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On 5 June 2001, the Securities and Futures Commission (SFC) announced amendments to the restrictions on transfers of shares in a public issuing company by its directors, supervisors, managers, or shareholders holding more than 10% of the outstanding shares of the company. The amendments, effective from the same day, introduce new minimum shareholding periods and maximum percentage of shares transferable in one day through Taiwan Stock Exchange (TSE) or over-the-counter market as prescribed in Article 22-2, Paragraph 1, Item 2 of the Secu-rities and Exchange Law (SEL). The amended restrictions are as follows:
The minimum period an insider must hold its shares before it may transfer them is extended from three months to six months after the date when the insider acquires the status of an in-sider. As provided by Article 22-2, Paragraph 3 of the SEL, and by an SFC ruling of 20 August 1988, the restriction also applies to the insider's spouse, minor children, and nominees who hold the shares on behalf of the insider, and to representatives of juristic persons (in-cluding such reprsentatives' spouses, minor children and nominees).
The maximum number of shares that may be transferred by an insider on any given trading day may not exceed: (a) where the total number of the shares issued by the company does not exceed 30 million, 0.2% (previously 0.5%) of the total number of shares; (b) where the total number of issued shares exceeds 30 million, 0.2% of the 30 million shares plus 0.1% (previously 0.25%) of the shares ex-ceeding 30 million; and (c) in any case, 5% (previously 10%) of the average trading volume for the ten consecutive trading days preceding the reporting day of the intended transfer.
The above restrictions do not apply to shares transferred by auction or by bidding under the rules of TSE or Over-the-Counter Securities Exchange. Neither the amended restrictions apply to after-hours fixed price trading.
An insider must complete the share transfer within one month after it reports the intended share transfer, otherwise a new report must be filed. However, no reporting is required if less than 10,000 shares will be transferred on any given trading day.
