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Title Operating Rules of the Taiwan Depository & Clearing Corporation (TDCC) CH
Date 2024.12.31 ( Amended )

Article Content

Chapter 1 General Principles
Article 1     These Operating Rules are adopted pursuant to Article 14 of the Regulations Governing Centralized Securities Depository Enterprises.
Article 2     The Taiwan Depository & Clearing Corporation ("TDCC") shall conduct business operations in compliance with relevant acts and regulations and on the basis of these Operating Rules.
Article 3     Securities under TDCC custody that may be transferred on a book-entry basis are limited to the following:
  1. Stocks, certificates of entitlement to new shares or certificates of payment for shares, preferred shares with warrants listed on a centralized securities market, and stock warrants.
  2. Beneficial certificates listed on a centralized securities market.
  3. Depositary receipts listed on a centralized securities market.
  4. Convertible corporate bonds, exchangeable corporate bonds, corporate bonds with warrants, corporate bonds, and bond conversion entitlement certificates listed on a centralized securities market.
  5. Bonds traded on a centralized securities market.
  6. Call (put) warrants listed on a centralized securities market.
  7. Beneficial securities and asset-backed securities (ABS) listed on a centralized securities market.
  8. Exchange-traded notes (ETNs) listed on a centralized securities market.
  9. Stocks, certificates of entitlement to new shares or certificates of payment for shares, preferred shares with warrants traded over-the-counter at securities firms, and stock warrants.
  10. Beneficial certificates traded over-the-counter at securities firms.
  11. Depositary receipts traded over-the-counter at securities firms.
  12. Convertible corporate bonds, exchangeable corporate bonds, corporate bonds with warrants, corporate bonds, bank debentures, and bond conversion entitlement certificates traded over-the-counter at securities firms.
  13. Bonds traded over-the-counter at securities firms.
  14. Call (put) warrants traded over-the-counter at securities firms.
  15. Beneficial securities and asset-backed securities (ABS) traded over-the-counter at securities firms.
  16. ETNs traded over-the-counter at securities firms.
  17. Employee stock warrants.
  18. Stocks and corporate bonds issued by a company, when issued in dematerialized form.
  19. Corporate bonds with warrants and convertible corporate bonds privately placed by a company, when issued in dematerialized form.
  20. Stocks, certificates of payment for shares, bond conversion entitlement certificates, corporate bonds, bank debentures, preferred shares with warrants, and exchangeable corporate bonds privately placed by a public company, when issued in dematerialized form.
  21. Open-end beneficial certificates and bank debentures, when issued in dematerialized form.
  22. Beneficial certificates and asset-backed securities (ABS) privately placed by a trustee institution or special-purpose company, when issued in dematerialized form.
  23. RMB-denominated corporate bonds issued overseas by a public company, when the investors are offshore banking branches and the bonds are issued in dematerialized form.
  24. Foreign securities in the custody of a foreign depository or clearing institution.
  25. Other securities approved by the Financial Supervisory Commission ("the Competent Authority").
Article 4     Entities that may become participants by opening an account at TDCC to handle securities deposits, withdrawals, and book-entry transfers are limited to the following:
  1. The Ministry of Finance.
  2. The Central Bank of the Republic of China (Taiwan).
  3. The Taiwan Stock Exchange (TWSE).
  4. The Taipei Exchange (TPEx).
  5. The Taiwan Futures Exchange (TAIFEX).
  6. Securities firms.
  7. Securities finance enterprises.
  8. Custodian institutions appointed to custodize funds and securities for securities investment trust funds, offshore overseas Chinese and foreign nationals, discretionary investment, insurance enterprises, and mainland area investors ("custodian institutions").
  9. Government bond dealers.
  10. Ordinary financial institutions.
  11. Insurance enterprises.
  12. Asset management companies.
  13. Domestic agents engaged to converts overseas corporate bonds into shares of a domestic company ("domestic conversion agents").
  14. Foreign depository or clearing institutions.
  15. Companies that issue exchangeable corporate bonds.
  16. Issuers that deliver dematerialized securities via the book-entry transfer method.
  17. Issuers that submit securities for TDCC custody pursuant to the regulations of the Competent Authority, the TWSE, or the TPEx.
  18. Mandated institutions conducting public tender offers, or handling redemption securities held by dissenting shareholders.
  19. Trust enterprises.
  20. Agencies that manage or utilize funds of the Public Service Pension Fund (PSPF), Labor Pension Fund, Labor Insurance Fund, postal savings or other government funds.
  21. Futures commission merchants.
  22. Other entities approved by the competent authority.
Article 5     Deposits and withdrawals of securities in TDCC custody by a participant's customer ("customer") and the book-entry transfer of securities in TDCC custody shall all be made in the participant's name.
Article 6     Except where otherwise provided, securities custodies by the TDCC are held in fungible custody, and in co-ownership by shares based on the balance recorded in the participant's account book.
    When, pursuant to Article 43, paragraph 5 of the Securities and Exchange Act, the TDCC performs title transfer during the period of custody for the securities of the preceding paragraph held in fungible custody, the securities shall remain in fungible custody.
    When a participant applies to withdraw securities held in TDCC custody, the TDCC may return to the participant securities of the same class and quantity.
Article 7     Except where otherwise provided in these Operating Rules, the TDCC business hours are 9 a.m. to 5 p.m., Monday through Friday.
    As it deems necessary for operations, the TDCC may publicly announce a change to the business hours of the preceding paragraph after a request for the change is submitted to and approved by the competent authority.
Article 8     TDCC holidays will be the same as the announced holidays of the TWSE.
Article 8-1     The provisions of Chapter 8 shall govern all operations in connection with cross-border custody services provided by TDCC for foreign securities in custody with a foreign depository or clearing institution. The aforesaid operations include but are not limited to participant account opening, account book arrangement, cash and securities account servicing and settlement, and exercise of rights.
Chapter 2 Opening, Management, and Cancellation of Participant Accounts
Article 9     A participant that operates securities brokering and dealing businesses may not use the same account for those business, but shall make separate applications to open depository accounts for each.
    When a participant establishes a branch unit, it must arrange for joint use of its own account to conduct the securities deposits, withdrawals, and book-entry settlements of the branch unit; the TDCC will not set up a separate account to record those transactions.
Article 10     When applying to the TDCC to open a participant account, a participant shall fill out an account opening application and submit the following documents:
  1. A Participant Agreement.
  2. A photocopy of the document evidencing company or business registration; for a foreign depository or clearing institution, a photocopy of documentation of its business operations issued by its home country.
  3. A specimen card showing the seal to be used.
  4. Other documentation as required.
    When the participant is a securities firm, it shall also submit a photocopy of its securities firm business permit and a register of associated persons and clerks who are registered with the TWSE or TPEx to perform clearing and settlement.
Article 11     After a principal completes account opening procedures, the TDCC shall set up a participant account book, advise the principal of the account activation date, and report to the competent authority for recordation in its monthly report.
Article 12     The account book set up for a participant by the TDCC shall bear the participant's name, location, and uniform ID number as a profit-seeking enterprise or tax withholding entity, and shall also include the matters below regarding securities deposits or book-entry transfers by the participant:
  1. Respective identification of the portions under the ownership of the participant or the customer, or that are pending settlement, under pledge, or registered.
  2. The type and quantity of the securities and the issuer's name.
  3. Increases or decreases in the quantity of securities and the reasons for both.
  4. Any necessary notations with respect to securities marked as trusted assets.
  5. Other necessary matters.
    If the participant is an issuer as referred to in Article 4, subparagraph 16, the registered portion in its account represents the quantity of securities held by those of its securities holders that have not opened a depository account. That portion may not be sold, deposited, withdrawn, or pledged, nor will a securities passbook be issued for those securities.
Article 13     After a customer completes account opening procedures, the customer's participant shall use the computer network to make a complete and accurate entry of the customer account information below into the TDCC computer system:
  1. The customer account number and funds transfer account number.
  2. The name of the person or entity.
  3. The customer's date of birth or date of establishment (year/month/day).
  4. The customer's national ID number or profit-seeking enterprise or tax withholding entity uniform ID number.
  5. The name of the customer's statutory representative.
  6. The customer's registered household address or place of business.
  7. The mailing address of the customer or its statutory representative.
  8. Any trust relationship matters.
  9. Other matters.
    Except where otherwise designated by the customer, the funds transfer account number of paragraph 1, subparagraph 1 shall be that of the customer's deposit account for the receipt and payment of funds on its behalf at the participant's designated financial institution.
    A depository enterprise may provide the fund transfer account number of paragraph 1, subparagraph 1 to the securities issuer to conduct the distribution of securities dividends and bonuses, redemption of beneficial certificates, redemption or resale of convertible corporate bonds, redemption of depositary receipts, redemption of and payment of interest on bonds, and other operations related to transfer of funds.
    Unless otherwise specified by the TDCC, after the participant has completed the file creation under paragraph 1, a securities passbook shall be issued to the customer. The passbook may be in paper or electronic form.
Article 14     When there is a change in customer information, the participant shall promptly change the customer's records through the computer network after receiving notice of the change.
Article 15     A participant may request that the TDCC print paper securities passbooks for its customers and pay the cost of printing. Any passbooks printed by a participant must be qualified by TDCC computer testing before use.
Article 16     When a participant deposits a customer's securities in TDCC custody pursuant to law and regulation but the customer has not applied to open a depository account at the participant's place of business, the participant shall first complete procedures to open an account and establish a file based on the Customer Securities Trading Brokerage Contract or Account Opening Contract for Over-the-Counter Trading of Securities, then notify the customer as soon as possible to retroactively carry out account opening procedures. No sale, withdrawal, or transfer may be conducted before such procedures have been completed.
Article 17     A participant shall use the computer network or other means of transmission to make a daily check of the changes to and the balance of securities recorded in its account with the TDCC. If it discovers a discrepancy, the participant shall notify the TDCC to undertake a joint investigation to determine the cause of the discrepancy and make a correction.
Article 18     Given either of the following circumstances, the TDCC may terminate a participant's contract:
  1. The participant loses the qualification set out in Article 4.
  2. The participant has not used its account within six months from the date of signing the account opening agreement with the TDCC and completing account-opening procedures. With legitimate reason, a one-time-only extension of the deadline may be granted for a period of six months.
    The cancellation of the agreement shall be publicly announced after the TDCC and the participant complete termination procedures.
Article 19     If a participant's contract is terminated, it shall settle the fees payable and the balance of securities recorded in its account within one month from the effective date of termination and notify its customers as soon as possible to carry out securities transfer procedures.
    If a participant whose contract is terminated pursuant to the preceding paragraph has designated another participant or a participant has been designated by the Competent Authority, or if, in a Letter of Consent for Handling of Settlement (Payment) Matters by Proxy signed pursuant to TWSE or TPEx regulations, a proxy has been specified to handle securities withdrawal and transfer on the participant's behalf, it shall transfer the customer information and the specimen of its seal or signature to the designated participant.
Article 20     When a participant closes its account, withdrawal or transfer of the customer-owned portion of the securities balance of its account into customer accounts with other participants may only be carried out at the designated participant's place of business.
    The same shall apply when a participant applies for temporary suspension of business operations, carries out a merger or business transfer, suspends operations under a disposition of the competent authority, or temporarily suspends trading under a disposition of the TWSE or the TPEx.
    The TDCC may reactivate the participant's account upon expiry of the period of suspended operations under the preceding paragraph.
    If a participant fails to settle its account within one month in accordance with the provisions of paragraph 1 of the preceding article, the TDCC will handle transfer of the securities in the customer accounts under its depository account according to the following procedure:
  1. If the participant's contract is terminated due to a merger or transfer of business, the TDCC will transfer the securities in the customer accounts into the designated accounts of the surviving participant, the new post-merger participant, or the transferee participant pursuant to its notification.
  2. If the participant's contract is terminated due to a suspension of business, the TDCC will transfer the securities in the customer accounts into designated accounts pursuant to notification by the designated participant of paragraph 1. The designated participant of paragraph 1 shall as quickly as possible notify customers to carry out supplemental account opening procedures; prior to completing those procedures, customers may not apply for any sale, withdrawal, or transfer of securities.
Article 21     Prior to the closing of an account by a participant, when share transfers or interest and redemption payments on its deposited securities must be conducted in order for an issuer to convene a shareholders meeting, a general meeting of beneficial owners, or a general meeting of creditors, or for the distribution of dividends, bonuses, or other interests, then the TDCC may conduct such transfers or payments pursuant to Article 90 or 91 of these Operating Rules after compiling a stock ownership register, a register of beneficial owners, a register of depositary receipt holders, or a register of creditors on the issuer's behalf.
Article 22     After the given participant settles its account and all fees payable, the TDCC will cancel the account and indicate the account closing in the monthly report to the competent authority.
Article 23     When a participant terminates its contract with a customer, it shall settle the client's account through the computer network. The date of termination of the agreement shall be clearly noted on the customer agreement, on the seal or signature specimen, and on any electronic identity verification materials, which shall then be reviewed supervisory personnel, who shall then place them on file or keep records of them. Any paper securities passbook shall additionally be rendered null and void by punching a hole in it or cutting off a corner and stamping the word "invalid" on the first page.
Article 24     The TDCC and participant shall respectively maintain custody of the participant's account book and the customer's account book and the book-entry reports for fifteen years from their date of their recordation.
    The TDCC and the participant may instead respectively use printed statements or data storage media for the participant's account book and the customer account book of the preceding paragraph.
Chapter 3 Deposits and Withdrawals of Securities
Article 25     Participants shall conduct their securities deposits or withdrawals within the respective time periods set forth below:
  1. Period for the use of computer networks or other types of transmission: 8 a.m. to 3:30 p.m., Monday through Friday.
  2. Period for deposit or withdrawal of securities: 9 a.m. to 4:30 p.m., Monday through Friday.
Article 26     Registered securities deposited by a participant in TDCC custody must have the seal/signature-of-record stamped in the "Transferor" space of the security itself and on the transfer application submitted by the original shareholder or beneficial owner, or, by the holder of the depositary receipt or asset-backed security, or the creditor of the convertible corporate bond, exchangeable corporate bond, corporate bond with warrant, corporate bond, bank debenture, government-issued bond, or domestically issued bond of a foreign issuer, and must have the deposit date stamped on the reverse side of the transfer application by the participant.
    The deposited securities of the preceding paragraph are restricted to those owned by a participant or its customers and that are not tax-deferred stocks under Articles 16 and 17 of the Act for Upgrading Industries, or under Article 13 of the Statute for Encouragement of Investment as implemented prior to the end of 1990.
