CHAPTER I GENERAL PROVISIONS
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| Article 1 | These Guideline are prescribed in accordance with Paragraph 2 of Article 22-1 of the Securities and Exchange Law (the "Law"). |
| Article 2 | The stock affairs referred to in these guidelines include the following affairs:
1. Opening of account, change of basic shareholder information, etc. for a shareholder.
2. Transfer of share ownership, creation of pledge, removal of pledge, reporting of loss, canceling report of loss, etc. and the merger and division of stocks.
3. Holding shareholders' meetings.
4. Distribution of cash and stock dividends.
5. Rights issue stock affairs.
6. Affairs regarding printing of share certificates by a third party.
7. Shareholder's inquiry or other affairs related to stocks required by government regulations.
8. Other stock affairs approved by the Securities and Exchange Commission of the Ministry of Finance (hereinafter referred to as "this Commission"). |
| Article 3 | The stock affairs of a public company (hereinafter referred to as "company") may be entrusted to a third party. The entrusted person shall be limited to the integrated securities firms and the banks and trust enterprises that may be entrusted with the stock affairs under the laws.
The company or the institution entrusted by the company to handle stock affairs (hereinafter referred to as "entrusted institution") shall pay attention to the rights and interests of the shareholders and the safety of stock transaction.
Companies applying for the first time for stocks to be listed on the stock exchange or to be traded in the OTC market shall, before the stocks are listed or traded, publicly announce and report the name and place of the institution handling company stock affairs to the stock exchange and the OTC securities exchange for record and also notify the centralized securities depositary enterprise.
For stocks that are listed on the stock exchange or traded in the OTC market, when the company changes the institution handling its stock affairs or when the institution handling its stock affairs changes its business location, there shall be public notification and a report to the stock exchange and the OTC securities exchange within five (5) days, and there also shall be a notification to this Commission and the centralized securities depositary enterprise. The same shall be done when a company with stocks already listed on the stock exchange market or traded in the OTC market terminates its entrusting of stock affairs.
The provisions of the preceding two paragraphs concerning notification to the centralized securities depositary enterprise shall apply mutatis mutandis to companies that are not listed on the stock exchange or traded in the OTC market and whose stocks are in the custody of a centralized securities depositary enterprise, or that have not printed stock certificates and whose stocks are registered with a centralized securities depositary enterprise.
This Commission or the institutions designated by this Commission may examine the stock affairs and the internal control system of the organizations handling stock affairs.
Should any dispute occur over law or regulation or any other uncertainty arise with respect to the handling of stock affairs business, the above-stated designated institutions 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. |
| Article 4 | When handling stock affairs, the company or the entrusted institution, other than appointing sufficient employees with appropriate training and management, shall meet the following conditions:
1. At least one member of the person and his/her deputies in charge of the affairs must have at least 5 years of practical experience in stock affairs; among the rest of the employees handling stock affairs, at least one-third of them, and no less than 5 in all, must meet one of the following criteria. However, this ratio requirement does not apply if there are at least 20 employees handling stock affairs who meet the following criteria:
(1) at least 3 years of practical experience in stock affairs.
(2) an agent or senior agent of a securities firm.
2. For companies having stocks that are listed on the stock exchange or traded in the OTC market who choose to manage their own stock affairs, at least one member of the person and his/her deputies in charge of stock affairs must have at least 3 years of practical experience in stock affairs.
If only the minimum requirements of Subparagraph 1 of Paragraph 1 are met, those employees must be full-time employees.
A company that handles, for itself or as entrusted by another company, stock affairs of a company whose stock is listed on the stock exchange or traded in the OTC market, shall, before the person in charge and his/her deputies begin working on stock affairs, report to the institution designated by this Commission the said employees' basic information, and in case of any changes, shall report the condition of all the changes within 15 days from the beginning of the month after the month of the change. |
| Article 5 | The entrusted institution's facilities for handling stock affairs must follow the rules below:
1. Must have the necessary computer facility and chop comparison/verification equipment.
2. Must have a safe equipped to deal with fire, floods, and burglars, and establish and follow rules for management of the safe.
Companies who handle their own stock affairs shall have a safe storage room and shall establish and follow rules for management of their storage room, as well as have sufficient watch equipment and other facilities. |
| Article 6 | The internal control system of the company or the entrusted institution shall include the process for handling stock affairs and establish practice of investigation, and the responsible employees shall carry out, on a regular or irregular basis, internal auditing, which is to be recorded for inspection. |
| Article 7 | The computer software used by the company or the entrusted institution 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 tracking of the system's operations, the explanations of file structure, and the explanations of the systems control, and backing up files and shall be stored at a different location. |
| Article 8 | For stocks not taken by shareholders and for blank spare corporate stocks, the company or the entrusted institution shall establish management procedures and inventory plans and shall keep them on file for inspection.
