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Title	Taiwan Depository & Clearing Corporation Directions for the Handling by Issuers of Central Custody and Book-Entry Operations for Securities in Specific Custody Accounts CH
Date	2021.10.13 ( Amended )

Article Content

Chapter I General Principles

Article 1

These Directions are adopted under Articles 83-1 and 101 of the Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC).

Article 2

Where an issuer's directors, supervisors, specified shareholders, owners of beneficial securities, or subscribers of convertible corporate bonds or corporate bonds with warrants ("securities owners"), place their securities in central custody for a certain period in accordance with the requirements of the Financial Supervisory Commission (FSC), Taiwan Stock Exchange (TWSE), or Taipei Exchange (TPEx), matters in connection with the central custody of the securities may be handled by book-entry transfer.

Chapter II Account Opening Operations

Article 3	An issuer must sign an account opening agreement with TDCC, open a depository account, and become a participant of the TDCC, and leave a seal/signature impression on record with TDCC, to be used for the handling of matters in connection with the central custody and book-entry transfer of the securities of securities owners.
Article 4	A securities owner shall issue a power of attorney, and notify the issuer of the relevant data for the securities being placed in central custody. The issuer shall execute an "Account Opening - Creation of Basic Information File" transaction (transaction code 140), to establish a specific custody account (account type: 81 director, 82 supervisor, 83 other securities owner without passbook account), which will be used for the handling of central custody and transfer of securities.
Article 5	If the securities that the securities owner is placing in central custody are under a trust arrangement whereby the owner retains the power to decide the allocation of the securities, the trustee shall submit a power of attorney, specifying the name of the securities owner and the fiduciary relationship therewith, and submit a photocopy of the trust agreement and notify the issuer to carry out account opening in accordance with the operation procedures set out above, whereupon the issuer shall do so in accordance with the follow procedures: Execute a "Trust/Discretionary Investment/English Account Name Maintenance" transaction (transaction code 179), and input the account number and the account name "○○○Trusted by○○○Trust Account". Execute a "Trust Remarks and Related Party Maintenance" transaction (transaction code 540), input the account number and place the trust remarks; and input the data of all related parties of the trust arrangement, such as the name, date of birth or date of incorporation, and personal ID number or profit-seeking enterprise uniform ID number of the trustee, the trustor, and the beneficiary, to create the file. Execute a "Trust Account Basic Data Query" transaction (transaction code 541) to print out a "Changes to Related Parties of Trust" query form and check the content for correctness.
Article 6	For specific custody accounts, applications may not be made for operations such as deposit, withdrawal, transfer, or delivery of pledged securities.

Chapter III Operations for Control of Deposited Securities

Section 1 Transfer Operations

Article 7	If a securities owner's securities are duly required to be placed in central custody for a certain period, those securities must be transferred into a specific custody account.
Article 8	If the securities owner will transfer a balance of securities from the depository account it has opened with a participant into the specific custody account, it must go to the place of business of its participant to submit an "Application for Transfer of Deposited Securities", to apply for the handling of the transfer. The operations shall be conducted in the same way as the operations for a "Transfer of Deposited Securities" transaction (transaction code 130).
Article 9	If the trustee will transfer a balance of securities from the trust depository account it has opened with a participant into the specific custody account, it must go to the place of business of its participant to submit a "Trust Transfer Application─Substitute for Debit Voucher", to apply for the handling of the transfer. The operations shall be conducted in the same way as the operations for a "Trust Transfer" transaction (transaction code 543).
Article 10	If a securities owner will transfer a balance of securities from the general custody account or registration account under the issuer's depository account into the specific custody account, it shall follow the following procedures: The securities owner shall go to the issuer's place of business to submit an "Application for Transfer of Deposited Securities in Issuer's Depository Account/Registration Account", affixing its seal/signature-of-record, to apply for the account transfer. After reviewing and verifying the content of the application, the issuer shall execute a "Transfer of Deposited Securities in Issuer's Depository Account/Registration Account" transaction (transaction code 671), to notify TDCC of the securities owner account transfer data. After receiving the account transfer notice of the preceding subparagraph, TDCC will transfer the securities from the general custody account or registration account under the issuer's depository account into the specific custody account.

Section 2 Control Application

Article 11	The issuer shall submit a Notice of Control Matters, affixing its seal/signature-of-record, and submit an application to TDCC along with a photocopy of the document from the competent authority, the TWSE, or the TPEx notifying it to carry out the placement of securities in central custody (if the securities being placed in central custody are convertible corporate bonds or corporate bonds with warrants, it is only necessary to submit the issuance rules of those corporate bonds). After TDCC receives the notice from the issuer, and checks that it is affixed with the correct seal/signature, it will notify the issuer of the control case number.
Article 12	The issuer shall execute a "Control Case Number Query" transaction (transaction code 663) and print a "Control Case Number Query Form" to query the control case number, and execute a "Depository Control/Voidance" transaction (transaction code 660; type: control) or a "Depository Control/Voidance Media Transmission" transaction (transaction code 660S), to notify TDCC of the data concerning control of the securities owner's deposited securities.
Article 13	After the issuer has completed the operations, it shall execute a "Specific Custody Balance Details Query" transaction (transaction code 664; type: by control case number) to print a "Specific Custody Balance Details Query Form" (by Control Case Number), and check the accuracy of the information concerning control of the securities owner's deposited securities. If there is any error, it shall execute a "Depository Control/Voidance" transaction (trasaction code 660; type: voidance) or a "Depository Control/Voidance Media Transmission" transaction (transaction code 660S) to void the control on the securities. After verifying, it shall affix its seal/signature-of-record on the Specific Custody Balance Details Query Form (by Control Case Number) and notify TDCC.