    Where the securities deposited under paragraph 1 are the subject of a trust and deposited in a trustee's trust depository account, trust registration for those securities shall first be carried out by the issuer or its transfer agent.
    To verify factual ownership of securities by a customer, the participant shall request that the customer submit a trade report or other evidentiary document, stamp it with a "TDCC Custody Deposit Date Stamp," and return it to the customer. In addition, the code number of the securities firm that accepted the buy order, and the order ticket number, purchase date, and number of shares or units shall be noted in the "summary" column of the application for securities deposit filled out by the customer, or photocopies of other evidentiary documents shall be submitted as attachments with that application.
    If, pursuant to regulations, a customer is appointed to sell securities it does not own, then after execution of the transaction, the participant shall check the documentation of ownership and the order ticket submitted by the principal, and after the TDCC verifies the accuracy of the information sent by the TWSE, the participant shall deposit the securities in the customer account under the depository account and perform book-entry settlement.
Article 27     Unregistered bearer corporate bonds, bank debentures, debt-type beneficial securities and asset-backed securities, municipal bonds, and bonds domestically issued by a foreign issuer and deposited by the participant in TDCC custody must have a deposit-date stamp affixed by the participant.
    The TDCC may refuse to accept a deposit of bonds if their attached unmatured interest coupons have been detached, if their number is short, or if the coupons have matured.
    The TDCC need not accept a deposit of corporate bonds, bank debentures, debt-type beneficial securities or asset-backed securities, municipal bonds, or bonds domestically issued by a foreign issuer deposited by a participant during the two business days prior to the date of interest and redemption payments.
Article 28     The TDCC may decline a participant's deposit of securities if the securities are securities issued cross-border.
Article 29     When a participant accepts a customer's deposit of securities for custody, it shall compile and deliver to the customer a statement listing the serial numbers of the securities, and input through the computer network the participant code number, the customer account number, and the type, serial numbers, and quantity of securities. After inputting the information the participant shall make the relevant entries in the customer passbook.
Article 30     When a participant deposits securities with the TDCC, it shall compile a Securities Deposit List that distinguishes proprietary and customer-owned securities and send the list together with the securities to be checked by the TDCC. If the securities are bonds, respective lists shall be compiled for the bonds according to type, series, and par value.
    After checking and acceptance, the TDCC will enter the securities delivered for deposit pursuant to the preceding paragraph into the participant's account book on the date of the delivery; in the case of securities issued domestically by a foreign company, the TDCC will make the book entry in the account book only after receiving notification of delivery from the foreign depository or clearing institution.
    When a participant in an area other than Taipei City or New Taipei City delivers the List and the securities of paragraph 1 to the TDCC by 1:30 p.m. on the next business day, the TDCC will take the delivery date as the date of the account entry.
Article 30-1     When the securities deposited by the participant are Emerging Stocks, the TDCC will make the relevant account book entry after the issuer has authenticated the securities or stricken the previous owner from the certificate, or after the TDCC approves the submission of a bond against defective title by the depositor under relevant regulations.
Article 31     When comparison by the TDCC shows a discrepancy between the securities to be deposited by a participant, based on information from the computer network or other inputs, the TDCC shall notify the participant to determine the reason and make a supplemental deposit by 6 p.m. the same day, provided that if a participant is a foreign depository or clearing institution and its contract otherwise stipulates a period for supplementation, that stipulation shall govern.
    If a participant fails to make the supplementation of the preceding paragraph, the TDCC shall notify the TWSE and the TPEx to handle the matter, and shall report the matter to the competent authority.
Article 32     When a participant applies to withdraw securities under TDCC custody, it shall notify the TDCC through the computer network or other transmission of its participant code number, the customer account number, and the type, serial numbers, and quantity of securities. TDCC will make account book entries on the following business day.
    If the securities of the preceding paragraph are bonds, the participant shall additionally give notice to the TDCC by inputting the bond names and par values.
    The participant, on the second business day of each week, shall compile a Deposited Securities Withdrawal List that distinguishes proprietary and customer-owned securities and deliver it to TDCC. After TDCC review confirms the accuracy of the Deposited Securities Withdrawal List, it will place a withdrawal stamp on the securities and deliver them to the participant on the same day. This procedure, however, will not apply under the following circumstances:
  1. When a participant applies to withdraw odd-lot stocks or depositary receipts under TDCC custody or securities custodies overseas, the TDCC will wait until the given odd-lot stocks or depositary receipts have been separated out or after the securities are withdrawn from the foreign depository or clearing institution, and will then notify the participant to compile the Deposited Securities Withdrawal List and carry out withdrawal. After TDCC review of the Deposited Securities Withdrawal List confirms its accuracy, it will deliver the securities to the participant the same day.
  2. When a participant applies to withdraw bonds under its proprietary ownership, the TDCC shall make the participant’s account entry, and after confirming the accuracy of the Deposited Securities Withdrawal List, deliver the bonds to the participant the same day.
Article 33     If a participant applies to withdraw securities under TDCC custody in order to carry out conversion, exchange, redemption, repurchase, resale, retirement of shares or to exercise other rights, the TDCC shall make the account book entry on the next business day, and by the second business day, deliver the securities to the issuer or depositary institution. those securities are issued in dematerialized form or constitute a deposit with a large face value distributed by book entry and for which share certification is not required by regulations, the TDCC shall by the second business day compile a statement of change in balance and deliver it to the issuer or depositary institution for verification.
Article 33-1     When a participant applies to conduct bond resale operations for corporate bonds, bank debentures, debt-type beneficial securities and asset-backed securities, or municipal bonds, or for New Taiwan Dollar (NTD) bonds or international bonds issued in Taiwan by a foreign national, the TDCC, after comparing and verifying the accuracy of the information from the notifications by the issuer and the participant, will debit the depository account of the holder, and by the next business deliver to the issuer a statement of change in balance.
Article 34     When an issuer announces the beginning date of a book closure period in order to convene a shareholders meeting or distribute dividends, bonuses, or other interests, the TDCC will temporarily suspend processing of participant withdrawals of the securities under custody for a period of three business days from said beginning date.
Article 35     When any of the following circumstances apply to securities under TDCC custody, the TDCC may refuse to accept a participant's application for withdrawal:
  1. The exchange for shares has not been completed for certificates of entitlement to new shares or certificates of payment for shares.
  2. The securities were deposited as large face-value certificates or other documents of title and distributed via book-entry transfer.
  3. Securities issued cross-border.
  4. The securities need to be separated out by the issuer's shareholder services unit.
  5. Withdrawal of shares underlying exchangeable corporate bonds is restricted during the custody period.
  6. The securities were issued in dematerialized form.
  7. The securities are corporate bonds, bank debentures, debt-type beneficial securities or asset-backed securities, municipal bonds, or domestically issued bonds of a foreign issuer.
Article 36     When a participant delivers a customer's securities, it shall stamp the date of withdrawal from TDCC custody on the reverse side of the transfer application or the bonds, and shall also compile and deliver a statement listing the serial numbers of the securities. When there is insufficient space on the reverse side of the bond, the participant shall paste on a bond transfer flow chart and place a stamp across the seam joining the two documents.
Article 37     When a securities finance enterprise withdraws securities from TDCC custody, it shall input the relevant withdrawal information through the computer network within the time period set out in Article 25 and compile a Deposited Securities Withdrawal List. After receiving the Deposited Securities Withdrawal List compiled and sent by the securities finance enterprise, the TDCC will deliver the securities bearing the withdrawal stamp to the enterprise on the same day.
Article 38     When the TDCC delivers a participant's securities, it will place a TDCC date of release from deposit stamp on the reverse side of the transfer application or bonds; when there is insufficient space on the reverse side of the bonds, the TDCC will place the stamp on the bond transfer flow chart.
Article 39     A participant shall conduct deposits and withdrawals of securities as separate operations and may not net deposited securities and withdrawn securities.
Chapter 4 Clearing, Settlement, and Book-Entry Transfer of Securities Trades
Section 1 Trading on Exchanges
Article 40     The TDCC prepares Clearing and Settlement Statements on behalf of the TWSE for the handling of securities receipt and delivery operations.
    The Clearing and Settlement Statements referred to in the preceding paragraph are prepared separately for each respective type of security based on the transaction records for a given day delivered by the TWSE.
    Each participant shall input margin transaction data for the Clearing and Settlement Statements into the TDCC mainframe computer through the computer network during the specified time period.
    The "specified time period" of the preceding paragraph shall be as prescribed in the TWSE Operating Rules.
Article 41     A participant shall print a Settlement List, on the basis of which settlement of trades for the given period will be performed.
Article 42     The TDCC will perform book-entry transfer and make account book entries for securities payable by the participant, based on the Clearing and Settlement Statement and the timetable prescribed by the TWSE, according to the following procedures:
  1. For the portion of securities sold by a customer, after the TDCC receives the participant's notification it will transfer the securities from the customer account in the securities firm's depository account into the same account's settlement account. However, in the case of a day trade of securities, the TDCC may transfer merely the difference by which the total quantity sold exceeds the total quantity purchased.
  2. The shortfall in securities resulting when the total quantity sold by the customer exceeds the total quantity purchased will be transferred from the settlement account into the TWSE settlement account.
  3. Securities sold by a securities firm on a proprietary basis will be transferred directly from the securities firm's depository account into the TWSE settlement account. However, in the case of a day trade of securities, or when a securities firm that is a liquidity provider for beneficial certificates, ETNs, or call (put) warrants or a market maker or liquidity provider for stocks makes a proprietary trade thereof, it is only necessary to transfer the difference by which the total quantity sold exceeds the total quantity purchased.
Article 43     After receiving notification from the TWSE, the TDCC will conduct book-entry transfer and make account-book entries for the securities transferable by the participant, based on the Clearing and Settlement Statement and the timetable prescribed by the TWSE, according to the following procedures:
  1. The shortfall in securities resulting when the total quantity purchased by the customer exceeds the total quantity sold will be transferred from the TWSE settlement account into the settlement account under the securities firm's depository account.
  2. For the customer-purchased portion of securities, the TDCC will transfer the securities from the settlement account of the respective securities firm's depository account into that account's customer account, based on notification from security firm, and notify the securities firm to credit the customer's account. However, in the case of a day trade of securities, it is only necessary to transfer the difference by which the total quantity purchased exceeds the total quantity sold.
  3. Securities purchased by a securities firm on a proprietary basis will be transferred from the TWSE settlement account into the securities firm's depository account. However, in the case of a day trade of securities, or when a securities firm that is a liquidity provider for beneficial certificates, ETNs, or call (put) warrants or a market maker or liquidity provider for stocks makes a proprietary trade thereof, it is only necessary to transfer the difference by which the total quantity purchased exceeds the total quantity sold.
    Notifications by securities firms under subparagraph 2 of the preceding article shall be carried out through the computer network by 6 p.m. of the second business day after the trade date. If such notification is not sent, the TDCC may at its discretion transfer securities from the settlement account under the securities firm's depository account into the customer account under that same account.
Article 44     The TDCC will perform book-entry transfer and make account book entries for any block trade of central government bonds by a government bond dealer, based on the Clearing and Settlement Statement, according to the procedures below:
  1. When there is a remaining balance of securities sold after netting the total of government bond purchases and sales, the TDCC will transfer that balance from the government bond dealer's depository account into the TWSE settlement account by 12 noon on the first business day after the trade date.
  2. When there is a balance of securities purchased after netting the total of government bond purchases and sales, then the TDCC will transfer the balance from the TWSE settlement account into the bond dealer's depository account after it receives TWSE notification on the first business day after the trade date.
Article 45     The TDCC will perform book-entry transfer and make account book entries for margin transaction securities in transactions undertaken by a securities finance enterprise or a securities firm engaged in margin purchase and short sale business, based on the Clearing and Settlement Statement and the timetable prescribed by the TWSE, according to the procedures below:
  1. When there is a remaining balance of securities sold after netting total margin transaction purchases and sales, the balance will be transferred from the segregated margin transactions account under the participant account with the securities finance enterprise or the securities firm engaged in margin purchase and short sale business and into the TWSE settlement account.
  2. When there is a remaining balance of securities purchased after the netting of total margin transaction purchases and sales, then after receiving TWSE notification, the TDCC will transfer the balance from the TWSE settlement account into the segregated account for margin purchases and short sales in the participant account of the securities finance enterprise or the securities firm engaged in margin purchase and short sale business.
Article 46     When the participant is a custodian institution, a domestic conversion agent, or a trust enterprise, the TDCC will perform book-entry transfer and make account book entries for its securities trades according to the following procedures:
  1. For the portion sold: the TDCC will transfer securities from the depository account of the custodian institution, domestic conversion agent, or trust enterprise, based on their notification, into the depository account opened at the securities firm.
  2. For the portion purchased: the securities will be transferred from the depository account opened at the securities firm by the custodian institution or the trust enterprise into the custodian institution or trust enterprise's depository account, based on notification from the securities firm.
    When the TDCC performs book-entry transfer and account book entries for securities trades under the preceding paragraph, in the case of a day trade of securities, it is only necessary to transfer the difference between the total quantity purchased and the total quantity sold.
Article 46-1     (Deleted)
Article 46-2     (Deleted)
Article 47     When there is a shortfall in the depository account of a participant's customer, the TDCC will prepare a Securities Shortfall List and notify the participant to forward it to the customer to make up the shortfall.
    If the participant's customer fails to make up the shortfall in full, and the participant fails to make the necessary corrections within the time set by the TWSE, the TDCC shall promptly notify the TWSE to handle the matter.
Article 48     When the TDCC performs book-entry operations and discovers that the balance transferable from a participant's account book is insufficient for settlement, the TDCC shall still transfer the balance into the TWSE settlement account and notify the TWSE to handle the matter.
Article 49     When a participant applies to correct an account number, process defective securities, report an out-trade or the handling of an out trade, or report a default or the handling of a default, it shall notify the TDCC with relevant information through the TWSE.
    After receiving the notification of the preceding paragraph, the TDCC will perform the relevant book adjustment operations.
Section 2 Securities Trading at Securities Firms' Places of Business
Subsection 1 Book-Entry Transfer of Securities Traded Over-the-Counter
Article 50     The TDCC is mandated by the TPEx to prepare Calculation Tables for Clearing and Settlement, based on the transaction records delivered by the TPEx on each given day, and to perform book-entry transfer of securities traded in TPEx.