A company that, for itself or as entrusted by another company, handles stock affairs of a company whose stock is listed on the stock exchange or traded in the OTC market shall file the management procedures and inventory plans referred to in the preceding paragraph with this Commission for recordation, and shall do the same upon any amendment thereto. |
| Article 9 | For stocks received from the centralized securities depositary enterprise and temporarily kept due to the removal of the previous owner, merger, or division or from a shareholder due to the application for transfer, merger, or division of the stock, the company or entrusted institution shall keep a daily record and specially assign someone to be in charge of its storage. |
| Article 10 | When the entrusted institution handles stock affairs, other than following the Banking Law if it is a financial institution, it 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. |
| Article 11 | Where a shareholder of a company processes stock affairs 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 institution entrusted to handle stock affairs 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. |
| Article 12 | Documents and forms utilized by a company during the process of handling stock affairs shall be stored in accordance with the following provisions after the affair has been completed:
1.Shareholders list, 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.
2.Voucher for issuance of cash dividends shall be stored for at least five years.
3.Other documents and forms utilized during the handling of stock affairs shall be stored for at least three years. However, copies of identity card, replaced voided stock certificates, and shareholders list maintained and sent by centralized securities depositary enterprises may be stored for one year.
4. 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 Law, the minutes of the shareholders' meeting shall be kept by the company until the conclusion of the litigation. |
CHAPTER II COMPANY STOCK AFFAIRS
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Section I The Format of and the Production of Stock Certificates
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| Article 13 | When issuing stocks, the company may print the share certificates and deliver them physically or through bank transfer.
In case the delivery is through bank transfer prescribed in the preceding paragraph, there is no need to physically print the share certificates for the stock issuance and the issuance shall be handled according to the procedure for centralized custody of securities through book transfer and relevant regulations prescribed the centralized securities depositary enterprise.
The printing and production of stock certificates shall be in conformance with the prescribed format attached hereinafter. |
| Article 14 | The par value of stock certificates shall be ten New Taiwan Dollars. |
| Article 15 | Subsequent to the printing and production of stock certificates, such stock certificates shall be sent to a certifying institution for certification in accordance with the Rules for Certification of Stocks and Corporate Bonds issued by Public Companies. |
| Article 16 | Where the format of the stock certificates issued by a formerly non-public company are not in compliance with these Guidelines, such company shall print and produce new stock certificates in accordance with these Guidelines and commence replacement procedures within six months of the date of approval for public issuance.
Where a company conducts initial public listing or OTC listing, such company shall send the stock certificates and relevant documents to the centralized securities depositary enterprise for checking of errors, and in case the printed stock certificates are determined by such enterprise to be non-conforming to the prescribed format, or its terms cannot be accurately determined, the company shall re-print and produce the stock certificates and commence replacement procedures; if there is no error upon such checking, such enterprise shall supply a certificate to that effect. |
| Article 17 | Where a stock is currently listed on the stock exchange or OTC securities exchange and the issuing company issues new capitalization stocks, before listing the stocks on the stock exchange or OTC securities exchange, such company shall send the stocks and relevant documents to the centralized securities depositary enterprise for checking of errors, and in case the printed stock certificates are determined by such enterprise to be non-conforming to the prescribed format, or its terms cannot be accurately determined, the company shall re-print and produce the stock certificates and commence replacement procedures; if there is no error upon such checking, such enterprise shall supply a certificate to that effect. |
Section II Shareholders List and Shareholder Account Opening
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| Article 18 | The names registered on the shareholders list, as applicable to natural persons, shall be based on the name shown on the National Identity Card, except in the case of overseas Chinese and foreign nationals who may supply the name shown on the alien resident certificate, passport or other documents evidencing identity; as applicable for juristic persons, the name registered on the shareholders list shall be their full registered name.
In handling matters in the preceding Paragraph regarding securities and securities represented by overseas depositary receipts that have been purchased by either Qualified Foreign Institutional Investors, overseas Chinese and foreign national outside the territory, or securities investment trust fund enterprises; or overseas Chinese and foreign national desiring to convert overseas corporate bonds into stocks, or to redeem overseas depositary receipt into stocks, or have invested in overseas stocks, the shareholders registry of the company may be registered under a specialized account name that can clearly identify the rights and obligations relating to the stock certificates.
