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Article NO. Content

Title:

Operation Directions for Applications by Overseas Chinese, Foreign Nationals, and Mainland Area Investors for Registration to Invest in Domestic Securities or Trade Domestic Futures  CH

Amended Date: 2019.12.18 (Articles 1, 2, 3, 5 amended,English version coming soon)
Current English version amended on 2019.02.12 
Categories: Securities Exchange Market > Trading > Securities Transaction
3     Application for registration of Mainland Area investors
  1. New addition
    1. Basis:
      Article 7 of the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors (the "Mainland Area Investor Regulations"), Article 77-7, 77-8 of the Operating Rules of the Taiwan Stock Exchange Corporation, and Article 44-4 of the Operating Rules of the Taiwan Futures Exchange Corporation.
    2. The meaning of "Mainland Area investors" in these Directions is restricted to the persons in the subparagraphs below:
      1. Qualified institutional investors of the Mainland Area ("Mainland institutional investors").
      2. Employees of TWSE or TPEx listed companies to whom securities have been duly issued in accordance with law and regulation and who have household registrations in the Mainland Area ("Mainland Area employees").
      3. Shareholders of juristic persons organized and registered under the laws of foreign nations whose shares, or certificates evidencing shares, are listed or traded on the TWSE or the Taipei Exchange (TPEx), where such shareholders are duly organized and registered in or have household registrations in the Mainland Area and where such shareholders are companies in a third place invested by individuals, juristic persons, groups or other organizations from the Mainland Area ("Mainland Area shareholders").
      4. Others permitted by the competent authority.
    3. Application documents:
      1. Registration application form: The agent of the Mainland Area investor shall fill out an "Application Form for Registration of Mainland Area Investors Investing in ROC Securities or Trading of ROC Futures," Form 3-1.

