In accordance with the Financial Supervisory Commission’s strategic direction of “Innovation, Resilience, and Sustainability,” TDCC has been assisting in encouraging the securities market to realize the global goal of 2050 net-zero emissions. The company has designed and established the “Stock Affairs Electronic Notification Platform” (eNotice Platform). With the consent of investors (shareholders) and TWSE-listed, TPEX-listed, and emerging stock companies or public companies with shareholder services agents, the platform provides electronic notification services for dividend distributions, and it officially went live on June 30, 2023.
Planning Background - Digitalization and ESG Sustainability Trends
In recent years, the digitalization of the financial market has become a core policy of the Authority. Electronic operations have become more crucial, especially under the influence of the pandemic. Meanwhile, the public has gradually adapted to a digital lifestyle, such as receiving credit card bills through text messages, emails, and push notifications from apps. Due to the widespread use of electronic devices, investors seeking efficiency and privacy actively turn to electronic notifications to meet their needs. This has given rise to more application scenarios of electronic notifications through information technology. As for the issuing companies, due to the numerous notifications regarding shareholders’ rights and benefits, as well as the increasing paper mailing costs with the growing number of shareholders, many issuing companies and their shareholders have been calling for the digitalization of notifications for shareholders in recent years. This is not just an issue of economic benefit but also aligns with ESG benefits. In response to the needs of investors and issuing companies, TDCC planned and established the eNotice Platform and integrated it with the digital platform service TDCC ePASSBOOK, providing electronic notification services related to stock affairs for issuing companies, rettail investors, and institutional investors. This is an even more significant advancement for the Fintech applications and enhancement of corporate governance in Taiwan’s securities market.
Legal Framework
According to Article 172, Paragraph 4 of the Company Act: “The cause(s) or subject(s) of a meeting of shareholders to be convened shall be indicated in the individual notice to be given to shareholders; and the notice may, as an alternative, be given by means of electronic transmission, after obtaining a prior consent from the recipient(s) thereof.” Moreover, as stipulated in Article 12-1 of the Regulations Governing the Administration of Shareholder Services of Public Companies: “After obtaining shareholder approval, a company may transmit documents related to convening of shareholders meetings and other notices via electronic documents.” The above regulate that notifications for shareholders regarding corporate shareholder services such as cash dividend distribution and stock dividend distribution can be processed electronically. The official letter dated July 5, 2022, with reference number 11102420050 from the Ministry of Economic Affairs offers an interpretation of TDCC’s planning for the eNotice Platform, which can be established based on the agreement between the investor and TDCC in the range and term approved by shareholders.
TDCC’s establishment of the eNotice Platform plays a dual agency role. Investors sign the consent terms on the TDCC eNotice Platform, and TDCC acts on behalf of the investors to express intentions to the issuers. In addition, the issuing companies sign the eNotice service contract with TDCC, and TDCC, representing the issuing companies, accepts the intentions expressed by the investors. Therefore, TDCC has a dual agency role: on the one hand, the company accepts the investors’ consent; on the other hand, it accepts the commission from the issuers.
Operational Process - three channels for retail investors to activate eNotice quickly
TDCC prioritizes electronic notifications for matters not involving the subsequent exercise of shareholders’ rights and benefits, large volumes of cash, and stock dividend distribution notices. Retail investors can log in via three channels: downloading TDCC ePASSBOOK through cellphones, selecting the “Electronic Voting” or “Shareholder e-Service” function within a brokerage’s trading app, or opening a Shareholder e-Service platform webpage on a computer. Then they can log in with the corresponding certificate (such as a Citizen Digital Certificate, Brokerage Trading Certificate, and so on).
On the eNotice platform, the electronic notification methods investors approve of are generally coupled with negative exclusion. The range of consent covers but is not limited to the companies whose stocks are currently held by the investors. However, investors can still choose certain companies individually to show disapproval to or maintain paper notifications from. As for the duration of the consent, investors can choose indefiniteness (permanence) or a fixed period (20 years or 10 years). If an investor chooses a specific duration (10 or 20 years), the system will notify the investor before the period expires.
Investors must complete their consent to adopting electronic notifications on the eNotice platform one business day before the record day of the stock affairs regarding the securities. After the stock affairs notifications are launched, investors can receive them and check the details electronically. Once investors complete email verification and activate the eNotice service, as long as an issuing company has commissioned the platform to send electronic notifications, investors can receive dividend eNotices via email and the TDCC ePASSBOOK app. Investors can also inquire about dividend details from the past three years and download the related notices on the eNotice platform. This ensures privacy and efficient receipt of dividend notices without worrying about losing physical mail.
Effectiveness - Enthusiastic feedback from issuing companies and investors
TDCC launched electronic notification services for the dividend distributions of TWSE-listed, TPEX-listed, and emerging stock companies in response to the high dividend distribution season from July to September. By the end of August, over 800 issuing companies had signed up, nearly 500 of which had scheduled to use the eNotice platform, with more than 250,000 electronic dividend distribution notices sent. Besides, the number is still increasing. This highlights the issuing companies’ commitment to digital transformation and sustainable ESG development, providing shareholders with convenient and efficient services. On the other hand, the number of users activating the eNotice services has exceeded 200,000. The widespread positive feedback from investors demonstrates the platform’s efficiency and convenience in offering dividend-related information and significantly reducing paper waste. Investors can experience convenient digital technology and gain instant updates of dividend information. Meanwhile, they can actively support energy conservation and carbon reduction, heading towards the goal of 2050 net-zero emissions and realizing sustainable ESG development.
