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Article 5
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Except as provided in Article 6, a solicitor of proxies shall be a shareholder holding 50,000 or more of the issued shares of the company; provided that if election of directors or supervisors is proposed in the shareholders meeting, the solicitor shall hold the shares issued by such company, as evidenced by the shareholders register, or by the documentation of deposit in the centralized securities depository enterprise, as of the book closure date for the shareholders meeting, under one of the following conditions:
- Where a financial holding company, a bank regulated under the Banking Act, or an insurance company regulated under the Insurance Act convenes a shareholders meeting, the solicitor shall have continuously held, for a period of at least one year, 2 million of the company's issued shares or 0.5% or more of the total number of its issued shares; or
- Where a company other than those specified in the preceding subparagraph convenes a shareholders meeting, the solicitor shall have continuously held for a period of at least 6 months 800,000 or more of the issued shares of the company, or 0.2% or more of the total number of issued shares of the company.
A shareholder qualified under the preceding paragraph, or a trust enterprise or shareholder services agent under Article 6, or a responsible person thereof, to which any of the following circumstances applies shall not serve as a solicitor:
- Has previously been convicted by a conclusive judgment of a crime under the Organized Crime Prevention Act, where less than five years has elapsed since completion of the term of sentence.
- Has been convicted by a conclusive judgment of violating, in connection with solicitation of proxies, provisions of the Criminal Code addressing forgery of documents, where less than three years has elapsed since completion of the term of sentence.
- Has previously been sentenced to imprisonment for six months or more for fraud, breach of trust, or misappropriation, where less than three years has elapsed since completion of the term of imprisonment.
- Has previously been sentenced to imprisonment for six months or more for violating the Securities and Exchange Act, Futures Trading Act, Banking Act, Trust Enterprise Act, Financial Holding Company Act, or other financial administration act, where less than three years has elapsed since completion of the term of imprisonment.
- Has previously violated Article 10-1 and less than 3 years has elapsed since the Financial Supervisory Commission (FSC) imposed a sanction for the violation.
- Has previously violated Article 11, paragraph 1, or violated provisions of this article or of Article 6 relating to qualifications for solicitation, and less than 1 year has elapsed since the FSC imposed a sanction for the violation.
- Has previously been found by a conclusive judgment to have solicited proxies in violation of these Regulations and the represented votes were not counted, where less than two years have passed since such conclusive judgment.
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Article 6
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A shareholder who for one year or more has continuously held issued shares of a company in conformance with one of the following conditions may mandate a trust enterprise or shareholder services agent to act as the solicitor, and the number of shares to be represented by it shall not be subject to the restriction under Article 20:
- Where a financial holding company, a bank regulated under the Banking Act, or an insurance company regulated under the Insurance Act convenes a shareholders meeting, the shareholder and its related parties shall hold 10% or more of the total issued shares of the company, and shall meet one of the following conditions;
- Have reported to or obtained approval from the FSC under Article 16, paragraphs 1 or 3 of the Financial Holding Company Act, Article 25, paragraphs 3 or 5 of the Banking Act, or Article 139-1, paragraphs 2 or 4 of the Insurance Act.
- Comply with the provisions of Article 10 of the Regulations Governing Approvals of the Same Person's or Same Related Parties' Application to Own More Than a Certain Percentage of the Issued Voting Shares of a Financial Holding Company, or of Article 10 of the Regulations Governing Approvals of the Same Person's or Same Related Parties' Applications to Own More Than a Certain Percentage of the Issued Voting Shares of a Bank, or of Article 11 of the Regulations Governing the Same Person or Same Related Parties Holding the Issued Shares with Voting Rights over a Particular Ratio of an Insurance Enterprise.
- Where a company other than those specified in the preceding subparagraph convenes a shareholders meeting, the shareholder shall hold issued shares of the company in conformance with one of the following conditions:
- Has held 10 percent or more of the total number of issued shares of the company.
- Has held 8 percent or more of the total number of issued shares of the company and, when election of directors or supervisors is on the shareholders meeting agenda, one of the candidates it intends to support meets the qualifications for independent director.
- Where the consolidated number of shares of the shareholders sharing the same opinion on a proposal in a shareholders meeting meets the requirements of the preceding subparagraph, such shareholders may jointly make a mandate.
When assigning election votes under proxies obtained through solicitation by a trust enterprise or shareholder services agent mandated by a shareholder to act as a solicitor in accordance with the preceding paragraph, the number of votes assigned to any independent director candidate the shareholder intends to support shall be greater than those assigned to any non-independent director candidate.
