| 1 |
Ratio of Shares for Centralized Custody
- Except as otherwise provided for the specific enterprises listed below, the personnel required to place their shares in centralized custody means the directors and shareholders holding more than 10 percent of the total amount of issued shares:
- In the case of a technology-based enterprise, it means the directors, general manager, R&D directors, shareholders holding more than 5 percent of the total amount of issued shares, and those shareholders providing patent rights or technical know-how as capital contribution and holding a position in the company and also holding 0.5 percent or more, or at least 100,000 shares, of the total issued shares of the company at the time of applying for TPEx listing.
- In the case of a cultural or creative enterprise, it means the directors, shareholders holding more than 5 percent of the total amount of issued shares, and shareholders providing patent rights or technical know-how as capital contribution and holding a position in the company and also holding 0.5 percent or more, or at least 100,000 shares, of the total issued shares of the company at the time of applying for TPEx listing.
- In the case of a securities investment trust enterprise, it means the directors and shareholders holding more than 5 percent of the total amount of issued shares.
This restriction shall not apply where, during the emerging stock registration period of a technology-based enterprise, or cultural or creative enterprise, or securities investment trust enterprise, its recommending securities firm holds more than 5 percent of its total issued shares as a result of subscription or trading of operating securities.
- The persons required to place shares in centralized custody under the preceding paragraph shall place the full amount of the shares they hold as set out in the application documents after deduction of the number of shares placed with the recommending securities firm for underwriting, and the total shares placed in centralized custody shall not be less than the percentage of the total number of shares of common stock already offered and issued by the company at the time of application for listing as calculated in accordance with paragraph 1, subparagraph 2. An applicant company that is a securities investment trust enterprise shall place in centralized custody not less than 50 percent of its total issued shares of common stock as of the time of application for TPEx listing. If there is any deficit, arrangements shall be made with other shareholders to make up the deficit.
Where the first section of this paragraph requires that a certain percentage of the total number of shares at the time of application for TPEx listing be placed in centralized custody, the total percentage of shares that must be placed in centralized custody shall be calculated using one of the following methods:
- Where the total number of shares at the time of application for TPEx listing is 30 million or fewer, 25 percent of the total number of shares shall be placed in centralized custody.
- Where the total number of shares at the time of application for TPEx listing is greater than 30 million but not more than 1 billion, in addition to abiding by the provisions of paragraph 1 above, the party shall place in centralized custody 20 percent of those shares in excess of 30 million.
- Where the total number of shares at the time of application for TPEx listing is greater than 1 billion but not more than 2 billion, in addition to abiding by the provisions of paragraph 2 above, the party shall place in centralized custody 10 percent of those shares in excess of 1 billion.
- Where the total number of shares at the time of application for TPEx listing is greater than 2 billion, in addition to abiding by the provisions of paragraph 3 above, the party shall place in centralized custody 5 percent of those shares in excess of 5 billion.
- Persons who are required to place shares in centralized custody and who, when the issuing company carries out a share issuance for capital increase and completes amendment registration with the Ministry of Economic Affairs between the date of application for listing and the listing date, obtain capital increase shares or who obtain shares for other reasons, may not pledge, transfer, or similarly dispose of those shares, which shall be transferred as a block to centralized custody. Persons who have not physically received the shares as of the listing date shall undertake that they will submit those shares to centralized custody after their receipt. The "other reasons" given above refers to acquisition through succession or donation or through purchase on the Emerging Stock Market.
- Shares of the recommending securities firm that was engaged for underwriting were originally deducted and need not be placed in custody, provided that any number of shares that cannot actually be sold during an overallotment shall be placed in custody after their return by the recommending securities firm and prior to listing.
Shares bought back from the market by the recommending securities firm while implementing price stabilization measures during the first 5 business days after listing need not be placed in custody.
- Where the total number of shares placed in centralized custody pursuant to regulations is confirmed to exceed 50 percent of the total shares of the issuer at the time of application for TPEx listing, and where the issuer has paid-in capital of at least NT$30 billion, in the event that the portion of the number of shares placed in centralized custody exceeding the above-stated 50 percent of the total shares at the time of application for TPEx listing has been pledged to a financial institution by any director or any shareholder holding more than 10 percent of the total amount of issued shares of the issuer for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in centralized custody; provided that if the pledge is released during the custodial period, such director, or shareholder holding more than 10 percent of the total amount of issued shares, shall deposit the same amount of shares into centralized custody, or if the subject of the pledge is disposed of by the financial institution, the issuer's responsible person shall arrange within one month thereafter for deposit of the same amount of shares into centralized custody. However, the same shall not apply to a technology-based enterprise, or cultural or creative enterprise, or securities investment trust enterprise.
|
| 2 |
The Taiwan Depository & Clearing Corporation (TDCC) shall be designated as the centralized depository institution.
|
| 3 |
Except as otherwise provided in paragraph 2 or 3, one-half of the shares placed in custody in accordance with applicable regulations may be withdrawn upon expiration of the 6-month period following the first day the issuer's shares are traded on the TPEx; all of the shares may be withdrawn upon expiration of a 1-year period.
A technology-based enterprise, or an issuer that applies for TPEx listing of its stock based on the "net worth, operating revenue, and cash flow from operating activities" standard set out in Article 3, paragraph 1, subparagraph 2 of the Taipei Exchange Rules Governing the Review of Securities for Trading on the TPEx may withdraw one-fourth of the shares upon expiration of a 6-month period following the day that TPEx trading of the issuer's shares commences; it may withdraw a further one-fourth of the shares 6 months thereafter; all of the shares may be withdrawn upon expiration of the 2-year period following the commencement of TPEx trading.
A securities investment trust enterprise may withdraw one-half of the shares placed in central custody in accordance with applicable regulations upon expiration of the 1-year period following the first day the enterprise's shares are traded on the TPEx; all of the shares may be withdrawn upon expiration of a 2-year period.
|
| 4 |
The effect of stock custody shall not be affected by any change of an original holder's status.
|
| 5 |
During the custody period, a person who is required to place shares in central custody may not rescind the custody contract, and the custodial receipt may not be transferred or pledged.
|
| 6 |
The provisions of paragraph 1 of Point 1 shall not apply to directors and shareholders that are government agencies or government-owned enterprises, or that have obtained an approval from the authority in charge of the relevant industry for the sale of the shares held by them and it has been determined inappropriate to place the shares in central custody.
|
| 7 |
Where, prior to expiration of the custody period, as a result of withdrawal of shares by operation of court orders or for other causes, the shares placed in centralized custody under relevant regulations fall below the number required for centralized custody for such custody period as calculated pursuant to regulations, the issuer's responsible person shall coordinate to remedy the deficit within one month.
|
| 8 |
Where a TPEx listed company fails to observe relevant regulations by remedying its deficit of shares required for centralized custody, the TPEx may impose a penalty of NT$50,000 on a case-by-case basis and notify the company by letter to make corrections within 2 days from receipt of the letter, and, where the company still fails to make corrections within that time limit, a further penalty of NT$10,000 may be imposed on a daily basis until the day corrective measures are taken.
|
| 9 |
These Directions, and any amendments hereto, shall be promulgated and enforced following submission to the competent authority for recordation.
|