TWSE Market Insights

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A securities firm has knowledge, or should reasonably have knowledge, that when a specific investor has unfortunately passed away – pursuant to Taiwan’s Civil Code, which stipulates that a person’s legal capacity commences at birth and terminates at death – any securities trading account opened by the decedent with securities firms during their lifetime loses its legal basis upon their death. The securities firm cannot ignore the investor’s passing and continue to allow the account to remain active. In accordance with regulations, it is prohibited for securities firms to accept requests from heirs to sell securities held by the decedent through that securities account.

Upholding the principles of investor protection and providing friendly services, the Taiwan Stock Exchange Corporation (TWSE) has reviewed numerous similar cases in which investors passed away before disposing of their shareholdings. To address such situations, the TWSE has specifically stipulated a relevant measure in Article 82-1, Paragraph 2 of its Operating Rules. That is, securities acquired through inheritance are handled in accordance with Paragraph 1 of the same article. In accordance with the “Guidelines for Reporting by Securities Brokers of Brokerage Sale of Securities Not Owned by the Principal” (Guidelines for Reporting), such securities may be sold through the mechanism commonly referred to as “selling borrowed securities” in the market, thereby resolving the practical difficulties encountered in such cases.

When a securities firm accepts a client’s order to sell listed securities acquired through inheritance in accordance with Chapter 6 of the aforementioned Operating Rules, the firm must confirm that the transfer registration procedures have been duly completed before accepting the sale through another discretionary account. Accordingly, pursuant to the relevant provisions of the “Guidelines for Reporting,” where a securities firm wishes to accept an order to sell securities not registered under the client’s name, the firm must request the securities owner as recorded in the shareholder register to complete a power of attorney (POA) authorizing the sale. The firm must then input all required information from the aforementioned POA via computer transmission before 6:00 PM on the day of the transaction. 

In the event of unforeseen circumstances in which a computer transmission line is unavailable, the firm must immediately notify the TWSE by telephone. The required information must be compiled into a written document and affixed with the seals of the company and its person in charge. The written document must then be sent to the TWSE via fax or delivered by a designated person for the TWSE to input the information on their behalf. Simultaneously, the cause of the incident and the handling process must be documented for future reference and filing. Those failing to report within the prescribed time frame or with obvious errors in their report are subject to the penalties set forth in TWSE’s Operating Rules. 

However, while it is feasible in practice to sell listed securities originally held in the testator’s name through another person’s account, the mechanism’s original intent fundamentally addresses issues such as employees of an institution who can acquire stocks of listed companies but are restricted from opening securities accounts, an elderly heir living abroad who is unable to return to Taiwan to complete the procedures, or the representative of a minor heir who lacks identification documents. While this approach provides several available options, securities practice reveals numerous other alternatives for disposing of assets left by the testator. Based on this notion, this article aims to categorize the common patterns of disposing of inherited securities. By linking application procedures with their regulatory basis, the concrete structural differences among various approaches are analyzed. Taking into account the unique circumstances of each case’s background, this article further seeks to clarify the optimal practical guidelines and solutions.

To enhance transaction security and transparency as well as strengthening anti-money laundering measures, stocks of public companies in Taiwan must, pursuant to the Company Act and Securities and Exchange Act, adopt a registered ownership system. Furthermore, to reduce the risk of losing physical certificates, minimize the likelihood of forgery or alteration, and increase the efficiency of trading and transfer processes, information on stocks of TWSE and TPEx listed companies has been centrally managed and recorded in dematerialized form in the system of “Taiwan Depository & Clearing Corporation” (TDCC) since 2012.

Regarding inherited securities and the transfer of ownership following the testator’s death, the relevant operating rules of the TDCC explicitly state that investors with legal inheritance rights may apply for a transfer request with the decedent’s securities firm, provided they submit the relevant supporting documents specified in Article 24 of the “Regulations Governing the Administration of Shareholder Services of Public Companies,” along with proof of tax payment or tax exemption. The securities firm will then forward the information provided by the heir through the TDCC to the issuing company or the testator’s stock transfer agent for review. Alternatively, the heir may submit the relevant documents directly to the issuing company or its stock transfer agent for processing. After successful verification by the issuing company or its stock agent, the TDCC will be notified to transfer the securities into the heir’s central custody account.

