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Title	Taiwan Depository and Clearing Corporation Directions for the Handling by Participants of Book-Entry Operations for the Pledge and Delivery of Securities CH
Date	2026.04.29 ( Amended )

Article Content

Chapter I General Principles

Article 1	These Directions are adopted pursuant to Articles 72 to 76, Article 90, Article 91, Article 95-9, and Article 101 of the Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC).
Article 2	A participant must establish a segregated pledge account under its depository account to handle book-entry transfer operations for the pledge and delivery of securities.

Chapter II Pledge Creation and Release Operations

Article 3

The pledge and delivery of securities by a pledgor by means of book-entry transfer is limited to securities as prescribed under Article 3 of the TDCC Operating Rules.
Securities held in the pledge account under a participant depository account may not be withdrawn, sold, transferred, or remitted during the subsistence of the pledge, unless a transfer has been applied for in accordance with applicable rules.

Article 4

When a pledgor applies in writing for book-entry transfer to create a pledge, the following procedures shall apply:

The pledgor shall complete an "Application for Book-Entry Transfer for Creation of Securities Pledge," and submit the application affixed with the depository account seal/signature-of-record. If the pledgor is a customer, the pledgor must present their passbook (not required for passbook-free accounts) and apply through their participant. If the pledgor is a participant, it shall apply directly to TDCC.
After the pledgor's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Creation" transaction (transaction code: 310) to notify TDCC of the relevant application information.
After TDCC has reviewed and verified the accuracy of the relevant data, it will carry out the transfer in the following manner:

If the pledgor is a participant: TDCC will transfer the securities from the pledgor's proprietary account under its depository account to the pledge account of the pledgee's participant depository account.
If the pledgor is a customer: TDCC will transfer the securities from the customer account of the pledgor's participant depository account into the pledge account of the pledgee's participant depository account, and notify the participant to make the necessary entries in its customer ledger.

After TDCC completes the pledge creation transfer, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the pledgee. If the pledgee is a participant, the issuance of a single-entry passbook may be waived.

When a pledgor applies electronically for book-entry transfer to create a pledge, the following procedures shall apply:

The pledgor shall complete an "Application for Book-Entry Transfer for Creation of Securities Pledge," affix the depository account seal/signature-of-record, create a file, and upload it to the application system provided by the pledgor's participant. Simultaneously, the pledgor shall input the information set out in the application form into the application system, use a certificate recognized by the participant as an electronic signature to sign the input data, and apply to the participant for processing.
Before submitting the application under the preceding paragraph, the pledgor shall notify the pledgee to input the information set out in the application form referred to in the preceding paragraph into the application system provided by the pledgee's participant, sign using a certificate recognized by that participant as an electronic signature, and transmit the signed data to that participant.
Upon receiving the pledgor's application under subparagraph 1 and verifying the pledgor's identity and the validity of the electronically signed document, and reviewing and verifying the accuracy of the data entered by the pledgor into the application system under subparagraph 1 against the uploaded file, the pledgor's participant shall use the book-entry STP service to perform an "Electronic Pledge Creation" transaction (transaction code: 931) (type: Pledge Creation) to notify TDCC of the relevant information of the application.
Upon receiving the notification under subparagraph 2 and verifying the pledgee's identity and the validity of the electronically signed document, the pledgee's participant shall use the book-entry STP service to perform an "Electronic Pledge Creation" transaction (transaction code: 931) (type: Pledgee Submission of Pledge Data) to notify TDCC of the data input by the pledgee.
After reviewing and verifying the accuracy of the relevant information, TDCC will carry out the transfer operation in accordance with subparagraph 3 of the preceding paragraph.
After TDCC completes the pledge creation transfer, the pledgee's participant shall carry out the single-entry passbook issuance in accordance with subparagraph 4 of the preceding paragraph.

When a financial institution applies for book-entry transfer for the creation of a pledge to the Central Bank over stripped principal and interest government bonds or bank debentures[WP1] as collateral for lending facilities, the following procedures shall apply:

The pledgor shall complete the "Application for Book-Entry Transfer for Pledge Creation for Central Bank Lending Facility," and proceed in accordance with the provisions of paragraph 1, subparagraph 1.
After the pledgor's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Central Bank Lending Facility Pledge and Delivery" transaction (transaction code: K85) to notify TDCC of the application data.
After TDCC has reviewed and verified the accuracy of the information under the preceding subparagraph, it will notify the Central Bank. Upon confirmation by the Central Bank, TDCC will carry out the book-entry transfer and make the necessary entries in accordance with paragraph 1, subparagraph 3. However, if the pledged property is a bank debenture, TDCC shall, after reviewing and verifying the accuracy of the information under the preceding subparagraph, carry out the book-entry transfer and make the necessary entries in accordance with paragraph 1, subparagraph 3.
If the pledged property is the subject of a public guarantee, TDCC will make a public guarantee notation in the pledge account of the Central Bank's depository account, and will additionally make pledge notations in the Central Bank's public guarantee account and in the financial institution's depository account.
The pledgor's participant and the Central Bank may perform a "Central Bank Lending Facility Pledge Change Information Query" transaction (transaction code: K86) and print a "Central Bank Lending Facility Pledge Change Information Query Report" to verify the relevant pledge creation information.

