Bond & Derivatives Market Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Corporate Bonds (including CBs) 7,555 9,217 10,521 10,906 11,541 10,881 11,334 10,819 11,376 12,902 15,235 Financial Debentures 1,299 2,639 4,551 5,836 7,418 7,541 8,062 7,370 7,659 8,479 9,904 Government Bonds 22,127 25,871 28,507 31,417 33,825 35,185 37,352 39,709 43,342 46,442 49,343 Unit: NT$100 million 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 The bond market ranks alongside the stock market as one of the most important constituent elements of capital markets. GTSM has been involved in the administration of Taiwan’s bond market ever since its establishment, and has worked actively to develop bond trading and other relevant systems. Currently, all Taiwan government bond trading takes place on GTSM platform. GTSM also provides trading platforms for other instruments, such us corporate bonds and financial debentures. In addition, GTSM has been developing interest rate and bond derivatives markets; products trading on the market include New Taiwan Dollar interest rate swaps, swap options, bond options, convertible bond asset swaps and bond forwards. In these days, GTSM tunes its policy to encourage foreign bonds issuing in Taiwan. In this regard, we launched Renminbi- denominated bonds, named Formosa Bond in 2013. By introducing diversified products to the market, GTSM bond market is gradually striding toward international standards. GTSM has established an electronic bond trading system to facilitate the establishment of a long-term benchmark rate and enhance the efficiency of government bond trading and settlement. This electronic trading platform, which covers the whole trading process from quotation and dealing through to risk management and settlement, has proved to be very efficient and its establishment marked the beginning of a new era of electronic trading for Taiwan’s bond market. To stimulate the growth of the corporate bond, financial debenture and beneficiary certificate markets, GTSM has also introduced a fixed income securities trading system. This automatic trade matching system facilitates the transaction of convertible corporate bonds. The trading system operates in a similar manner to GTSM stock trading making it very convenient for investors. GTSM has established a foreign government bond trading platform, to provide domestic securities firms with a convenient, competitive channel for foreign government bond investment. Through this platform, Taiwan securities firms are able to participate directly in the global U.S. government bond B2B market. The Size of the Bond Trading Market in Taiwan GreTai Securities Market