer to the following operations:

(1) Payments of negotiable instruments.

(2) Settlements of net debit and net credit positions from the exchange of bills.

(3) Settlements of net debit and net credit positions through electronic payment or securities clearing system.

14.

14. The interbank funds inquiry services shall allow online institutions to inquire about transaction details, account balances and other related information at any time during business hours.

15.

15. Real-time transfers of interbank funds and encashments for negotiable instruments presented shall be executed only if the available balance at an account is sufficient for payment.

16.

16. Online institutions shall use the "CBC Interbank Funds Transfer System" in accordance with the relevant Directions of the Bank.

Ⅱ. Application and Management

Section 1: Financial institutions

17.

17. Financial institutions participating in the "CBC Interbank Funds Transfer System" shall first submit by mail two copies of the "Application for Participation in the CBC Interbank Funds transfer and Settlement System" (Form 1) to the Department of Banking of the Bank.

18.

18. After the Bank has issued a letter of approval, the institution shall proceed with the following preparatory measures:

(1) Designation of staff responsible for an operation plan.

(2) Drafting a schedule for the implementation of the online operation plan.

(3) Preparation of hardware and software for online operations as per specifications of the Department of Information Management of the Bank.

(4) Application to arrange online operation tests in accordance with testing plan outlined by the Department of Information Management of the Bank.

(5) Consultation with the Department of Information Management of the Bank on other matters relating to the establishment of online connections.

19.

19. A financial institution shall become an online institution when the Department of Information Management of the Bank has confirmed the completion of error-free tests; the Department of Banking of the Bank will notify the official date for the commencement of operations.

The Department of Banking of the Bank will notify all other online Institutions when an institution becomes a new online institution in accordance with the preceding paragraph.

20.

20. An online institution shall appoint the following employees to perform work set forth in these Directions:

(1) One operations director and one deputy operations director, responsible for assigning duties, security control and connections with the Bank.

(2) A team of two to ten authorized transmission staffs, responsible for the verification and transmission of various fund transfers and corrections, as well as deposit, pledge, and cancellation of collateral.

(3) A certain number of data entry personnel, responsible for entering fund transfer data, corrections, and information for inquiries.

No personnel may concurrently serve in both the authorized transmission and data entry positions, nor can personnel in either of these two positions undertake security control.

21.

21. An online institution shall submit the title, name, service unit, telephone number, and sample seal impression of the designated operation director and the deputy operation director referred to in Direction 20 in writing to the Department of Banking of the Bank; the same procedure shall be followed at the time of any change in the above positions.

The operation director referred to in the preceding paragraph shall be issued a user ID and an initial password by the Department of Banking of the Bank, for the exclusive purpose of canceling the registrations of authorized transmission personnel. The operations director shall himself/herself transfer the user ID and password when a new operation director assumes the position.

22.

22. An online institution shall compile and submit the titles, names, and service units of all authorized transmission personnel referred to in Direction 20 to the Bank in writing to apply for the issuance of an individual user ID and initial password for each employee; the said user ID and password shall be cancelled when an authorization is revoked.

Authorized transmission personnel issued with individual user IDs and passwords as specified in the preceding paragraph and the second paragraph of preceding Drection shall access the "update user password" field at an online institutions' workstation to change their passwords.

Where authorized transmission personnel leave the institution or are transferred to another post, cancellations of user IDs and passwords for such personnel shall be carried out by the online institution operations director by accessing the "cancel authorized transmission personnel" field on the online institution's workstation.

23.

23. In carrying out the procedures regulated under these Directions, all online institutions shall establish rigorous security control and instruction manuals in order to prevent abuse.

Section 2: Clearing Institutions

24.

24. A Clearing Institution that intends to apply for the Bank’s handling of settlements of net credit or net debit positions of its Participant Entities (hereafter referred to as "handling of settlements") shall submit a letter together with the following documents to the Bank for application:

(1) A license or document showing the competent authority's approval for establishment.

(2) The articles of institution.

(3) The institution's operating rules.

(4) A description of its clearing system (including computer hardware and software, network structure, security control, and business continuity plan).