Article 5

When a pledgee applies for book-entry transfer to release a pledge, the following procedures shall apply:

The pledgee shall complete an "Application for Book-Entry Transfer for Release of Securities Pledge," affix the depository account seal/signature-of-record, and present the securities passbook (not required for passbook-free accounts) and the single-entry passbook (not required if the pledgee is a participant and no single-entry passbook was issued) to apply through its participant for processing.
After reviewing and verifying the application documents, the pledgee's participant shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the release application.
After reviewing and verifying the accuracy of the relevant information, TDCC will cancel the original single-entry passbook record and carry out the transfer in the following manner:

If the pledgor is a participant: TDCC will transfer the securities from the pledge account of the pledgee's participant depository account to the proprietary account of the pledgor's participant depository account.
If the pledgor is a customer: TDCC will transfer the securities from the pledge account of the pledgee's participant depository account to the customer account of the pledgor's participant depository account, and notify the participant to make the necessary entries in its customer ledger.

When the pledgee applies for release of the pledge over part of the pledged property, after TDCC completes the transfer under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) for the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee. If the pledgee is a participant, the issuance of a single-entry passbook may be waived.

When the Central Bank applies for book-entry transfer to release a pledge, the following procedures shall apply:

After the Central Bank has reviewed and verified the accuracy of the pledgor's pledge release notification data, it will notify TDCC of the relevant information. However, if the pledged property is a bank debenture, the Central Bank shall perform a "Central Bank Lending Facility Pledge Release" transaction (transaction code: G98) to notify TDCC of the relevant information.
After TDCC has reviewed and verified the accuracy of the information, it will carry out the book-entry transfer and make the necessary entries in accordance with subparagraph 3 of the preceding paragraph. If the pledged property is the subject of a public guarantee, TDCC will cancel the public guarantee notation in the pledge account of the Central Bank's depository account, and will additionally cancel the pledge notations in the Central Bank's public guarantee account and in the financial institution's depository account.
The pledgor's participant and the Central Bank may perform a "Central Bank Lending Facility Pledge Change Information Query" transaction (transaction code: K86) and print a "Central Bank Lending Facility Pledge Change Information Query Report" to verify of the relevant pledge release and delivery information.

