xBond Central Government Bonds System meets the requirement for clearing banks with reference on the system built by the application system specifications from the Central Bank. They provide the clearing banks the processing of entry without physical securities and relevant operations for principal and interest payments. This is done in order to increase the safety and convenience for securities transactions. The banking industries may process securities settlements and principal and interest payments, absorption of demand deposit, reduction of operational capital costs, and thereby increase and promote customer service items.
The architecture of Central Government Bonds System contains an interbank on-line network, tiers account structure, log book-entry, real-time gross settlement, delivery versus payment. These are described as follows:
- Interbank on-line network
The Central Government Bonds System is based on the Central Bank as the interbank on-line network which operates through connection between the computer hosts of Central Bank and the clearing bank, to proceed with the sale, buyback, transfer, and principal and interest payments for Book Entry Central Securities using computer log.
- Tiers Account Structure
The system allows the Treasury Department and the Business Department of Central Bank to set up separate Securities entry accounts, whereas only clearing banks may directly set up Securities entry accounts from the Treasury Department and in general, any legal person or corporations may concurrently apply to clearing banks for setting up Securities entry accounts to facilitate the processing of relevant operations.
- Log Book-Entry Operations
The Book Entry Central Government Securities are registered securities, which purchase, transfer, trust, lodgment, depository preparation, and pledge and publicly guarantee to undergo computer book entry of equity holders to ensure specification against third-parties without registration.
- Real Time Gross Settlement (RTGS)
Transferring entry through consecutive, real-time and case-by-case total liquidation settlement models.
- Delivery versus Payment (DVP)
Assisting clearing banks with transaction transfers using delivery versus payment systems to eliminate principal risks through connection between security transfer and fund transfer system.
- System design that meets the specification and security control requirement from the Central Bank. Complete function and architecture (including SBL job function).
- Debt settlement and principal and interest payment operations can link with the banking account host in real-time with automatic processing to reduce the cost of manual operations.
- Value-storing that synchronizes with interbank transaction securities to reduce delivery default risks.
- Providing investors with internet banking query and channels of order transactions in order to enhance service convenience.
- Increasing account management fees and income of related fees.
- Increasing absorption of demand deposit and reduces cost of fund source.
- Reducing manual operation costs for reducing allocation of principal and interests.
- Reducing physical security custody, delivery and risks of forgery and alteration.
- Comprehensive solutions that allow clearing banks to quickly pass test from Central Bank and project into market lines of operations as soon as possible.
- Increasing online order and query services to improve customer service efficiency.
Chunghwa Post, Chinatrust Commercial Bank, First Bank, Fubon Financial, The Shanghai Commercial & Savings Bank Ltd., E. Sun Bank, Citibank