A company with shares listed on the stock exchange or traded in the OTC market that issues employee stock option certificates to foreign nationals employed by an overseas subsidiary may, when foreign employees exercise the stock options and obtain certificates of payment for exercising stock options issued by the company or company stock certificates, transfer the certificates of payment for exercising the stock options or the company stock certificates directly into an investment account opened by its overseas subsidiary pursuant to the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, and make the registration in the company's roster of shareholders in the name of said account.
The registration referred to in the preceding paragraph may be itemized by the specific subsidiaries of the company whose shares are listed on the stock exchange or traded in the OTC market and by the year of issue and issue number.
If the company whose shares are listed on the stock exchange or traded in the OTC market, or foreign employees of an overseas subsidiary thereof, are unwilling to follow the procedures set forth in Paragraph 3, the foreign employees of the individual subsidiary shall themselves open investment accounts for such purpose.
A company shall not open two or more accounts for the same shareholder. |
| Article 19 | Upon opening a new account, the shareholder shall supply a specimen chop, photocopy of the National Identity Card, resident certificate, passport, or other documents evidencing identity or photocopy of documents evidencing company registration; where necessary, the company or the institution entrusted to handle stock affairs may require the shareholder to supply originals of the above documents; where a foreign shareholder consigns a domestic agent or representative to open the account, a power of attorney shall be supplied.
When opening an account as referred to in the preceding Paragraph, a natural person shall leave on file a signature or chop specimen using his or her true name; a juristic person shall use its full registered name, and in addition, may also register the signature or chop of its representative or use the professional chop of its agent; where in accordance with Paragraph 2 of the preceding Article a specialized account is used, a chop based on the name of such specialized account name shall be used; in case of a minor or an interdicted person, the statutory agent shall also supply their signature or chop; if the statutory agent is the parents, the parents may agree to signing or use of chop by either parent on behalf of both parents; in the case of a signature account, the company or the institution entrusted to handle stock affairs may adopt the procedures set forth in Paragraph 2 of Article 11.
A shareholder that has provided both a signature and chop specimen on the specimen chop card on file may effectively use either signature or chop to process stock affairs with the company or exercise related rights pursuant to Paragraph 1 of Article 11.
The shareholder specimen chop and signature shall be limited to a single copy. |
| Article 20 | The contents of the specimen chop card shall include the shareholder account number, name of the shareholder, commencement date, and specimen signature or specimen chop. In addition, natural persons shall indicate the address shown on the household registry, and contact address and telephone number, National Identity Card number or the number of other document evidencing identity or photo copy of profit-seeking-enterprise certificate, and the date of birth; a juristic person shall indicate its registered address and its uniform number; a foreign shareholder consigning a domestic agent or representative to open account shall indicate the address and uniform number of the domestic agent or representative.
A contact address indicated by a domestic shareholder as referred to in the preceding Paragraph shall be confined to a domestic address; where a foreign shareholder has designated a depositary institution, the name of such institution shall be included.
The uniform number of overseas Chinese or foreign national, in case of natural persons, shall be the western calendar date of birth (year, month, date) shown on the passport, alien resident certificate or other document evidencing identity (eight digits) plus the first two alphabets of its English last name (two digits); in case of juristic persons, the number shall be based on the withholding uniform invoice number assigned by the tax authority.
The uniform invoice number of a person from the mainland China area shall be the final 10 digits of the identity number on the mainland China area resident identity card; for a person who does not have a resident identity card, the first digit shall be 9, the second through the seventh digit shall be the final two digits of the western calendar year of birth and the month and day of birth (two digits each), and the eighth through the tenth digits shall be left blank. |
| Article 21 | Where a shareholder changes the specimen chop on file to a new chop or to a signature, a change of specimen chop application shall be completed specifying the serial numbers of and the number of the shares bearing the old chop, affixed with the old and new specimen chop or specimen signature, together with the new specimen chop card and the stock certificates, and the above materials shall be sent to the company for processing. The new specimen chop shall be effective on the date following completion of registration.
In processing the change of specimen chop referred to in the preceding Paragraph, where the stock certificate has been sent to the centralized securities depositary enterprise, has been pledged, or has been sold, and for valid reasons the shareholder cannot supply the stock certificate for processing, the stock certificates need not be supplied.
Where a stock is pledged as referred to in the preceding Paragraph, where the pledge is removed, the stock certificate shall be presented and amendment registration procedures carried out.
