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Lodgment for Security of Debt

Means investors to deposit in the form of centralized custody securities.

Q&A

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  • 1.

    Q37: Where companies listed on the TWSE, TPEx or the Emerging Stocks return stock capital in cash due to capital reduction or perform cash merger pursuant to the Business Mergers and Acquisitions Act, how to handle the cash payment corresponding to stocks under attachment or pledge, or in the account designated by the court for auction or surety?

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    When companies listed on the TWSE, TPEx or the Emerging Stocks return stock capital in cash due to capital reduction or perform cash merger pursuant to the Business Mergers and Acquisitions Act, the centralized securities depository enterprise would provide the transfer agent with relevant data on the details of pledge, attachment, court's auction account, and data on court surety. For cash payment corresponds to these stocks, the transfer agent shall note the following:

    1. Pledge: proceed in accordance with the pledge data of dividend distribution agreement between the pledgee and the pledgor provided by the centralized securities depository enterprise. If there is no distribution agreement between pledge parties concerning capital reduction/merger and acquisition/buy back/return of capital, the field shall be left blank and the monetary amount shall be placed under the issuer's or its transfer agent’s custody. Once the pledgor, pledgee or the buyer provides documents proving the removal of pledge, acquisition of pledged items or transfer of court auctions, the transfer agent would then deliver the monetary amount to the pledgor, pledgee or the buyer.
    2. Attachment: the centralized securities depository enterprise would compile and provide the "Summary of Court Attachment Data" (report code ST56J) to the transfer agent and inform the execution agencies the reasons for changes in the companies listed on the TWSE, TPEx or the Emerging Stocks. Thus, the transfer agent shall place cash associated with attachment under custody and wait for the execution agencies' instructions to deliver the cash.
    3. Details on court auction: place cash associated with the "Auction Details of Securities Owners List" provided by the centralized securities depository enterprise under custody and wait for the court's instructions to deliver the cash.
    4. Court surety: money is remitted into the court surety account in accordance with the "Court Surety List" provided by the centralized securities depository enterprise to continue to serve as surety.

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