Section 3 Control of Securities on Deposit

Article 14

After TDCC receives the notice from the issuer and checks that it is affixed with the correct seal/signature, it will issue a certificate of custody and execute a "Specific Custody Balance Details Query" transaction (transaction code 664; type: by custody certificate) and print a "Specific Custody Balance Details Query Form (by Custody Certificate)" and deliver it to the issuer to keep on file.
The certificate of custody issued to the issuer under the preceding paragraph may not be transferred or pledged or used for book-entry transfer.
　　

Article 15

For securities that the securities owners have placed under depository control, the securities owners may not, during the custody period, apply for any book-entry operations such as sale, pledge and delivery, or account transfer of the securities, with the exception that subscribers of convertible corporate bonds and corporate bonds with warrants may apply for conversion or subscription of shares.

Chapter IV Operations for Release From Control

Section 1 Application for Release

Article 16

For a securities owner's securities that have been placed in central custody, once the custody period expires, or if by regulations the securities are no longer required to be placed in central custody, or when the securities are required by order of an executing agency to be released into an account designated by the agency, the issuer shall execute a "Control Release" transaction (transaction code 661; type: application) or a "Control Release Application/Voidance Media Transmission" transaction (transaction code 661S), to notify TDCC of the data of the securities owner's application for control release.

Article 17

After the issuer has completed the operations, it shall execute a "Control Release Details Query" transaction (transaction code 665; type: for pending application) to print a "Control Release Details Query Form (for pending application)", and check the accuracy of the securities owner control release data. If there is any error, it shall execute a "Control Release/Voidance" transaction (transaction code 661; type: voidance) or a "Control Release/Voidance Media Transmission" transaction (transaction code 661S) to void the application for control release. After verifying, it shall affix its seal/signature-of-record on the Control Release Details Query Form (for pending application) and submit it along with the certificate of custody to notify TDCC.

Section 2 Release of Control

Article 18	After TDCC receives the notice from the issuer and checks that it is affixed with the correct seal/signature and is in accordance with relevant requirements, it will confirm the release of control, and will cancel the Custody Certificate. If there is any remaining balance of securities under control, it will separately issue a new certificate of custody and execute a "Control Release Details Query" transaction (transaction code 665; type: confirmed) and print a "Control Release Details Query Form (Confirmed)" and deliver it to the issuer to keep on file.
Article 19	For securities in a specific custody account that have been released from control, the securities owner must submit an "Application for Transfer of Securities on Deposit in Issuer's Depository Account/Registration Account" to apply to the issuer for the account transfer, whereupon the issuer shall execute a "Transfer of Securities on Deposit in Issuer's Depository Account/Registration Account" transaction (transaction code 671) for transfer of the securities into the depository account opened with a participant or into the general custody account or registration account under the issuer's depository account. Or the securities owner shall submit a "Trust Transfer Application─Substitute for Debit Voucher" to apply to the issuer for the account transfer, whereupon the issuer shall execute a "Trust Transfer" transaction (transaction code 543) for transfer of the securities into the Trust Depository Account opened with a participant. Only after these procedures have been completed may any sale settlement, delivery of pledged securities, or other book-entry transfer operations be conducted.
Article 20	With respect to securities in a specific custody account that have been released from control, it is prohibited to apply for transfer of such securities into the registration account under the issuer's depository account, unless the securities are tax-deferred/tax-payment-deferred or privately placed stock.
Article 21	If securities in a specific custody account that have been released from control are tax-deferred/tax-payment-deferred stock, when the securities owner applies for cancellation of the notation of tax deferral/tax-payment-deferral, the securities owner shall make the application to the issuer by submitting a written application form or other sufficient documentary proof. After reviewing and verifying the accuracy of the content, the issuer shall execute a "Cancellation of Notation of Tax Deferral or Tax Payment Deferral" transaction (transaction code: 674) to notify TDCC to cancel the notation of tax deferral/tax payment deferral.

Chapter V Supplementary Provisions

Article 22	The issuer may execute relevant transactions to query or print detailed information regarding the specific custody account including the account balance, account transactions, and depository control.
Article 23	With respect to securities that securities owners place under depository control, TDCC will prepare statements at the end of each month, incorporating the securities submitted for deposit into specific custody that month and specifying on an issuer-by-issuer basis the amount in custody and the increase or decrease therein, and submit the statements by official letter to the TWSE or TPEx for public announcement, and also report them by official letter to the competent authority for its recordation.
Article 24	When the issuer calls a shareholder meeting or distributes dividends, bonus, or other benefits, TDCC will prepare an owner-specific list of securities owners accounting for the securities owners' balances of securities in the specific custody accounts, and the balances of securities in their depository accounts opened with participants, and notify the issuer of the securities or its transfer agent.
Article 25	When TDCC handles central custody and book-entry transfer operations for securities of securities owner, it will charge fees in accordance with the TDCC fee-charging standards.
Article 26	Any matters on which these Directions are silent shall be governed by the TDCC Operating Rules and other applicable provisions.