Chapter III Enforcement of Pledge

Article 6	When a pledgee that is a customer applies for book-entry transfer to enforce a pledge by way of a court order for compulsory execution, the following procedures shall apply: Upon receipt of a court order of attachment in compulsory execution proceedings, the pledgee's participant shall perform a "Court Attachment Data Entry" transaction (transaction code: 150) to notify TDCC of the relevant attachment information. Upon receipt of a court compulsory execution order for transfer or delivery to the court, the pledgee's participant shall perform a "Court Attachment Data Change" transaction (transaction code: 151, Change Type 2: Attachment Transfer) and a "Pledge Enforcement Application" transaction (transaction code 325) to notify TDCC of the relevant information, and shall compile and submit to TDCC the original of the order together with a copy thereof (the original to be returned after verification against the copy). After reviewing and verifying the accuracy of the relevant documents, TDCC will cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's participant depository account into the auction account designated by the court; or deliver the pledged property awaiting auction to the recipient designated by the court for delivery to the court, and will notify the participant to make the necessary entries in its customer ledger. If the pledged property is securities that are not listed on the TWSE nor listed on the TPEx, the pledgee's participant shall additionally submit to TDCC the court auction record or relevant supporting documents together with proof of payment of securities transaction tax (not required if the pledged property is securities exempt from securities transaction tax by law). After TDCC has reviewed and verified the accuracy of the relevant documents, it shall cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's participant depository account into the depository account designated by the court, and shall notify the participant to make the necessary entries in its customer ledger. When the pledgee applies to enforce the pledge over part of the pledged property, after TDCC has completed the transfer operations under the preceding two subparagraphs, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee. If the securities being transferred are tax-deferred / payment-deferred shares held in the issuer's depository account, upon completion of the transfer TDCC will notify the issuer by way of a "Summary Report of Sales of Tax-Deferred and Payment-Deferred Share Balances" (report code: ST272), whereupon the issuer shall complete and submit the declaration voucher for the share transfer.
Article 7	When a pledgee that is a customer applies for book-entry transfer to enforce a pledge by way of self-conducted auction of the pledged property through the centralized exchange market or TPEx trading system, the following procedures shall apply: The pledgee shall complete the "Application for Book-Entry Transfer for Enforcement of Securities Pledge" (affixed with the original seal/signature of record for the depository account) and a sell order, and shall present the securities passbook (not required for passbook-free accounts) and the single-entry passbook, together with any one of the following documents evidencing that the pledgee has notified, or was unable to notify, the pledgor prior to the auction, and submit these to its participant to apply for a sell order: A post office evidentiary letter. A court-certified letter. A written undertaking together with documentation evidencing that notification was given or could not be given. Upon reviewing and verifying the accuracy of the application documents, the participant may accept the pledgee's order, and after the transaction is executed, the participant shall prepare a sale confirmation and deliver it to the pledgee together with the aforementioned auction documents, whereupon the pledgee shall apply to its participant for a pledge enforcement transfer. After the pledgee's participant has reviewed and verified the accuracy of the self-conducted auction documents, it shall perform a "Pledge Enforcement Application" transaction (transaction code: 325) to notify TDCC of the sale information, and submit the application documents to TDCC. After TDCC has reviewed and verified the accuracy of the relevant documents, it will cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's participant depository account into the customer account of the transacting securities firm's depository account, and will notify the participant to make the necessary entries in its customer ledger. When the pledgee applies to enforce the pledge over part of the pledged property, after TDCC has completed the transfer operations under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee. If the securities being sold by self-conducted auction are tax-deferred shares held in the issuer's depository account, and the reporting entity for the share income is a securities firm, the issuer shall complete the itemized data for the tax-deferred shares and affix the original seal/signature-of-record on file with TDCC, and deliver such documents to TDCC for transmission by fax to the transacting securities firm handling the pledgee's sell order, so that the securities firm may complete and submit the declaration voucher for income from the transfer of tax-deferred shares.
