Nora Shih
Article 150 of the Securities Exchange Act (the “SEA”) stipulates that the listed securities must be traded in the centralized securities trading market established by the stock exchange. Thus, this regulation prohibits over-the-counter listed securities transactions. However, Article 150, Paragraphs 1 to 3 of the SEA stipulates three exceptions, and Paragraph 4 grants the competent authority to specify certain circumstances as other exceptions. The Financial Supervisory Commission (the “FSC”) issued several letters in the past to clarify exceptions from Article 150 of the SEA. Since the circumstances permitted by the competent authorities under Article 150, Paragraph 4 of the SEA are scattered in letters of different code, the FSC issues Jin-Guan-Zheng-Jiao-Zi-1100362895 Letter on August 2, 2021, to list all 18 exceptions (detailed below) and void the past interpretations.
(1) Listed companies purchasing shares from dissenting shareholders in accordance with the Company Law, the Enterprise Merger and Acquisitions Law, and the Financial Holding Company Law
(2) Overseas Chinese or foreigners transferring the shares to other Overseas Chinese or foreigners and that is approved by the Investment Commission of the Ministry of Economic Affairs in accordance with the Statute For Investment By Overseas Chinese or the Statute For Investment By Foreign Nationals
(3) The FSC approving the convertible securities issued by the companies to be settled or converted with other securities
(4) Companies repurchasing issued securities with repurchase conditions in accordance with the conditions recorded in the articles of association
(5) Repaying the trustor the listed securities purchased with designated purpose trust funds after the termination of the contract
(6) Circumstances stipulated in Article 22, Paragraph 3, Article 22-2, Paragraph 1, Sections 1 and 3, and Article 43-1, Paragraph 2 of the SEA
(7) Listed securities approved by the FSC to stop trading in the centralized trading market
(8) Stocks forbidden to be listed trading by the SEA
(9) According to the Company Act, investors offsetting the payment of the shares with listed securities, or companies offsetting the refunding of capital reduction with listed securities
(10) Listed companies carrying out share exchanges in accordance with the Business Mergers And Acquisitions Act or the Financial Holding Company Act
(11) Investors using domestic listed stocks to offset the payments of shares issued by the foreign company for its establishment or capital increase under the laws and regulations of its registered country
(12) Banks and securities firms conducting business regarding the financial derivatives and structured products linking to Taiwan stocks to perform physical delivery with the listed securities in the segregated hedge account
(13) Securities firms conducting Contract-Based Call (Put) Warrant Business at its business place to perform physical delivery with the listed securities in the segregated hedge account
(14) Traders conducting stock option contracts transaction delivery with physical stocks when the contracts expiring
(15) Leverage transaction merchants conducting Taiwan stock leverage contract trading and performing these contracts with listed securities;
(16) Repaying the exchangeable government bonds issued by the central government with listed securities
(17) The listed companies purchasing their shares to transfer to their employees
(18) Other circumstances approved by the FSA in advance