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Title	Taiwan Depository & Clearing Corporation Directions for Participants Executing Book-Entry Transfer Operations for Purchases of Securities CH
Date	2024.10.28 ( Amended )

Article Content

Chapter 1　General Principles

Article 1	These Directions are adopted pursuant to Articles 71-2 and 101 of the Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC).
Article 2	The term "book-entry transfer operations for purchases of securities" in these Directions means the purchase operations for securities in TDCC custody that are the object of a public tender offer, for shares for which directors have made purchase undertakings, and for shares of dissenting shareholders purchased under the Business Mergers and Acquisitions Act.

Chapter 2　Account Opening Operations

Article 3	When a public tender offeror ("offeror") conducts a public tender offer, the institution that the offeror mandates to handle shareholder services ("the mandated institution"), shall, to handle the deposit of securities of sellers, apply to TDCC to open a depository account and become a participant, and set up a segregated public tender offer account (account type: 76, non-passbook) under its depository account, through which book-entry operations can be carried out for the securities to be purchased in the public tender offer, including deposit of the securities, revocation by sellers, and transfer of the transacted securities.
Article 4	The mandated institution for a public tender offer shall submit relevant documents in an official letter to inform TDCC of the tender offer period and relevant information, and shall do the same again in the event of any subsequent change to the terms and conditions of the tender offer.
Article 5	An issuer's director who in accordance with regulations undertakes to purchase stock (an "undertaking director") shall issue a signed letter of undertaking specifying the undertaken purchase period and relevant information, and that if purchase of 20 percent or more of the shares is undertaken, the undertaking will be withdrawn and a public tender offer will be adopted instead, in which event, TDCC is instructed to transfer the undertaken securities back to the sellers' depository accounts, and the undertaking directors will be charged based on TDCC's fee-charging standards.
Article 6	TDCC shall designate a directors' purchase undertakings account (A/C no.: 99609999920), to handle matters in connection with directors' purchase undertakings.
Article 7	When the institution mandated by an issuer to handle shareholder services in connection with a business merger or acquisition carries out the deposit of stock of dissenting shareholders, it shall notify TDCC by official letter. The mandated institution of the preceding paragraph shall apply to TDCC to open a depository account and become a participant, and the issuer shall open a dissenting shareholder account (account type: 02) with the mandated institution, so that book-entry transfer operations for the deposit and return of dissenting shareholder stock can be carried out.
Article 8	The mandated institution handling the purchase of dissenting shareholder shares shall inform TDCC by official letter of specific relevant information including the name of the issuer, the account name and account number of the dissenting shareholder account, the date of the relevant shareholders meeting or board meeting, and the period for deposit; the mandated institution shall do the same again in the event of any subsequent change in the information.
Article 9	The offeror and the undertaking director shall open depository accounts with a participant. If the offeror is using domestic securities that are listed on a stock exchange or traded on an OTC market as consideration for the public tender offer or as proof that it has the ability to perform payment of the tender offer consideration, the participant under the preceding paragraph shall be limited to the mandated institution.

Chapter 3 Public Tender Offer Procedures

Section 1 Deposit Operations

Article 10

A seller shall present its original seal/signature-of-record and passbook to its securities firm or custodian bank and submit a "Deposit/Revocation Transfer Application" (and tick "deposit", and further tick "public tender offer" under the "Summaries" column) to carry out the deposit operation.
If the securities to be purchased in a public tender offer are issued by a public company that is neither listed on a stock exchange nor OTC market nor registered on the emerging stock board, when a seller carries out deposit under the preceding paragraph, they shall apply to the issuer for account transfer in accordance with the TDCC Directions for Participants Executing Book-Entry Transfer Operations for Purchases of Securities.

Article 11

After reviewing and verifying the accuracy of content of the customer's application, the securities firm or custodian bank shall perform a "Deposit/Revocation Transfer" transaction (transaction code: 360; purchase type: 1 public tender offer, operation type: 0 deposit) to transfer the securities from the seller's depository account to the public tender offer account.

