If any of the following applies to the depositary institution applying for issuance of Depositary Receipts, the TWSE may, in addition to issuing a letter to request that cure be made with care, further notify the depositary institution of the disposition within the prescribed time limit of the underlying securities evidenced by the Depositary Receipts in the Depositary Receipts account as purchased from the exchange market:
The TWSE may refuse to entertain an application of the depositary institution for issuance approval for three months if any of the following circumstances applies to the depositary institution in its issuance of Depositary Receipts:
- The account and number of underlying securities of the shareholders of which the depositary institution requests the custodian institution to apply to TDCC for transfer to the Depositary Receipts account do not conform to those specified in the application for approval.
- The number of underlying securities which the depositary institution purchases from the Depositary Receipts account via the custodian institution from the exchange market exceeds the number stated in the application for approval.
- The depositary institution fails to conduct the initial issue pursuant to the preceding article within six months from the day the notice of effective registration is received or within any extended period requested from the competent authority.
- The depositary institution requests a custodian institution to apply to TDCC for transfer the underlying securities evidenced by the Depositary Receipts or purchases the underlying securities from the exchange market, without applying to the TWSE for approval.
- The preceding paragraph is violated two or more times.
- Article 7 is materially violated.