In other words, for inheritance transfers, the application must prepare required documentation: shareholder specimen seal card, photocopies of both sides of the ID card, a photocopy of the detailed household certificate or household registration transcript, and certification of payment of taxes or tax exemption. The transfer is subject to all securities acquired before the testator's death and received after the testator's death. The heir must complete the application forms for stock transfer, adjustment of registered account holdings, and securities transfer from the issuer's designated account, as well as an inheritance chart prepared listing the order of inheritance and the rules on representation under the Civil Code. Where there is more than one heir, if the stocks are distributed according to the provisions on entitlement to inheritance in the Civil Code, the stocks may be inherited centrally by a single person or distributed among several heirs. However, a “Stock Distribution Agreement” must be signed by all heirs. If the distribution is as per a court judgment or a valid will, the court judgment or will must also be submitted as proof.

Once the aforementioned inheritance transfer procedures are completed, the securities originally held in the testator’s name are legally transferred into the testator’s account. The heir may sell the securities directly through the securities account previously opened with the securities firm, either in batches or as a single package. If the heir has never participated in securities market transactions, they may select a nearby securities firm. Upon account opening, the heir will sign a securities trading agreement and can simultaneously consult the firm for assistance with the inheritance transfer procedures. Opting for the aforementioned one-stop service means that both account opening and inheritance transfers are completed, and there is no need to resort to Article 82-1 of the TWSE’s Operating Rules. This approach not only avoids the relatively complex legal relationships involved in the sale process through a third-party account but also moderately reduces the trust risks associated with the transfer of property under private law.

To gain a clear understanding of the testator's history of investment in the securities market, pursuant to the “Procedures for Requesting Testator’ Account or Transaction Information at the Centralized Securities Exchange Market”—any party related to the estate—whether the estate administrator, executor, or heir—may apply to inquire about the testator’s trading accounts and related transaction information obtained by the TWSE through indirect collection means on its trading platforms. In other words, not only can the heir access – either in person or via communication means – information regarding the blood relatives or relatives by marriage from whom their inheritance rights derive, but other parties such as the estate administrator elected by the family council or appointed by the court, as well as the executor appointed by the testator or by a person engaged by the testator, or elected by the family council or appointed by the court, may exercise the relevant right to access such information, provided they present valid supporting documents.

In addition, pursuant to the “Operating Procedures for Processing Data Inquiries by Investors and External Agencies” of the TDCC, the aforementioned estate administrator, executor, or heir, upon presenting supporting documents, may apply – either in person, online, or via other communication means – to inquire about changes and balances in the testator’s securities and other investment holdings. This convenient service is similar to the “Financial Inheritance Inquiry” currently provided by the National Taxation Bureau, as both are designed to facilitate the inventory of the testator’s assets.

Pursuant to the relevant provisions of Section 5, Chapter 5 of the Taiwan Civil Code, when there is uncertainty regarding the existence of an heir, the family council may appoint a candidate to undertake the critical responsibility of estate administration. The inference procedures will be initiated with the aforementioned inference administrator in place. The specific details are reported to the court, which then orders the heir to acknowledge the inheritance within a prescribed time frame, in accordance with a public announcement procedure. Where there is no family council or if such council fails to appoint an estate administrator within the prescribed time frame, an interested party or a public prosecutor may petition the court to appoint an estate administrator on their behalf. For example, the “Act Governing Relations between the People of the Taiwan Area and the Mainland Area” explicitly stipulates that where the decedent’s estate is located in the Taiwan Area and their heirs are residents of the Mainland Area, except where the decedent was active-duty military personnel or a retired military officer or enlisted personnel, the National Property Administration, Ministry of Finance shall be appointed as the estate administrator. Prior to electing an estate administrator, the court may first take necessary measures to preserve the estate, upon application by an interested party or a prosecutor.

Accordingly, the duties of an estate administrator include not only preparing an inventory of the estate, taking necessary measures to preserve the estate, and issuing public announcements or notifying creditors and legatees, but also settling debts, delivering bequests, and transferring the estate to the heirs or the state treasury. In addition, where the settlement of debts or the delivery of bequests is necessary, the estate administrator may, with the consent of the family council, sell the estate under administration. Simply put, prior to the heir acknowledging the inheritance, any acts performed by the estate administrator are deemed to be on behalf of the heir.