(5) A corporate governance statement: including ownership structure, composition of the boards of directors and supervisors, board-management relationship regarding powers and responsibilities, checks and balances mechanism (such as sound internal control, risk management, and audit systems) and performance management mechanism (such as business goals and how to achieve such goals, and how to disclose the achievement of goals to the shareholders, users, and the competent authority representing public interests).

(6) A commitment to abide by these Directions and other relevant provisions.

The Bank will not grant consent to an application if any of the documents listed in the preceding paragraph or information required therein is incomplete. The same provision applies if the incomplete documents or information are not supplemented within a specified time period.

25.

25. The operating rules referred to under Subparagraph 3, paragraph 1 of the preceding direction shall include the following:

(1) Standards for the review and acceptance of Participant Entities.

(2) The rights and obligations existing between Participant Entities and between Participant Entities and Clearing Institutions.

(3) Items of business and operating hours.

(4) Settlement methods, times, and operational flows.

(5) Internal controls and risk management measures for payment clearing and settlement operations.

(6) Procedures for dealing with errors or negligence in the transmission of payment information.

(7) Business continuity measures.

(8) Other matters related to information exchange between financial institutions.

26.

26. The Bank may not grant consent to an application for the handling of settlements of a Clearing Institution that lacks any of the following qualifications:

(1) Sound and effective operating rules.

(2) Transparency in information sufficient to allow Participant Entities to understand related risks and responsibilities.

(3) Clear risk management procedures.

(4) A system designed to ensure the smooth completion of each day's settlement procedures.

(5) Fair and open standards for participation.

(6) Security and backup measures to ensure stability of operations.

27.

27. The risk management procedures of a Clearing Institution applying to the Bank to employ deferred net settlement procedures shall include the following:

(1) Risk limit: including the establishment of a bilateral credit limit between Participant Entities and maximum net-debit limit for each Participant Entity.

(2) Risk collateral: including the standardization of guarantees or collateral items to be deposited by Participant Entities and a mechanism for shared distribution or liability for loss.

(3) Follow-up procedures: including procedures for the completion of clearance after the occurrence of the risk event and for sharing any loss.

27-1.

27-1. Where a Clearing Institution needs to open a special settlement account at the Bank, it shall apply in the same manner as stated in Direction 17 stated after the Bank has agreed to handle settlements of net credit or net debit positions between the Participant Entities.

The special settlement account mentioned in the preceding paragraph is used only for a Clearing Institution's intraday payments or receipts of settlement funds, and the balance at the end of the day shall be cleared. If the balance has not been cleared, the Bank may list such balance as other payables temporarily to match with the ledger -closing of the CBC Interbank Funds Transfer System.

28.

28. A Clearing Institution may apply to the Bank for using the "CBC Interbank Funds Transfer System" to carry out real-time interbank funds settlement for the following payment transactions :

(1) Electronic fund transfers for transactions above a specified amount.

(2) Securities transactions settled with delivery-versus-payment.

(3) Foreign exchange transactions involving a foreign currency and New Taiwan Dollar settled with delivery-versus-payment.

The specific amount for transactions referred to in the first subparagraph of the preceding paragraph shall be separately prescribed by the Bank.

29.

29. A Clearing Institution shall notify the Bank of any change in the business items it handles; the same provision shall apply when there is a change to the operating rules required for submission under Subparagraph 3, paragraph 1 of Direction 24.

The changes referred to in the preceding paragraph shall be notified to the Bank within three months after the change has taken place.

Prior consent from the Bank is required before a Clearing Institution may engage in any of the following activities:

(1) Suspension of business operation.

(2) Merger or dissolution.

(3) Transfer of whole or major parts of its business or properties.

(4) Acceptance of transfer of whole or major parts of another’s business or properties.

(5) Operating or investing in other payment clearing or settlement businesses.

(6) Other activities as prescribed by the Bank.

29-1.

