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Title	Taiwan Depository & Clearing Corporation Directions for Book-Entry Transfer Operations for Securities Issued Cross-Border CH
Date	2018.01.23 ( Amended )

Article Content

Chapter I General Principles

Article 1

These Directions are adopted pursuant to Articles 4, 28, 30, 32, 35, 66 to 68, and 101 of the Operating Rules of the Taiwan Depository & Clearing Corporation ("TDCC").

Article 2

Securities issued cross-border in these Directions includes the following:

Foreign securities

Stock of a TWSE (or TPEx) secondary listed company issued in Taiwan by a foreign issuer.
Beneficial certificates, fund shares, or investment units of any offshore exchange-traded fund (ETF) that is publicly offered and sold, and that furthermore is listed in Taiwan (hereinafter "offshore ETF beneficial certificates") by an offshore fund manager or an institution designated by it (hereinafter "offshore fund institution") in accordance with the Regulations Governing Offshore Funds.

Overseas stocks means overseas stocks issued in a foreign market by Taiwan issuers.

Chapter II Foreign Securities

Section 1 Account Opening and Agreement Signing

Article 3	When a foreign issuer applies for listing of its stock in Taiwan on the TWSE or TPEx, or when a master agent appointed by an offshore fund institution applies for listing in Taiwan of its publicly offered and sold offshore ETF beneficial certificates, TDCC will enter into a custody agreement with a foreign depository or clearing institution to open an account, and authorize the foreign depository or clearing institution to act on behalf of TDCC to provide custody of foreign securities held by Taiwan investors. The account will then be used to handle related matters including cross-border transactions and book-entry transfer operations.
Article 4	A customer shall open a depository account with a participant, for book-entry transfer operations for trades of foreign securities and cross-border transactions.
Article 5	A foreign issuer or master agent must sign an agreement and letter of undertaking with TDCC with respect to the handling of matters related to book-entry transfer and corporate action services of cross-border securities.

Section 2 Book-Entry Transfer Operations

Article 6	When a foreign issuer or master agent applies to distribute or deliver foreign securities to a Taiwan investor's depository account by book-entry transfer, the following procedures shall be followed: The foreign issuer, master agent or its transfer agent in Taiwan shall submit materials including documentary proof of approval by the Competent Authority, the distribution/delivery list, data media, and distribution/delivery amount to TDCC by 5:30 p.m. on the second business day before the designated transfer date to apply for the distribution/delivery operations. After checking the documents specified in the preceding subparagraph and confirming the amount in custody with the foreign depository or clearing institution, TDCC will distribute/deliver the foreign securities to the designated account on the designated transfer date according to the distribution/delivery list, record the entries to the participant account book, and notify the participant to record the necessary entries to the customer account book.
Article 7	Book-entry transfer operations done by TDCC for trading of foreign securities are in accordance with the relevant provisions of the TWSE and the TPEx. Any operations done by a participant involving foreign securities in connection with a direct trade between parties, inheritance, endowment, provision of property other than cash as a capital contribution, waiver of shares, pledge, or trust shall comply with TDCC's relevant directions.
Article 8	When an out-trade or default occurs in the course of a trade of foreign securities, the trade shall be handled in accordance with the relevant provisions of the TWSE and the TPEx.
Article 9	When a participant handles a customer's application to transfer foreign securities from an account at a foreign depository or clearing institution to a domestic depository account, the following procedures shall be followed: The customer shall submit an Application for Cross-Border Inward Remittance of Foreign Securities to the participant. If the foreign securities to be transferred are joint subscriptions of offshore ETF beneficial certificates, the participant shall specify the group number on the Application for Cross-Border Inward Remittance of Foreign Securities submitted by the customer. After checking the correctness of the application data, the participant shall submit the Application to TDCC (The Application may be faxed to TDCC first, but the original shall be delivered to TDCC within 2 business days from the application date). When TDCC receives the participant's application, TDCC shall notify the foreign depository or clearing institution of the relevant data after confirming that the application is within quota control limits. If the foreign securities to be transferred are joint subscriptions of offshore ETF beneficial certificates, TDCC will aggregate the application amounts with the same group number before carrying out the notification. After receiving a notification from the foreign depository or clearing institution, and checking it against the participant's application data for correctness, TDCC will record the entries to the participant account book, and notify the participant to record the necessary entries to the customer account book. If the check reveals any discrepancy in the data, TDCC will notify both parties to make a correction. If the correction cannot be made by both parties within 5 business days, TDCC will notify the foreign depository or clearing institution of reversal of the transfer. With respect to a participant's application to TDCC for a cross-border inward remittance, if TDCC does not receive inward remittance notification from the foreign depository or clearing institution within 3 business days from the application date, TDCC will notify the participant to handle the matter within 2 business days. If it cannot be handled within the time limit, TDCC will deem the application invalid and notify the participant.
Article 10	When a participant handles a customer's application for transfer of foreign securities from a domestic depository account to a designated account at a foreign depository or clearing institution, the following procedures shall be followed: The customer shall present the customer's securities passbook (unless there is no passbook), and submit the Application for Transfer of Deposited Securities and the Application for Cross-Border Outward Remittance of Foreign Securities, stamped with its seal/signature-of-record, to the participant to apply. After checking the correctness of the application data, the participant shall execute a "Transfer of Deposited Securities" transaction (transaction code 130) to transfer the outwardly remitted foreign securities from the customer's depository account to the TDCC Segregated Account for International Securities (account number 99709999900). The participant will then submit the Application for Transfer of Deposited Securities and the Application for Cross-Border Outward Remittance of Foreign Securities to TDCC (the applications may be faxed to TDCC first, but the originals shall be delivered to TDCC within 2 business days from the application date). TDCC will summarize the data of the participant's application for outward remittance of foreign securities and notify the foreign depository or clearing institution of the matters for conducting the cross-border transfer. When the outward remittance data of which TDCC is notified by a foreign depository or clearing institution does not match the outward remittance data on the participant's application, TDCC will notify the participant to correct the data. If the participant fails to make the correction within 5 business days, TDCC will immediately reverse the transfer, and record the entries to the participant account book, and notify the participant to record the necessary entries to the customer account book.
Article 11	TDCC does not allow deposit of foreign securities by participants. If a participant's customer holds foreign securities issued in certificated form, and wishes to place the securities under central deposit with TDCC, it may first have the foreign securities deposited in the country in which the foreign securities were issued, and then apply to the participant in accordance with Article 9 for transfer of the foreign securities to the domestic depository account.
Article 12	TDCC does not allow withdrawal of foreign securities by participants. If a participant's customer wishes to keep the foreign securities in the customer's own custody, the customer may apply to the participant in accordance with Article 10 for transfer of the foreign securities to the relevant account designated by the customer in the country in which the securities were issued, and then carry out withdrawal of the securities in the country in which they were issued.