Where a chop is replaced by a signature pursuant to Paragraph 1, the company or the institution entrusted to handle stock affairs may adopt the procedures set forth in Paragraph 2 of Article 11. |
| Article 22 | Where the specimen chop is lost or destroyed, a lost specimen chop application shall be completed specifying the serial numbers and number of shares bearing the old chop, together with identification papers and copies thereof, new specimen chop card and the stock certificates, and the above materials shall be personally sent to the company for processing. Upon determination that the specimen chop may be replaced with a new one or with a specimen signature, and upon completing the procedures for registering a new specimen chop, the new specimen chop shall be effective on the date following completion of registration, unless it is declared that the effective date shall be on the same date.
Where the procedures for replacement of a specimen chop with a new chop or provision of a specimen signature are consigned to a third party or handled through correspondence, the following identity documents shall be submitted:
1. Natural person shareholder: if a domestic natural person, the National Identity Card; if a foreign natural person, the alien residence certificate, passport, or certificate legalized by an ROC representative body or issued by a local court or government agency in the shareholder's home country, or identity document notarized by a statutory notary institution in the shareholder's home country.
2. Juristic person shareholder:
(1) A juristic person shareholder shall submit an application letter bearing the company chop on the company amendment registration chart issued by the competent authority and the chop of the responsible person who represents the company.
(2) Photocopy of the company amendment registration chart issued by the competent authority, with a statement thereupon indicating that it is a true and faithful copy of the original.
(3) Documentation of identity in accordance with the preceding subparagraph for the responsible person of the juristic person shareholder.
3. Where a third party is consigned to carry out the procedures, such consignee shall be a citizen of the Republic of China, and, in addition to the identity documents set forth in the preceding two subparagraphs the National Identity Card and power of attorney of the consignee shall also be submitted.
The provisions of Paragraphs 2 and 3 of the preceding Article shall apply mutatis mutandis while processing the lost specimen chop under Paragraph 1.
Where a chop is replaced by a signature under Paragraph 1, the company or the institution entrusted to handle stock affairs may adopt the procedures set forth in Paragraph 2 of Article 11. |
Section III Transfer, Registration of Changes, Pledges, and Lost Reporting Procedures of Stock Certificates
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| Article 23 | Where a shareholder processes the transfer of stock certificates on his own behalf in accordance with ordinary transactions, the procedures shall be as follows:
1. Private direct transfers of listed shares:
i)The transferred stock shall conform with the requirement that the transferred volume does not exceed one trading unit and that at least three month elapses between two successive transfers.
ii)Transfer application completed by both parties and signature or chops affixed on the backside of the stock certificate.
iii)Proof that the securities transaction tax has been paid.
2. Private direct transfers of unlisted shares:
i)Transfer application completed by both parties and signature or chops affixed on the backside of the stock certificate.
ii)Proof that the securities transaction tax has been paid. |
| Article 24 | Where a shareholder processes the transfer of stock certificates on his own behalf in accordance with provisions of law, the procedures shall be as follows:
1. Court auction or compulsory execution:
i) The stock certificate to be transferred, transfer application, court auction records and proof of transfer, and proof that the securities transaction tax has been paid shall be submitted.
ii) The space allotted on the transfer application and on the stock certificate for the chop of the transferor may be replaced with the proof of transfer issued by the court.
5. Transfer via inheritance:
The inheriting party shall complete the transfer application and affix his signature or chop on the backside of the stock certificate in space allotted for the transferee, and shall further attach the following documents:
i) Line of inheritance chart (to be completed by the applicant inheriting party in accordance with Articles 1138 through 1140 of the Civil Code; if there are any errors, the applicant shall be responsible therefore).
ii) The current household registry of the inheriting party.
iii) For a domestic inheriting party, the National Identity Card (if the inheriting party is a minor, the National Identity Card of the statutory agent shall also be attached); for a foreign inheriting party, the residence certificate, passport, certificate legalized by an ROC representative body or issued by local court or government agency in the shareholder's home country, or identity document notarized by a statutory notary institution in the inheriting party's home country. Where the inheriting party consigns a third party to process the transfer on his behalf, the consignee shall be a citizen of the Republic of China, and the consignee's National Identity Card and the power of attorney shall be presented. An inheriting party who is a person of the mainland China area shall submit inheritance relationship documents that have been certified by the Straits Exchange Foundation and the inheritance relationship certificate or similar documents issued by a notary authority within the mainland China area. If due to his special status or other reasons such an inheriting party cannot personally enter Taiwan to process such matters, such person shall execute a legally recognized power of attorney and appoint a third person located within the Taiwan area to process such matters.
iv) Where there are several inheriting parties, an agreement signed by all eligible inheriting parties under the Book of Inheritance of the Civil Code stating that they agree with the distribution shall be supplied; where a judgment is rendered by a court, the judgment shall be supplied.
v) Certification of payment of taxes or tax exemption issued under Article 41 of the Estate and Gift Tax Law.
