Features of Clearing and Settlement Operations

  • Clearing method: TWSE adopts multilateral net settlement to produce the receivable and payable net amounts of securities and funds between securities firms and TWSE.
  • Principle of two-tiered settlement: The clearing and settlement between the securities firm and its clients, and between the securities firm and TWSE operates separately in accordance with the principle of two-tiered settlement.All the securities that were sold by investors shall be ready for settlement before the deadline on T+2 day.
  • Book-entry system: Since 1995, the transfer of securities between securities firms and their clients, and between securities firms and TWSE, has to be processed through the book-entry system operated by TDCC (the centralized depository). The fund transfer between securities brokers and their clients has to be processed through the accounts in the settlement banks, while the funds between securities brokers and clients entrusting custodian banks can process settlement obligations via wire transfer.
  • Settlement cycles: TWSE implements multilateral net settlement on a daily basis. The settlement day is T+2. The unsettled position cannot be deferred to the next day.
  • DVP: All trades in TWSE's market are locked-in. The settlement of funds and securities from securities firms to TWSE is final and irrevocable.