Article 51     The TDCC will conduct book-entry transfers and make account book entries for securities to be transferred by participants, based on the Clearing and Settlement Statement and the time period prescribed by the TPEx, according to the following procedures:
  1. For the portion sold by customers: when the TDCC receives the participant's notification, it will transfer the securities from the customer account under the securities firm's depository account into that account's settlement account. However, in the case of a day trade of securities, it is only necessary to transfer the difference by which the total quantity sold exceeds the total quantity purchased.
  2. If the total quantity sold by customers exceeds the total quantity of their purchases, the securities from the settlement account will be transferred into the TPEx settlement account.
  3. For the portion sold by a securities firm on a proprietary basis: the securities will be transferred directly from the securities firm's depository account into the TPEx settlement account. However, in the case of a day trade of securities, or in the case of a securities firm that is a liquidity provider for beneficial certificates, ETNs, or call (put warrants) or a market maker or liquidity provider for stocks and is making proprietary trades thereof, it is only necessary to transfer the difference by which the total quantity sold exceeds the total quantity purchased.
Article 52     After receiving TPEx notification, the TDCC will conduct book-entry transfer and make account book entries for securities to be transferred to participants according to the following procedures, based on the Clearing and Settlement Statement and the time period prescribed by the TPEx:
  1. For a shortfall when the total quantity purchased by the customers exceeds the quantity sold: the securities will be transferred from the TPEx's settlement account into the settlement account under the securities firm's depository account.
  2. For the portion purchased by customers: the TDCC will transfer securities from the settlement account of each securities firm's depository account into that account's customer account, based on the securities firms' notifications, and notify the securities firms to make the customer account book entries. However, in the case of a day trade of securities, it is only necessary to transfer the difference by which the total quantity purchased exceeds the total quantity sold.
  3. For the portion purchased by a securities firm on a proprietary basis: the securities will be transferred from the TPEx settlement account into the securities firm's depository account. However, in the case of a day trade of securities, or in the case of a securities firm that is a liquidity provider for beneficial certificates, ETNs, or call (put) warrants or a market maker or liquidity provider for stocks and is making proprietary trades thereof, it is only necessary to transfer the difference by which the total quantity purchased exceeds the total quantity sold.
    The notification of subparagraph 2 of the preceding paragraph shall be given through the computer network by 6 p.m. of the second business day after the trade date. Absent notification, the TDCC will at its discretion transfer the securities from the depository account's settlement account into its customer account.
Article 53     The TDCC will conduct book-entry transfers and account book entries for the margin transactions of securities finance enterprises or securities firms engaged in margin purchase and short sale business according to the following procedures, based on the Clearing and Settlement Statement and the time period prescribed by the TPEx:
  1. When there is a remaining balance of securities sold after netting total margin trade purchases and sales, the balance will be transferred from the customer account's margin transactions special account under the depository account of the securities finance enterprise or the securities firm engaged in margin purchase and short sale business into the TPEx settlement account.
  2. When there is a remaining balance of securities purchased after netting total margin transaction purchases and sales, then after receiving TPEx notification, the TDCC will transfer the balance from the TPEx settlement account into the customer account's margin transactions special account under the depository account of the securities finance enterprise or the securities firm engaged in margin purchase and short sale business.
Article 54     If a participant is a custodian institution, domestic conversion agent, or a trust enterprise, the TDCC will conduct book-entry transfer and make account book entries for the participant according to the following procedures:
  1. For the portion sold: based on the notification from the custodian institution, domestic conversion agent, or trust enterprise, the TDCC will transfer the securities from their depository account into the depository account opened with the securities firm.
  2. For the portion bought: based on the notification from the securities firm, the TDCC will transfer the securities from the depository account opened at the securities firm by the custodian institution or trust enterprise into the depository account of the custodian institution or trust enterprise.
    When the TDCC performs book-entry transfer and account book entries for securities trades under the preceding paragraph, in the case of a day trade of securities, it is only necessary to transfer the difference between the total quantity purchased and the total quantity sold.
Article 54-1     (Deleted)
Article 54-2     (Deleted)
Article 55     When a customer negotiates a securities trade with a participant at the participant's place of business, the TDCC will conduct book-entry transfers and make account book entries according to the following procedures:
  1. For the portion comprising bonds, corporate bonds, bank debentures, debt-type beneficial securities or asset-backed securities (ABS), municipal bonds, NTD bonds issued in Taiwan by a foreign national, international bonds, or foreign currency bonds issued overseas by a Taiwan national or foreign national and approved for registration by the Taipei Exchange (TPEx) ("foreign bonds"):
    1. For the portion comprising transfers of customer purchases: based on the participant's notification, the TDCC will transfer the securities from the proprietary account under the participant's depository account into the customer account under the participant's depository account and notify the participant to make the customer account book entry.
    2. For the portion comprising transfers of securities sold by customers: based on the participant's notification, the TDCC will transfer those securities from the customer account of the participant's depository account into the proprietary account of the participant's depository account, and promptly notify the participant to make the customer account book entry.
    3. When payment and receipt of funds for negotiated trades between customer and participant are handled by the TDCC, then after it completes payment and receipt operations, the TDCC will carry out the book-entry transfers and account book entries under items 1.1 and 1.2. based on notification from the participants of the two parties.
  2. For the portion comprising stocks, beneficial certificates, ETNs, depositary receipts, convertible corporate bonds, exchangeable corporate bonds, corporate bonds with warrants, stock warrants, bond conversion entitlement certificates, and real estate investment trust (REIT) beneficial securities:
    1. For the portion comprising transfers of customer purchases: based on the TPEx market transaction record and notification from the participant, the TDCC will transfer the securities from the proprietary account in the participant's depository account into that account's customer account by the second business day after the trade date and notify the participant to make the customer account book entries.
    2. For the portion comprising transfers of securities sold by customers: based on the TPEx market transaction record and notification from the participant, the TDCC will transfer the securities from the customer account in the participant's depository account and into that account's proprietary account by the second business day after the trade date and notify the participant to make the customer account book entries.
    If the book-entry transfers and account book entries of the preceding paragraph represent repo transactions involving convertible corporate bonds, corporate bonds with warrants, beneficial certificates of a securities investment trust ETF with bond components, or beneficial certificates of an active securities investment trust ETF ("active ETF") with bond components, they shall be completed on the trade date.
Article 56     When a participant and customer negotiate a repo transaction at the participant's place of business and delivery to the customer is effected using a bond passbook issued by the participant, the TDCC will conduct book-entry transfers and account book entries for the securities according to the following procedures:
  1. When there is an application to issue a bond passbook for the purpose of a repo transaction, the TDCC, based on the participant's notification, will verify that the disposable balance in the participant's account is accurate, then credit the quantity of bonds in the passbook opened under the participant's account and debit the same quantity in the disposable balance of the participant's account.
  2. When an application is made to cancel the bond passbook at the maturity of the repo transaction, the participant shall notify the TDCC of the cancellation application information. If there is any amount payable, the information shall include the amount of the remittance, the remittance method, and the time the bank was notified to make the remittance. The TDCC, based on the participant's notification, will verify the accuracy of the transaction information, then debit the quantity in the passbook opened under the participant's account and credit the same quantity in the disposable balance of the participant's account.
  3. When an application is made to cancel the bond passbook due to early termination of the repo transaction, the TDCC, based on the participant's notification, will verify the accuracy of the declaration and bond passbook or the documentation of payment of funds to the customer, then debit the quantity in the bond passbook opened under the participant's account and credit the same quantity in the disposable balance of the participant's account. When the participant and the customer undertake a new transaction with no refund of monies between the parties, the aforementioned documentation of payment need not be submitted.
    If the participant does not notify the TDCC of the bond passbook cancellation by 5 p.m. on the date of maturity of the repo transaction, the customer may, through the participant with which the customer has the account, notify the TDCC to transfer the bonds recorded in the bond passbook. Upon receiving the notification, the TDCC, after verifying its accuracy, will debit the quantity in the bond passbook opened under the participant's account book, and transfer the bonds into the customer’s book-entry depository account.
    The bond passbook issued by the participant under paragraph 1 and the declaration for an application for early termination may be in paper or electronic form. If the bond passbook or the declaration for an application for early termination is issued in electronic form, the participant shall, in accordance with the Electronic Signature Act, identify and confirm the customer's identity and its signature on the declaration of intent with respect to matters such as the delivery of the bond passbook and applications or cancellation or voidance of the bond passbook in connection with maturity or early termination of transactions.
    If the operations of the preceding paragraph are performed electronically, the participant shall keep records of the content, IP address, time, and identity verification data of the customer's application.
Article 57     If the book-entry transfer method is used between participants for delivery of negotiated OTC transactions in bonds, corporate bonds, bank debentures, debt-type beneficial securities or asset-backed securities, municipal bonds, NTD bonds issued in Taiwan by a foreign issuer, international bonds, or foreign bonds, the TDCC, based on the participant's notification, will promptly make entries in the account books of both participants. If the TDCC is mandated with payment and receipt of funds for a negotiated trade between participants, then after it completes payment and receipt of funds, the TDCC will make account book entries for both participants based on their notifications.
    When the book-entry transfer method is used between participants for deliveries in negotiated OTC transactions in stocks, beneficial certificates, depositary receipts, convertible corporate bonds, exchangeable corporate bonds, corporate bonds with warrants, stock warrants, bond conversion entitlement certificates, or real estate investment trust (REIT) beneficial securities, the TDCC will make account book entries for both participants, based on the TPEx securities market transaction record and the participants' notifications, by the second business day after the trade date.
    If the book-entry transfers and account book entries of the preceding paragraph represent repo transactions involving convertible corporate bonds, corporate bonds with warrants, beneficial certificates of a securities investment trust ETF with bond components, or beneficial certificates of an active ETF with bond components, they shall be completed on the trade date.
Article 57-1     For bonds traded by participants through the TPEx Electronic Bond Trading System, TDCC will conduct book-entry transfers and make account book entries according to the following procedures:
  1. For the portion comprising corporate bonds, financial debentures, or municipal bonds:
    1. If the participant has bonds deliverable, TDCC, based on the participant's notification, will transfer the bonds from the participant's depository account into the TPEx settlement account.
    2. If the participant has bonds receivable, TDCC, based on the TPEx's notification, will transfer the bonds from the TPEx settlement account into the participant's depository account.
  2. For the portion comprising international bonds:
    1. If the participant has bonds deliverable, TDCC, based on the TPEx's notification information, will transfer the bonds from the participant's depository account into the TPEx settlement account.
    2. If the participant has bonds receivable, TDCC, based on the TPEx's notification, will transfer the bonds from the TPEx settlement account into the participant's depository account.
Article 58     The provisions of paragraph 1 of Article 47 apply mutatis mutandis when the TDCC performs book-entry transfer operations for TPEx securities trades and discovers that the balance in a participant's customer depository account is insufficient.
    If the participant's customer fails to make up the shortfall in full, and the participant fails to make the necessary corrections within the time set by the TPEx, the TDCC shall promptly notify the TPEx to handle the matter.
Article 59     When the TDCC performs book-entry transfers for TPEx securities trades and finds an insufficient balance in the participant's depository account, it shall still transfer the balance into the TPEx settlement account and then notify the TPEx to handle the matter.
Article 60     When a participant applies to correct an account number, process defective securities, report an out-trade or the handling of an out-trade, or report a default or the handling of a default, it shall notify the TDCC by passing relevant information through the TWSE.
    The TDCC will conduct relevant book adjustment operations after receiving the notification of the preceding paragraph.
Article 61     (Deleted)
Subsection 2 Clearing and Settlement for TPEx-Traded Emerging Stocks
Item 1 (Deleted)
Article 61-1     A securities firm shall enter into a contract with the TDCC, on the basis of which clearing and settlement for negotiated OTC trades of Emerging Stocks will be handled; if the securities firm has a branch unit, clearing and settlement for its trades shall be handled by the head office in aggregate with its own trades.
Article 61-2     Pursuant to the provisions of Chapter 2 of these Operating Rules, a securities firm shall open a depository account at the TDCC through which book-entry settlement for TPEx trades of Emerging Stocks will be carried out.
Article 61-3     A securities firm must open a settlement account at the correspondent bank for payment and settlement of TPEx trades of Emerging Stocks.
    The funds in the settlement account opened by a securities firm pursuant to the preceding paragraph may not be used for any purpose other than the payment and receipt or the transfer of funds in connection with securities trades brokered by the firm. This restriction shall not apply, however, when a customer has authorized the securities firm to utilize funds from its securities trading balances.
    If a securities firm has mandated two or more financial institutions to perform payment and receipt of customer funds on its behalf, only one of those financial institutions may conduct account transfers of funds for settlements through the TDCC settlement account. Accounts at other financial institutions will be in the nature of transition accounts, and each day the customer settlement funds in those accounts shall be cleared into the account of the abovementioned financial institution or remitted to the securities trading funds transfer account of the customer, leaving no residual balance. A securities firm customer may open a funds transfer account for securities trading at only one of those financial institutions.
Article 61-4     For trades of Emerging Stocks executed by a recommending securities firm on a proprietary basis or by price negotiation with another securities firm, the two parties shall, prior to 3 p.m. on the trade date, notify TDCC, through the TPEx, of the trade information. Upon receiving the notification, TDCC will immediately earmark the sold securities.
    In the event the buying and selling securities firms, before clearing and settlement are carried out, change the net settlement or real-time gross settlement method, they shall notify TDCC of the relevant information through the online computer system prior to 3:30 p.m. on the trade date.
Article 61-5     If real-time gross settlement is used for a trade of Emerging Stock executed by a recommending securities firm on a proprietary basis or by price negotiation with another securities firm, one of the following methods may be used for payment and receipt of funds and securities:
  1. If the two parties handle payment and receipt of funds themselves, then when the TDCC receives the notifications of the two participants, it will transfer the Emerging Stocks from the seller participant's depository account into the buyer participant's depository account and notify the participants to make the necessary entries in their customer accounts.
  2. If the TDCC is requested to conduct payment and receipt of funds on behalf of the participants, the buyer participant shall remit funds payable to the seller participant into the TDCC clearing account within the time period specified by the TDCC and transmit a remittance statement to the TDCC through the computer network.
    After the TDCC receives the buyer participant's remittance and remittance statement and confirms their accuracy by comparison with the transaction data, it will promptly transfer the Emerging Stocks from the seller participant's depository account into the buyer participant's depository account and notify the participants to make the necessary entries in their customers' accounts.