29-1. If handling of settlements by the Bank is still needed after the merger of a Clearing Institution with other institution(s), such Clearing Institution and other institution(s) shall jointly submit the following documents to the Bank for consent to the merger before the merger takes place:

(1) Merger plan: specifying the preliminary assessment of the decision to merge, the merger organization structure, the scheduled timing for the merger, the description of the business differences (description of differences in scope of business, principles and concrete matters concerning performance before the merger as distinguished from business conduct after the merger as well as the synergy of the merger), computer system operation models, and the impacts on Participant Entities and the financial system.

(2) A corporate governance statement: including ownership structure, composition of the boards of directors and supervisors, board-management relationship regarding powers and responsibilities, checks and balances mechanism (such as sound internal control, risk management, and audit systems) and performance management mechanism (such as business goals and how to achieve such goals, and how to disclose the achievement of goals to the shareholders, users, and the competent authority representing public interests).

(3) A business continuity plan of system operations (including backup facilities, risk management and contingency planning in response to different emergency conditions).

(4) Other documents as prescribed by the Bank.

If the Bank consents to the merger in accordance with the preceding paragraph, the surviving or newly established institution after the merger shall submit a letter together with relevant documents to apply for the Bank’s handling of settlements in accordance with Direction 24.

29-2.

29-2. A Clearing Institution shall promptly notify the Department of Banking of the Bank if it is in any of the following situations:

(1)Filing for reorganization, composition or bankruptcy, or being declared bankruptcy.

(2)Experiencing business interruption owing to problems in system operation.

(3)Having a cybersecurity incident that affects the security or efficiency of its clearing and settlement operation.

30.

30. A Clearing Institution shall conscientiously apply a sound system of internal controls and auditing with respect to check clearance, electronic payments or securities operations between Participant Entities, and shall attend to improving the assessment of employees' ethical standards.

31.

31. A Clearing Institution shall provide information online as required by the Bank ; the Clearing Institution shall also prepare statistical statements on a regular basis for submission to the Bank.

32.

32. The Bank may, whenever necessary, dispatch personnel to inspect business functions with respect to the clearance of checks, electronic payments or securities between Clearing Institutions; a Clearing Institution shall cooperate during such inspections.

33.

33. A Participant Entity shall open a deposit account at the Bank or an agent bank designated by the Bank for settlement; provided that if a Participant Entity is unable to open a deposit account at the Bank or an agent bank designated by the Bank, such Entity may apply to a Clearing Institution to entrust a Clearing Bank to use the deposit account at the Bank opened by such Clearing Bank for settlement.

34.

34. A Participant Entity shall seek to enhance the maintenance and management of computer and information facilities in order to ensure the smooth operation of the system; the Participant Entity shall also adopt concrete and effective safety and back up measures in order to avoid affecting the rights and interests of clients due to system breakdowns or service interruptions.

35.

35. A Participant Entity providing check clearance, electronic payments or securities fund-leg transfer services for financial institutions may not violate the relevant consumer protection regulations.

36.

36. If the conduct of a Participant Entity violates these Directions or the operating rules of a Clearing Institution, resulting in the disruption of clearing systems for checks, electronic payments or securities, a Clearing Institution may take the necessary measures as warranted by the particulars of the Participant Entity's violation.

A Clearing Institution shall clearly set forth the measures referred to in the preceding paragraph in the relevant agreement between itself and the Participant Entity.

37.

37. If a Clearing Institution's conduct is in violation of these Directions or if the Bank determines that other matters have disrupted clearing systems for checks, electronic payments or securities, the Bank may, as warranted by the particulars of the situation, terminate or suspend for a given period the provision of settlement services or take other appropriate measures.

Ⅲ. Interbank Funds transfer

38.

38. The transferor bank shall initiate the transfer information, with each transaction order to include the user ID and password of the authorized transmission personnel, the transferor bank account, the time of the transfer (real-time or forward ttansfer), the transferee bank account, the transfer amount , the date of transfer and the type of transaction. Upon the receipt of the information, and once the Bank has verified the password and that the authorized transmission personnel user ID is tallied, the order will be executed as instructed therein; otherwise it shall be returned.

