Chapter I General Provisions |
| Article 1 | These Regulations are prescribed in accordance with Article 22-1, paragraph 2 of the Securities and Exchange Act (the "Act").
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| Article 2 | The shareholder services referred to in these Regulations include the following affairs:
- Opening of account, change of basic shareholder information, etc. for a shareholder.
- Transfer of share ownership, creation of pledge, removal of pledge, reporting of loss, canceling report of loss, etc. and the merger or split of stocks.
- Holding shareholders' meetings.
- Distribution of cash and stock dividends.
- Rights issue stock affairs.
- Affairs regarding printing of stock certificates by a third party.
- Shareholder's inquiry or other affairs related to stocks required by government regulations.
- Other shareholder services approved by the Financial Supervisory Commission (hereinafter referred to as "this Commission").
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| Article 3 | A public company (hereinafter referred to as "company") may engage a third party to handle its shareholder services. Such parties shall be limited to integrated securities firms and to those banks and trust enterprises that are permitted by law to handle shareholder services for others.
To assist companies to successfully convene shareholders' meetings, companies limited by shares meeting the following conditions also may be engaged to handle matters in connection with shareholders' meetings:
- have paid-in capital of not less than NT$200 million;
- shareholders operating securities firm business under the Act hold an aggregate of more than 50 percent of the total number of the issued shares of the company, and any individual securities firm holds no more than 10 percent of the total number of the issued shares of the company;
- at least one-third of the directorships of the company are held by independent directors;
- personnel and the internal control system comply with the requirements of Articles 4 and 6.
In handling shareholder services, the company, or the institution engaged by the company to handle such shareholder services (hereinafter referred to as a "shareholder services agent"), shall pay attention to upholding the rights and interests of the shareholders and the security of securities transactions.
If a company whose stock is listed on the stock exchange or traded on the OTC market handles its own shareholder services, its personnel, facilities, and internal control system shall comply with the requirements of these Regulations.
During the period in which the company under the preceding paragraph engages a shareholder services agent to handle its shareholder services, it may not revert to handling those services in-house, with the exception of notifications for and issuance of cash dividends and capital increase shares for employees, directors, supervisors, and any shareholders holding more than 10 percent of the total shares of the company. When carrying out the above operations, the provisions of Articles 4 and 5 do not apply with respect to the employees carrying out the operations and the facilities used.
A company applying for the first time for its stock to be listed on the stock exchange or to be traded on the OTC market shall, before the stock is so listed or traded, publicly announce and report the name and business location of the unit handling the company's shareholder services to the stock exchange and the OTC securities exchange for record and also notify the centralized securities depository enterprise.
For a stock that is listed on the stock exchange or traded on the OTC market, when the unit handling the company's shareholder services changes its business location, it shall publicly announce and report the fact to the stock exchange and the OTC securities exchange within three days from the decision, and shall also notify the centralized securities depository enterprise. A shareholder services agent that is engaged to handle shareholder services for a company with a stock listed on the stock exchange or traded on the OTC market shall also be required to make the same public announcement and report when it changes its business location.
If a company is not listed on the stock exchange or traded on the OTC market and its stock certificates are in the custody of a centralized securities depository enterprise, or it has not printed stock certificates and its stocks are registered with a centralized securities depository enterprise, then prior to delivering the stock certificates into custody or registering the stocks, the company shall notify the centralized securities depository enterprise of the name and business location of the unit handling its shareholder services; when the company changes the agent handling its shareholder services or there is a change in the business location of the unit handling its shareholder services, it shall notify the centralized securities depository enterprise within three days after the decision.
This Commission or an institution designated by this Commission may examine the shareholder services and internal control systems of any organizations handling shareholder services.
Should any dispute occur over law or regulation or any other uncertainty arise with respect to the handling of shareholder services business, the above-stated designated institution may call together concerned bodies to deliberate and prepare an opinion on the handling of such matters, and submit it via letter to this Commission.
