Cross-Border Custody Services

As part of the government’s policy objectives to achieve better alignment of Taiwan’s financial system with global standards, facilitate the operations of Taiwanese businesses in the global market, and serve the needs of institutional investors, TDCC was approved by competent authorities to engage in cross-border custody and book-entry settlement of foreign securities, and to establish a web-based custody system, which became officially operational in August 2015, in accordance with Article 5, Paragraph 6 of the Regulations Governing Centralized Securities Depository Enterprises, and Article 2, Paragraph 3 of the Regulations Governing Book-Entry Operations for Centrally Deposited Securities.

Introduction

1.Account opening:

(1)Participants that wish to access cross-border foreign securities custody services via TDCC should acquire an electronic certificate accepted by TDCC and provide the following documents to open an account:

A.A custody contract

B.An account opening/cancellation/modification form for cross-border deposit of foreign securities

C.A copy of corporate registration certificate or certificate of business registration

D.A signature specimen card

E.Other necessary documents

(2)Upon receiving the application from a participant, TDCC will review the documents and then open an account with a foreign depository.

2.Cross-border custody operation:

(1)Transaction settlement:

Upon receiving a participant’s request to settle securities transactions or transfer securities, TDCC will forward the instruction to a foreign depository after confirming that the information provided by the participant is correct. Once the settlement or transfer is completed, TDCC will update the participant’s ledger entry and notify the participant.

(2)Cash transfer:

A.Participants may request TDCC to remit cash from their segregate account with a foreign depository to another bank account, or to transfer to another segregate account with the same foreign depository. TDCC will verify the information and instruct the foreign depository to carry out the remittance or transfer, and then update the participant’s ledger entry before sending a notice to the participant.

B.Participants may request an inward cash transfer to their segregate account. TDCC will verify the information and update the participant’s ledger entry before sending a notice to the participant of such transfer.

3.Principal and interest payments:

TDCC will credit the principal and interest payments to participants’ segregate accounts upon receiving notification from a foreign depository that such payments have arrived.

4.Taxation:

Participants may file an application to register as a tax payer in a foreign country via TDCC. TDCC will review the information and forward the documents to a foreign depository. Once the foreign depository completes and informs TDCC of the registration, TDCC will notify the participant.

5.Corporate action information:

(1)Upon receiving notifications from a foreign depository regarding issuers’ corporate actions, TDCC will inform participants of such corporate actions so that they can react accordingly.

(2)If the aforesaid corporate action requires a reply from participants, participants should make the reply before the deadline designated by TDCC. TDCC will then update the changes to the participant’s cash and securities accounts and inform the participant of such changes.

6.Bookkeeping:

TDCC receives securities and cash account balances from foreign depositories on a daily basis. After receiving the data, TDCC reviews every transaction for reconciliation purposes. Cross-border deposit participants may examine the balances of their securities and cash accounts, as well as securities settlement and payment statements to see if they are consistent with the records in their ledger.

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