Section 2 Revocation Operations

Article 12	If a seller will revoke the sale during the tender offer period: The seller shall present its original seal/signature-of-record and passbook to its securities firm or custodian bank and submit an "Application for Revocation of Sale". After reviewing and verifying the accuracy of the application content, the securities firm or custodian bank shall perform an "Application for Revocation of Sale" transaction (transaction code: 361) to inform TDCC of the content of the seller's revocation application. The mandated institution shall perform a "Deposit Balance/Revocation Application Information Query" transaction (transaction code: 362; type: 1) to print a "Revocation Application Information Query Form", to query the details of the seller's revocation application. The mandated institution shall perform a "Deposit/Revocation Transfer" transaction (transaction code: 360; purchase type: 1 public tender offer; operation type: 1 revocation) to transfer the securities deposited by the seller from the public tender offer account to the seller's depository account.
Article 13	If the Financial Supervisory Commission has approved the termination of a public tender offer, the mandated institution, pursuant to notice by the offeror, shall perform a "Deposit/Revocation Transfer" transaction (transaction code: 360; purchase type: 1 public tender offer; operation type: 1 revocation) to transfer the securities already deposited by sellers from the public tender offer account to the sellers' depository accounts.
Article 14	After the mandated institution receives a copy of the notice from the offeror informing it that the terms and conditions of the public tender offer have been achieved, the mandated institution shall immediately perform a "Mandated Institution Notification" transaction (transaction code: 363; operation type: 1) to notify TDCC to restrict sellers from applying for revocation of sale. If, after the mandated institution has given TDCC notice under the preceding paragraph, any circumstance occurs that is a statutory grounds of revocability of sale, the mandated institution shall immediately perform a "Mandated Institution Notification" transaction (transaction code: 363; operation type: 2) to notify TDCC to lift the restriction of the preceding paragraph.

Section 2-1 Operations for Control and Release of Control on Securities That Are Consideration for a Public Tender Offer

Article 14-1

When the offeror is using domestic securities that are listed on a stock exchange or traded on an OTC market as consideration for the public tender offer or as proof that it has the ability to perform payment of the tender offer consideration, it shall first transfer those securities to the depository account opened by the offeror at the mandated institution and then present its securities passbook and original seal/signature-of-record and submit an "Application for Control/Release of Control on Securities Used for Payment of Public Tender Offer Consideration" to the mandated institution for handling of the control operations.
After reviewing and verifying the accuracy of the content of the offeror's application for control, the mandated institution shall perform a "Control/Release of Control on Securities Used for Payment of Public Tender Offer Consideration" transaction (transaction code: G52; transaction type 0: control), to restrict any transfer to another person or account transfer of the securities under the preceding paragraph.

Article 14-2

The operations for the offeror to apply to release control on securities used as public tender offer consideration under the preceding article are as follows:

The offeror shall present its securities passbook and original seal/signature-of-record and submit an "Application for Control/Release of Control on Securities Used for Payment of Public Tender Offer Consideration" to the mandated institution for handling of the release of control operations.
After reviewing and verifying the accuracy of the content of the offeror's application for release of control, the mandated institution shall perform a "Control/Release of Control on Securities Used for Payment of Public Tender Offer Consideration" transaction (transaction code: G52; transaction type 1: release of control), to release the control on the securities that the offeror had applied to have placed under control.

