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The director, general manager, core technology specialist and shareholder holding more than 5 percent of the total issued shares of a domestic issuer or foreign issuer applying for the listing of stocks at the TIB should deposit all shares held by each individual, after deducting such number of shares offered for listing and public sale, under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of stocks may be approved.
For purpose of the preceding paragraph, core technology specialists refer to R&D officers, operation-related technology officers, and shareholders making investments in the form of patents or know-hows and holding a position in the company.
The shares other than those offered for listing and public sale as in the first paragraph include new shares issued with increased capital received between the application date for initial listing and the date of listing for which registration of change has completed, as well as shares held for other reason. The applicant shall guarantee to deposit shares that have not been received on the date of listing under centralized custody.
For the shares that must be deposited under centralized custody under the first paragraph, one fourth of them may be withdrawn after full six months from the first day of listing and trading. Another one fourth may be further withdrawn at the end of the second six-month period and so on. All the shares under centralized custody may be fully withdrawn after two full years from the first day of listing and trading.
Where the total number of shares of a domestic issuer or a foreign issuer applying for listing under the first paragraph that are placed in central custody is assessed to exceed 50 percent of its issued shares, and the issuer has paid-in capital of at least NT$10 billion, if the portion of the number of shares required to be placed in central custody exceeding the above 50 percent of issued shares has been pledged to a financial institution by the director or shareholder of the issuer who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in central custody; provided, if the pledge is released during the custody period, the director and major shareholder shall deposit the same amount of shares into central custody; or, if the subject of the pledge is disposed by the financial institution, the applicant shall contact other directors or shareholders to deposit the same amount of shares into central custody.
Shareholders required to deposit their shares under centralized custody under the first paragraph shall not rescind the contract prior to expiry of the term of custody. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
The first paragraph does not apply to directors and shareholders being government authorities, government-owned enterprises, or having obtained approval from the competent authority of a target business for the sale of the shares held by them rendering the placing of such shares in central custody inadvisable.
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