The estate administrator is authorized to make necessary dispositions of the estate and may even sell the estate under administration depending on the circumstances. Based on this notion, it appears that, in practice, the estate administrator should not be prohibited from disposing of the listed securities originally held in the name of the testator on the centralized trading market. Consequently, following the instructions in Letter Jin-Guan-Zheng-Quan-Zi No.1100373514 dated December 7, 2021 issued by the Financial Supervisory Commission (FSC), the TWSE promptly issued Letter Tai-Zheng-FU-Zi No.1110500136 dated January 14, 2022, notifying all securities firms to permit estate administrators to open discretionary accounts. To foster clear identification, the code “187” was newly added as the estate administrators’ exclusive identifier within the investor account opening system.

Since the above letter became effective on April 11, 2022, estate administrators may apply to a securities firm to open an account by submitting the tax ID number assigned by the local tax bureau where the estate administrator is registered, identification documents, and proof of qualification as the estate administrator, as outlined in the letter. The account should be opened in the name of the estate administrator of the testator. Furthermore, as these special accounts are intended solely for the purpose of disposing of inherited stocks, their nature is similar to the disposition of securities by guardians acting on behalf of persons under guardianship (ID code 188). Consequently, both types of accounts are restricted to selling securities on behalf of others and prohibited from purchasing any securities on behalf of others. In addition, the Taipei Exchange (TPEx) also issued Letter Zheng-Gui-Jiao-Zi No.1110051089 dated January 19, 2022, in synchronization with the TWSE, removing the previous restriction prohibiting account opening in the name of an estate administrator.

If the estate administrator simultaneously opens a dedicated securities custody and transfer account (Code 27) at a securities firm’s branch, they may fill out the “Application for Securities Transfer” there. After confirming that the transfer-out and transfer-in account numbers and account names, stock details, specimen seal or signature, and other required information are correctly completed, and after verifying the relevant identification documents, the securities firm is entrusted to execute the securities transfer transaction. The TDCC will then transfer the stocks to the estate administrator’s account.

In terms of estate administration, aside from the aforementioned estate administrator, the term “executor” often appears in real cases. Taking the long-standing and high-profile inheritance dispute case involving a certain large corporate group in Taiwan as an example – one of the heirs petitioned the court to replace the executor. In essence, executors are mostly appointed by the decedent during their lifetime. The role and purpose of an executor is to ensure that the contents of the will are accurately carried out according to the testator’s wishes and procedures, precisely implementing all instructions. In contract, an estate administrator relies on legal intervention to step in when the chain of inheritance is unclear or when there are no heirs. This mechanism aims to ensure that the estate’s liquidation and distribution proceed smoothly without delay.

Based on the duties of executors and estate administrators, and according to the relevant provisions of the Taiwan Civil Code and judicial interpretations, both executors and estate administrators are responsible for the custody and administration of the testator’s estate. Consequently, this naturally leads to public questioning as to why the TWSE’s institutional design appears to favor estate administrators while seemingly overlooking the executor’s role in upholding the testator’s final wishes. Some individuals further advocated that executors should be treated similarly to estate administrators. The TWSE should consider and subsequently permit them to be permitted to open a discretionary account at a securities firm. Although the TWSE is not yet able to immediately issue a letter to securities firms for implementation, there is no legal barrier preventing securities firms from doing so at their own discretion, provided the case is submitted to the TWSE for approval. The case will proceed pursuant to Letter Tai-Zheng-FU-Zi No. 1110500136 dated January 14, 2022. The executor’s application for account opening will be accepted first to facilitate the timely disposition of the estate.