Article 8	When a pledgee that is a customer applies for book-entry transfer to enforce a pledge by way of acquiring ownership of the pledged property, the following procedures shall apply: The pledgee shall complete the "Application for Book-Entry Transfer for Enforcement of Securities Pledge," affixed with the seals/signatures-of-record for the depository accounts of both the pledgee and the pledgor, and shall present the securities passbook (not required for passbook-free accounts), the single-entry passbook, the original application for book-entry transfer for creation of the pledge, together with proof of payment of securities transaction tax (not required if the pledged property is securities exempt from securities transaction tax by law) and a contract evidencing the pledgor's consent to the pledgee acquiring ownership of the pledged property, and submit these to its participant to apply for processing. If the pledged property is privately placed securities, the pledgee shall additionally provide documentation issued by the issuer confirming the pledgee's identity. If the pledged property is non-privately-placed securities of a TWSE listed (or TPEx listed) or Emerging Stock company, the pledgee must provide documentation issued by the issuer confirming that the pledgor's identity is not that of a company insider. After the pledgee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Enforcement Application" transaction (transaction code: 325) to notify TDCC of the relevant information of the ownership acquisition, and shall submit the application documents to TDCC. After TDCC has reviewed the relevant documents and has further confirmed with the issuer that the pledgor's identity is not that of a company insider, it will cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's participant depository account into the customer account of the same depository account, and notify the participant to make the necessary entries in its customer ledger. When the pledgee applies to enforce the pledge over part of the pledged property, after TDCC has completed the transfer operations under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee. If the securities being transferred are tax-deferred / payment-deferred shares held in the issuer's depository account, upon completion of the transfer TDCC will notify the issuer by means of a "Summary Report of Sales of Tax-Deferred and Payment-Deferred Share Balances" (report code ST272), whereupon the issuer shall complete and submit the declaration voucher for the share transfer.
Article 9	When a pledgee that is a customer applies for book-entry transfer to enforce a pledge by way of withdrawing the pledged bonds, the following procedures shall apply: The pledgee shall complete the "Application for Book-Entry Transfer for Enforcement of Securities Pledge," affixed with the original seal/signature-of-record for the depository account, and shall present the securities passbook (not required for passbook-free accounts) and the single-entry passbook, together with any one of the following documents evidencing that the pledgee has notified, or was unable to notify, the pledgor prior to the auction, and submit these to its participant to apply for processing: A post office evidentiary letter. A court-certified letter. A written undertaking together with documentation evidencing that notification was given or could not be given. After the pledgee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Enforcement Application" transaction (transaction code: 325) to notify TDCC of the relevant information of the withdrawal, and shall submit the application documents to TDCC. After TDCC has reviewed and verified the accuracy of the relevant documents, it shall cancel the original single-entry passbook record, deduct the balance of bonds applied for withdrawal from the pledge account of the pledgee's participant depository account, deliver the pledged property to the pledgee's participant, and notify the participant to make the necessary entries in its customer ledger. When the pledgee applies to enforce the pledge over part of the pledged property, after TDCC has completed the transfer operations under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee.
Article 10	When a pledgee that is a customer and is a financial institution or asset management company applies for book-entry transfer to enforce a pledge by way of engaging an impartial third party to auction pledged securities not listed on the TWSE or the TPEx, the following procedures shall apply: The pledgee shall complete the "Application for Book-Entry Transfer for Enforcement of Securities Pledge," affixed with the original seal/signature-of-record for the depository account, and shall submit the securities passbook (not required for passbook-free accounts) and the single-entry passbook, together with the following supporting documents, to its participant to apply for processing: An auction award certificate issued by an impartial third party established with the recognition of the Financial Supervisory Commission. Certification issued by a notary public or other entity as provided under the proviso to Article 28 of the Enforcement Act of the Obligation Part of the Civil Code. A notice of a statement issued by the pledgee declaring the release of the pledge. Securities transaction tax clearance certificate (not required if the pledged property is of securities exempt from securities transaction tax by law). If the pledged property is privately placed securities, the pledgee shall additionally attach documentary proof of confirmation by the issuer. After the pledgee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Enforcement Application" transaction (transaction code: 325) to notify TDCC of the auction information, and submit the application documents to TDCC. After TDCC has reviewed and verified the accuracy of the relevant documents, it shall cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's participant depository account into the successful bidder's depository account, and notify the participant to make the necessary entries in its customer ledger. When the pledgee applies to enforce the pledge over part of the pledged property, after TDCC has completed the transfer operations under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance to print and deliver a new single-entry passbook to the pledgee. If the securities being transferred are tax-deferred / payment-deferred shares held in the issuer's depository account, upon completion of the transfer TDCC will notify the issuer by means of the "Summary Report of Sales of Tax-Deferred and Payment-Deferred Share Balances" (report code ST272), whereupon the issuer shall complete and submit the declaration voucher for the share transfer.
Article 11	The provisions of Articles 6 to 10 shall apply mutatis mutandis if the pledgee is a participant, other than the Central Bank. If the pledgee is a participant and no single-entry passbook has been issued, presentation of the single-entry passbook shall not be required upon enforcement of the pledge; if application is made for enforcement of the pledge over part of the pledged property, issuance of a single-entry passbook may likewise be waived.