Section 3 Corporate Action Services

Article 13	A foreign issuer or master agent shall establish or designate a transfer agent in the locale of TDCC to handle corporate action services on its behalf (hereinafter the "transfer agent"). The transfer agent of the preceding paragraph and its personnel, qualifications, equipment, and internal control system shall comply with the relevant provisions of the Regulations Governing the Administration of Shareholder Services of Public Companies. A foreign issuer or master agent shall notify TDCC of the name and location of the transfer agent referred to in paragraph 1 before the securities are listed on the TWSE or TPEx. If a foreign issuer or master agent will change its transfer agent or the transfer agent will change its place of business, the foreign issuer or master agent shall notify TDCC within 3 days after the decision is made. When the transfer agent and the foreign issuer or master agent will terminate the agreement for handling corporate action services, the foreign issuer or master agent also shall notify TDCC within 3 days after the decision is made.
Article 14	When a foreign issuer closes its books because of convening of a shareholder meeting, or distribution of dividends, bonus, or other benefits, or when an offshore fund institution closes the books because of convening of a beneficial owner meeting or distribution of gains, the foreign issuer or the master agent shall notify TDCC of the reasons for book closure, the record date for distribution of entitlements, the book closure period, and the reasons therefor, and shall do the same in the event of any changes thereto. The participant shall compile a list of foreign securities owners and notify TDCC as specified in the TDCC Operating Rules. TDCC will then notify the transfer agent of the foreign issuer or the master agent of the list. When the list of foreign securities owners does not match the data of the foreign depository or clearing institution, TDCC and the foreign depository or clearing institution shall jointly ascertain the reasons and make adjustments, and then notify the transfer agent.
Article 15	A transfer agent shall handle matters related to a shareholder meeting or beneficial owner meeting by the following means: Mail relevant documents to the securities owners according to the list of securities owners provided by TDCC. Compile the securities owners' number of votes for each proposal, and deliver it to TDCC within the designated time. TDCC will exercise the voting rights on behalf of the securities owners at a shareholders meeting or beneficial owner meeting pursuant to the regulations and methods of the home country of the foreign issuer or offshore fund institution. The foreign issuer or master agent shall pay all the fees for the operations handled by TDCC under subparagraph 2 of the preceding paragraph.
Article 16	When a foreign issuer or offshore fund institution distributes cash dividends or cash earnings, the following procedures shall be followed: The foreign issuer, master agent, or foreign depository or clearing institution shall notify TDCC of the predetermined amount of cash dividend or cash earnings to be remitted to TDCC and relevant information before the cash dividend or cash earnings distribution date. After the amount of foreign currency for the cash dividends or cash earnings is delivered into the account, TDCC will notify the overseas bank handling the payment operations to deduct the necessary expenses from the amount of foreign currency, and then transfer the amount into the cash account designated by the transfer agent. The transfer agent shall deliver the cash dividends or cash earnings to the securities owners according to the list of securities owners provided by TDCC.
Article 17	When a foreign issuer conducts any share split, merger, capital reduction, cash capital increase by subscription of new shares, or issuance of stock dividends, the provisions of Article 6 shall apply mutatis mutandis to the relevant book-entry distribution/delivery of the securities.
Article 18	A transfer agent shall assist securities owners to exercise their rights such as the proposal right in a securities owner meeting and the right of inspection, and also shall assist securities owners to exercise rights in non-routine or individual cases between securities owners and foreign issuers or offshore fund institutions, and shall provide relevant services such as handling queries by securities owners or government agencies.