Where a transfer has been effected in accordance with the provisions of the preceding paragraph, an online institution may offer no opposition to the transfer on the grounds that the transmission personnel were not those originally authorized, that others assumed their role under pretense, or for any other reason.

38-1.

38-1. If an interbank fund transfer relates to a securities settlement, it can only be processed with a real-time transfer. Each instruction shall include the items prescribed in paragraph 1, Direction 38, and additional information such as the transferor or the transferee securities firm's account number, account name, or code.

39.

39. The Bank may, if necessary, stipulate a minimum amount for each interbank fund transfer.

40.

40. Once a real-time transfer transaction is accepted by the Bank, the account transfer will be executed immediately and irrevocably if the available balance of the transferor bank is sufficient for payment. After the execution, the Bank will simultaneously inform both parties of the transaction as well as record the resulting book balance. However, if the available balance of the transferor bank is insufficient for payment, the said transaction shall be alternatively processed through the queuing mechanism.

41.

41. Once a transaction is accepted by the Bank, if the available balance of the transferor bank is insufficient for payment, the Bank shall assign one of the following classes of priority to the said transaction, and process it through the queuing mechanism:

(1) First class: Funds payable by the financial institution to the Bank.

(2) Second class: Negotiable instruments for clearing payable by a financial institution, the net amount payables for negotiable instruments cleared by the clearing house, securities settlement funds transfers, credit card settlement funds transfers or funds appropriated to the "interbank funds transfer guarantee special account" by the financial institution.

(3) Third class: Funds for forward transfers to repay interbank call loans when due.

(4) Fourth class: Funds transfers between financial institutions as well as other payments.

42.

42. Payment orders of the same priority stated in Direction 41 shall be executed based on the principle of first-in-first-out. However, if the available balance is insufficient to cover payments for payment instructions of high priority, the Bank may first execute the payment instructions of a lower priority, and after completing all payment instructions of the same priority in order, then process payment instructions of the next priority.

In case a transferor bank intends to revoke a real-time transfer transaction in queue, or discovers an error in the payment instruction, it may initiate an instruction for revocation.

43.

43. For transactions processed in accordance with the preceding two Directions, if the available balance is still insufficient for payment towards the cutoff time of the queuing mechanism, all payment orders remaining in the queue shall be immediately revoked, and the Bank shall simultaneously notify both parties to the transaction; among the cancelled orders, the negotiable instruments for clearing and the net amount payable for negotiable instruments clearing for first class and second class shall be processed in accordance with pertinent directions of this Bank.

For those transfer transactions revoked as stated in the preceding paragraph, the Bank may issue a "Certificate of Transfer Transaction Revoked due to Insufficient Funds" as per transferee bank's application.

44.

44. The forward transfer instruction shall include the transfer date on which the transfer will be executed. The Bank shall inform both parties of the transaction in advance upon receiving the instruction, and place it in file. The transfer shall be executed and posted to the related account at 1:30 in the afternoon on the designated transfer date; if there is insufficient fund to cover payment of a forward transfer transaction, it shall be processed through the queuing mechanism.

If the designated transfer date is not a business day, the execution of the transaction shall be deferred to the next business day.

45.

45. If a transferor bank intends to revoke a forward transfer transaction or discovers an error in the content of the instruction, it may negotiate with the transferee bank for initiating an instruction for revocation either on the transmission date or the designated transfer date.

Where the transferee bank in the preceding paragraph is an offline institution, it may fill out a "Letter of Authorization for the Revocation of Interbank Funds transfer Transaction" (Format 2) to entrust the Department of Banking of the Bank to revoke the instruction on its behalf.

46.

46. If an offline institution sends its staff bearing negotiable instruments to the Bank to process fund transfers, in all cases the transfers will be processed on a real-time basis. However, if the available balance of the transferor bank is insufficient for payment, it will not be placed in queue and the negotiable instrument will be returned on the spot. The staff sent to conduct the transfer shall wait for the processing result before they leave.

47.

47. In order to avoid the delay of processing payment instructions, the Bank may set up criteria to require the financial institutions to ensure that a certain proportion of their outgoing payments are processed before a specified time each day.