In fact, in 2021, the TWSE provided assistance to securities firms and heirs in successfully overcoming certain technical obstacles – specifically, selling borrowed stocks held in the name of a testator. Considering that the number of disputed securities involved in the case was small and the value of the sale was limited, it was preliminarily determined that this case was unlikely to cause controversy. After joint discussions with the TDCC, specific securities firms, and the lawyers serving as executors, a consensus was reached – the TWSE made an exception for this special case. On a special project approval basis, the TWSE permitted the securities firm to apply for a name change of the original account, rather than opening a new account in the name of the executor. The securities firm was restricted from executing sell orders directly from this temporary account that has been renamed; disposition of the securities holdings in the name of the testator was only permitted through a separate borrowed discretionary account.

Due to the unique nature of this case, the request for the executor to change the account name was permitted with a more flexible approach to assist the securities firm and heir in resolving this specific issue. This approach is distinctly different from the general procedures outlined in Article 82-1, Paragraph 2, Item 2 of the Operating Rules of the TWSE, which govern general cases of entrusting another person’s account to sell securities due to inheritance. Therefore, the TWSE issued Letter Tai-Zheng-FU-Zi No. 1110019708 dated October 7, 2022, to the securities firm, citing Article 82-1, Paragraph 2, Subparagraph 7 of the Operating Rules – “Other matters approved by the company” – as the basis for approving this application. This indirectly highlights its nature as a special approval case, meaning subsequent cases cannot directly cite it or apply it by analogy. Stock agents’ operations do not fall within the TWSE’s scope of authority. The subsequent application of stock transfer was submitted to the TDCC by the securities firm before settlement could proceed.

The regulations of the Operating Rules of the TWSE and other related regulations apply only to securities firms that have entered into a Contract for the Usage of the Centralized Securities Exchange Market with the TWSE. The relationship between providers and users of the centralized trading market is based on contractual agreements. Securities firms are obliged to comply with all rules and announcements established by the TWSE and to pay securities transaction handling fees and other charges on time as required. In this regard, the TWSE has handled a number of cases referred to it by the FSC. These cases primarily involved professional legal service providers appointed by heirs who actively inquired about the feasibility of executors opening an account with a securities firm or financial institution in their name. The TWSE has already issued a letter addressing relevant securities practices; however, the communication in the letter is advisory in nature and serves as a reference only. The letter does not bind securities firms in handling similar cases, and this should be made clear.

Based on the aforementioned principles concerning securities market operations, if the heir or executor directly requests to apply the provisions of Article 82-1, Paragraph 2, Subparagraph 7 of the Operating Rules, or requests to be treated as outlined in Letter Tai-Zheng-FU-Zi No. 1110500136 dated January 14, 2022, the heir or executor may not engage a securities firm – with which the TWSE has a contractual relationship – to handle the disposition of the estate on their behalf. Since the securities firm is not yet a contracted user of the centralized securities exchange market, the TWSE may only offer professional consultation and can only endeavor to explain the developmental experience of past cases. The TWSE does not yet have the authority to directly express any approval or rejection regarding third parties that have no contractual relationship with the TWSE under the relevant operating rules or other regulations.

As for whether an executor may open an account with a securities firm or financial institution, comprehensive exchanges of views among various parties were carried out between 2025 and 2026, with the TWSE diligently serving as a communication bridge. Each case was discussed in a phased manner with external parties, and the results were reported to the competent authority – the Securities and Futures Bureau – through written documents, telephone calls, and emails for its reference. Despite extensive coordination and negotiation efforts, a consensus on the immediate opening of discretionary and bank accounts by executors has not yet been reached. However, the groundwork has been steadily laid for subsequent relevant guidelines.

Upon examination, although the role and functions of an executor share similarities with those of an estate administrator in some aspects, there are distinct differences in nature. When both exist simultaneously, their duties are subject to a hierarchical order. As instructed by the competent securities and futures authority, the TWSE previously informed securities firms to accept account openings by estate administrators or executors through an official letter rather than via an announcement of a regulatory amendment. This better facilitates the disposition of securities held in the name of the testator. Whether this constitutes a general opening of accounts or a case-by-case approval, each case’s historical context and circumstances at the time must be considered.