3. Transfer via gift:
Complete the transfer application and affix the signature or chops of the transferor and transferee to the backside of the stock certificate, and attach certification of payment of taxes or tax exemption issued under Article 41 of the Estate and Gift Tax Law. |
| Article 25 | Where a shareholder processes the transfer of stock certificates on his own behalf in accordance with applicable provisions of the Law, the procedures shall be as follows:
1. Purchase from the director, supervisor, manager, or shareholder holding more than 10% of outstanding shares of the company in accordance with Subparagraph 3 of Paragraph 1 of Article 22-2 of the Law:
i) Both parties shall sign or chop the transfer application and the backside of the stock certificate.
ii) Attach the daily statement for the transfer filing date downloaded from the Taiwan Stock Exchange Corporation Market Observation Post System and certification of payment of the securities transaction tax.
2. Public tender offer in accordance with Paragraph 2 of Article 43-1 of the Law:
i) Both parties shall sign or chop the transfer application and the backside of the stock certificate.
ii) The stock transfer application shall be stamped by the consigned securities firm showing that the securities transfer tax has been paid, and documents showing that this Commission has approved the public tender offer shall be attached.
3. Purchases of privately placed shares pursuant to Article 43-8 of the Law and purchases made in accordance with the circumstances prescribed by this Commission in accordance with Paragraph 4 of Article 150 of the Law:
i) Both parties shall sign or chop the transfer application and the backside of the stock certificate.
ii) Attach documents evidencing conformity with the requirements set forth by this Commission and certification of payment of the securities transaction tax. |
| Article 26 | Where a shareholder processes the transfer of stock certificates on his own behalf upon the withdrawal of the shares from centralized custody, the procedures shall be as follows:
i) Complete the transfer application.
ii) Submit the transfer application stamped with the "date of withdrawal" stamp (where the stock certificate is under the custody of a securities finance enterprise, then chopped by it; where the stock certificate is under the custody of centralized securities depositary enterprise, then chopped by it) and the original purchase report or other documents, and upon confirmation, complete the transfer. |
| Article 27 | Where a shareholder processes the transfer of stock certificates on his own behalf when for some reason the transfer of stocks cannot be completed on time and request is made to the previous owner for return of stocks and stock dividends have been received, the procedures shall be as follows:
i) The original purchase report and the stock delivery voucher issued by the securities firm, or other documentary proof.
ii) Final judgment of a court, court settlement records, confirmed order for payment, or consent of the previous owner to return stocks.
iii) Stock certificate obtained from the previous owner.
iv) Transfer application signed or chopped by both parties (the space allotted on the transfer application for the chop of the transferor may be replaced with the final judgment issued by the court, court settlement records, or confirmed order for payment); upon confirmation, complete the transfer. The backside of the stock certificate shall be stamped with the "change of name" stamp to distinguish it. |
| Article 28 | Where a shareholder processes the transfer of stock certificates on his own behalf for a trust in respect of stock pursuant to Paragraph 2 of Article 4 of the Trust Law, the procedures shall be as follows:
i) The settlor and the trustee shall complete the transfer application and sign or chop the backside of the certificate; where the trustee withdraws the stock from a centralized securities depositary enterprise, documents showing that the withdrawal has been made from such enterprise shall be attached, and the trustee shall further place its signature or chop on the space allotted on the transfer application and on the stock certificate for the chop of the transferee.
ii) Attach the trust deed, and related documents of the tax authority, and upon confirmation by the company, the stamp "trust property" and a date stamp shall be stamped on the roster of shareholders and on the backside of the stock certificate.
iii)Where the trustee has been changed, an application for change shall be made by attaching the reason for the change.
iv) Where the trust deed specifies that the beneficiary of the whole or any part of the trust interest is the settlor and, during the term of the trust relationship, such beneficiary is changed to a person other than the settlor, relevant supporting documents from the tax authorities shall be attached.
v) When the trust relationship has been terminated, and by law the trust property belongs to the settlor, documents showing that the trust relationship has terminated shall be attached, and upon confirmation by the company, the application to cancel the trust registration shall be made; where by law the trust property belongs to a person other than the settlor, related documents issued by the tax authority shall be attached, and upon confirmation by the company, the application to cancel the trust registration shall be made, and the stamp "registration of termination of trust" and a date stamp shall be stamped on the roster of shareholders and on the backside of the stock certificate.