    After it conducts the account transfer of the participant's Emerging Stocks of the preceding paragraph, the TDCC will remit the funds receivable by the participant seller into its designated settlement account.
Article 61-6     When an Emerging Stock is traded by a recommending securities firm on a proprietary basis or by price negotiation with another securities firm, if, due to occurrence of a trade error, it is necessary to correct the error or to cancel the trade, the securities firm shall notify the counterparty securities firm to handle the matter before clearing and settlement are carried out.
    The securities firms of the preceding paragraph shall notify the TDCC, through the TPEx, of the correct trade information or trade cancellation information by 3:30 p.m. on the trade date.
Article 61-7     Based on trades of Emerging Stocks by securities firms on a proprietary basis or by price negotiation with other securities firms and on the balances after netting funds and securities payable and receivable, the TDCC will compile Calculation Tables for Clearing and Settlement of TPEx-Traded Emerging Stocks and conduct clearing and settlement operations.
    A securities firm as referred to in the preceding paragraph shall print a Clearing and Settlement Statement for TPEx-Traded Emerging Stocks on the trade date as the basis for settlements of funds and securities in the current settlement cycle.
    When a securities firm is unable to complete delivery by 10 a.m. on the second business day after the trade date for Emerging Stocks it has sold either on a proprietary basis or in a brokered trade, the TDCC will not conduct clearing and settlement for those Emerging Stocks, but will adjust the clearing and settlement information and notify the counterparty securities firm and the TPEx.
Article 61-8     When the Clearing and Settlement Statement for TPEx-traded Emerging Stocks shows a price payable for a trade in Emerging Stocks executed by a recommending securities firm on a proprietary basis or by price negotiation with another securities firm, the price payable shall be remitted to the TDCC settlement account by 10 a.m. on the second business day after the trade date.
    The TDCC will conduct settlement of the funds receivable and receipt and delivery of the Emerging Stocks for the securities firm, based on the Calculation Table for Clearing and Settlement of TPEx-traded Emerging Stocks, according to the procedures below:
  1. For Emerging Stocks deliverable: the TDCC will transfer the Emerging Stocks from the seller participant's depository account into the TDCC settlement account by 10 a.m. on the second business day after the trade date and notify the participant to make the necessary entry in its customer account. However, in the case of proprietary trading by a recommending securities firm or in the case of a securities firm handling an out-trade , it is only necessary to transfer the balance of the total quantity sold in excess of the total quantity bought.
  2. For payments receivable: the funds will be remitted by the TDCC into the securities firm's funds settlement account on or after 10 a.m. on the second day after the trade date.
  3. For Emerging Stocks receivable: after the TDCC confirms on the second business day after the trade date that the trade was processed without error pursuant to paragraph 1, it will transfer the Emerging Stocks from its settlement account into the buyer participant's depository account and notify the participant to make the necessary entries in its customer account. However, in the case of proprietary trading by a recommending securities firm or in the case of a securities firm handling an out-trade, it is only necessary to transfer the balance of the total quantity bought in excess of the total quantity sold.
Article 61-9     If a participant is a custodian institution or a trust enterprise, the TDCC will conduct book-entry transfer and account entry for the Emerging Stocks according to the following procedures:
  1. For the portion sold: based on notification by the custodian institution or trust enterprise, the TDCC will transfer the stocks from the custodian institution or trust enterprise's depository account into the enterprise or the institution's depository account with a securities firm.
  2. For the portion bought: based on notification by the securities firm, the TDCC will transfer the stocks from the depository account opened by the custodian institution or trust enterprise with the securities firm into the custodian institution or trust enterprise's depository account.
Article 61-10     (Deleted)
Article 61-11     When a securities firm fails to complete settlement of funds by 10 a.m. on the second business day after the trade date, the TDCC will not conduct clearing and settlement according to the transaction data of the securities firm, but will adjust the clearing and settlement information and notify the counterparty securities firm and the TPEx, and will also report the matter to the competent authority.
Article 61-12     When a securities firm reports a correction of an account number, an out-trade, or a customer default with respect to the execution of an Emerging Stock trade, it shall notify the TDCC through the TPEx. The TDCC will conduct the relevant book adjustment operations after receiving notification.
Item 2 (Deleted)
Article 61-13     (Deleted)
Subsection 3 Clearing and Settlement of TPEx-Traded Open-End Beneficial Certificates
Article 61-14     A securities firm performing clearing and settlement of a TPEx trade of open-end beneficial certificates shall, in accordance with Articles 61-1 to 61-3, sign an agreement with TDCC and open a participant account with TDCC, and open a settlement account at the correspondent bank. If the securities firm has previously performed settlement for Emerging Stock, it shall make joint use of the original Emerging Stock participant account and settlement account.
Article 61-15     The provisions of Article 61-4 to 61-12 shall apply mutatis mutandis to the operations for clearing and settlement of TPEx traded open-end beneficial certificates, and settlement shall be completed together with the settlement of Emerging Stock.
Section 3 Account Transfer Operations
Article 62     When the TDCC accepts a request from an issuer or its transfer agent, a depositary institution, a securities underwriter, or another institution to distribute securities by book-entry transfer, it will make the entries in the participant and customer accounts on the transfer date designated by the given institution based on the list of recipients for the requested distribution, provided that when the distribution is a private placement, the issuer shall notify the TDCC when it files with the competent authority for recordation pursuant to law.
Article 62-1     When an issuer delivers uncertificated securities by book-entry transfer, it shall prepare computer media of distribution lists of the securities for registration and delivery by book-entry transfer and deliver them to the TDCC before the book-entry delivery date, together with the relevant evidentiary documents for that issue of securities, provided that when an issuer privately places securities, it shall notify the TDCC when it reports to the competent authority for recordation in accordance with law.
    After confirming the accuracy of the evidentiary documents of the preceding paragraph, the TDCC will register the total quantity of the given issue, and on the designated delivery date will transfer the securities into the customers' depository accounts with participants, based on the quantity stated in the computer media of the preceding paragraph, and will notify each participant to make the necessary entries in its customer accounts. If the owner of securities has not opened a depository account with the participant, book-entry delivery will be completed by transferring the securities into the registered account under the issuer's depository account.
    If an issuer requests that the TDCC handle receipt and payment of funds on its behalf when offering and issuing securities, the TDCC will conduct book-entry delivery and make account book entries for such securities pursuant to paragraph 2 after completing funds payment and receipt operations.
    For the owners of the registered accounts' securities under the issuer's depository account, the issuer shall notify the TDCC of the name of the respective person or entity, their national ID number or profit-seeking enterprise or tax withholding entity uniform ID number, along with other required particulars and matters regarding delivery to the securities owners.
Article 62-2     If the securities delivered by book-entry transfer under the preceding article are bonus shares with a dividend yield of 20 percent or higher and are provided as collateral for margin transactions, money lending for securities business, securities settlement financing, money lending for unrestricted purposes, or secured money lending, the TDCC will transfer the securities on the designated transfer date, based on the list of collateral owners provided by the lending company, from the security owner's central depository account into the lending company's margin transactions special account or its collateral special account.
    If the securities delivered by book-entry transfer under the preceding article are the shares of transferee company resulting from a security issuer's demerger and capital reduction, and those shares and the shares after capital reduction are exchange-listed or TPEx-listed on the same day, then in accordance with regulation they may be pledged as margin transactions collateral, and the TDCC will apply the provisions of the preceding paragraph mutatis mutandis in carrying out the transfer.
Article 62-3     If securities delivered by an issuer by book-entry transfer under Article 62-1 are collateral for lending conducted by the securities firm for share subscription purposes, the securities firm shall, on the cash capital increase payment deadline date, prepare an itemized statement of the share subscription lending. After comparing and verifying the accuracy of the list of securities for registration and delivery by book-entry transfer, the TDCC will transfer the securities on the designated transfer date from the securities owner's depository account into the money lending collateral account of the securities firm that is conducting the lending for the share subscription.
Article 63     When a participant accepts a customer application to transfer the balance of securities booked in the customer account into an account with another participant, it shall notify the TDCC within the time period specified in Article 25 by entering the relevant information through the computer network.
    The TDCC will promptly make account book entries for both participants upon receiving the transfer notification of the preceding paragraph.
Article 63-1     If an issuer, an issuer's transfer agent, a depositary institution, a securities underwriter, or other institution carries out book-entry distribution of securities pursuant to Article 62, or if an issuer delivers uncertificated securities by book entry pursuant to Article 62-1 and if, for reasons not attributable to the securities owners, an error occurs in the quantity of securities distributed or delivered or in the depository account, it may apply to the TDCC with the relevant evidentiary documents for correction of the error. When the TDCC has confirmed the accuracy of the information, it will make the correction; if the amount of securities in the owner's account is insufficient to make an account transfer, the TDCC will not handle the correction and will notify the applicant to handle the matter.
    The provisions of the preceding paragraph apply mutatis mutandis when an issuer conducts a transfer operation pursuant to Article 63 for the registered accounts' securities under the issuer's depository account, and for reasons not attributable to the securities owners, an error results in the type or quantity of securities transferred.
Article 64     When a customer purchases securities, the customer may only apply to transfer the balance of the purchased securities in its account to an account with another participant on the third business day after the trade date; with the consent of the participant, however, the customer may apply to make a transfer on the second day after the trade date.
Article 64-1     When a customer makes a transfer of securities other than through the centralized securities market or an OTC transaction at a securities firm, and uses the book-entry transfer method, the customer shall present relevant evidentiary documents and apply with the participant to make the transfer. The participant will use the computer network to notify the TDCC of the information relevant to the securities to be transferred by the customer, and make the necessary entries in its customer accounts.
    When the application for transfer of securities under the preceding paragraph is for transfer of bonds, beneficial securities, or asset-backed securities, and furthermore is not a private placement, the application shall be reviewed and confirmed by the participant. With respect to applications for transfer of other securities, the participant shall deliver related documents such as the tax clearance or tax-exemption certificate to the TDCC on the first business day after application. The TDCC shall forward the aforesaid documents to the issuer for review on the second business day after the application.
    After confirming the accuracy of the documentation, the participant or issuer will notify the TDCC. Upon receiving the notification, the TDCC will make the entries in the participant’s account book and notify the participant to make the required entries in its customer account.
    The provisions of paragraph 1, the latter part of paragraph 2, and the preceding paragraph shall apply mutatis mutandis to transfers of securities by participants other than on a centralized securities exchange market or an OTC transaction at a securities firm, with the exception of transfers of bonds, beneficial securities, and asset-backed securities, that furthermore are not private placements, which transfers shall be reviewed and confirmed by the TDCC.
    When regulations require that a transfer agent be appointed for the securities but no transfer agent has been appointed, the TDCC will not accept applications for transfer in such cases.
Article 65     When a securities finance company or a securities firm engaged in margin purchase and short sale business on its behalf ("agent securities firm"), or a securities firm engaged in margin purchase and short sale business, performs delivery and receipt of securities related to margin trading business or refinancing transactions, it may use the computer network to notify the TDCC by inputting the relevant account transfer information.
    The provisions of the preceding paragraph apply mutatis mutandis to the delivery and receipt of securities in connection with margin trading involving an agent securities firm and customer, or a securities firm engaged in margin purchase and short sale business and a customer.
    Upon receiving the account transfer notification of the preceding two paragraphs, the TDCC will immediately make account entries for the participants of both parties.
Article 65-1     When a securities firm conducts money lending for securities business or money lending for unrestricted purposes, or a securities finance company conducts securities settlement financing or secured money lending, it shall notify the TDCC of any related receipt and delivery of securities by inputting the relevant account transfer information through the computer network.
    The TDCC will make the entries in the participant's account book upon receiving the notification of the preceding paragraph.
Article 65-2     When a custodian institution conducts business involving an offshore overseas Chinese or foreign national providing domestic securities as collateral for offshore investment activities, it shall notify the TDCC of any related receipt and delivery of securities by inputting the relevant account transfer information through the computer network.
    The TDCC will make the entries in the participant's account book upon receiving the notification of the preceding paragraph.
Article 66     When a participant applies to make a transfer of securities issued cross-border from an overseas to a domestic account, then the TDCC, after receiving the participant's application information and confirming its accuracy through a check against the information as notified by the foreign depository or clearing institution, will make the account book entry for the participant.
    When there is an application for a transfer of securities issued overseas by a domestic company between foreign depository or clearing institutions, the TDCC will make the account book entries for the participant after receiving data notified by both parties and confirming its accuracy through comparison.
Article 67     When a participant applies to transfer securities issued cross-border from a domestic to a foreign account, the TDCC will make the entry in the participant’s account book and notify the foreign depository or clearing institution after receiving the participant's application information and confirming its accuracy.
    If a foreign depository or clearing institution sends notice that it has rejected the transfer of the preceding paragraph, the TDCC will notify the participant and make the account book entry.
Article 68     The TDCC may refuse to accept a participant's application to transfer securities issued cross-border if transfers are restricted due to limits controls or other factors.
Article 69     When an issuer of exchangeable corporate bonds transfers the underlying shares, it shall notify the TDCC by inputting the relevant account transfer information through the computer network or providing it in a data storage medium.
    Upon receiving the account transfer notification of the preceding paragraph, the TDCC will make account book entries for both participants.
Article 69-1     When a holder of exchangeable government bonds applies to exchange them for the underlying securities, the TDCC will calculate the quantity of the underlying securities the holder may exchange based on the notification of the Ministry of Finance and Central Bank. After comparing the exchange and transfer data from the Central Bank and confirming its accuracy, the TDCC will transfer the underlying securities from the Ministry of Finance's depository account into the depository account of the bondholder's participant, notify the participant to make the necessary entries in the customer account, and notify the Ministry of Finance and Central Bank with the data on the completed exchange and account transfer.
Article 70     When a participant carries out an account transfer of customer securities under TDCC custody pursuant to a court order, in addition to transferring the securities into the court-designated auction account, it shall apply with the TDCC for the transfer by completing an application form and attaching the court notice, and additionally notify the TDCC by inputting the relevant information through the computer network.
    The TDCC will promptly make the account book entry for the participant after it receives the account transfer notification of the preceding paragraph and confirms the accuracy of the relevant information.