Section 3 Transfer Operations

Article 15	After the mandated institution has submitted the tax payment certificate and other relevant documents to apply to TDCC for release of the securities, it shall perform a "Transfer of Securities on Deposit" transaction (transaction code: 130) or a "Correction of Securities Transfer" transaction (transaction code: 131) to notify TDCC to transfer the securities from the public tender offer account to the offeror's depository account. When the offeror is using domestic securities that are listed on a stock exchange or traded on an OTC market as the consideration for the public tender offer, it shall submit the tax payment (or exemption) certificate and other relevant documents, and have the mandated institution apply to TDCC for release of the securities and then perform a "Transfer of Securities on Deposit" transaction (transaction code: 130) or "Correction of Securities Transfer" transaction" (transaction code: 131) to notify TDCC to transfer the securities from the offeror's depository account opened at the mandated institution to the public tender offer account. Then, after the mandated institution has followed the same procedures set out in the preceding paragraph to apply to TDCC for release of the securities, it shall notify TDCC to transfer the securities from the public tender offer account to the sellers' depository accounts. If the offeror is a public company whose stock is already issued in fully dematerialized form, and is using stocks or bonds that it publicly offers and issues as the consideration for the public tender offer, the offeror shall comply with the TDCC Directions for the Handling by Issuers of Registration and Book-Entry Delivery Operations for Securities Issued in Dematerialized Form, and submit the relevant documents to notify TDCC to deliver the securities by book-entry transfer to the sellers' depository accounts. However, if the offeror is unable to complete the offering and issuance on time, and so makes payment using the domestic securities it used as proof of its ability to perform payment of the tender offer consideration, the provisions of the preceding paragraph shall apply mutatis mutandis.
Article 16	When a public tender offer is not consummated, or for any portion of securities that is not transacted or for which the seller revokes the sale, the mandated institution shall perform a "Deposit Balance/Revocation Application Information Query" transaction (transaction code: 362; type: 0) to print a "Deposit Balance Query Form" and use it to review the details of the securities deposited by the sellers and, after reviewing and verifying the accuracy of the content, it shall use one of the following methods to notify TDCC to transfer the securities from the public tender offer account to the sellers' depository accounts: Perform a "Deposit/Revocation Transfer" transaction (transaction code: 360; purchase type: 1 public tender offer; operation type: 1 revocation) to notify TDCC to immediately carry out the transfer. Perform a "Public Tender Offer Batch Return Information Transmission File" transaction (transaction code: C41) to notify TDCC to carry out the transfer on the following business day. If the public tender offer is not consummated because the offeror fails to pay the tender offer consideration in accordance with the specifications in the public tender offer prospectus, the mandated institution shall first perform a "Mandated Institution Notification" transaction (transaction code: 363; operation type: 3) to notify TDCC, and then follow the procedure set out in the preceding paragraph to return the securities deposited by the sellers to the sellers' depository accounts.
Article 16-1	If securities to be deposited to a seller's depository account under Article 12, 13, or 16, or securities to be deposited to the offeror's depository account under Article 15, are issued by a public company that is neither listed on a stock exchange or OTC market nor registered on the emerging stock board, the seller or the offeror shall, after the securities have been transferred to the account, additionally apply to their participant for transfer of the securities to the issuer's registration account or to the general custody account under the issuer's depository account. After reviewing and verifying the accuracy of the content of the application under the preceding paragraph, the participant shall perform an "Issuer Depository Account/Registration Account - Deposited Securities Account Transfer" transaction (transaction code: 671) or a "Transfer of Securities on Deposit" transaction (transaction code: 130) to notify TDCC. Upon receiving the notification, TDCC will transfer the shares from the seller's or offeror's depository account to the issuer's registration account or to the general custody account under the issuer's depository account.

Chapter 4 Directors' Purchase Undertakings

Section 1 Deposit Operations

Article 17

Article 18

After reviewing and verifying the accuracy of the content of the customer's application, the securities firm or custodian bank shall perform a "Deposit/Revocation Transfer" transaction (transaction code: 360; purchase type: 2 directors' purchase undertakings, operation type: 0 deposit) to transfer the securities for which the seller applied for deposit from the seller's depository account to the directors' purchase undertakings account designated by TDCC.

Section 2　Revocation Operations

Article 19

    The seller shall present its original seal/signature-of-record and passbook to its securities firm or custodian bank and submit an "Application for Revocation of Sale".
    After reviewing and verifying the accuracy of the application content, the securities firm or custodian bank shall execute an "Application for Revocation of Sale" transaction (transaction code: 361) to inform TDCC of the content of the seller's revocation application.
    When TDCC receives the revocation notification, it will transfer the securities from the directors’ undertakings account to the seller's depository account.

Section 3　Transfer Operations

Article 20	After the purchase is completed, TDCC will calculate whether the number of shares in the directors' purchase undertakings account meets the target undertaken by the directors. If so, it will notify the undertaking directors of the purchase results and, based on the tax payment certificates they have submitted, transfer the securities from the directors' purchase undertakings account to the depository accounts of the purchasing directors.
Article 21	During the directors' purchase undertakings period, if the number of shares in the directors' undertakings account reaches 20 percent of the issuing company's total issued shares, the purchase undertakings will be deemed revoked, and TDCC will transfer the securities from the directors' undertakings account to the sellers' depository accounts, and will notify the participants, the TWSE or TPEx, and also will notify the competent authority.
Article 22	After the directors' purchase undertakings period ends, if TDCC calculates that the number of shares in the directors' undertakings account, while not reaching 20 percent of the issuer's total issued shares, nevertheless exceeds the target undertaken by the directors, TDCC will notify the undertaking directors and the issuer to take necessary measures.