Chapter IV Pledge-Related Operations

Article 12	When a pledgee that is a customer applies for book-entry transfer for assignment of a pledge, the following procedures shall apply: The pledgee shall complete the "Application for Book-Entry Transfer for Assignment of Securities Pledge," affixed with the seal/signatures-of-record for the depository accounts of both the original pledgee and the assignee of the pledge, and shall present the securities passbook (not required for passbook-free accounts), the single-entry passbook, and a post office evidentiary letter or court-certified letter giving notice to the pledgor of the pledge assignment, and submit these to its participant to apply for processing. After the original pledgee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the pledge assignment. After reviewing and verifying the accuracy of the relevant information, TDCC will cancel the original single-entry passbook record and transfer the securities from the pledge account of the original pledgee's participant depository account into the pledge account of the assignee's participant depository account, and shall notify the participant to make the necessary entries in its customer ledger. After TDCC completes the transfer under the preceding subparagraph, the assignee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the assignee. When the pledgee applies for assignment of the pledge over part of the pledged property, after TDCC completes the transfer under subparagraph 3, the original pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the unassigned remaining pledge balance to print and deliver a single-entry passbook to the original pledgee. If the securities in respect of which pledge assignment is applied for are securities held in the issuer's depository account, the assignment may only be processed with the same issuer.
Article 13	When a pledgor or pledgee applies for book-entry transfer for a pledge balance transfer, the following procedures shall apply: Pledgor applying for pledge balance transfer: Pledgor applying to change account number: The pledgor shall complete the "Application for Book-Entry Transfer of Pledge Balance for Pledge and Delivery of Securities," affixed with the seals/signatures-of-record for the depository accounts held with both the original participant and the designated participant, and shall present the securities passbook (not required for passbook-free accounts) to apply to the original participant for processing. After the pledgor's original participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the pledge balance transfer. After TDCC has reviewed and verified the accuracy of the relevant information, it will make the necessary entries in the ledger and notify the participant to make the necessary entries in its customer ledger. Pledgor applying to transfer the pledged property to a surviving, newly incorporated, or transferee company as a result of a company merger, demerger, or business transfer: The pledgor shall complete the "Application for Book-Entry Transfer for Transfer of Pledgor Status over Pledged Securities," affixed with the seals/signatures-of-record for the depository accounts of both the original pledgor and the successor pledgor, as well as the pledgee's original pledge seal, and shall present the securities passbook (not required for passbook-free accounts) and the original book-entry transfer application for the creation of the pledge, together with the following documents, and submit these to the original participant to apply for processing: In the case of a company merger: the competent authority's approval letter and the company amendment registration form. II. In the case of a company demerger: the competent authority's approval letter, the company amendment registration form, the demerger plan, the balance sheet, or other relevant documents capable of evidencing the details of the transfer. III. In the case of a business transfer: the shareholders' meeting minutes, the board of directors' meeting minutes, proof of payment or exemption of securities transaction tax (not required if the pledged property is securities exempt from securities transaction tax by law), the balance sheet, or other relevant documents capable of evidencing the details of the transfer. If the pledged property is listed securities exceeding one trading unit, the approval document issued by the securities competent authority shall additionally be provided. After the pledgor's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the pledge balance transfer. After TDCC has reviewed and verified the accuracy of the relevant information, it will make the necessary entries in the ledger and notify the participant to make the necessary entries in its customer ledger. Pledgee applying for pledge balance transfer: The pledgee shall complete the application form in accordance with subparagraph 1.A.a. above, and shall present the securities passbook (not required for passbook-free accounts) and the single-entry passbook to apply to its original participant for processing. The pledgee's original participant shall perform a transaction and notify TDCC in accordance with subparagraph 1.A.b. above. After TDCC has reviewed and verified the accuracy of the relevant information, it will cancel the original single-entry passbook record and transfer the securities from the pledge account of the pledgee's original participant depository account into the pledge account of the pledgee's designated participant depository account, and will notify the participant to make the necessary entries in its customer ledger. After TDCC has completed the transfer operations under the preceding item, the pledgee's designated participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the pledgee. When the pledgee applies for a pledge balance transfer of part of the pledged property, after TDCC completes the transfer under item C of this subparagraph, the pledgee's original participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the untransferred remaining pledge balance to print and deliver a single-entry passbook to the pledgee. When the pledgee applies to the issuer to transfer shares recorded under "Spot Share Pledge Details" (already returned) in the registration account under the issuer's depository account into the pledge account of the pledgee's participant depository account, the pledgee's participant shall, upon receipt of notification from TDCC that the transfer has been completed, perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the pledgee. The provisions of paragraph 1 shall not apply to securities held in an issuer's depository account.
Article 14	When the pledgee and the pledgor agree to deliver the pledge balance into trust, the settlor shall be limited to the pledgor and the trustee shall be limited to the pledgee. Furthermore, the trustee shall first complete the opening of a trust depository account and data file creation for the parties to the trust relationship in accordance with the TDCC Directions for the Handling of Book-Entry Operations for Securities Trusts, before applying to its participant or to TDCC for processing of the transfer operations for delivery of the pledge balance into trust.