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| Article 3-1 | A company referred to in paragraph 2 of the preceding article shall submit to an institution designated by this Commission relevant documents evidencing that it meets the conditions. It may not accept an engagement to handle matters in connection with shareholders' meetings until after the institution has reviewed the documents and forwarded them in a report to this Commission for recordation.
This Commission or an institution designated by this Commission may from time to time inspect the qualifications of a company referred to in the preceding paragraph, and the company may not refuse inspection. A company that refuses inspection shall be deemed unqualified, and shall be prohibited from accepting any engagement to handle matters in connection with shareholders' meetings for a period of three years. If upon inspection a company is found to be unqualified in any way, and fails to make supplementations or corrections within a deadline upon being notified to do so by this Commission or an institution designated by this Commission, it may not accept any engagement to handle matters in connection with shareholders' meetings until such time as it has made the supplementations or corrections.
When there is any change to the paid-in capital, or to a securities-firm shareholder, independent director, or executive or deputy executive officer, or any amendment to the internal control system, of a company referred to in paragraph 1, the company shall report to an institution designated by this Commission within five days after the change or amendment.
If a company fails to comply with the preceding paragraph, or fails to make supplementations or corrections within a deadline upon being notified to do so by this Commission or an institution designated by this Commission, it may not accept any engagement to handle matters in connection with shareholders' meetings until such time as it has made the supplementations or corrections.
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| Article 3-2 | A company whose stock is listed on the stock exchange or traded on the OTC market may not make a change to handling its shareholder services in-house once those services are outsourced.
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| Article 3-3 | When a company whose stock is listed on the stock exchange or traded on the OTC market terminates the engagement agreement with its shareholder services agent to handle its shareholder services, or the engagement agreement is terminated by its shareholders services agent, or when, by order of this Commission, it must engage another shareholder services agent to handle its shareholder services, and it therefore makes a change in its shareholder services agent, the company shall in each case do so through the passage of a resolution by the board of directors, and after entering into an agreement with the new shareholder services agent, shall report the matter to the institution designated by this Commission for recordation.
When a company has made a change in its shareholder services agent pursuant to the preceding paragraph, then within three days, calculated from its receipt of the letter indicating recordation by the institution designated by this Commission, the company shall report the change to the stock exchange or the OTC securities exchange and publicly announce it.
The preceding two paragraphs shall apply mutatis mutandis to the company under paragraph 1 when it makes a change from handling its own shareholder services in-house to outsourcing them, or when, by order of this Commission, it must outsource those services, and it therefore engages a shareholder services agent to handle them.
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| Article 3-4 | When a company whose stock is listed on the stock exchange or traded on the OTC market handles its own shareholder services, if it is deemed likely by any shareholder who has held 3 percent or more of the total issued shares of the company for a continuous period of one year or more, or by the Securities and Futures Investors Protection Center, that the company's handling of matters relating to shareholders meetings is detrimental to shareholder rights and interests, then that party, 10 days prior to the first day of the book closure period, may apply to the institution designated by this Commission to have the matters relating to the upcoming shareholders meeting handled by a shareholder services agent.
The company of the preceding paragraph, upon its receipt of the letter of approval from the institution designated by this Commission, and within the deadline specified by that institution, shall engage a shareholder services agent to handle matters relating to the upcoming shareholders meeting, and shall submit the agreement entered into with that shareholder services agent to the institution designated by this Commission for recordation.
When the company fails to proceed as specified in the preceding paragraph, the institution designated by this Commission shall appoint a shareholder services agent to handle matters relating to the upcoming shareholders meeting. The centralized securities depository enterprise shall deliver the list of stock owners to the newly appointed shareholder services agent within 3 days from the first day of the book closure period.
Fees for the handling of shareholders meeting matters by the shareholder services agent appointed pursuant to the preceding paragraph shall be borne by the company.
Within 3 days after its receipt of the letter of paragraph 2 indicating recordation, or the letter of paragraph 3 appointing a shareholder services agent, the company shall report the matter to the stock exchange or the OTC securities exchange and publicly announce it, with a copy to this Commission.