Chapter 5　Operations for Purchase of Dissenting Shareholder Shares

Section 1 Deposit Operations

Article 23	A dissenting shareholder shall present the shareholder's securities passbook and original seal/signature-of-record to its participant and submit a "Deposit/Revocation Transfer Application" (and tick "dissenting shareholder deposit") to carry out the deposit operation.
Article 24	After reviewing and verifying the accuracy of the content of the customer's application, the participant shall perform a "Dissenting Shareholder Stock Deposit/Return Transfer" transaction (transaction code: G20, operation type: 0 deposit transfer) to transfer the deposited shares from the dissenting shareholder's depository account to the dissenting shareholder account set up by TDCC.

Section 2 Return Operations

Article 25

In the event there occurs a circumstance such as that the issuer cancels the action listed under the Business Mergers and Acquisitions Act, Article 12, paragraph 1, or a shareholder makes an erroneous deposit, or a dissenting shareholder makes an excessive deposit, the institution mandated to handle the purchase of dissenting shareholder shares shall perform a "Dissenting Shareholder Stock Deposit/Return Transfer" transaction (transaction code: G20, operation type: 1 return transfer) or a "Dissenting Shareholder Stock Deposit/Return Transfer - Electronic Transmission" transaction (transaction code: G20S) to have the stock transferred from the dissenting shareholder account to the shareholder's depository account.

Chapter 6　Account Reconciliation Operations

Article 26	A participant that conducts book-entry transfer operations for purchases of securities shall, at the close of business each day, carry out account reconciliation and settlement operations in accordance with the following procedures: A securities firm or custodian bank that is handling deposit operations for a public tender offer or for directors' purchase undertakings shall on a daily basis perform a "Deposit Balance/Revocation Application Information Query" transaction (transaction code: 362; type: 0, 1) to respectively print a "Deposit Balance Query Form" and a "Revocation Application Information Query Form", and use them to check the details of changes in customer deposits and revocations. A participant that is handling dissenting shareholder stock deposit operations shall perform a "Dissenting Shareholder Stock Deposit Transfer/Return Information Query" transaction (transaction code: G21) to print a "Dissenting Shareholder Stock Deposit/Return Transfer Information Query Form", and use it to check the details of customer deposits and returns.
Article 27	At the close of business each day, the mandated institution shall carry out account reconciliation and settlement operations in accordance with the following procedures: A mandated institution for a public tender offer shall on a daily basis perform a "Transfer Transaction Information Query" transaction (transaction code: 167) and "Deposit Balance/Revocation Application Information Query" transaction (transaction code: 362; type: 0, 1) to respectively print out a "Transfer Transaction Information Query Form", " Deposit Balance Query Form", and "Revocation Application Information Query Form", and use them to check the details of changes in seller deposits and revocations. The institution mandated to handle the purchase of dissenting shareholder shares shall on a daily basis perform a "Transfer Transaction Information Query" transaction (transaction code: 167), "Dissenting Shareholder Stock Deposit Transfer/Return Information Query" transaction (transaction code: G21), and "Dissenting Shareholder Stock Deposit Balance Information Query" transaction (transaction code: G22), to respectively print a "Transfer Transaction Information Query Form", "Dissenting Shareholder Stock Deposit/Return Transfer Information Query Form", and "Dissenting Shareholder Stock Deposit Balance Information Query Form", and use them to check the details of dissenting shareholder deposits and returns.
Article 28	On the next business day after the cut-off date of a public tender offer or directors' purchase undertakings, TDCC will prepare a statement of deposit and account transfer details, specifying the basic information of the sellers, including account name, personal ID number, business administration number, registered address, and bank account number, and provide it to the mandated institution or the undertaking director.
Article 29	On the first business day after the cut-off date for deposits by dissenting shareholders, TDCC will prepare a statement of dissenting shareholder stock deposit balances, specifying the basic information of the dissenting shareholders, including account name, personal ID number, business administration number, registered address, and bank account number, and provide it to the mandated institution handling the dissenting shareholder deposits.

Chapter 7　Supplementary Provisions

Article 30	If during the purchase period the issuer calls a shareholder meeting or distributes dividends, bonus, or other benefits, TDCC will prepare a list of securities owners accounting on an owner-specific aggregate basis for the sellers' balances of securities in the public tender offer account or directors' undertakings account, and balances of securities in their depository accounts, and deliver it to the issuer.
Article 31	For book-entry transfer operations for purchases of securities, TDCC will charge fees in accordance with its fee-charging standards.
Article 32	All matters for which these Directions make no provision shall be handled in accordance with the TDCC Operating Rules and other relevant provisions.