Article 71     (Deleted)
Article 71-1     When a participant, in order to sponsor an issuance of overseas depositary receipts, applies to transfer securities held by a customer into a custodial account for overseas depositary receipts at a custodian institution, it shall attach the approval documents for the given issue and certificates showing securities transaction tax clearance or tax-exempt status or other relevant documents for submission to the TDCC and notify the TDCC by inputting the relevant information through the computer network. After the TDCC receives the notification and reviews the relevant information to confirm its accuracy, it will make the entries in the participant's account book.
    When a participant applies to transfer securities held by a customer into a custodian institution's temporary deposit account to sponsor the issuance of overseas depositary receipts, or a custodian institution applies to transfer temporary deposit account securities into the depository account of the sponsoring customer, it shall notify the TDCC by inputting the relevant information through the computer network. Upon receiving the notification, the TDCC will promptly make the participant account book entries.
    When the custodian institution applies to transfer the temporary deposit account securities of the preceding paragraph into the custodial account for overseas depositary receipts in order to sponsor the issuance of overseas depositary receipts, the TDCC and custodian institution shall proceed in accordance with the provisions of paragraph 1.
Article 71-2     When a participant applies to transfer the securities deposited by a tenderer of a public tender offer into the public tender offer account under the mandated institution's depository account, or applies to transfer securities deposited by a tenderer that directors of the issuer are committed to purchase into the TDCC's designated tender account, or applies to transfer securities deposited by dissenting shareholders into the issuer's dissenting shareholder deposit account under the mandated institution's depository account, it shall notify the TDCC by inputting the relevant information through the computer network.
    Upon receiving the account transfer notification of the preceding paragraph, the TDCC will make the entries in the participant account book and notify the participant to make the necessary entries in its proprietary or customer accounts.
    When the mandated institution conducting a public tender offer and the directors of the issuer that are committed to purchase the tendered securities apply to transfer securities deposited by a tenderer into the tender offeror's depository account, they shall submit relevant documents, including the securities transaction tax clearance certificate, to the TDCC. For the public tender offer portion, the mandated institution shall also notify the TDCC by inputting the relevant information through the computer network.
    When the mandated institution conducting a public tender offer applies to transfer securities that are consideration for the public tender offer from the tender offeror's depository account into the public tender offer account, for further transfer into the tenderer's depositary account, it shall submit relevant documents, including the securities transaction tax clearance (or exemption) certificate, to the TDCC for handling, and also shall notify the TDCC by inputting the relevant information through the computer network.
    After receiving an account transfer notification of the preceding two paragraphs and confirming its accuracy, the TDCC will make the entries in the participant account book and notify the participant to make the necessary entries in its proprietary or customer account.
    When the mandated institution applies to transfer securities from the public tender offer account or the issuer's dissenting shareholder deposit account into the tenderer's or dissenting shareholder's depository account, it shall notify the TDCC by inputting the relevant information through the computer network.
    When the TDCC receives the account transfer notification of the preceding paragraph it will make the entries in the participant account book and notify the participant to make the necessary entries in its proprietary or customer accounts.
    For the portion that the directors are committed to purchase, when the combined total of tenderer's deposited shares satisfies the regulations that require handling by public tender offer, the TDCC will transfer securities from the designated tender account into the tenderer's depository account and notify the participant to make the necessary entries in its proprietary account or customer accounts.
Article 71-3     When a participant applies to transfer securities held by a customer to the TAIFEX's or futures commission merchant's depository account for purposes of paying in margin, it shall notify the TDCC by inputting the relevant information through the computer network.
    When the TDCC receives the account transfer notification of the preceding paragraph, it will promptly transfer the securities from the participant's depository account into the TAIFEX's or futures commission merchant's depository account and notify the participant to make the necessary entries in the customer account.
    The provisions of the preceding two paragraphs concerning computer input and account transfers shall apply mutatis mutandis when a futures commission merchant applies to have securities that have been paid into its depository account as margin transferred into the TAIFEX's depository account for purposes of paying in margin.
Article 71-4     (Deleted)
Article 71-5     When the TAIFEX or a futures commission merchant rejects or accepts an application to withdraw or dispose of securities paid in as margin by a customer, it shall notify the TDCC by inputting the relevant information through the computer network.
    When the TDCC receives the account transfer notification of the preceding paragraph, it will transfer the securities from the TAIFEX's or the futures commission merchant's depository account into the depository account of the TAIFEX's designated participant and notify the participant to make the necessary entries in the customer account.
Article 71-6     When a securities firm performs subscription of securities investment trust ETF beneficial certificates or futures ETF beneficial certificates (collectively, "ETF beneficial certificates") or active ETF beneficial certificates for its own account or for another party, the TDCC will conduct book-entry transfers and account book entries, based on the notification from the TWSE or TPEx, according to the following procedures:
  1. In-kind creation of domestic-component-securities securities investment trust ETF beneficial certificates or active ETF beneficial certificates:
    1. By the second business day after the subscription date, the TDCC will earmark the underlying portfolio securities for those beneficial certificates in the proprietary or customer account under the securities firm's depository account.
    2. On the second business day after the subscription date, the TDCC will transfer the underlying portfolio securities for those beneficial certificates from the proprietary or customer account under the securities firm's depository account into the depository account of the securities investment trust enterprise (SITE) at the custodian institution within the time period specified by the TWSE or TPEx, and transfer the those beneficial certificates into the proprietary or customer accounts under the securities firm's depository account, based on the list provided in computer media form by the SITE for securities registered and delivered by book-entry.
    3. If, on a single business day, the quantity of purchases by a securities firm of the underlying portfolio securities for those beneficial certificates for its own account or through a single account for another party, or that same quantity of purchases plus the combined total of its original holdings, borrowing and lending securities, and the balance of the purchases and in-kind redemptions on the previous business day reaches the prescribed quantity for in-kind creation of those ETF beneficial certificates, and if the securities firm sells those certificates, then on the second business day after the subscription date, the TDCC will transfer those beneficial certificates from the proprietary or customer accounts under the securities firm's depository account into the TWSE or TPEx settlement account.
  2. Cash creation of ETF beneficial certificates and active ETF beneficial certificates:
    3. After the TDCC, on the business day before the book-entry delivery date, based on the computer media list of the securities for registration and book-entry delivery provided by the SITE or futures trust enterprise, has reviewed the accuracy of the quantity for registration and delivery as verified by the custodian institution, the TDCC, on the book-entry delivery date, will transfer those beneficial certificates into the proprietary or customer account under the securities firm's depository account.
Article 71-7     When a securities firm performs redemption of beneficial certificates of an ETF or active ETF for its own account or for another party,, the TDCC will conduct book-entry transfer and make account book entries, based on the TWSE or TPEx notification, according to the following procedures:
  1. In-kind redemption of domestic-component-securities securities investment trust ETF beneficial certificates or active ETF beneficial certificates:
    1. By the second business day after the redemption, the TDCC will earmark those beneficial certificates in the proprietary or customer accounts under the securities firm's depository account.
    2. On the second business day after redemption, the TDCC will cancel those beneficial certificates, and based on the SITE's computer media listing of the underlying portfolio securities of those beneficial certificates, will transfer the underlying portfolio securities of those beneficial certificates from the SITE's depository account with the custodian institution into the proprietary or customer accounts under the securities firm's depository account within the time period specified by the TWSE or TPEx.
    3. If, on a single business day, the quantity of purchases by a securities firm of those beneficial certificates for its own account or through a single account for another party, or that same quantity of purchases plus the combined total of its original holdings, borrowing and lending of certificates, and the balance of certificates purchased and created in-kind on the preceding business day reaches the in-kind redemption requirements for the portfolio securities underlying those certificates, and if the securities firm sells the portfolio securities of those certificates, then on the second business day after the redemption date, the TDCC will transfer the underlying portfolio securities of those beneficial certificates from the proprietary or customer accounts under the securities firm's depository account into the TWSE or TPEx settlement account
  2. Cash redemption of ETF beneficial certificates and active ETF beneficial certificates:
    1. On the first business day after the redemption date, the TDCC will earmark those beneficial certificates in the proprietary or customer account under the securities firm's depository account.
    2. After the TDCC, on the business day before the redemption and cancellation date, based on the computer media list of those beneficial certificates for cancellation provided by the SITE or futures trust enterprise, has reviewed the accuracy of the quantity for cancellation as verified by the custodian institution, the TDCC, on the redemption and cancellation date, will perform the cancellation of those beneficial certificates.
Article 71-8     When a participant applies to strip or reconstitute corporate or bank debentures, the TDCC will conduct book-entry transfers and make account book entries according to the following procedures:
  1. When an application is made to strip bonds, the TDCC will check the TPEx and participant's notifications against the issuer-provided registration information and confirm its accuracy, debit the corporate or bank debentures from the participant's depository account, register the quantities of interest-only and principal only bonds or bank debentures, and transfer them to the participant's depository account.
  2. When an application is made to reconstitute bonds, the TDCC will check the TPEx and the participant's notifications against the issuer-provided registration information and confirm its accuracy, debit the principal-only or interest-only corporate or bank debenture strip bonds from the participant's depository account, register the quantity of corporate or bank debentures, and transfer them into the participant's depository account.
Article 71-9     When the holder of book-entry government bonds applies to strip an interest-bearing bond or reconstitute a principal-only or interest-only government strip bond, the TDCC will conduct the book-entry transfers and make the account book entries according to the following procedures:
  1. When application is made to strip bonds, the TDCC will confirm the accuracy of the delivery notification it receives from its correspondent clearing bank and transfer the principal-only or interest-only government strip bonds into the depository account designated by the holder.
  2. When an application is made to reconstitute bonds, the TDCC will confirm the accuracy of the notification it receives from the holder's participant, debit the principal-only or interest-only government strip bonds from the holder's designated depository account, and notify the correspondent clearing bank of the data in the application for reconstitution.
    After the holder completes the stripping or reconstitution procedures of the preceding paragraph, the TDCC will notify the TPEx of the relevant information.
Article 71-10     When a participant applies to transfer securities that it or a customer holds into the depository account of a trading counterparty for the exercise and settlement of OTC financial derivatives, or for exercise and settlement of financial derivatives by banks in accordance with regulations, it shall notify the TDCC by inputting the relevant data through the computer network.
    After the TDCC receives the transfer notification under the preceding paragraph and confirms its accuracy by comparison with the notification of settlement from the TPEx, it will promptly make the participant’s account book entries.
Article 71-11     (Deleted)
Article 71-12     (Deleted)
Article 71-13     When a securities firm performs subscription of ETNs for its own account or for another party, after the TDCC, on the business day before the book-entry delivery date, based on the notification from the TWSE or TPEx of the issuer's computer media list of the securities for registration and book-entry delivery, has reviewed the accuracy of the quantity for registration and delivery as verified by the issuer, the TDCC, on the book-entry delivery date, will transfer the ETNs into the proprietary or customer account under the securities firm's depository account.
Article 71-14     When a securities firm performs redemption of ETNs for its own account or for another party, the TDCC will conduct book-entry transfer and make account book entries, based on the TWSE or TPEx notification, according to the following procedures:
  1. On the redemption date, the TDCC will earmark the ETNs in the proprietary or customer accounts under the securities firm's depository account.
  2. After the TDCC, on the business day before the redemption and cancellation date, based on the computer media list of the ETNs for cancellation provided by the issuer, has reviewed the accuracy of the quantity for cancellation as verified by the issuer, the TDCC, on the redemption and cancellation date, will perform the cancellation of the ETNs.
Section 4 Pledge operations
Article 72     Application to conduct book-entry pledges of securities purchased by a customer or participant may only be made one business day after the book-entry transfer of the securities into the account.
    Except for the applications of transfer pursuant to regulations, the securities in the pledge account of the participant's depository account may not be withdrawn, sold, transferred between accounts, or wire transferred during the term of the pledge.
Article 73     When, for securities under centralized custody, a participant applies to carry out procedures to create a pledge, extinguish a pledge, exercise pledge rights, assign or transfer pledge rights together with a claim, transfer the balance of pledge rights to another account, or deliver the balance of pledge rights into trust, it shall notify the TDCC by entering the relevant information through the computer network.
    When the participant carries out procedures for the exercise of pledge rights under the preceding paragraph, it shall submit the following documents to the TDCC:
  1. In the case of compulsory execution by a court, an Application for Book-entry Transfer for Exercise of Pledge Rights on Securities and the court order for compulsory execution shall be submitted. If the subject of the pledge is securities not listed on the TWSE or TPEx, evidentiary documents shall also be submitted, including the court auction transcript and securities transaction tax clearance certificate.
  2. When pledge rights are exercised by means of self-auction, an Application for Book-entry Transfer for Exercise of Pledge Rights on Securities shall be submitted, accompanied by any of the following documents by which the pledgee notified, or was unable to notify, the pledgor prior to the auction:
    1. A post office evidentiary letter.
    2. A court letter of certification.
    3. A declaration and documentation evidencing notification or inability to notify.
  3. If bonds are the subject of the pledge, when pledge rights are exercised by withdrawal, the same documents as in the preceding subparagraph are to be submitted.
  4. When pledge rights are exercised by acquiring ownership, an Application for Book-Entry Transfer for Exercise of Pledge Rights on Securities shall be submitted, accompanied by a securities transaction tax clearance certificate and the agreement under which the pledgor consents to acquisition of ownership of the pledged object by the pledgee.
  5. When a financial institution or asset management company engages an impartial third party to auction pledged securities not listed on the TWSE or TPEx, it shall submit an Application for Book-entry Transfer for Exercise of Pledge Rights on Securities and the related evidentiary documents listed below:
    1. An auction certificate issued by an impartial third party established with the approval of the Competent Authority.
    2. A certificate issued by a notary public pursuant to the proviso of Article 8 of the Act Governing the Application of Part II (Obligations) of the Civil Code.
    3. A statement, issued by the pledgee, rescinding the notice of pledge.
    4. The securities transaction tax clearance certificate.
    Delivery to the TDCC of application documents sent to it by a participant must take place on the day documents are sent; documents sent by a participant from areas outside Taipei City and New Taipei City must be delivered to the TDCC by 1:30 p.m. on the business day following the day the documents are sent.
    A participant carrying out the operation under paragraph 2, subparagraph 4 may do so with only the following securities:
  1. Exchange-listed securities, in an amount not in excess of one trading unit, and an interval of not less than three months separating any two such transfers.
  2. Non-exchange-listed securities.
Article 74     (Deleted)
Article 75     TDCC receives the notification from the participant in Article 73, after reviewing and confirming the accuracy of the relevant data, the TDCC will conduct book-entry transfer according to the following procedures:
  1. When a pledge is created, the securities will be transferred from the customer account or proprietary account under the depository account of the pledgor's participant into the pledge account under the depository account of the pledgee's participant.