vi) Where the stock certificate is under the custody of a centralized securities depositary enterprise, the indication of the trust relationship and matters to be recorded shall be governed by the Regulations Governing Book-Entry Operations for Centrally Deposited Securities. |
| Article 29 | Where a shareholder of a company whose shares are listed on the stock exchange or traded on an OTC market transfers shares in the custody of a centralized securities depositary enterprise other than on the centralized securities exchange market or an OTC market, and does so by book-entry, the company shall handle the transfer in accordance with the Regulations Governing Book-Entry Operations for Centrally Deposited Securities and regulations applicable to centralized securities depositary enterprises. |
| Article 29-1 | When a company distributes cash dividends, handles rights issue subscription, or issues new capitalization stocks, shareholders who have opened a discretionary investment account shall handle the portion involving discretionary investment in accordance with the relevant regulations prescribed by the securities centralized depository enterprise. |
| Article 30 | The cancellation of previous ownership and transfer of stocks in a centralized securities depositary enterprise shall be processed as follows:
1.Upon receiving the stocks that the centralized securities depositary enterprise periodically send to it for processing, the company shall commence the procedure for canceling the stocks previously owned by the previous owner within the time specified by this Commission, register such stocks into the dedicated account opened by the centralized securities depositary enterprise, store the original transfer application, and affix a notation in the space allotted for chop of the transferee indicating that the ownership of the previous owner has been canceled; the centralized securities depositary institution shall prepare and affix a new blank transfer application and affix a stamped notation to such effect on the stock and on the space allotted for the chop of the transferor in the transfer application. The centralized securities depositary enterprise shall send a specimen of such stamp to the company for its review.
2.The centralized securities depositary enterprise shall send the shareowners list and the list of stock certificates under its custody prepared by its participating parties, together with information stored on media, to the company. Withdrawals shall be made from the dedicated account opened by the centralized securities depositary enterprise, and corresponding entry shall be made in the shareholders list, and such actions shall constitute the completion of the transfer. Paragraph 1 of Article 165 and Article 176 of the Company Law shall not be applicable. The company shall, using the contact address provided by the centralized securities depositary enterprise, notify those owners that have not commenced account opening procedures and commence account-opening procedures.
The matters to be recorded on the shareowner list, and the time limit for notification to the company shall be governed by the Regulations Governing Book-Entry Operations for Centrally Deposited Securities.
The time period referred to in Subparagraph 1 of Paragraph 1 shall be separately prescribed by this Commission. |
| Article 31 | Where shares under custody of a centralized securities depositary enterprise apply for issuance of replacement stocks due to mergers, the company shall cancel such stocks and register such stocks in the dedicated account opened by the centralized securities depositary enterprise. |
| Article 32 | A company shall process the application made by a centralized securities depositary enterprise for issuance of replacement stocks due to splits; where a company processes a shareholder's application to issue replacement stocks due to splits and such split stocks do not exceed 1,000 shares, the company may charge a handling fee, except where the stocks were obtained through inheritance. |
| Article 33 | Where a shareholder has opened an account for centralized custody, unless the shareholder expresses contrary opinion, the company may consign a centralized securities depositary enterprise to effect delivery by the book-entry method, and prepare a "List of Stocks using Consigned Delivery" based on such information. |
| Article 34 | Where a company consigns a centralized securities depositary enterprise for book-entry delivery of newly issued shares, for the shares deliverable to a shareholder that has applied for book-entry delivery of stocks, such processes may be combined. |
| Article 35 | Where a shareholder processes matters in accordance with Articles 23 to 28, and such shareholder is a minor or an interdicted person, for the shares being transferred, the statutory agent shall affixed his or her signature or chop on the stock certificate and the transfer application. |
| Article 36 | Where a minor reaches adult legal status, or an interdicted person resumes his legal capacity, such shareholder shall submit a copy of his National Identity Card or the final court order removing the interdicted status, and stock certificates held by such shareholder that bear the old chop, to the company to carry out specimen chop card replacement and registration procedures. |
| Article 37 | The contact address of a shareholder shall be based on the address indicated on the specimen chop card. However, where a centralized securities depositary enterprise processes transfer matters, and the specimen chop card has not been completed, the address notified by the centralized securities depositary enterprise shall govern. If the information has been indicated on the specimen card, but the address so indicated is different from the contact address of which notice has been given by the centralized securities depositary enterprise, the latest address for which the shareholder has carried out amendment procedures shall govern.