Article 15	When a pledgee that is a customer applies for book-entry transfer to transfer the pledge balance into its trust depository account, the following procedures shall apply: The pledgee shall complete an "Application for Book-Entry Transfer for Delivery of Pledged Securities into Trust," affixed with the seals/signatures-of-record for the depository accounts of both the pledgor and the pledgee, and shall present the securities passbook (not required for passbook-free accounts), the single-entry passbook, the original book-entry transfer application for the creation of the pledge, the trust agreement, and other relevant documents, and submit these to its participant to apply for processing. After the pledgee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the trust delivery transfer. After TDCC has reviewed and verified the accuracy of the relevant information, it shall cancel the original single-entry passbook record, transfer the securities from the pledge account of the pledgee's participant depository account into the trust depository account designated by the pledgee, make a pledge notation, and notify the participant to make the necessary entries in its customer ledger. After TDCC has completed the transfer operations under the preceding subparagraph, the trustee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the trustee. When the pledgee applies for book-entry transfer to transfer the pledge balance of part of the pledged property into its trust depository account, after TDCC completes the transfer operations under subparagraph 3, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledge balance not delivered into trust to print and deliver a single-entry passbook to the pledgee.
Article 16	When a trustee that is a customer applies, following the extinguishment of the trust relationship, for book-entry transfer to transfer the pledge balance in its trust depository account into the pledge account of its participant depository account, the following procedures shall apply: The trustee shall complete the "Application for Book-Entry Transfer for Delivery of Pledged Securities into Trust," affixed with the seal/signature-of-record for the trustee's depository account, and shall present the securities passbook (not required for passbook-free accounts), the single-entry passbook for the pledged trust, and documents evidencing the extinguishment of the trust relationship and other relevant documents, and submit these to its participant to apply for processing. After the trustee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information. After TDCC has reviewed and verified the accuracy of the relevant information, it shall cancel the original single-entry passbook record, transfer the securities from the trustee's trust depository account into the pledge account of the pledgee's participant depository account, and notify the participant to make the necessary entries in its customer ledger. After TDCC has completed the transfer under the preceding subparagraph, the pledgee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to print and deliver a single-entry passbook to the pledgee. When the trustee processes the extinguishment of the trust relationship in respect of part of the pledged property, after TDCC has completed the transfer operations under subparagraph 3, the trustee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledged trust balance to print and deliver a single-entry passbook to the trustee.
Article 17	When a trustee that is a customer applies for book-entry transfer to release the pledge over the pledge balance in its trust depository account, the following procedures shall apply: The trustee shall complete the "Application for Book-Entry Transfer for Delivery of Pledged Securities into Trust," affixed with the seals/signatures-of-record for the depository accounts of both the trustee and the pledgee, and shall present the securities passbook (not required for passbook-free accounts), the single-entry passbook for the pledged trust, and the original application for book-entry transfer for delivery of pledged securities into trust, and submit them to its participant to apply for processing. After the trustee's participant has reviewed and verified the accuracy of the application documents, it shall perform a "Pledge Release / Change Application" transaction (transaction code: 320) to notify TDCC of the relevant information of the pledge release application. After TDCC has reviewed and verified the accuracy of the relevant information, it shall cancel the original single-entry passbook record, remove the pledge notation from the balance in the trustee's trust depository account, and notify the participant to make the necessary entries in its customer ledger. When the trustee processes the release of the pledge over part of the pledged property, after TDCC has completed the operations under the preceding subparagraph, the trustee's participant shall perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) in respect of the remaining pledged trust balance not yet released to print and deliver a single-entry passbook to the trustee.
Article 18	The provisions of Article 12 and Articles 15 to 17 shall apply mutatis mutandis when the pledgor, pledgee, or trustee is a participant. When the pledgee is a participant and no single-entry passbook was issued, presentation of the single-entry passbook shall not be required when processing pledge-related book-entry transfer operations. When application is made for pledge-related book-entry transfer operations in respect of part of the pledged property, issuance of a single-entry passbook may likewise be waived.
Article 19	When the pledgor and pledgee wish to change the agreed arrangements for the collection of income from pledged securities, the following procedures shall apply: Change of the designated income recipient for a specified year: The pledgee shall complete the "Application for Notification of Change in Operations Relating to Pledge and Delivery of Securities" and submit it to its participant to apply for processing. After the participant has reviewed and verified the accuracy of the application documents, it shall perform a "Notification of Change in Operations Relating to Pledged Securities" transaction (transaction code: A45, Change Type Option 1) to notify TDCC of the relevant information of the application. After receiving the notification under the preceding item and verifying its accuracy, TDCC will compile the "Detailed Statement of Book-Entry Transfer Changes for Pledge and Delivery of Securities" and notify the participant on the next business day following the transaction, and will additionally prepare the "Summary of Changes to Income Collection and Capital Reduction / Merger and Acquisition / Redemption Proceeds for Pledged Securities" and notify the issuer, its shareholder services agent, or the principal and interest payment agent on the next business day following the transaction. Change of income collection arrangement: Each party to the pledge shall complete an "Application for Notification of Change in Operations Relating to Pledged Securities" and submit it to their participant to apply for processing. After the participant has reviewed the application documents and verified their accuracy, it shall perform a "Notification of Change in Operations Relating to Pledged Securities" transaction (transaction code: A45, Change Category Option 3 or 4) to notify TDCC of the relevant information of the application. After receiving the notifications under the preceding item and verifying that they accurately match, TDCC will make the change to the income attribution arrangement, prepare a "Detailed Statement of Book-Entry Transfer Changes for Pledge and Delivery of Securities" and notify the participants on the next business day following the transaction, and will additionally prepare the "Notification of Book-Entry Transfer Changes for Pledge and Delivery of Securities (in lieu of securities owner register)" and notify the issuer, its shareholder services agent, or the principal and interest payment agent on the next business day following the transaction. If the parties to the pledge have agreed that income is to be collected by the pledgee, and this operation is carried out after the transfer books have been closed for the relevant securities, any simultaneous change to designate the pledgor as recipient of the income for that particular distribution shall require completion of the procedures under the preceding subparagraph before the procedures under this subparagraph may be carried out.