48.

48. Any fund transfers for open market operations, rediscounting, bond or treasury bill transactions, foreign exchange transactions or other operations between an online institution and an internal unit of the Bank shall be processed according to the following provisions. A statement of the fund transfers and the account balance after settlement shall be provided to the online institutions.

(1) For payments due to the Bank from an online institution, except where other laws or regulations stipulate payment through the issuance of a note with the Bank as the payer, the online institution may transfer funds from its account in the "CBC Interbank Funds Transfer System" to the account designated by the Bank or have a deduction made from its own account by the Bank in accordance with prior agreement.

(2) For payments due to an online institution from the Bank, the Bank shall transfer funds into the online institution's account.

The provisions in Directions 40 ~ 43 herein shall apply mutatis mutandis to the situation where a deduction is made from the account of the online institution by the Bank in accordance with prior agreement as stipulated in subparagraph 1 of the preceding paragraph.

49.

49. Where a transferor bank transmits fund transfer information and fails to receive a return confirmation from the Bank for an inordinate amount of time, it shall trace the transaction, and where the transaction order has not been successfully transmitted, the online institution shall retransmit the information.

Ⅳ. Interbank Funds Settlement

Section 1: Electronic payment and settlement

50.

50. Prior to the stipulated time for settlement, a Clearing Institution shall notify each participant entity of the net-credit or net-debit positions for verification, and then transmit the same to the Bank or the agent bank designated by the Bank for the execution of settlements.

In executing settlements as referred to in the preceding paragraph, all participant entities with net-debit positions shall supplement those net settlement positions, after which the Bank or the agent bank designated by the Bank will transfer net-credit positions into their accounts.

A Clearing Institution may transfer funds several times during the daily settlement period, while transmitting and managing transfers initiated by itself.

Where the balance in the settlement account of a participant entity is insufficient to effect payment of amounts payable, the Clearing Institution shall be responsible for notifying the participant entity to make up the shortfall.

The stipulated time for settlement referred to in Paragraph 1 shall be separately prescribed by the Bank.

51.

51. Where a participant entity is unable to perform the settlement of debt at the stipulated settlement time, the Clearing Institution shall perform a supplementary settlement to complete settlement procedures within the time stipulated by the Bank as per Subparagraph 4, Direction 26 herein.

Neither the Bank nor its designated agent banks shall bear liability for the compensation of any loss resulting from the inability to complete daily settlement on time due to the participant entity's delay in the settlement of net-debit positions.

Section 2: Negotiable instruments clearing and settlement

52.

52. Where the available balance of an "interbank funds account" is insufficient to cover the payment for negotiable instruments presented for clearing, the Bank shall process the transaction through the queuing mechanism and simultaneously notify the online institution that issued the said negotiable instruments. The online institution is required to immediately make up the difference upon receiving the notification.

For dishonored negotiable instruments, if sufficient funds are not replenished by 3:30 in the afternoon, they shall be returned in accordance with pertinent rules.

53.

53. For daily clearance and settlement of negotiable instruments, Participant Entities shall immediately replenish sufficient funds for payment upon receiving an advance notification of their balance payable; check clearing institutions shall, at the designated time, deduct the balance payable from the non-interest-bearing reserve account of the Participant Entity and transfer the funds into its settlement account opened at the Bank.

The "Designated Time" as referred to in the preceding paragraph shall be coordinated and determined by and between the check clearing institution and the Participant Entity, and reported to the Bank for record.

Check clearing institutions shall monitor whether any Participant Entity fails to replenish sufficient funds for balance payable, promptly remind and urge such Participant Entity to replenish funds, and keep track of whether the Participant Entity has funds to be transferred in.

Check clearing institutions shall not post the balance receivable of a Participant Entity to its non-interest-bearing reserve account until having completed the deduction and transfer procedures in accordance with Paragraph 1 hereof.

If a Participant Entity is unable to pay the balance payable in whole or in part, check clearing institutions shall complete the day's settlement operation in accordance with Article 18 of the "Regulations Governing the Business of Negotiable Instruments Exchange and Clearance of Accounts among Banks."