        Form 3-1: Application Form for Registration of Mainland Area Investors Investing in ROC Securities or Trading ROC Futures
      2. Documents to be attached: Mainland Area investors applying for registration shall submit a complete set of the following documents:
        1. The agent's power of attorney or the representative's letter of appointment.
        2. Identification documents.
          1. Mainland Area institutional investors: A certificate or letter issued by the competent Mainland Area authority approving the institutional investor's establishment and its conformance with eligibility criteria.
          2. Segregated collective investment account for Mainland Area nationality employees of overseas subsidiaries or branch companies of TWSE listed or TPEx listed companies: Documentation of incorporation issued by the local government where the foreign subsidiary or branch company of the TWSE or TPEx listed company is located.
          3. Segregated collective investment account for Mainland Area nationality employees of TWSE (or TPEx) primary listed companies: Documentation of incorporation issued by the local government where the TWSE (or TPEx) primary listed company is located.
          4. Mainland Area shareholders:
            1. Natural persons: A passport, national ID, or other photo identification papers sufficient to establish their identity and Mainland Area nationality.
            2. Juristic persons or other lawful entities: Documents issued by the Mainland Area government approving establishment.
            3. Companies in a third place invested by individuals, juristic persons, groups or other organizations from the Mainland Area: Documentation of incorporation issued by the local government, such as documents proving incorporation of the company.
        3. Other documentation.
          1. Mainland Area institutional investors:
            1. Documentation issued by the competent Mainland Area securities, banking or insurance authority approving the qualifications of the institutional investor.
            2. Documentation issued by the competent Mainland Area authority over foreign exchange business showing the approved limit on foreign investment.
          2. Segregated collective investment account for employees of Mainland Area nationality at overseas subsidiaries or branch companies of TWSE or TPEx listed companies:
            1. An original copy of the declaration by the overseas subsidiary or branch company of the TWSE or TPEx listed company stating that it has obtained authorization from the employees of Mainland Area nationality.
            2. Photocopies of documents showing either approval by the competent authority or filing for effective registration for the issuance by the TWSE or TPEx listed company of new shares or employee share subscription warrants, or the company's repurchase of employee-held shares.
            3. A photocopy of meeting minutes from the relevant board of directors meeting of the TWSE or TPEx listed company showing passage of the given repurchase of company shares for transfer to employees pursuant to Article 28-2, paragraph 1, subparagraph 1 of the Securities and Exchange Act, the issuance of share subscription certificates to employees pursuant to Article 28-3 of the same Act, or the issuance of new shares pursuant to Articles 235 and 267 of the Company Act.
          3. Segregated collective investment account for employees of Mainland Area nationality at TWSE (or TPEx) primary listed companies:
            1. An original copy of the declaration by the TWSE (or TPEx) primary listed foreign issuer stating that it has obtained authorization from the employees of Mainland Area nationality.
            2. Photocopies of documents showing filing with the competent authority and effective registration for the issuance by the TWSE (or TPEx) primary listed foreign issuer of new shares or employee share subscription warrants, or the company's repurchase of employee-held shares.
          4. Mainland Area shareholders:
            1. Documents issued by the shareholder services agent of the foreign issuer showing that shares (or certificates evidencing shares) issued by that foreign issuer were already held by the Mainland Area shareholders prior to the TWSE or TPEx listing of the issuer. Documents showing that the employees of Mainland Area nationality were allotted with, subscribed to or were assigned with shares pursuant to the laws of the country of registration, and photocopies of documents of the foreign issuer showing filing with the competent authority and effective registration for the issuance of new shares or employee stock warrants.
            2. Documents issued by the shareholder services agent of the foreign issuer showing that shares issued by that foreign issuer were already held by the Mainland Area shareholders because of direct participation in private placement, cash capital increase, merger, acquisition or share swap prior to the TWSE or TPEx listing of the foreign issuer, or the approval reply of the TWSE or TPEx to the foreign issuer's direct investment report letter.< /li>
        4. If the Mainland Area institutional investor, on the declarations section of the registration form, checks "hedging," or "investment and hedging," the stock exchange or the futures exchange may, as necessary, request that the investor or the trader provide the fund prospectus or the fund establishment agreement and related documents setting out its investment or trading strategies.
    4. Procedural flow:
      1. Transmission of registration application form: The agent of the Mainland Area investor applying for registration first transmits the completed registration form online over the TWSE system, and when the information is reviewed through the system and found free of error, the TWSE will immediately issue a "Certificate of Completed Registration by Mainland Area Investor," Form 3-2.

        Form 3-2: Certificate of Completed Registration for Mainland Area Investors
      2. Related materials: After the agent of the Mainland Area investor applying for registration has transmitted the registration application form through the TWSE system, the registration form (either in Chinese or in English, provided that the content must be identical to the form transmitted to the TWSE), personally signed by the Mainland Area investor, shall be delivered with the Chinese version of the same form for recordation by the TWSE, which will periodically undertake review of the related materials. The Mainland Area investor's agent shall retain a full set of the documents set out in Point 2.C "Application Documents."
      3. Denial of registration: The TWSE or TAIFEX may deny a Mainland Area investor's application for registration under any of the following circumstances:
        1. The registration documents or particulars they list are found to be fraudulent or untrue.
        2. An incomplete set of registration documents is submitted or they have not been fully filled out, and the applicant has failed to supplement them within 5 days following notification by the TWSE.
        3. The investor is found to have committed a serious violation of the Mainland Area Investor Regulations or the regulations governing securities or futures.
        4. The investor's registration has been cancelled by the TWSE or the TAIFEX in accordance with securities or futures laws and regulations.
  2. Amendments
    When there has been a change in the content of registration particulars by a Mainland Area investor who has already completed registration, the investor's agent shall immediately apply to the TWSE to amend the registration.
    1. Application:
      1. Name change:
        The Mainland Area investor or the investor's agent transmits the "Application for Registration of Name Change by Mainland Area Investor," Form 3-3-1, online through the TWSE system. After the form is reviewed through the system and found free of error, the "Certificate of Completed Amendment of Registration by Mainland Area Investor," Form 3-4, can be printed out and immediately used to carry out account opening amendment at a securities firm or futures commission merchant. Related documents and information need not be delivered to the TWSE for recordation, but the TWSE or TAIFEX may as necessary request the investor or trader to provide relevant information.