Article 20	When, after the creation of a pledge, the pledgor and pledgee make or cancel a foreclosure agreement, the following procedures shall apply: Both parties to the pledge shall complete an "Application for Notification of Change in Operations Relating to Pledged Securities" and submit it to their participant to apply for processing. After the participant has reviewed and verified the accuracy of the application documents, it shall perform a "Notification of Change in Operations Relating to Pledged Securities" transaction (transaction code: A45, Change Type Option 5 or 6) to notify TDCC of the relevant information of the application. After receiving the notifications under the preceding subparagraph and verifying that they accurately match, TDCC will make the entry recording the foreclosure agreement or cancellation thereof, prepare a "Detailed Statement of Book-Entry Transfer Changes for Pledge and Delivery of Securities" and notify the participants on the next business day following the transaction, and will additionally prepare the "Notification of Book-Entry Transfer Changes for Pledge and Delivery of Securities (in lieu of securities owner register)" and notify the issuer, its shareholder services agent, or the principal and interest payment agent on the next business day following the transaction.
Article 21	When the pledgor and pledgee make or change an agreement on the attribution of proceeds arising from capital reduction / merger and acquisition / redemption / principal repayment during the subsistence of the pledge, the following procedures shall apply: Pledgee consenting to the pledgor collecting capital reduction / merger and acquisition / redemption proceeds for a designated distribution year: The pledgee shall complete the "Application for Notification of Change in Operations Relating to Pledged Securities" and submit it to its participant to apply for processing. After the participant has reviewed and verified the accuracy of the application documents, it shall perform a "Notification of Change in Operations Relating to Pledged Securities" transaction (transaction code: A45, Change Category Option 7) to notify TDCC of the relevant information of the application. After receiving the notification under the preceding item and verifying its accuracy, TDCC will prepare the "Detailed Statement of Book-Entry Transfer Changes for Pledge and Delivery of Securities" and notify the participant on the next business day following the transaction, and will additionally prepare the "Summary of Changes to Income Collection and Capital Reduction / Merger and Acquisition / Redemption Proceeds for Pledged Securities" and notify the issuer or its shareholder services agent on the next business day following the transaction. Agreement or change of agreement regarding attribution of capital reduction / merger and acquisition / redemption / principal repayment proceeds: Both parties to the pledge shall complete an "Application for Notification of Change in Operations Relating to Pledged Securities" and submit it to their participants to apply for processing. After the participant has reviewed the application documents and verified their accuracy, it shall perform a "Notification of Change in Operations Relating to Pledged Securities" transaction (transaction code: A45, Change Category Option A, B, or C) to notify TDCC of the relevant information of the application. After receiving the notifications under the preceding item and verifying that they accurately match, TDCC will make the entry recording the agreement or change of agreement on attribution of capital reduction / merger and acquisition / redemption / principal repayment proceeds, prepare a "Detailed Statement of Book-Entry Transfer Changes for Pledge and Delivery of Securities" and notify the participant on the next business day following the transaction, and will additionally prepare the "Notification of Book-Entry Transfer Changes for Pledge and Delivery of Securities (in lieu of securities owner register)" and notify the issuer, its shareholder services agent, or the principal and interest payment agent on the next business day following the transaction. If the parties to the pledge have agreed that capital reduction / merger and acquisition / redemption proceeds are to be collected by the pledgee or retained in custody by the shareholder services agent, and this operation is carried out after the transfer books have been closed for the relevant securities, any simultaneous change to designate the pledgor as the recipient of the proceeds for that particular distribution shall require completion of the procedures under the preceding subparagraph before the procedures under this paragraph may be carried out.
Article 22	If stock dividends acquired by the pledgor during the subsistence of the pledge are retained in the registration account under the issuer's depository account and are required by law to be collected by the pledgee, the pledgee may request delivery from the issuer by following the procedures set out below: The pledgee shall complete an "Application for Transfer of Pledge Income from Registration Account," affixed with the seal/signature-of-record for the depository account, and attach proof of specimen seal verification, and submit these to the issuer to apply for processing. The issuer may perform a "Pledge and Delivery Information Query" transaction (transaction code: 366) to print a "Pledge and Delivery Information Query Report" to query the status of changes to pledge and delivery of securities. After the issuer has reviewed the application documents and verified their accuracy, it shall perform a "Notification of Pledge Income Transfer from Registration Account" transaction (transaction code: A47) to notify TDCC of the relevant information of the application. After receiving the transfer notification under the preceding subparagraph and reviewing and verifying its accuracy, TDCC will transfer the stock dividends from the registration account under the issuer's depository account into the pledge account of the pledgee's participant depository account. The issuer may perform a "Registration Account Pledge Income Transfer Information Query" transaction (transaction code: A48) to print the "Registration Account Pledge Income Transfer Information Query Report" to query the data for that pledge income transfer.
Article 23	When a pledgee or trustee applies to its participant for a lost passbook report or cancellation and replacement (or exchange) of a single-entry passbook due to loss, damage, or a change in the particulars recorded in the single-entry passbook, the following procedures shall apply: The pledgee or trustee shall complete the "Application for Loss Report Release / Passbook Reissuance / Magnetic Strip Reconstruction / Single-Entry Passbook Loss Report or Cancellation" and submit it to its participant to apply for processing. After the pledgee's or trustee's participant has reviewed the application information and verified its accuracy, it shall perform a "Single-Entry Passbook Loss Report / Cancellation" transaction (transaction code: 447) to notify TDCC of the relevant information, and shall then perform a "Single-Entry Passbook Issuance" transaction (transaction code: 440) to issue a replacement single-entry passbook for delivery to the pledgee or trustee.