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| Article 3-5 | If a company whose stock is listed on the stock exchange or traded on the OTC market handles its own shareholder services or engages a shareholder services agent to handle shareholder services for it, the company or the shareholder services agent, as the case may be, shall be subject to evaluation by the institution designated by this Commission at least once every three years.
The items, contents, criteria, and evaluation outcomes of the evaluations under the preceding paragraph shall be set by the institution designated by this Commission and then submitted to this Commission for ratification. The same shall be true for any amendment thereto.
After conducting an evaluation pursuant to the preceding two paragraphs, the institution designated by this Commission shall submit the outcome of the evaluation in writing to this Commission.
If the outcome of evaluation is "fail" and the circumstances are serious or the corrections ordered by this Commission are not made by the specified deadline, this Commission may order the evaluated entity, in the case of a company handling its own shareholder services, not to handle its own shareholder services any longer, in which case the provisions of Article 6, paragraph 3 with respect to the outsourcing or transfer of the handling of shareholder services or, as the case may be, the appointment of a shareholder services agent shall apply mutatis mutandis, or, in the case of a shareholder services agent, not to enter into any new shareholder services agreement for a period of not less than 6 months and not more than 1 year.
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| Article 4 | A company whose stock is listed on the stock exchange or traded on the OTC market and that handles its own shareholder services, or a shareholder services agent of such a company, for the handling of shareholder services, shall allocate a sufficient number of personnel, provide them with appropriate training and management, and meet the following conditions:
- At least 1 of the shareholder services agent's executive personnel must possess at least 5 years of practical experience in shareholder services operations; at least one-third of its associated persons handling shareholder services, and no less than 5 in all, must meet one of the following criteria. However, this ratio requirement does not apply if at least 20 of its associated persons handling shareholder services meet the criteria:
- Have three or more years of practical experience in shareholder services.
- Are an agent or senior agent of a securities firm.
- Have successfully passed the shareholder services examination held by an institution designated by this Commission.
- If a company handles its own shareholder services, at least 1 of its executive personnel must possess at least 5 years of practical experience in shareholder services operations, and at least 5 of its associated persons handling shareholder services shall meet one of the qualifications set out under the preceding subparagraph.
Personnel of a shareholder services agent who are counted toward the minimum standards for numbers of personnel set forth in the preceding paragraph shall be full-time employees. At a company that handles its own shareholder services, at least three of the personnel counted as meeting the qualifications of the preceding paragraph shall be full-time employees, and the remainder may be part-time employees.
The associated persons handling shareholder services shall participate in education and training courses related to shareholder services that are held by the institution designated by this Commission, in accordance with the number of such course hours as required by that institution.
If a company handles shareholder services for itself or for another company whose stock is listed on the stock exchange or traded on the OTC market, it shall report the basic information of the executives and associated persons for such services to the institution designated by this Commission before such employees carry out their duties, and file a summary report of any changes thereto by the 15th day of the month following the month in which such changes occurred.
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| Article 5 | Companies whose stocks are listed on the stock exchange or traded on the OTC market and that handle their own shareholder services, and shareholder services agents of such companies, must have facilities for handling shareholder services complying with the rules below:
- Must have the necessary computer facility and chop comparison/verification equipment.
- Must have a safe equipped to deal with fire, floods, and burglars, and establish and follow rules for management of the safe.
Companies whose stocks are not listed on the stock exchange or traded on the OTC market and that handle their own shareholder services shall have a safe storage room and shall establish and follow rules for management of their storage room, as well as have sufficient hardware equipment and other facilities.
The provisions of the preceding paragraph shall apply to the facilities used to handle their own shareholder services by companies whose stocks are listed on the stock exchange or traded on the OTC market and that issue all their stocks in scripless form.
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| Article 6 | A company that handles its own shareholder services, or a shareholder services agent handling shareholder services for a company, shall adopt an internal control system in accordance with the rules establishing standards for the internal control systems of shareholder services units that have been set by the institution designated by this Commission; dedicated employees shall be assigned to carry out internal audits on a regular or irregular basis and prepare written records of the audits, which are to be retained for inspection.