Section 4 Quota Control Operations

Article 19

When a quota limit is imposed on the amount of foreign securities circulated in Taiwan, the quota control calculation method shall be as follows:

When a participant applies for cross-border outward remittance, after TDCC receives the notice of confirmation of the outward remittance data from the foreign depository or clearing institution, the outward remittance amount will be calculated into the inward remittance quota for the next business day.
When a participant applies for cross-border inward remittance, TDCC will check the participant's inward remittance quota and then deduct the inward remittance amount from the inward remittance quota. When the inward remittance quota is exhausted, TDCC will decline inward remittance applications from the participant.
The total amount of foreign securities circulating in Taiwan may not exceed the originally approved quota for issuance or public offering and sale of the foreign securities. When there is any change in the amount of foreign securities being issued or publicly offered and sold because of any share split, merger, capital reduction, cash capital increase by subscription of shares, issuance of stock dividends, or other reason, the domestic transfer agent shall notify TDCC of the amount of the change. After checking it against the approval documents from the competent authority for correctness, TDCC will adjust the quota control limit.

Chapter III Overseas Stock

Section 1 Account Opening and Agreement Signing

Article 20

When a domestic issuer applies for listing of its stock on an overseas stock exchange or over-the-counter market, a foreign depository or clearing institution may sign a custody agreement with TDCC, and open a depository account to become a TDCC participant. The participant may then authorize TDCC to keep custody of overseas stock held by foreign investors, and use the account to handle matters related to cross-border transactions and book-entry transfer operations.

Article 21

A customer shall open a depository account with a participant to conduct overseas stock cross-border book-entry transfer operations.

Section 2 Book-Entry Transfer Operations

Article 22	A domestic issuer, based on the approval documents from the competent authority, and in accordance with the agreement or other relevant contracts entered into with TDCC, and with TDCC's directions for the handling of relevant matters, shall submit to TDCC the data for any transfer of overseas stock. After TDCC checks the correctness of the data, it will record the entry to the foreign participant's depository account.
Article 23	When a participant handles a customer's application for tranfer of overseas stock from an account at a foreign depository or clearing institution to a designated domestic depository account, the following procedures shall be followed: The customer shall submit an Application for Cross-Border Inward Remittance of Overseas Securities to the participant. After checking the application data for correctness, the participant shall submit the application to TDCC. (The application may be faxed to TDCC first, but the original shall be delivered to TDCC within 2 business days from the application date.) After receiving notification from the foreign depository or clearing institution and checking it against the participant's application data of the preceding subparagraph for correctness, TDCC will record the entries to the participant accountbook, and notify the participant to record the necessary entries to the customer account book. If the check reveals any discrepancy in the data, TDCC will notify both parties to make a correction. If the correction cannot be made by both parties within 5 business days, TDCC will notify the foreign depository or clearing institution of reversal of the transfer. With respect to a participant's application to TDCC for cross-border inward remittance data, if TDCC does not receive the inward remittance notification from the foreign depository or clearing institution within 3 business days from the application date, TDCC will notify the participant to handle the matter within 2 business days. If it cannot be handled within the time limit, TDCC will deem the application invalid and notify the participant.
Article 24	When a participant handles a customer's application for transfer of overseas stock from a domestic depository account to an account at a foreign depository or clearing institution, the following procedures shall be followed: The customer shall present the customer's securities passbook (unless there is no passbook), and submit the Application for Transfer of Deposited Securities and the Application for Cross-Border Outward Remittance of Overseas Securities, stamped with its seal/signature-of-record, to the participant to apply. After checking the correctness of the application data and notifying TDCC to confirm compliance with quota control limits, the participant shall execute a "Transfer of Deposited Securities" transaction (transaction code 130) to transfer the outwardly remitted overseas stock from the customer's depository account to the TDCC Segregated Account for International Securities (account number 99709999900). The participant will then submit the Application for Transfer of Deposited Securities and the Application for Cross-Border Outward Remittance of Overseas Securities to TDCC (the applications may be faxed to TDCC first, but the original shall be delivered to TDCC within 2 business days from the application date). TDCC will summarize the data of the participant's application for outward remittance of overseas stock and notify the foreign depository or clearing institution of the matters for conducting the cross-border transfer. When there is any error in the transfer data of which TDCC is notified by a foreign depository or clearing institution, TDCC will notify the participant to correct the data. If the participant fails to make the correction within 5 business days, TDCC will reverse the transfer, record the entries to the participant account book, and notify the participant to record the necessary entries to the customer account book.
Article 25	When a foreign depository or clearing institution applies for transfer of overseas stock from its depository account to a depository account at another foreign depository or clearing institution, the following procedures shall be followed: The foreign depository or clearing institutions that are applying for outward and inward remittance, respectively, shall notify TDCC of the remittance data. After checking the correctness of the remittance data submitted by the parties, TDCC will record the entries to their books. If the check reveals any discrepancy in the data, TDCC will notify both parties to make corrections. If the correction cannot be made by both parties within 5 business days, TDCC will notify both parties of reversal of the transfer.
Article 26	TDCC does not allow deposit of overseas stock by foreign depository or clearing institutions. If a foreign depository or clearing institution's customer holds overseas stock issued in certificated form, and wishes to place the stock under central deposit with TDCC, it may apply to a TDCC participant for deposit of the overseas stock, and then apply to the participant in accordance with Article 24 for transfer of the overseas stock to the relevant foreign account.
Article 27	TDCC does not allow withdrawal of overseas stock by a foreign depository or clearing institution. If a foreign depository or clearing institution's customer wishes to keep the overseas stock in the customer's own custody, the customer may apply to a participant in accordance with Article 23 for transfer of the overseas stock into a domestic depository account, and then apply to the participant for withdrawal.