The TWSE has assigned a dedicated account ID code for estate administrators and issued an official letter to inform securities firms of its implementation. By doing so, the Banking Bureau also approves estate administrators to open an account with a financial institution. The Securities and Futures Bureau proceeds with relevant matters accordingly, as instructed by the official letter issued by the TWSE. Otherwise, with respect to the general authorization for estate administrators to open an account with a financial institution, the administrative discretion for such decision clearly lies with the Banking Bureau, Financial Supervisory Commission (“Banking Bureau”). The Securities and Futures Bureau, also under the FSC, would find it difficult to overstep its authority in this regard, much less the TWSE, which is positioned as a private entity.

Furthermore, pursuant to the “Directions for the Full Implementation of the Book-Entry Transfer System in the Centralized Securities Exchange Market,” when a principal and a securities firm enter into a “Securities Trading Brokerage Contract” and open an account, a central custody account for securities and a deposit account with the financial institution designated by the securities firm should be opened simultaneously. The securities firm may accept securities trading orders from the principal only after the aforementioned accounts have been opened and the principal has executed a letter of authorization with the financial institution authorizing said institution to receive and make settlement payments. This means that even if the opening of a securities trading account is permitted, no transactions can be conducted in the securities market unless the obstacles to opening accounts with financial institutions are removed.

Regarding special cases where approval is reluctantly granted to a securities firm acting on behalf of an executor to change the testator’s account name and sell stocks through a borrowed account, these are exceptional cases given their unique circumstances and will not be regarded as standard practice in securities market operations. These cases do not meet the criteria established in the aforementioned case for the general approval of opening an account by an estate administrator. Accordingly, other similar cases involving the disposition of estate assets by executors still rely on a review of relevant documents and a case-specific analysis before an individual determination can be made. If the public mistakenly believe that subsequent cases of a similar nature should be treated the same, there is still considerable room for further deliberation.

Pursuant to Letter Jin-Guan-Yin-Fa-Zi No. 10802707961 dated March 21, 2019, issued by the Banking Bureau and addressed to the Bankers Association of R.O.C. and the National Federation of Credit Co-operatives of R.O.C., with a copy sent to the Taiwan Bar Association and the Land Administration Agent Association of R.O.C., the official letter primarily concerned the conclusions reached at the meeting “How to Assist Estate Administrators in Opening Special Account” held on March 7 of the same year. The purpose of the meeting was to safeguard creditors and the public interest by ensuring the preservation, management, and subsequent payment of taxes on estates in situations where heirs are unknown or no one acknowledges inheritance. The initiative prevents issues such as estate idleness and disposal difficulties. The regulatory context was also closely tied to the severe COVID-19 pandemic at the time, which led to a significant increase in deaths.

Pursuant to the aforementioned official letter from the Banking Bureau, when an estate administrator opens an account with a financial institution for the necessary preservation of an estate, they may do so, provided that the account name is in the name of the estate administrator of the testator. However, prior application must be made to the local tax bureau where the estate administrator is registered for the assignment of a dedicated tax ID number. Along with identification documents and proof of qualification as the estate administrator, the application may be submitted to the financial institution.

An executor may not directly replicate the aforementioned approach. If the sole purpose is to dispose of the estate on behalf of the testator and distribute the proceeds from the sale of securities to achieve estate division, this may be accomplished through the inheritance transfer procedure. All heirs must reach a written agreement on the distribution of stocks held in the testator’s name and transfer the stocks collectively to a single heir, who will sell and liquidate them through their account. This aligns with the intent of Article 824 of the Civil Code, which stipulates that jointly owned property may be divided according to the agreement of the co-owners.

If all heirs have opened discretionary accounts, or agree that it is appropriate for stocks to be sold through a neutral third party without conflicts of interest, the securities firm must report the sale to the TWSE from the aforementioned third party’s account in accordance with the “Guidelines for the Reporting of Sales by Engaged Securities Firms of Stocks Not Owned by the Principal.” The Banking Bureau’s stance on a general opening for accounts to be opened at financial institutions remains unclear. Unless determined on a case-by-case basis, the so-called “third parties” cannot be broadly interpreted to include executors within the scope of application for the time being.

After persistent coordination, the case regarding whether an executor may open an account has finally shown signs of progress. In response to an inquiry from an executor, the National Taxation Bureau of Taipei, MOF – after taking into account a civil ruling by the Taipei District Court – agreed to assign a tax code number to the withholding agency. This enabled the executor to open a dedicated account at designated financial institutions and securities firms to hold cash dividends and stock dividends that had not yet been distributed as of the date of the testator’s death.