Where the contact address or the registered address shown on the specimen chop card referred to in the preceding Paragraph has been changed, the shareholder shall notify the company in writing. |
| Article 38 | Where a pledge is made on a stock, and the pledgor and pledgee complete the "Pledge Notification," and endorse the stock certificate and send it to the company for registration, upon registration, such pledge shall be effective against the company, and the company is not required to issue a pledge certificate; upon release of a pledge, a "Notice of Release of Pledge" shall be completed and submitted to the company for processing.
Where a pledge is made on a stock under custody of a centralized securities depositary enterprise, the depositary enterprise shall notify the company of the names of the pledgor and pledgee, the number of shares under pledge, and matters relating to dividends for processing by the company, and the preceding Article shall not be applicable. |
| Article 39 | While the pledge is effective, the withdrawal of dividends arising from the stock shall be made by either the pledgor or pledgee as agreed under the pledge agreement. During the period in which the transfer of ownership is suspended, the company shall continue to accept application for pledge registrations. |
| Article 40 | Where a stock certificate is lost and replacement procedures are commenced, it shall be commenced as follows:
1.The shareholder or the legal owner shall report the event to the police authorities for handling or recordation, complete the loss of stock application, and send such to the company for its examination and recordation; where the transfer has not been previously registered, the securities firm or the transferor shall supply documentary proof.
2.The applicant shall, within five days, apply to the courts under the Code of Civil Procedure for public announcement of the event, and a copy of the court application and the court acceptance voucher shall be sent to the company; where such procedure is not commenced upon the expiration of the time period, the company may cancel the application for lost stock certificates.
3.Upon issuance of the public announcement ruling by the courts, the applicant shall send a copy of the announcement made in the newspaper to the company, and upon the expiration of the period of public announcement, the applicant may apply to the company for issuance of replacement stocks by attaching the court judgment declaring the lost stock certificates void.
4. To cancel a report of loss of stock certificates, an applicant shall complete an application for cancellation of a report of loss of stock certificates and send it to the company for examination and recordation; where the applicant has already applied to a court for public announcement of the event or for a judgment voiding the stock certificates pursuant to the Code of Civil Procedure, the applicant shall submit photocopies of the application to the court for cancellation of the public announcement or for withdrawal of the judgment voiding the stock certificates, and of the receipt issued by the court for the documents.
When processing matters in accordance with Subparagraph 1 of the preceding Paragraph, and the lost stock certificates have been registered in the dedicated account of the centralized securities depositary enterprise, the applicant shall attach documents showing that such stocks have been withdrawn from the centralized securities depositary enterprise.
Where a company processes loss, replacement, and cancellation pursuant to Paragraph 1, if such stock is listed on the Stock Exchange or traded in the OTC market, it shall, immediately upon accepting the application, notify the Stock Exchange (listed portion) or the OTC Securities Exchange (OTC portion), and the centralized securities depositary enterprise, of the event via Internet transmission, and the Stock Exchange or the OTC Securities Exchange shall in turn inform the securities firms. While the stock is still in the process of public announcement, the dividends (capital interest), bonuses, distributed stock dividends and other ancillary rights accumulated during the period shall be held and not distributed by the company until the court judgment has been issued.
Where a third person is consigned to apply for the lost of stock certificates, a natural person shall provide a power of attorney, and a juristic person shall provide an application letter, and the power of attorney and the application letter shall be signed or chopped with the original specimen chop.
Upon the company completing the application for the lost of stock certificates, if the lost certificates are discovered, a notation stating "Registered Lost Stock Certificates" shall be affixed on such stock certificates and on its transfer application.
A company that is applying for the first time for listing of its stock on the stock exchange or trading of its stock in the OTC market shall, before listing or OTC trading of the stock, notify the centralized securities depositary enterprise of the numbers of all stock certificates that have been reported lost and for which a judgment of voidance has been issued. |
Section IV Suspension of Stock Transfers, Distribution of Dividends, and Issuance of New Capital Stocks
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| Article 41 | A company shall suspend the transfers of stocks 60 days prior to the shareholders meeting, 30 days prior to the special shareholders meeting, or 5 days prior to the record date for the distribution of dividends, bonuses or other interests.
Where a stock is listed on the stock exchange or traded over-the-counter, the company shall within the required time period notify the Taiwan Stock Exchange or the OTC Securities Exchange, and the centralized securities depositary enterprise, of the reason and the date for the suspension of transfer of stocks. It shall also give such notice of reason and date upon any amendment or cancellation of the suspension of transfer.