  2. When a pledge is extinguished, the securities will be transferred from the pledge account under the depository account of the pledgee's participant into the customer or proprietary account under the depository account of the pledgor's participant.
  3. When a court orders compulsory execution, the securities will be transferred from the pledge account under the depository account of the pledgee's participant into the court-designated auction account, or delivered to a court-designated recipient for transfer to the court.
  4. When pledge rights are exercised by means of self-auction, transfer will be made from the pledge account under the depository account of the pledgee's participant based on the auction results.
  5. When bonds are the subject of the pledge and pledge rights are exercised by withdrawal, the bonds will be debited from the pledge account under the depository account of the pledgee's participant.
  6. When pledge rights are exercised by acquiring ownership, the securities will be transferred from the pledge account under the depository account of the pledgee's participant into the customer or proprietary account under the depository account of the pledgee's participant.
  7. When a financial institution or asset management company engages an impartial third party to auction pledged securities not listed on an exchange or OTC market, the securities will be transferred from the pledge account under the depository account of the pledgee's participant based on the auction results.
  8. When pledge rights are assigned or transferred together with a claim, the securities will be transferred from the pledge account under the depository account of the original pledgee's participant into the pledge account under the depository account of the participant of the successor to the pledge rights.
  9. When a pledgee applies to transfer the balance of pledge rights on securities entered in its account into its account with another participant, the securities will be transferred from the pledge account under the depository account of the pledgee's original participant into the pledge account under the depository account of the pledgee's designated participant.
  10. When a pledgee applies to transfer the balance of pledge rights on securities entered in its account into its trust depository account, the securities will be transferred from the pledge account under the depository account of the pledgee's participant into the trust depository account designated by the pledgee.
Article 76     After the TDCC completes book-entry transfer and account entries pursuant to the preceding article, it will prepare the relevant statements and notify the issuer regarding the names of the pledgor and pledgee, the pledged quantity, and stipulations regarding interest. These requirements shall not apply, however, if the subject of the pledge is principal-only or interest-only government strip bonds, international bonds not registered with the TDCC, or foreign bonds.
    If the subject of a customer's pledge is corporate bonds, bank debentures, debt-type beneficial securities or asset-backed securities, municipal bonds, NTD bonds issued in Taiwan by a foreign issuer, international bonds registered with the TDCC, or principal-only or interest-only government strip bonds, then at the time of interest or redemption payments, the TDCC will summarize the relevant statements prepared by the participants and will notify the issuer or its institution in charge of principal redemption and payments regarding the names of the pledgor and pledgee, the pledged quantity, and stipulations regarding interest.
    When the institution in charge of principal redemption and interest payments performs the principal redemption and interest payment operations of the preceding paragraph, the principal or interest will be transferred into the funds transfer account designated by the pledgee based on the stipulations between the pledgor and pledgee.
Section 5 Securities Borrowing and Lending Operations
Article 77     The TDCC performs book-entry transfers and account book entries for SBL necessary for securities settlement by participants, based on the TWSE or TPEx notification, according to the following procedures:
  1. When securities are being lent, the securities will be transferred from the proprietary account or customer account under the lender participant's depository account into the pending settlement or proprietary account of the borrower participant's depository account, or into the margin transactions special account under the customer account.
  2. When securities are being returned, the securities will be transferred from the relevant account supplemented by the borrower participant or the margin transactions special account under the customer account and into the TWSE or TPEx settlement account, and further transferred into the proprietary or customer account under the lender participant's depository account.
  3. When a borrower participant is unable to return borrowing and lending securities and the TWSE or TPEx uses the cash collateral for the securities borrowing to replace the securities, the securities will be transferred from the relevant account supplemented by the TWSE or TPEx and into its settlement account, and then transferred into the proprietary or customer account under the lender participant's depository account.
Article 77-1     When a participant performs account transfers for a customer's loan of securities to a put warrant issuer or for a securities firm engaging in structured instrument transaction business, it shall do so according to one of the following methods:
  1. The participant applies to transfer in full the securities loaned by the customer into the hedge account of the put warrant issuer or the securities firm engaging in structured instrument transactions.
  2. The participant applies to earmark the securities loaned by the customer, then the put warrant issuer's participant or the securities firm engaging in structured instrument transaction business applies to transfer the securities loaned by the customer into the hedge account of the put warrant issuer or the securities firm engaging in structured instrument transactions.
    When the participant conducts the operations of the preceding paragraph, it shall notify the TDCC by inputting the relevant information through the computer network.
    When the TDCC receives the transfer notification under the preceding paragraph it will make the entries to the participant’s account book and notify the participant to make the necessary entries in its proprietary or customer account.
    When a participant conducts transfer operations for the return of a customer's securities loan by a put warrant issuer or a securities firm engaging in structured instrument transactions, it shall notify the TDCC by inputting the relevant information through the computer network.
    When the TDCC receives the transfer notification under the preceding paragraph, it will promptly transfer the securities from the hedge account of the put warrant issuer or securities firm engaging in structured instrument transactions and into the customer’s account, make the participant’s account book entries, and additionally notify the participant to make the necessary entries in its proprietary or customer account.
Article 77-2     The TDCC will perform book-entry transfers and make account book entries for securities borrowing and lending ("SLB") by a participant through the TWSE securities lending system, based on TWSE notification, according to the following procedures:
  1. When an application is being made to loan securities, the TDCC will earmark the securities for loan in the proprietary or customer account under the lender participant's depository account.
  2. When an application is being made for SBL, the TDCC will earmark the collateral securities in the proprietary or customer account under the borrower participant's depository account.
  3. When securities are being lent, the TDCC will transfer the securities from the proprietary or customer account under the lender participant's depository account and into the proprietary or customer account under the borrower participant's depository account.
  4. When securities are returned or entitlements repaid, the securities will be transferred from the proprietary or customer account under the borrower participant's depository account and into the proprietary or customer account under the lender participant's depository account.
  5. When collateral securities are being provided, the collateral securities will be transferred from the proprietary or customer account under the borrower participant's account and into the TWSE depository account.
  6. When collateral securities are being returned, the collateral securities will be transferred from the TWSE depository account into the proprietary or customer account under the borrower participant's account.
  7. If the borrower participant is unable to return borrowed securities, when the TWSE repurchases those securities from markets or acquires them through borrowing, those securities will be transferred from the TWSE depository account into the proprietary or customer account under the lender participant's depository account.
Article 77-3     When the TWSE or the TPEx notifies the TDCC to perform book-entry transfers for an SBL transaction of a securities firm, the TDCC will obtain confirmation from the securities firm and perform book-entry transfers and make the account book entries in accordance with the following procedures:
  1. When SBL transaction source securities are being obtained, the TDCC will transfer the securities from the proprietary or customer account under the securities firm's or securities finance enterprise's depository account into the securities borrowing and lending account (SBL account) under the securities firm's depository account.
  2. When SBL transaction source securities are being returned or securities are being loaned, the TDCC will transfer the securities from the SBL account under the securities firm's depository account into the proprietary account or customer account under the securities firm's or securities finance enterprise's depository account.
  3. When securities are being returned or entitlements repaid, the TDCC will transfer the securities or entitlements from the proprietary or customer account under the securities firm's or securities finance enterprise's depository account and into the SBL account under the securities firm's depository account.
  4. When collateral securities are being provided, the TDCC will transfer the collateral from the customer account under the securities firm's depository account and into that same account's securities lending collateral account.
  5. When collateral securities are being returned, the TDCC will transfer the collateral from the securities lending collateral account under the securities firm's depository account and into that same account's customer account.
  6. When collateral securities are being utilized, the TDCC will transfer the collateral from the securities lending collateral account under the securities firm's depository account and into the depository account of the TWSE or the securities finance enterprise.
  7. When collateral securities are being disposed, the TDCC will transfer them from the securities lending collateral account under the securities firm's depository account and into that securities firm's account for processing defaults at a second securities firm.
Article 77-4     When the TWSE or the TPEx notifies the TDCC to carry out book-entry transfers for an SBL transaction of a securities finance, the TDCC will obtain confirmation from the participant and then perform book-entry transfers and make account book entries in accordance with the following procedures:
  1. When SBL transaction source securities are being obtained, the TDCC will transfer the securities from the proprietary or customer account under the securities firm's or securities finance enterprise's depository account into the SBL account under the securities finance enterprise's depository account.
  2. When SBL transaction source securities are being returned or securities are being loaned, the TDCC will transfer the securities from the SBL account under the securities finance enterprise's depository account into the proprietary or customer account under the securities firm's or securities finance enterprise's depository account.
  3. When securities are being returned or entitlements repaid, the TDCC will transfer the securities or entitlements from the proprietary or customer account under the securities firm's or securities finance enterprise's depository account into the SBL account under the securities finance enterprise's depository account.
  4. When collateral securities are being provided, the TDCC will transfer the collateral from the customer account under either the securities finance enterprise's depository account or the securities firm's depository account into the securities lending collateral account under the securities finance enterprise's depository account, or from the securities lending collateral account under the securities firm’s depository account into the margin transactions special account of the customer account under the securities finance enterprise’s depository account.
  5. When collateral securities are being returned, the TDCC will transfer the collateral from the securities lending collateral account under the securities finance enterprise's depository account into the customer account under that account or the customer account under the securities firm's depository account, or from the margin transactions special account of the customer account under the securities finance enterprise’s depository account into the securities lending collateral account under the securities firm’s depository account.
  6. When collateral securities are being utilized, the TDCC will transfer the collateral from the securities lending collateral account under the securities finance enterprise's depository account and into the customer account under its depository account or into the customer account under the depository account of the securities firm.
  7. When collateral securities are being disposed, the TDCC will transfer the collateral from the securities lending collateral account under the securities finance enterprise's depository account into the enterprise's default processing account at a securities firm.
Article 77-5     The TDCC performs book-entry transfers and account book entries for shortfalls in securities deliverable in day trading, based on the TWSE or TPEx notification, according to the following procedures:
  1. When securities are being lent, the TDCC will transfer the securities from the proprietary or customer account under the lender participant's depository account into the proprietary or customer account under the borrower participant's depository account.
  2. When securities are being returned, the TDCC will transfer the securities from the proprietary account under the borrower participant's depository account into the proprietary or customer account under the lender participant's depository account.
Section 6 Exercise of Call and Put Warrants
Article 78     When a call or put warrant holder applies to exercise the warrant, the TDCC will debit the call or put warrant from the participant's account (proprietary or customer account) on the first business day after receiving notification from the TWSE or the TPEx, and will notify the participant to make an entry in the customer account. The TDCC also will compile a statement of change in balance and deliver it to the issuer.
Article 79     The TDCC will perform book-entry transfer of securities underlying call and put warrants and make related account book entries, within the time period prescribed the TWSE or the TPEx and in response to the TWSE or TPEx notification, in accordance with the following procedures:
  1. When a call warrant holder purchases the underlying securities from the issuer at the stipulated exercise price, the TDCC will transfer the securities from the issuer's depository account to the holder's depository account. If the balance of underlying securities in the issuer's depository account is insufficient, the TDCC will transfer none of the securities and will notify the TWSE or the TPEx to handle the matter.
  2. When a put warrant holder sells the underlying securities to the issuer at the stipulated exercise price, the TDCC will transfer the securities from the holder's depository account to the issuer's depository account. If the balance of underlying securities in the holder's depository account is insufficient, the TDCC will transfer none of the securities and will notify the TWSE or the TPEx to handle the matter.
    When the underlying for exercise of a call or put warrant under the preceding paragraph is spot gold, the TDCC will perform book-entry transfers and make account book entries for spot gold exercise in accordance with the TDCC Operating Rules for Spot Gold.
Article 80     On the first business day following the expiration of a call or put warrant as publicly announced by the TWSE or TPEx, the TDCC will close out the balance of call and put warrants in the depository accounts of warrant holders, notify participants to make customer account book entries, and compile a statement of change in balance and deliver it to the issuer. If the call or put warrants are issued in certificated form, the TDCC will deliver the call or put warrants to the issuer.
Section 7 Book-Entry Operations for Open-End Beneficial Certificates
Article 80-1     A SITE or a futures trust enterprise shall open a depository account with the TDCC pursuant to the provisions of Chapter 2 of these Operating Rules for the purpose of handling book-entry operations related issuance of beneficial certificates in dematerialized form. Such an enterprise shall separately enter into an agreement with the TDCC if it wishes to request handling of payment and receipt of funds on its behalf by the TDCC.
Article 80-2     When a SITE or a futures trust enterprise applies to the TDCC for book-entry operations in connection with issuance of beneficial certificates dematerialized form, it shall attach the competent authority's approval document for the offering and notify the TDCC of the total amount of the approved issue; the same shall apply at the time of any follow-up offering.
    The TDCC will monitor and control the total issuance amount of beneficial certificates based on notifications from the SITE or futures trust enterprise with respect to the total approved amount of the issue and the amounts of book-entry deliveries and redemptions.
Article 80-3     Before accepting a customer's application for subscription or redemption of beneficial certificates, a securities firm shall notify the TDCC of information on the customer's funds transfer account at the financial institution with which the securities firm transacts business by inputting the information through the computer network.
Article 80-4     When a securities firm accepts individual subscriptions to beneficial certificates from customers, it shall notify the TDCC within the TDCC's prescribed time limit by inputting the relevant information through the computer network, and the TDCC will then notify the SITE of the subscription information.
    The funds used for the subscription by the securities firm's customer shall be transferred to the TDCC-designated account at the TDCC's designated financial institution within the TDCC's prescribed time limit.
    After receiving the customer's funds, the TDCC will transfer the funds into an account at the SITE's designated fund custodian institution.
Article 80-5     When a securities firm accepts a customer application for subscription to beneficial certificates under a systematic investment plan, it shall first inspect the debit authorization for the customer's systematic investment plan approved by the financial institution with which the securities firm transacts business, then notify the TDCC within its prescribed time limit by inputting the relevant information through the computer network. The TDCC will then notify the SITE of the subscription information.
    The SITE shall notify the TDCC of the debit information two business days prior to the account debit day designated by the customer.
    The TDCC will notify the designated financial institution of the debit information of the preceding paragraph, and on the designated account debit day, will deduct the funds from the customer's funds transfer account at the financial institution with which the securities firm transacts business, and on the following business day will transfer those funds to an account at the SITE's designated fund custodian institution.