Chapter V Daily Account Reconciliation, Shareholder Services, and Principal and Interest Payment Matters

Article 24	After a participant has applied to carry out book-entry transfer operations relating to pledge and delivery of securities, the following procedures for account reconciliation and end-of-day settlement shall be carried out at the close of each business day: The participant shall perform a "Pledge Change Summary Query" transaction (transaction code: 364) and a "Single-Entry Passbook Usage Record Query" transaction (transaction code: 433) to print a "Securities Pledge and Delivery Change Summary Table," a "Single-Entry Passbook Issuance Record Table," and a "Single-Entry Passbook Cancellation Record Table" respectively, and shall use these to reconcile against the day's relevant data on pledge changes, single-entry passbook issuance (including replacement issuance), cancellation, lost passbook reports, and cancellations. Furthermore, if a participant has applied to carry out pledge enforcement operations on that day, it shall compile the relevant application documents and forward them to TDCC together with the "Securities Pledge and Delivery Change Summary Table" on the day of the transaction for record-keeping purposes; participants located outside Taipei City and New Taipei City shall submit the relevant application documents to TDCC by 1:30 p.m. on the next business day. This does not apply if the participant is the Central Bank. The Central Bank may perform a "Central Bank Lending Facility Pledge Detailed Information Query" transaction (transaction code: K87) to print a "Central Bank Lending Facility Pledge Detailed Information Query Report" for the purpose of reconciling the data on pledges created in its favor by financial institutions. On the next business day following the transaction, TDCC will compile a "Detailed Statement of Book-Entry Transfer Changes for Securities Pledge and Delivery" and notify the participants of the pledgor, pledgee, and trustee, respectively. Upon receipt of the "Detailed Statement of Book-Entry Transfer Changes for Securities Pledge and Delivery" forwarded by TDCC, the participant shall reconcile it against the application forms, and after verifying the accuracy of the reconciliation, shall retain it in order of pledge and delivery reference number for safekeeping, to serve as a basis for processing related future operations such as pledge release and pledge enforcement, and as a reference for account reconciliation.
Article 25	Participants may use TDCC's online computer system to perform the following transactions to query information relating to pledge and delivery: A participant may perform a "Customer Pledge and Delivery Information Query" transaction (transaction code: 365) to print a "Customer Pledge and Delivery Information Query Report" and query detailed pledge or pledgor information of its customers. A participants may perform a "Pledge and Delivery Information Query" transaction (transaction code: 366) to print a "Pledge and Delivery Information Query Report" and query detailed information on changes to individual pledge and delivery reference numbers. A participant may perform a "Pledge and Delivery Inward Transfer Detailed Information Query" transaction (transaction code: 367) to print a "Pledge and Delivery Inward Detailed Information Query Report" and query the detailed inward transfer information for customer pledge and delivery transactions on the current day. A participant may perform a "Single-Entry Passbook Usage Record Detailed Query" transaction (transaction code: 432) to print a "Single-Entry Passbook Usage Record Details Table" and query all confirmed records of single-entry passbook issuance (including replacement issuance), cancellation, lost passbook reports, and voidances. A participant may perform a "Single-Entry Passbook Information Query" transaction (transaction code: 434) to print a "Single-Entry Passbook Information Query Report" and query the usage status and pledge details of individual single-entry passbooks. A participant may perform an "Electronically Submitted Pledge Creation Application Status Query" transaction (transaction code: 369) to print an "Electronically Submitted Pledge Creation Application Status Query Report" and query the progress of customers' electronic applications for pledge creation.
Article 26	A participant may perform a "Query on Notifications of Changes in Operations Relating to Pledged Securities" transaction (transaction code: A46) to print a "Query Report on Notifications of Changes in Operations Relating to Pledged Securities" and query the status of changes relating to the following operations: change of designated income recipient for a specified year; income collection arrangements; foreclosure agreements or cancellation thereof; agreements on or changes of agreements on attribution of proceeds from capital reduction / merger and acquisition / redemption / principal repayment; and the pledgee's consent during the subsistence of the pledge to the pledgor collecting proceeds arising from capital reduction / merger and acquisition / redemption by the issuer.
Article 27	TDCC will, on a daily basis, consolidate the relevant reports compiled by participants and compile the "Notification of Book-Entry Transfer Changes for Pledge and Delivery of Securities (in lieu of securities owner register)," and notify the issuer or its shareholder services agent of the following matters any changes thereto: pledgor, pledgee, amount pledged, income agreements, foreclosure agreements, and agreements on attribution of proceeds from capital reduction / merger and acquisition / redemption / principal repayment. This does not apply if the subject matter of the pledge is stripped principal and interest government bonds, international bonds not registered with TDCC, or foreign bonds.
Article 28	When securities in respect of which pledge and delivery book-entry transfer has been completed are subject to an issuer's announcement of suspension of transfers or principal and interest payment, the following procedures shall apply: If the subject matter of the pledge is corporate bonds, bank debentures, beneficiary securities and asset-backed securities of a debt type, bonds issued by local governments, New Taiwan Dollar bonds issued domestically by foreign persons, stripped principal and interest government bonds, or international bonds registered with TDCC: TDCC will prepare a bond owner register in accordance with Article 91 of the TDCC Operating Rules, stating the names of the pledgor and pledgee, income attribution, and payment transfer account numbers and other details, and shall submit it to the issuer or the principal and interest payment agent, which shall transfer the principal and interest into the payment transfer accounts of the pledgor or pledgee. If the subject matter of the pledge is stripped principal and interest corporate bonds, bank debentures, or government bonds, TDCC will additionally prepare and submit to the principal and interest payment agent a withholding (or exemption) schedule for income tax on interest from stripped bonds. If the subject matter of the pledge is stock or other securities: In addition to preparing a securities owner register in accordance with Article 90 of the TDCC Operating Rules, TDCC will additionally compile a "Register of Pledge Creation and Pledge Delivery for Centrally Deposited Securities," stating the names of the pledgor and pledgee, income attribution, and payment transfer account numbers and other details, and shall submit it to the issuer or its shareholder services agent for use in carrying out income distribution operations. If a financial institution has established a pledge over stripped principal and interest government bonds or bank debentures in favor of the Central Bank in connection with a lending facility: When TDCC compiles the bond owner register in accordance with subparagraph 1 and submits it to the principal and interest payment agent, the payment transfer account numbers of the pledgor and pledgee will not be recorded in the register; however, if the pledge relates to both a public guarantee and an intraday overdraft facility, a notation of the public guarantee status will additionally be made in the register. The principal and interest payment agent shall, in accordance with the register submitted by TDCC, retain the amounts payable in suspense, and shall not process payment thereof until the financial institution or the Central Bank presents the other party's consent documentation or other valid documents as required by applicable laws and regulations. If the pledged property is securities transferred by way of pledge balance delivery into trust: TDCC will make a pledge notation in the trust property account entry within the securities or bond owner register, and shall record the trust property account number in the "Register of Pledge Creation and Pledge Delivery for Centrally Deposited Securities" with a trust notation. During the period in which the pledge balance is held in trust, income distributions shall be governed by the trust agreement. Following extinguishment of the trust relationship, income collection shall be carried out in accordance with the arrangements agreed upon at the time of the original pledge creation.

Chapter VI Supplementary Provisions

Article 29	Any matters on which these Directions are silent shall be handled in accordance with the TDCC Operating Rules and other applicable provisions.
Article 29-1	When a custodian processes book-entry transfer operations for domestic securities serving as pledged collateral for offshore investment activities, it shall do so in accordance with the provisions of these Directions, except as otherwise provided in TDCC's Directions for the Handling by Custodians of Central Custody and Book-Entry Operations for Securities.