The provisions of the preceding paragraph concerning notification to the centralized securities depositary enterprise shall apply mutatis mutandis to companies that are not listed on the stock exchange or traded in the OTC market and whose stocks are in the custody of a centralized securities depositary enterprise, or that have not printed stock certificates and whose stocks are registered with a centralized securities depositary enterprise.
During the period of suspension of stock transfers referred to in Paragraph 1, for all stocks sent to it by a centralized securities depositary enterprise, the company shall still commence procedures for cancellation of previous ownership. |
| Article 42 | Where a company distributes dividends, it shall notify each registered shareholder of the date and location as well as transmit such information via the information reporting website designated by this Commission; after transmission has been completed, public notice shall be deemed to have been duly given. |
| Article 43 | Where a company distributes cash dividends or issues new capitalization stocks, and the stock holder has failed to complete registration of transfer before the suspension of transfer, the transfer of stock dividends or new capitalization stocks through a letter of consent, or a declaration that it is the owner of such stock or new capitalization stock must be made within five days of the suspension of transfer of ownership title; upon the expiration of the time period, the stock holder shall contact the previous owner for private resolution of the matter.
Where procedures are commenced in accordance with Subparagraph 1 of Paragraph 1 of Article 30 to cancel ownership of the previous owner, and withdrawal is made from the centralized securities depositary enterprise but registration of transfer is not made before the suspension of stock transfers, upon completing the transfer procedure, the company may withdraw and complete delivery of the stock dividends and new capitalization stock from the dedicated account of the centralized securities depositary enterprise. |
| Article 44 | When a company distributes cash dividends, handles rights issue subscription, or issues new capitalization stocks, shareholders who have opened a discretionary investment account shall handle the portion involving discretionary investment in accordance with the relevant regulations prescribed by the securities centralized depository enterprise. |
CHAPTER III MANAGEMENT OF THE STOCK AFFAIRS OF DIRECTORS, SUPERVISORS, MANAGERS AND SHAREHOLDERS HOLDING MORE THAN 10 PERCENT OF OUTSTANDING SHARES
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| Article 45 | Upon the registration of its publicly issued stocks, a company shall announce the type of shares owned and the total number of shares owned by its directors, supervisors, and shareholders holding more than 10% of outstanding shares by transmitting such information via the information reporting website designated by this Commission; after transmission has been completed, public notice shall be deemed to have been duly given
The total number of shares owned by the persons referred to in the preceding Paragraph shall include the shares owned by spouses, minor children and those beneficiarily held using the name of others. |
| Article 46 | The shareholders referred to in Paragraph 1 of the preceding article shall report to the company any changes in their shareholding during the previous month by the fifth day of each month. By the 15th day of each month, the company shall compile such information and transmit it via the information reporting website designated by this Commission; after transmission has been completed, public notice shall be deemed to have been duly given.
The provisions of Paragraph 2 of the preceding Article shall apply mutatis mutandis to Paragraph 1. |
| Article 47 | Where the stocks of persons referred to in Paragraph 1 of Article 45 are pledged, the pledgor shall immediately notify the company; within five days, the company shall transmit such information via the information reporting website designated by this Commission; after transmission has been completed, public notice shall be deemed to have been duly completed. |
| Article 48 | During his term in office, if a director or supervisor of a company transfers more than half of the total shares owned by such person at the beginning of his term of office, such person shall be automatically removed from his position; the company shall immediately proceed with the registration of the removal from office with the relevant authorities. After re-election of directors or supervisors effected prior to the expiration date of the term of office of existing directors, if any new director or supervisor elect has, before his or her inauguration of the office of director, assigned more than one-half of the total number of shares of the company he or she holds at the time of his or her election, or had transferred more than one-half of the total number of shares he or she held within the share transfer prohibition period fixed prior to the convening of a shareholders' meeting, then his or her election as a director shall become invalid. |
CHAPTER IV SUPPLEMENTARY PROVISIONS |
| Article 49 | This Commission may from time to time investigate the public announcements and filed information of a company; the same shall apply with changes in the rights of shareholders, the registration of pledges or removal thereof. Further, this Commission may inspect or order that relevant documents and documents be provided, and if it is discovered that there are matters not in conformance with the law or if the company refuses to provide such information, in addition to issuing orders to correct such non-compliance, this Commission may impose punishments in accordance with the Securities and Exchange Law. |
| Article 50 | These Guidelines shall come into effect on the date of promulgation. |