        Form 3-3-1: Application for Registration of Name Change by Mainland Area Investor

        Form 3-4: Certificate of Completed Amendment of Registration by Mainland Area Investor
      2. Change of agent or representative:
        After the Mainland Area investor or the investor's agent transmits the "Application for Registration of Change of Agent (or Representative) by Mainland Area Investor," Form 3-3-2, online through the TWSE system and prints out the "Certificate of Completed Amendment of Registration by Mainland Area Investor," Form 3-4, it may be used immediately for account opening amendment at a securities firm or futures commission merchant. Related documents and information need not be delivered to the TWSE for recordation, but the TWSE or TAIFEX may as necessary request the investor or trader to provide relevant information.
      3. Amendment of other items:
        With the exception of the above items, when information under item 5 of the Registration Form, other basic information, is amended, the Mainland Area investor's agent may directly update the information through TWSE system maintenance. Relevant documents and information need not be provided to the TWSE for recordation.

        Form 3-3-2: Application for Registration of Change of Agent (or Representative) by Mainland Area Investor
  3. Cancellation
    1. Application for Cancellation by Mainland Area Investors:
      1. When the agent of the Mainland Area investor applying for cancellation is a custodian institution, it shall transmit the "Application Form for Cancellation of Registration by Mainland Area Investor," Form 3-5, online through the TWSE system and fax a copy of the power of attorney for declaration of tax return and tax payment and the letter of consent issued by the National Tax Administration of Taipei to the TWSE. After TWSE confirmation, it may print a "Certificate of Completed Cancellation," Form 3-6, and then proceed to the securities firm or futures commission merchant to carry out account cancellation.
      2. When the agent of the Mainland Area investor applying for cancellation is a futures commission merchant, it shall transmit the "Application Form for Cancellation of Registration by Mainland Area Investor," Form 3-5, online through the TWSE system and fax Form 3-5 to the TWSE for confirmation. After TWSE confirmation, it may print a "Certificate of Completed Cancellation," Form 3-6, and then proceed to the securities firm or futures commission merchant to carry out account cancellation.
    2. Cancellation by the TWSE or TAIFEX
      1. If the registration by a Mainland Area investor has violated Article 8, paragraph 2 of the Mainland Area Investor Regulations, or is found by the competent authority governing relevant business to have violated relevant laws or regulations, the TWSE or TAIFEX may cancel the registration, and notify the securities firm or futures commission merchant where the account has been opened to proceed in accordance with the following provisions:
        1. The securities firm may not accept buy orders, and will cancel the account after the account balance has been settled.
        2. The futures commission merchant shall immediately stop accepting trading orders, provided that this restriction does not apply to orders for handling original transactions. The futures commission merchant shall immediately cancel the account after the claims and obligations of the account have been fully settled.
      2. When 6 full months have passed after the account of a Mainland Area investor has been cancelled by the TWSE or TAIFEX, and the cause for the cancellation has been extinguished or improved, the agent may submit by letter relevant data to the TWSE, to apply for restoration of registration, provided that where the circumstances are severe, the required time period before restoration after the cancellation may be extended to 2 years, or the cancellation may be made permanent. If the reason for the cancellation involves violation of foreign exchange related laws and regulations, the matter shall be referred to the competent authority, which shall consult the opinion of the competent authority governing foreign exchange business.

    Form 3-5: Application Form for Cancellation of Registration by Mainland Area Investor

    Form 3-6: Certificate of Completed Cancellation