A company or a shareholder services agent shall handle shareholder services in accordance with laws and regulations and the provisions of its internal control system.
If a company or a shareholder services agent violates the provisions of either of the two preceding paragraphs, and is issued an official reprimand or a disposition by this Commission, it may no longer handle shareholder services for itself or for the company involved in the violation, and shall outsource or transfer, as the case may be, the handling of the shareholder services to a or another shareholder services agent within 2 months, calculated from the day following its receipt of the letter of disposition from this Commission. If the company is unable to find an agent willing to take over as the successor for handling of the shareholder services, or if this Commission deems necessary, a shareholder services agent shall be appointed by the institution designated by this Commission to handle the company's shareholder services.
The rules establishing standards for the internal control systems of shareholder services units which are to be set by the institution designated by this Commission pursuant to paragraph 1 shall be submitted to this Commission for ratification. The same shall be true for any amendment to those rules.
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| Article 7 | The computer software used by the company or the shareholder services agent shall have an automatic inspection capability: in addition to regular inspections of the system and backing up of files, it shall keep a record of the system flowchart, the explanations of file structure, and the explanations of system operations, and shall store backup files at a different location.
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| Article 8 | For stock certificates not withdrawn by shareholders and for blank stock certificates for future use by a company, the company or its shareholder services agent shall establish management procedures and inventory plans and shall keep them on file for inspection.
A company that handles shareholder services for itself or for another company whose stock is listed on the stock exchange or traded on the OTC market shall file the management procedures and inventory plans referred to in the preceding paragraph for recordation with the institution designated by this Commission, and shall do the same upon any amendment thereto.
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| Article 9 | For stock certificates received from the centralized securities depository enterprise and temporarily kept due to a stock split or from a shareholder due to an application for transfer, or for reissuance due to a merger or split, the company or shareholder services agent shall keep daily records and specially assign someone to be in charge of their storage.
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| Article 10 | When handling shareholder services, a shareholder services agent shall open a special account with a bank for the receipt and payment of funds under its custody and shall not use the funds in such account for other purpose, unless the shareholder services agent is operated by a financial institution, in which case it shall follow the provisions of the Banking Act.
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| Article 11 | Where a shareholder of a company processes shareholder services or exercise other related rights in writing, such writing shall be signed or chopped with the specimen chop.
Where matters under the preceding paragraph are handled by means of signature, if the company or the shareholder services agent is unable to discern whether the signature was made by the shareholder himself or herself, it may request the shareholder to appear at the company and sign in person, and present a National Identity Card, residence certificate, passport, certificate legalized by an ROC representative body or issued by local court or government agency in the shareholder's home country, identity document notarized by a statutory notary institution in the shareholder's home country, or other documentary proof of identity.
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| Article 12 | Documents and forms utilized by a company during the process of handling shareholder services shall be stored in accordance with the following provisions after the affair has been completed:
- Shareholders register, registry of lost stock certificates, shareholder specimen chop, voucher for issuance of rights issue stock, and minutes of the shareholders meeting shall be stored permanently.
- Voucher for issuance of cash dividends shall be stored for at least five years.
- Other documents and forms utilized during the handling of shareholder services shall be stored for at least three years. However, copies of identity card, replaced voided stock certificates, and stock owners list maintained and sent by centralized securities depository enterprises may be stored for one year.
- The attendance list bearing the signatures of the shareholders present at the shareholders meeting and the powers of attorney of the proxies shall be kept for a period of at least one year. However if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the Company Act, the documents shall be kept by the company until the conclusion of the litigation.
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| Article 12-1 | After obtaining shareholder approval, a company may transmit documents related to convening of shareholders meetings and other notices via electronic documents.
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| Article 12-2 | When a company whose stock is listed on a stock exchange or traded on the OTC market convenes a shareholders meeting, the meeting shall be attended by personnel with the qualifications specified in paragraph 1 of Article 4 and complying with paragraph 4 of the same article.
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