Article 80-6     When a SITE or a futures trust enterprise delivers beneficial certificates through book-entry transfer, it shall prepare computer media of distribution lists of the securities for registration and delivery by book-entry transfer and deliver it to the TDCC by the book-entry delivery date.
    After reviewing and confirming the accuracy of the relevant data, the TDCC will transfer the beneficial certificates on the book-entry delivery date into the customer’s account with the participant or into the registered portion of securities under the SITE's or futures trust enterprise's depository account. The TDCC will then make account book entries for the participant and notify the participant to make the necessary account book entry for its proprietary account or customer account.
    The SITE or futures trust enterprise shall notify the TDCC of the owners of the registered portion of beneficial certificates under its depository account, providing their personal or entity name, national ID number or profit-seeking enterprise or tax withholding entity uniform ID number, and other required particulars, as well as the relevant delivery-related matters.
Article 80-7     When a securities firm accepts a customer application to redeem beneficial certificates, it shall notify the TDCC within the TDCC's prescribed time limit by inputting the relevant information through the computer network, and the TDCC will then make account book entries for the participant and notify the SITE of the redemption information.
    On the business day prior to the payment day, the SITE shall notify the TDCC of data on the amounts payable to the customer for the redemption.
    On the payment day, the SITE's designated fund custodian institution shall transfer the funds payable to the customer for the redemption into the TDCC special receipts/disbursements account at the TDCC's designated financial institution within the time limit prescribed by the TDCC.
    After receiving the funds, the TDCC will transfer the funds to the customer's account at the financial institution with which the securities firm transacts business.
    If the funds transferred by the SITE's designated fund custodian institution as referred to in paragraph 3 are insufficient, the TDCC will not handle the fund payment and receipt operations for the beneficial certificates.
Section 8 Trust Operations
Article 80-8     When a customer applies to transfer the securities under TDCC custody into a trustee's trust depository account, the customer shall present to the participant the documentary proof of tax payment or exemption from estate tax or gift tax issued by the tax authority and the trust agreement, will, or other relevant documents proving the existence of trust relationship; after the participant verifies the relevant information, it shall notify the TDCC of the relevant information by inputting the information through computer network.
    After confirming the transfer information in the preceding paragraph, the TDCC will make an entry in the participant’s account book and mark the securities as trusted assets, and notify the participant to make the necessary entries in their customers' accounts.
Article 80-9     When a distribution of trust proceeds or establishment of trust relationship is unsuccessful, voided, dismissed, revoked, amended, or terminated, the trustee shall apply to the participant to transfer the securities under trust under TDCC custody to the depository account of the owner; after accepting the application, the participant shall notify the TDCC by inputting the information through computer network.
    After confirming the transfer information of the preceding paragraph, the TDCC will make an account entry in the participant’s account book and notify the participant to make the necessary entries in their customers' accounts.
Section 9 Public Guarantee and Reserve Deposit Operations
Article 80-10     When a participant applies to carry out public guarantee or reserve deposit operations with respect to securities under the custody, the TDCC will perform book-entry transfer and make account book entries according to the following procedures:
  1. When there is an application to carry out public guarantee or reserve deposit operations, then after the TDCC confirms the participant's notification with respect to the public guarantee or deposit reserve provider ("the provider"), it will record an increase in the restricted outward transfer amount for the provider's account and a decrease of the same amount in its disposable balance, and will increase the restricted inward transfer amount for the account of the recipient of the public guarantee and deposit reserve ("the recipient").
  2. When there is an application for cancellation of the public guarantee or reserve deposit, then after the TDCC receives and verifies the accuracy of the notification from the recipient's participant, it will record a decrease in the restricted outward transfer amount for the provider's account and an increase of the same amount in its disposable balance, and will decrease the restricted inward transfer amount for the account of the recipient.
  3. When there is an application for cancellation by transfer for a public guarantee or reserve deposit, then after the TDCC receives and verifies the accuracy of the notification from the recipient's participant, it will proceed in accordance with the preceding subparagraph, and will transfer the securities into the account of the court, the assignee, or the purchaser at auction.
Article 80-11     When the securities under TDCC custody are the subject of a public guarantee or deposit reserve, the TDCC will at the time for interest and redemption payments compile the relevant statements and reports prepared by the participants and notify the organization for principal and interest redemption of matters with respect to the provider, recipient, amount provided, and stipulations regarding interest. The organization, pursuant to the stipulations between the provider and the recipient, will then transfer the interest due to the designated depository account. The principal will be transferred to the funds transfer account designated by the recipient to continue to serve as a public guarantee or deposit reserve.
Section 10 Lodgment Procedures
Article 80-12     When a participant applies for securities under TDCC custody to be lodged with a court, the TDCC will carry out the book-entry transfer and make account entries in accordance with the following procedures:
  1. For applications for lodgment, when the TDCC receives the notification from the lodger’s participant, after confirming the accuracy of the notification, it will transfer the securities from the customer account or proprietary account under the depository account of the lodger’s participant into the depository account opened by the court with a bank representing the National Treasury (“Treasury agent bank”).
  2. For applications for retrieval by the lodger or withdrawal by another party, when the TDCC receives the notification from the Treasury agent bank, after confirming the accuracy of the notification, it will transfer the securities from the depository account opened by the court with the Treasury agent bank into the customer account or proprietary account under the depository account of the participant of the lodger or the withdrawing party.
  3. For applications for transfer to an account designated by an enforcing authority, when the TDCC receives the notification from the Treasury agent bank, after confirming the accuracy of the notification, it will transfer the securities from the depository account opened by the court with the Treasury agent bank into the depository account designated by the enforcing authority. For applications for deposit back to the lodgment account, when the TDCC receives the notification from the participant of the account designated by the enforcing authority, after confirming the accuracy of the notification, it will transfer the securities from the depository account designated by the enforcing authority into the depository account opened by the court with the Treasury agent bank.
Article 80-13     After the TDCC completes book-entry transfer and account entries pursuant to the preceding article, it will prepare the relevant statements, and notify the issuer or its transfer agent of the particulars including the name of the lodger, the name of the court, and the amount of the lodgment.
    In the event that the issuer of lodged securities carries out any distribution of dividends, bonus, or other benefits, or interest and redemption payment, or the issuer announces any conversion, exchange, forced conversion, or other change to its securities, the TDCC will compile the relevant statements prepared by the participants and notify the issuer or its transfer agent and the institution in charge of handling interest and redemption payments of the particulars including the lodger, court, and amount of the lodgment. The institution in charge of handling interest and redemption payments shall handle the transfers of the securities and funds in accordance with the Regulations Governing the Lodgment of Securities in Central Custody and the Collection by Agents of Redemption Payments, Substitute Securities, and Interest Thereupon issued by the Judicial Yuan.
Chapter 5 Entry into Inventory, Release from Inventory, and Inventory Management for Securities Under Custody
Article 81     For securities a participant deposits or withdraws, and securities for which it conducts trade settlement for the current period requiring the TDCC to enter into or release from inventory, the TDCC shall prepare the respective Inventory Entry List and Inventory Release List within the prescribed time limit, and carry out the securities inventory entry or release.
    The TDCC shall each day compile an Inventory Entry List and Inventory Release List, and compile and print a Statement of Securities Entered and Released from Inventory.
Article 82     At close of business each day, the TDCC will prepare a Daily Statement of Securities Under Custody showing securities in inventory that day.
    The TDCC shall prepare a Monthly Statement of Securities Under Custody, showing the total volume of deposits and withdrawals of securities under custody and the inventory balance, to be filed with the competent authority.
Article 83     When the TDCC keeps the registered shares of an issuer's directors, supervisors, or specified shareholders in separate custody, deposits and withdrawals of those shares shall be handled personally by the shareholder. When another party is engaged to make a deposit or withdrawal on the shareholder's behalf, the shareholder shall furnish a letter of authorization bearing the shareholder's seal-of-record.
    The TDCC will establish depository accounts and issue certificates of custody for the separately custodized securities of each respective shareholder of the preceding paragraph.
    The certificates of custody referred to in paragraph 2 may only be used to withdraw stocks; they may not be the subject of a pledge or transfer or used for book-entry settlement.
    Certificates of entitlement to new shares or certificates of payment for shares may be temporarily deposited in separate custody when an issuer applies to issue or registers an issue of new shares and the competent authority grants approval or allows effective registration, and when, prior to printing of the stock certificates, the TWSE or the TPEx also consents to custody deposits of certificates of entitlement to new shares or certificates of payment for shares in place of stock certificates. Upon completion of printing, the stock certificates will immediately be exchanged for the certificates of entitlement or certificates of payment.
    When there is a change in the securities kept in separate custody, the TDCC shall make the necessary account book entries for customer depository accounts, and at the end of each month shall prepare a table separately listing the numbers of shares and the increase or decrease in shares of the respective companies, to be forwarded by letter to the TWSE or the TPEx for public announcement and additionally to be forwarded by letter to the competent authority for recordation.
Article 83-1     The issuer's directors, supervisors, specified shareholders, holders of beneficial securities, or subscribers of convertible corporate bonds or corporate bonds with warrants, may use book-entry transfer when they place their securities in custody for a prescribed period in accordance with the requirements of the competent authority or the TWSE or TPEx.
    When a holder applies to place securities in custody as referred to in the preceding paragraph, the securities of the holder in a depository account with a participant or the registered portion of the securities in the issuer's depository account shall be transferred into the account for customer-owned securities under the issuer's depository account, and the issuer will notify the TDCC to perform custody operations by inputting the relevant data through the computer network or by furnishing the data in a data medium.
    Upon receiving notification pursuant to the preceding paragraph, the TDCC shall record an account book entry for the issuer and notify the issuer to perform book entry for the customer. During the period of custody of the securities, the holders may not apply to sell or pledge the securities or otherwise transfer the securities by book entry, with the exception of subscribers of convertible corporate bonds or corporate bonds with warrants, who may apply for conversion or subscription of shares.
    When, for the holders under paragraph 1, the period of custody of the preceding paragraph expires or they are exempted from the requirement to place the securities in custody, the issuer shall notify the TDCC to release the securities from custody by inputting the relevant data through the computer network or by providing it in a data medium.
    Upon receiving the notification of the preceding paragraph and confirming its accuracy, the TDCC will make account book entries for the issuer and notify the issuer to make account book entries for the customer. The holders must first apply to the issuer to transfer the securities to their depository account at a participant before they may sell, pledge, or otherwise carry out any book-entry transfer of the securities.
    At the end of each month, the TDCC will prepare a table of data on changes in the aforementioned securities, along with the securities under separate custody as referred to in the preceding article, listing by company the quantity and the increase or decrease in the securities in custody, to be forwarded by letter to the TWSE or the TPEx for public announcement and to additionally be forwarded by letter to the competent authority for recordation.
Article 84     The TDCC shall from time to time perform an audit of securities in its inventory and prepare an audit record for recordation.
Article 85     The TDCC shall separately prescribe rules to govern the securities vault management.
Chapter 6 Corporate Action for Securities Under TDCC Custody and Bond Interest and Redemption Payments
Article 86     The TDCC will periodically send the securities under TDCC custody to the issuers or their transfer agents to have the names of previous owners stricken from the certificates.
    After the securities of the preceding paragraph from which the previous owners' names have been stricken are returned to the TDCC, the TDCC shall place its seal on the stock certificates and in the "transferor" space on title transfer applications.
    When an issuer and bond owner agree that the physical corporate bonds, bank debentures, debt-type beneficial securities and asset-backed securities, municipal bonds, or bonds issued in Taiwan by a foreign issuer under TDCC custody will be converted to dematerialized form, the TDCC may commence book-entry registration after the issuer has stricken the names of the previous owners from the securities and canceled the physical bonds.
Article 87     Within two days of the beginning date of a book closure period publicly announced by an issuer for the purpose of convening a shareholders meeting or distributing dividends, bonuses, or other benefits, the participant shall prepare and deliver to the TDCC a list of information on the holders of stocks under TDCC custody, current as of the business day immediately preceding the book closure date, including the holders' personal or entity names, dates of birth or establishment, national ID numbers or uniform ID numbers as profit-seeking enterprises or tax withholding entities, domiciles or residences, account numbers, funds transfer account numbers, numbers of shares held, and data related to securities marked as trusted assets.
    The provisions of the preceding paragraph apply mutatis mutandis to registers of the beneficial owners of beneficial certificates or beneficial securities, registers of holders of ETNs, depositary receipts, or asset-backed securities, registers of holders of convertible corporate bonds, registers of holders of exchangeable corporate bonds, or registers of the holders of other securities.
Article 88     By the business day immediately preceding the date of bond interest and redemption payments for corporate bonds, bank debentures, debt-type beneficial certificates and asset-backed securities, municipal bonds, NTD bonds issued in Taiwan by a foreign national, principal-only or interest-only strip bonds, international bonds, or foreign bonds, the participant shall prepare and deliver to the TDCC a list containing information on the holders of bonds under TDCC custody, current as of that business day, including the holders' personal or company names, national ID numbers or uniform ID numbers as profit-seeking enterprises or tax withholding entities, domiciles or residences, the principal balances of their holdings of those bonds, and the names of the financial institutions, and account numbers, used for funds transfer.
    When, in the event of bond interest and redemption payment, the participant does not cancel the bond passbook in accordance with Article 56, paragraph 1, subparagraph 2 of these Operating Rules, the list referred to in the preceding paragraph shall be prepared as follows:
  1. If the maturity date of the repo transaction is before the date of the interest and redemption payment, the content, preparation date, and delivery time of the list shall be in compliance with the preceding paragraph, and additionally the list shall contain information including the personal or business names, and national ID numbers or uniform ID numbers as profit-seeking enterprises or tax withholding entities, of the customers receiving the interest and redemption payments.
  2. If the maturity date of the repo transaction is the same as the date of the redemption payment, the preparation date and time for delivery of the list shall be 5 p.m. on the date of the redemption payment, and the list shall contain information including the personal or business names, and national ID numbers or uniform ID numbers as profit-seeking enterprises or tax withholding entities, of the customers receiving the interest and redemption payments.
Article 89     On the business day preceding an issuer's publicly announced book closure date, a securities finance enterprise or a securities firm engaged in margin purchase and short sale business shall prepare a register in accordance with Article 87 of securities holders that hold securities purchased on margin or any type of collateral securities, to be delivered to the TDCC.
    On the business day preceding an issuer's publicly announced book closure date, an agent securities firm [for margin loans and stock loans] shall close out the balance of securities of that type on deposit in its agent margin trading special accounts in the customer accounts under its depository account.
