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Amended Article

Title:

Regulations Governing the Administration of Shareholder Services of Public Companies  CH

Amended Date: 2021.03.02 
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:
  1. have paid-in capital of not less than NT$200 million;
  2. 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;
  3. at least one-third of the directorships of the company are held by independent directors;
  4. 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 3-2     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.
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.
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 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.
Article 14     (deleted)
Article 15     After printing and production, stock certificates shall be sent to a certification bank for certification in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies.
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Article 18     The names registered on the shareholders register, 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 or securities underlying overseas depositary receipts that are held by offshore overseas Chinese and foreign nationals, by securities investment trust funds, under trust contracts, or by collective investment accounts for foreign national or mainland Chinese national employees, the entry in the shareholders register of the company may be registered under a special account name that can clearly identify the rights and obligations relating to the securities.
    A company shall not open two or more accounts for the same shareholder.
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, and the date of birth; a juristic person shall indicate its registered address and its uniform number; a foreign shareholder shall additionally indicate nationality or place of registration and, if appointing a domestic agent or representative to open the 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 custodian institution, the name of such institution shall be included.
    The uniform ID number for people of the Mainland Area, Hong Kong, and Macao, and overseas Chinese or foreign nationals, in the case of natural persons, shall be the ID number assigned by the Ministry of the Interior; where an ID number has not been obtained, it shall be a number assigned in accordance with Ministry of Finance rules governing the allocation of relevant identification numbers; in case of juristic persons, the number shall be based on the withholding uniform invoice number assigned by the tax authority.
Article 30     A centralized securities depository enterprise, when handling the transfer of stocks that are in its custody or are registered with it, shall deliver the stock owners list prepared by its participants to the company, which shall record them in its shareholders register, after which the transfer procedure will be deemed completed, and the provisions of Article 165, paragraph 1 of the Company Act will not apply. The company shall use the contact address in the list of stock owners provided by the centralized securities depository enterprise to directly notify those owners that have not commenced account opening procedures, and commence account opening procedures.
    The content of the stock owners list of the preceding paragraph and the date on which it is delivered to the company shall be determined in accordance with the Regulations Governing Book-Entry Operations for Centrally Deposited Securities.
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Article 33     (deleted)
Article 40     Where stock certificates are lost, the procedures for applying to issue replacement stock certificates shall be conducted as follows:
  1. The shareholder or legal owner shall report the event to the police authority for handling or recordation, complete an application for reporting loss of stock certificates, and send such to the company for examination and registration; where the transfer procedure has not been completed, the applicant shall also attach a proof document provided by the securities firm or the transferor.
  2. The applicant shall, within five days, apply to the court for a public summons under the Code of Civil Procedure, and send to the company a photocopy of the application affixed with the court's stamp indicating its receipt of the application; where such procedure is not commenced upon the expiration of the time period, the company may cancel the application for reporting loss of stock certificates.
  3. Upon issuance of a public summons ruling by the court, the applicant shall make a public notice in a manner required in the court ruling, and upon the expiration of the period of public summons, the applicant shall apply to the company for issuance of replacement stock certificates by attaching the court's judgment of abridgment of rights.
  4. To cancel the report of loss of stock certificates, the applicant shall complete an application for cancellation of a report of loss of stock certificates and send it to the company for examination and registration; where the applicant has already applied to the court for a public summons or for a judgment of abridgment of rights pursuant to the Code of Civil Procedure, the applicant shall also submit a photocopy of the application to the court for cancellation of the public summons or for revocation of the judgment of abridgment of rights, affixed with the court's stamp indicating its receipt of the application.
    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 depository enterprise, the applicant shall attach documents showing that such stock certificates have been withdrawn from the centralized securities depository enterprise.
    While the stock certificates are still in the process of public summons procedures, 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's judgment of abridgment of rights has been issued.
    When appointing a third person to apply for issuance of stock certificates in replacement of lost ones under paragraph 1, a natural-person shareholder shall provide a power of attorney, and a juristic-person shareholder shall provide an application letter, and the power of attorney or application letter shall be signed or chopped with the original specimen chop.
    After the company completes the registration for the reported lost stock certificates, if the lost stock certificates are discovered, a notation stating "Registered Lost Stock Certificates" shall be affixed on the stock certificates and on the transfer application.
Article 44-5     The company or its shareholder services agent shall, by one day prior to the date of a shareholders' meeting, compile and prepare a statistical table of the number of shares of shareholders attending the shareholders' meeting by means of electronic transmission, and publicly disclose it on the electronic voting platform of the entity engaged to handle electronic voting matters.
    The company or its shareholder services agent shall, on the day of the shareholders' meeting, compile and prepare a statistical table of the number of shares of shareholders attending the shareholders' meeting in writing or by means of electronic transmission, and clearly disclose it at the place where the shareholders' meeting is held.
Article 49-2     These Regulations apply mutatis mutandis to any primary exchange (or OTC) listed company or emerging stock company as defined in Article 3 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers.
    When the laws and regulations of the country of registration of a primary exchange (or OTC) listed company or an emerging stock company contain no provisions for a book closure period, then the convening of a regular shareholders meeting or a special shareholders meeting or a decision to distribute dividends, bonus or other benefits may be carried out in accordance with the laws and regulations of the country of its registration, and are not subject to the restrictions of Article 41.
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Article 50     These Regulations shall enter into force from the date of issuance.
    Among the amended provisions of these Regulations, the provisions of Article 19, paragraph 2 and Articles 35 and 36 as amended on 20 November 2009 shall enter into force from 23 November 2009, the provisions of Article 3-5 as amended on 2 March 2021 shall enter into force from 1 January 2022, and the others shall enter into force from the date of issuance.
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