Section 3 Preparation of a List of Securities Owners

Article 28

A list of owners of overseas stock shall be prepared in accordance with the following procedures:

A foreign depository or clearing institution shall prepare a list of the securities owners of overseas stock and notify TDCC in accordance with the TDCC Operating Rules. When the foreign depository or clearing institution fails to provide the list of the securities owners of overseas stock in time, TDCC will treat that depository or clearing institution as the nominee.
When the list of securities owners of the overseas stock does not match the data kept by TDCC, TDCC and the foreign depository or clearing institution shall jointly ascertain the reasons and make adjustments, and then notify the domestic issuer.

Section 4 Quota Control Operations

Article 29

When a quota limit is imposed on the amount of overseas stock circulated abroad, the quota control calculation method shall be as follows:

When a participant applies for cross-border inward remittance, after TDCC records the entry for the inward remittance, TDCC will calculate the inward remittance amount into the outward remittance quota for the next business day.
When a participant applies for cross-border outward remittance, TDCC will check the outward remittance quota and then deduct the outward remittance amount from the outward remittance quota. When the outward remittance quota is exhausted, TDCC will decline outward remittance applications from the participant.
The total number of shares of overseas stock circulating abroad may not exceed the originally approved quota for issuance of overseas stock. When there is any change in the issuance amount of overseas stock because of any share split, merger, capital reduction, cash capital increase by subscription of new shares, issuance of stock dividends, or other reason, the domestic issuer shall notify TDCC of the amount of the change. After checking it against the approval documents issued by the competent authority for correctness, TDCC will adjust the quota control limit.

Chapter IV Supplementary Provisions

Article 30	After a participant applies for cross-border transfer operations, the account reconciliation and daily settlement operations shall be handled in accordance with the following procedures: After applying for cross-border inward remittance and receiving the TDCC's notification of receipt, the participant shall execute a "Transfer Transaction Details Query" transaction (transaction code 167), and print a Transfer Transaction Details Query Data Sheet, and check the content against the relevant cross-border inward remittance application data. A participant that applies for cross-border outward remittance shall execute a "Query of Daily Settlement Data of Trades of Deposited Securities" transaction (transaction code 165) at the close of the same business day, and print a Statement of Changes in Trades of Deposited Securities, and check the content against the Application for Transfer of Deposited Securities and the relevant cross-border outward remittance application data.
Article 31	When an issuer or master agent announces book closure of its securities issued cross-border, TDCC may halt the processing of cross-border transfer operations 2 business days before the book closure date, provided that if an agreement with a foreign depository or clearing institution stipulates otherwise, the stipulations thereof shall prevail.
Article 32	When a participant delivers securities issued cross-border to TDCC for central deposit, and applies to TDCC for handling of cross-border transfer, TDCC will charge fees according to its fee-charging standards, and additionally will charge the participant relevant fees according to the fee-charging standards set by the foreign depository or clearing institution.
Article 33	Any matters on which these Directions are silent shall be handled in accordance with applicable laws and regulations and the TDCC Operating Rules.