A trust enterprise or shareholder services agent, under any of the following circumstances, when election of directors or supervisors is on the shareholders meeting agenda, shall not act as a solicitor for a shareholder under paragraph 1 or handle proxy solicitation matters for a solicitor:
- where it is itself a shareholder services agent of the public company calling the shareholders meeting.
- where it is itself a subsidiary of the financial holding company calling the shareholders meeting.
A shareholder under paragraph 1 or the responsible person thereof to which any of the circumstances specified in paragraph 2 of the preceding article applies shall not mandate a trust enterprise or shareholder services agent to act as the solicitor.
After a shareholder mandates a trust enterprise or shareholder services agent to act as the solicitor, such shareholder at the current shareholders meeting shall not make any further solicitation, or handle proxy solicitation matters mandated by any solicitor.
If the shareholder of the preceding paragraph is a financial holding company, then no subsidiary of the financial holding company at the current shareholders meeting may make any further solicitation or handle proxy solicitation matters mandated by any solicitor.
"Subsidiary" in paragraph 3, subparagraph 2 and in the preceding paragraph means a subsidiary as defined in Article 4 of the Financial Holding Company Act.
Where there is a proposal for election of directors or supervisors in a shareholders meeting, at least one of the shareholders mandating solicitation referred to in paragraph 1 above shall be the candidate for the directorship or supervisorship; provided this restriction shall not apply if the candidate supported meets the qualifications for independent director.
The scope of "related parties" in paragraph 1, subparagraph 1 shall be as defined in in Article 4 and Article 16, paragraph 4 of the Financial Holding Company Act, Article 25, paragraph 4 and Article 25-1, paragraph 2 of the Banking Act, and Article 139-1, paragraph 3 and Article 139-2, paragraph 2 of the Insurance Act.
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Article 7-1
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Unless it is a securities firm or a company meeting the requirements of Article 3, paragraph 2, of the Regulations Governing the Administration of Shareholder Services of Public Companies, a company mandated to handle solicitation matters shall meet the following qualification requirements:
- A company limited by shares with paid-in capital of not less than NT$10 million;
- Have at least one officer in charge of handling solicitation matters, who must have at least 5 years of practical experience in shareholder services operations or the handling of solicitation matters; the personnel handling solicitation matters shall number at least five persons, including the officer and the deputy thereof, and shall meet at least one of the following qualifications:
- have at least three years of practical experience in shareholder services.
- be a senior agent or agent of a securities firm.
- have successfully passed the shareholder services examination held by the institution designated by the FSC.
- The company's internal control system shall include solicitation procedures, and shall prescribe audit items.
If a company mandated to handle solicitation matters has violated Article 11, paragraph 1, or violated provisions of Article 5 or Article 6 relating to qualifications for solicitation, and less than 1 year has elapsed since the FSC imposed a sanction for the violation, the company may not handle the solicitation matters.
A company mandated to handle solicitation matters shall submit the documents evidencing qualifications under paragraph 2 to the institution designated by the FSC, which shall review them and then forward them to the FSC for recordation, before the mandated company may begin to handle the solicitation matters.
The FSC or the institution designated by the FSC may from time to time inspect the qualifications of a company mandated to handle solicitation matters, and the company mandated to handle solicitation matters may not refuse such inspection; a company that refuses inspection shall be deemed disqualified, and shall be prohibited from handling solicitation matters for a period of three years. When inspection reveals any deficiency in qualification, and the company fails to make supplementation or correction within a deadline upon being notified by the FSC or the institution designated by the FSC to do so, it may not handle solicitation matters until such time as it has made supplementation or correction.
In the event of any change in paid-in capital amount or personnel or amendment to the solicitation procedures in the internal control system set out among the qualification requirements in paragraph 1, a company mandated to handle solicitation matters shall report to the institution designated by the FSC within five days after the change or amendment.
The internal control system of a company mandated to handle solicitation matters shall undergo regular or occasional internal auditing by personnel specifically responsible for the task, who shall prepare a written record of the auditing, and make it available to the FSC or the institution designated by the FSC for auditing.
A company that fails to perform the measures set out in the preceding two paragraphs and fails to make supplementation or correction within a deadline upon being notified by the FSC or the institution designated by the FSC to do so may not handle solicitation matters until such time as it has made supplementation or correction.
The personnel handling solicitation under paragraph 1, subparagraph 2 shall participate in education and training courses related to shareholder services that are held by the institution designated by the FSC, in accordance with the number of such course hours as required by that institution.
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