Article 89-1     On the business day preceding an issuer's publicly announced book closure date or the date of interest and redemption payments, the TAIFEX or futures commission merchant shall prepare a register in accordance with Articles 87 and 88 of securities holders with securities in its depository account, to be delivered to the TDCC.
Article 89-2     On the business day preceding an issuer's publicly announced book closure date, the TWSE shall prepare a register in accordance with Article 87 of securities holders with collateral securities in its depository account, to be delivered to the TDCC.
Article 90     The TDCC shall prepare an owner-specific stock ownership register compiled on the basis of the national ID numbers or profit-seeking enterprise or tax withholding entity uniform ID numbers of the owners, together with relevant information on securities marked as trusted assets, and forward the register along with stock certificate numbers to the stock issuer or its transfer agent within three days of the beginning date of the issuer's publicly announced book closure period for the purpose of convening a shareholders meeting or distributing dividends, bonuses, or other benefits.
    Where a customer has opened accounts with different participants and the participants provide two or more correspondence addresses for that customer, the TDCC will use the most recent correspondence address when preparing the stock ownership register. When a customer has both non-discretionary and discretionary investment deposit accounts, the most recent correspondence address for a non-discretionary investment deposit account will be used.
    The provisions of paragraph 2 apply mutatis mutandis to registers of beneficial owners of beneficial certificates or beneficial securities, registers of holders of ETNs, depositary receipts, or asset-backed securities, registers of holders of convertible corporate bonds, registers of holders of exchangeable corporate bonds, and registers of the holders of other securities.
Article 91     The TDCC shall prepare an owner-specific bond ownership register compiled on the basis of the national ID numbers or profit-seeking enterprise or tax withholding entity uniform ID numbers of the owners, and on the date of principal redemption and interest payments shall forward the register to institutions in charge of principal redemption and interest payments to notify the latter to perform the principal redemption and interest payments.
    When the issuer of a security of the preceding paragraph engages the TDCC to process principal redemption and interest payments on the issuer’s behalf, the TDCC will process the principal and interest payments on the designated date for principal redemption and interest payment after receiving the funds from the issuer.
Article 91-1     When the TDCC performs a distribution of cash dividends to parties with discretionary investment deposit accounts at participants ("discretionary account holders"), the issuing company or its transfer agent shall notify the account holders, and seven business days prior to the designated distribution date, shall deliver to the TDCC a register listing cash dividend distributions for the discretionary investments of discretionary account holders, and on the morning of the business day immediately preceding the designated distribution date transfer the total dollar amount of the distribution into the TDCC-designated account. On the designated distribution date, the TDCC shall transfer the amounts listed in the distribution register from its receipts/disbursements special account into the funds transfer accounts of the individual discretionary account holders or their custodians.
    The provisions of the preceding paragraph apply mutatis mutandis to distributions of cash interest on other discretionary investment securities.
Article 91-2     When the TDCC processes discretionary account holder subscriptions to new shares in a cash capital increase, the issuing company or its transfer agent shall notify the account holders, and by two business days prior to the date on which payments begin, shall also deliver to the TDCC a register of the cash capital increase share subscriptions made by discretionary account holders through discretionary investment.
    After the TDCC prepares a statement of shares subscribable by the holder of each discretionary investment deposit account, based on the aforementioned register, the discretionary account holders or their custodians or securities firms shall use the computer network connection with the TDCC to print out share subscription payment forms.
    On the business day immediately preceding the payment deadline, discretionary account holders or their custodians shall deposit their payments for the capital increase subscription in a TDCC-designated account for receipts and disbursements. After pooling the share subscription payments on the payment date, the TDCC shall remit the payment funds to the issuing company.
Article 91-3     When the TDCC performs distributions of securities acquired by discretionary account holders on a gratuitous or non-gratuitous basis, the TDCC shall execute transfers from the depository accounts of securities owners into the discretionary investment deposit accounts of each account holder on the specified distribution date in accordance with the itemized distribution statement.
Article 91-4     When handling distributions of trust securities acquired gratuitously by a trustee, the TDCC shall execute transfers from the trustee's trust depository account into each trust depository account on the specified distribution date in accordance with the itemized distribution statement.
Article 91-5     When handling distributions of securities acquired gratuitously by a lodger and being collected by the Treasury agent bank on behalf of the lodger, the TDCC shall transfer the securities from the lodger’s depository account into the depository account opened by the court with the Treasury agent bank, on the specified distribution date in accordance with the itemized distribution statement.
Article 92     (Deleted)
Article 93     With the exception of shares issued in dematerialized form delivered by book-entry transfer, the TDCC, in accordance with regulations, may inspect and test the securities printing specifications and barcode reading of shares issued by a company listed on an exchange or an over-the-counter market.
Chapter 7 Destruction, Loss, or Defect in Securities Under Custody
Article 94     The TDCC may refuse a deposit of securities when it believes that the title to securities submitted for deposit by a participant is defective or its legality subject to dispute, or when doubts regarding title occur for other reasons. When it discovers such matters with respect to securities already on deposit, the TDCC may return the securities to the participant or notify the participant to replace them with securities free of defect.
    The provisions of the preceding paragraph apply mutatis mutandis to securities that a participant seeks to withdraw from the TDCC.
    When the TDCC returns defective securities to a participant pursuant to the first paragraph, the participant shall debit them from the account to which they were originally deposited (whether a proprietary or customer account). If the participant does not promptly debit the securities, the TDCC may debit them from the participant's account (whether a proprietary or customer account) at its own discretion.
Article 95     When securities under TDCC custody are damaged due to a natural disaster or other cause not attributable to the TDCC, the TDCC shall duly report the securities as lost and reissue them, with fees for their reissuance borne by the TDCC. During the process of reporting and reissuing lost securities, the TDCC may postpone its processing of participants' securities withdrawals.
Chapter 8 Cross-Border Custody of Foreign Securities
Article 95-1     Participants that may mandate the TDCC to open an account with a foreign depository or clearing institution to handle cross-border custody of foreign securities (the "cross-border custody participant") shall be limited to the following:
  1. Qualified institutional investors as referred to in the authorizing provision of Article 4, paragraph 2 of the Financial Consumer Protection Act.
  2. Issuers that deliver dematerialized securities by book-entry transfer to the TDCC.
Article 95-2     When a cross-border custody participant mandates the TDCC to hold foreign securities in custody, it shall submit the following documents for the TDCC to open a segregated account with a foreign depository or clearing institution (the "segregated account"):
  1. Custody agreement.
  2. Account opening documents designated by the foreign depository or clearing institution.
  3. Photocopy of the document evidencing company or business registration.
  4. Specimen card of the seal to be used.
  5. Other documentation as required.
    When the TDCC has completed the opening of the segregated account for the cross-border custody participant with the foreign depository or clearing institution, the TDCC shall set up a cross-border custody account book for the participant, and enter the participant's name, location, and uniform ID number as a profit-seeking enterprise or tax withholding entity, and transaction details as well as the balance of the cash and securities in custody.
Article 95-3     When a cross-border custody participant applies to the TDCC for handling of settlement, transfer of cash or securities, securities lending, or foreign exchange, it shall notify the TDCC by inputting the information through the computer network or another transmission procedure.
    After receiving the notification, the TDCC shall immediately forward notification to the foreign depository or clearing institution to perform the operations. After the completion of the relevant operations by the foreign depository or clearing institution, the TDCC will immediately notify the cross-border custody participant and make the entries in the account book.
    When the TDCC learns that there is insufficient cash or securities for the settlement, transfer, securities lending, or foreign exchange as instructed in the notification by the cross-border custody participant, the TDCC will immediately notify that participant to take follow-up measures.
Article 95-4     When a cross-border custody participant applies to TDCC for handling of tax identity registration in any country, it shall submit the application documents provided by the foreign depository or clearing institution, and the application will be forwarded by the TDCC to the foreign depository or clearing institution for follow-up handling.
Article 95-5     Upon receiving notification from a foreign depository or clearing institution of information about corporate actions by issuers, the TDCC shall immediately notify the cross-border custody participant and take follow-up measures.
    If it is necessary for the cross-border custody participant to respond to the information under the preceding paragraph, the cross-border custody participant shall, within the deadline which the TDCC has provided, notify the TDCC by inputting the information through the computer network or another transmission procedure, and the TDCC will forward the notification to the foreign depository or clearing institution for follow-up handling.
Article 95-6     When a cross-border custody participant applies to TDCC to conduct asset valuation, it shall notify the TDCC by inputting the information through the computer network or another transmission procedure.
    After receiving the notification, the TDCC shall immediately forward the information and require the foreign depository or clearing institution to do so. Also, the TDCC shall provide the cross-border custody participant with the statement of those procedures.
Article 95-7     A cross-border custody participant shall use the computer network or another transmission procedure to check the transaction details as well as the balance of the cash and securities on its cross-border custody account book. Any time that it finds any discrepancy, it shall promptly notify the TDCC to undertake a joint investigation to determine the cause and make a correction.
Article 95-8     The TDCC shall use data storage media to preserve the account books and the related evidentiary documents for cross-border custody participants. The preservation period shall be 15 years from the date of any account entry.
Chapter 8-1 Electronic Operations
Article 95-9     When a participant accepts a customer's electronic application for account opening, account closing, book-entry transfer, or related operations under TDCC rules, it shall, in accordance with the Electronic Signature Act, identify and confirm the customer's identity, declaration of intent, and the signature on the application document, before it may notify the TDCC of the application information.
    Upon receiving the notification of the preceding paragraph, the TDCC, after reviewing and confirming the accuracy of the relevant data, will carry out book-entry transfer and make account entries in accordance with the relevant provisions of these Rules.
    The participant shall keep records of the content, IP address, time, and identity verification data of the customer's application
Chapter 9 Supplementary Provisions
Article 96     A participant shall establish a computer network connection with the TDCC to handle deposits, withdrawals, transfers, inquiries, bookkeeping entries, and book-entry transfers of securities.
    When using the computer network of the preceding paragraph, a participant shall input information accurately and without misrepresentation, in accordance with factual data and early warning procedures.
    When the TDCC accepts a request from a participant for computer processing of TDCC custody and book-entry transfer matters for customers, the participant's customer account information will be permanently stored by the TDCC on computer storage media.
Article 97     Participants shall notify the TDCC through the computer network of data on personnel who use control cards and supervisor cards; securities deposits and withdrawals, as well as trade settlements for the given period, shall be handled by registered clearing and settlement personnel.
    When there is a change in the personnel of the preceding paragraph, the participant shall notify the TDCC in writing for purposes of recordation.
Article 98     Personnel dispatched by a participant to TDCC business premises to handle clearing and settlement will be subject to approval by the TDCC on the basis of need.
    The personnel of the preceding paragraph shall observe applicable regulations and carry on their persons a registration certificate issued by the TWSE or the TPEx or an ID card issued by the TDCC.
Article 99     After securities under TDCC custody are delisted , participants shall be notified in writing to withdraw them within a prescribed period. This provision does not apply to the book-entry delivery of dematerialized securities.
Article 99-1     When book-entry registration for an issuer's dematerialized securities is terminated, then from the date of termination of book-entry registration, the TDCC will suspend all book-entry transfer functions other than those connected with extinguishment of pledge, the closing out of margin purchases and short sales, or the imposition or lifting of a court-ordered attachment, and shall further notify the securities issuer of information pertaining to the holders of the securities, including the holders' personal or entity names, national ID numbers or business unified numbers of profit-seeking enterprises or tax withholding entities, domiciles or residences, quantities of holdings, securities marked as trusted assets, creations of pledge, or court-ordered attachments.
    Within 30 days of the date of termination of book-entry registration, the issuer shall carry out reissuance, printing, and delivery of securities based on the securities holder information of the preceding paragraph and related provisions. This requirement does not apply, however, if the issuer, in accordance with law, will not issue shares after termination of its book-entry registration.
    When a participant accepts a customer application to withdraw from all its accounts the balance of the securities of the preceding paragraph, then after the customer agrees to provide authorization, the participant shall notify the TDCC by inputting the relevant data through the computer network. After other participants have confirmed the accuracy of the information, the balance of the customer's securities on deposit in depository accounts with those other participants will be transferred by the TDCC to the account with the participant through which the customer applied for the withdrawal and the TDCC will proceed in accordance with Article 32 of these Operating Rules.
Article 99-2     After book-entry registration is cancelled for securities under TDCC custody, customers may apply to participants with which they have accounts for documentary proof of shareholdings as of the date of termination of the registration. In addition, when an issuer is unable to print physical securities and is also unable to provide shareholding information, the owners of securities in the issuer's depository account or the investors under the registered portion of its book-entry account may apply to the TDCC to record the book-entry quantity as notified by the issuer as of the date of termination of book-entry registration.
Article 100     An issuer of securities under TDCC custody shall notify the TDCC of the name, business location, and other relevant information pertaining to its transfer agent. When there is a change in such information, the issuer shall notify the TDCC within three days after the change is determined.
    The transfer agent office is required to be located at the registered location of the TDCC’s office.
    When an issuer of securities under TDCC custody publicly announces a conversion, exchange, or forced conversion, the TDCC may use the balances of securities on deposit in the accounts of participants and their customers to execute the operation and make debits against those balances. When the issuer carries out a forced conversion of securities and requests the TDCC to handle the payment of funds, the TDCC will execute payments of funds, after receipt of the issuer's funds, on the payment date indicated by the issuer.
    When the securities referred to in the preceding paragraph are ETNs, the TDCC will make the debits from the balances on deposit in the accounts of participants and their customers on the first business day after the expiration of the term of the ETNs as announced by the TWSE or TPEx.
Article 101     The TDCC shall separately adopt directions or handbooks detailing coordination between the TDCC and participants in matters relating to the provisions of Articles 12, 13, 19, 26, 30-1, 32, 33, 33-1, 42, 43, 46, 49, 51, 52, 54, 55 to 57, 60, 61-1 to 61-9, 61-11, 61-12, 61-14, 61-15, 62, 62-1, 62-3, 63-1, 64-1 to 80, 80-1 to 80-13, 83, 83-1, 86, 88, 90, 91, 91-1 to 91-5, 93, 95-1 to 95-8, 96, 99-1, 99-2, and 100, as well as operations required by the provisions of these Operating Rules.
Article 102     These Operating Rules, and any amendments hereto, shall be implemented following approval by the competent authority.
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