Section 3 Securities Funds Settlement

53-1.

53-1. Paragraphs 1,3,4,5 of Direction 50, and Direction 51 shall apply mutatis mutandis to securities funds settlement.

53-2.

53-2. A Clearing Institution applying to the Bank for settlement of funds under delivery-versus-payment arrangements for securities transactions in accordance with subparagraph 2, paragraph 1, Direction 28 shall transmit transaction-by– transaction or the netting balance of each transaction cleared in accordance with the offsetting mechanism to the Bank for settlements.

Ⅴ. Accounting Information Inquiries

54.

54. No further receipts shall be issued for any remittances into interbank funds deposit accounts following the issuance of a notification through the CBC Interbank Funds Transfer System.

55.

55. Where during the course of operations an online institution has any doubt about the Bank's notices of remittance or payments into or out of interbank funds accounts, it may verify the transaction in question by inspecting an itemized transaction record.

Where an error is discovered through an attempted verification of remittance or payment notices as per the preceding paragraph, the relevant personnel of the Bank shall be notified immediately and the matter handled in accordance with the relevant regulations.

56.

56. An online institution shall print out a closing ledger after each daily closing of accounts, and shall verify each transaction individually. Where discrepancies are found, the System User shall immediately notify the Department of Banking of the Bank and jointly track the discrepancy. Where no opposition is offered within three business days beginning from the day after the transaction date, the transaction will be considered confirmed, except for those handled in accordance with the provisions of Direction 59 or 60 herein.

Ⅵ. Handling of Breakdowns

57.

57. Where there is a breakdown or interruption to connections in the Bank's central server system resulting in the inability to carry out online procedures, the Bank may, after the restoration of service, consider extending the normal period of operations in view of the length of the interruption and business conditions.

58.

58. If the computer equipment of an online institution breaks down or connections are interrupted, the user shall notify the Department of Information Management of the Bank and work out a solution together. The online institution may not immediately resume use of the CBC Interbank Funds Transfer System for transfers of funds, but shall dispatch personnel to the Bank to carry out transfers in person.

59.

59. When a breakdown of the CBC Interbank Funds Transfer System or an error by operation personnel results in interbank fund transfers at variance with the original receipts, the Bank will effect correction in accordance with the relevant accounting regulations. The Bank shall not be liable for any resulting influence on or adjustment of deposit reserves.

60.

60. When an interbank fund transfer initiated by a transferor bank is at variance with the original receipts, the transferor bank shall notify and make arrangements with the transferee bank to make correction by a reverse transfer or to make adjustments through other means. The transferee bank shall act in good faith to resolve the situation on the day it receives the notification.

61.

61. Where a transferor bank fails to discover a transaction error as set forth in Direction 60 on the date of the transaction and correction is made at a later date, and where delay is disadvantageous to the transferee bank, it may request the transferor bank to pay interest from the date of the transaction until the date of correction for the amount receivable pending payment during that time or for any underpayment. The transferor bank shall not be liable for any other damages.

The payment of interest as per the preceding paragraph, except as stipulated by a previous agreement between the parties to a transfer, shall be calculated at the weighted average of the interbank call loan rate for the number of days the payment was delayed.

Ⅶ. Fees

62.

62. Consideration may be given to collecting processing or service fees for interbank fund transfers and settlements, with fee rates to be determined separately.

The fees referred to in the preceding paragraph shall be totaled once a month, with the Bank making collection through deductions from interbank funds deposit accounts or paid by check from online institutions.

Ⅷ、 Operation Schedules

63.

63. The CBC Interbank Funds Transfer System shall be in operation from 8:30 a.m. to 6:20 p.m.. Scheduling of various transactions shall be in accordance with the "CBC Interbank Funds Transfer and Settlement System Daily Operations Flow Chart" (Appendix).

If an online institution is unable to complete the related operations in accordance with the schedule set in the preceding paragraph and must apply for an extension, the institution shall do so in accordance with the operating procedures established by the Bank.

Ⅸ、 (Deleted)

64.

64. (Deleted)