On Mar. 18, TAI FSC mandated central clearing for interest rate swaps.
TAI FSC, TAI Justice said all NTD interest rate swap (IRS) transactions between financial institutions must be submitted to the TAI FEX for mandatory central clearing.
Clearing Arrangement
This initiative aims to strengthen risk management, align with international financial market practices, and enhance efficiency in the OTC derivatives market.
The rule applies to NTD IRS contracts that are accepted for clearing by TAI FEX.
Both counterparties involved in transaction must be TAI FSC approved FIs, which include banks, securities firms, bills finance companies, and insurance companies.
Plus, trust businesses, leveraged traders, and other designated financial institutions.
Must comply with TAI FEX OTC derivative clearing operating rules and OTC derivative clearing enforcement rules; TAI FSC expects mandatory central clearing to eliminate counterparty risk, simplify settlements, and enhance risk control and efficiency.
Effectiveness
Mandatory central clearing through TAI FEX will be effective from Jul. 1, 2025.