Based on this, the TWSE issued an official letter to certain securities firms, with a copy sent to the Securities and Futures Bureau. The letter explicitly stated that if the executor had already opened an account with the designated financial institution using the tax ID number issued by the National Taxation Bureau of Taipei, then pursuant to the “Directions for the Full Implementation of the Book-Entry Transfer System in the Centralized Securities Exchange Market,” this exceptional case did not preclude opening a discretionary account under the same name with that company. Additionally, as set forth in the aforementioned approval letter from the National Taxation Bureau of Taipei, Zhongbei Branch, the account was settled and the tax code number of the withholding agency canceled after the estate division and delivery were completed.

The Securities and Futures Bureau issued a letter to the securities firm stating that this case must be handled in accordance with Letter Tai-Shui-San-Fa-Zi No. 09804024590 and the provisions of the Civil Code. Specifically, where stocks in the estate of a testator have not yet been registered for inheritance, any stock dividends distributed after the occurrence of an inheritance event belong to the heir. These stock dividends may be registered for transfer and collected by the heir. The TWSE issued the official letter to the securities firm to ensure compliance with this particular requirement.

The TWSE consulted with the TDCC regarding practical operational aspects. It is understood that if the sole purpose at this stage is temporary custody, the undistributed stocks accumulated over the years since the testator’s death may be managed jointly by all executors. The issuing company or the stock agent may directly contact the TDCC to make the relevant notations in a dedicated registration account established under its custody and book-entry transfer account. If, subsequently, the name of the executor is to be used to coordinate the liquidation of the aforementioned account balance for distribution, it must be done in compliance with relevant court rulings and securities management regulations. Specifically, a joint securities account must be opened, the shareholder registration information of the designated account must be modified, and the stocks must be transferred to the executor’s custody and book-entry transfer account.

In response to the subsequent letters issued by the Securities and Futures Bureau, the TWSE compiled its long-term experience and insights in handling account opening applications by executors. The TWSE’s views are summarized as follows:

I. Joint securities accounts opened in the name of the executor:

(I) Considering current securities market regulations from a substantive perspective, there is no explicit prohibition against executors opening accounts in their own name or in the name of their firm. For executors to trade securities, from a formal perspective, a general account opening mechanism – the account should be opened in the name of the executor of the testator. When a principal and a securities firm enter into a “Securities Trading Brokerage Contract” and open an account, they must simultaneously establish both a central custody account for securities and a deposit account with the financial institution under the same name. Both accounts are required.

(II) With respect to the aforementioned concerns, in response to the Taipei District Court’s inquiry regarding current banking industry practices, it appears that no concrete consensus has yet been reached regarding the full opening of accounts by executors at financial institutions. Except in cases where approval is reluctantly granted by courts or other authorities, it remains difficult for a single executor or multiple executors to establish their identity when applying to open an account with a financial institution or securities firm.

(III) Even if a securities firm intentionally or negligently accepts an executor’s opening of a trading account, such actions may not only violate relevant regulations but also lead to a situation where the executor is unable to obtain a financial institution account bearing matching names As a result, the executor would be unable to make either withdrawals or deposits, making it difficult for them to liquidate the securities held in the name of the testator through this channel.

II. Legal effect of the executor successfully opening a joint securities account in their name:

(I) In terms stock dividends, a public company should transfer the stock dividends derived from the inherited stocks to a joint securities account opened in the name of the executor in accordance with the court’s temporary restraining order. Therefore, pursuant to Article 24 of the Regulations Governing the Administration of Shareholder Services of Public Companies, the legal heir may submit valid documents, such as a household registration transcript, certification of payment of taxes or tax exemption, and court judgments, to the shareholder services department of the issuing company or its stock transfer agent. They may apply to have the testator’s shares transferred and registered in the heirs’ names according to the distribution ratio of the estate.

(II) The TWSE has previously issued an official letter to the Pingtung District Court that, where there are multiple heirs, the heirs themselves – upon reaching an agreement on the distribution of stocks – may collectively decide whether to consolidate the total inherited stocks into a single heir’s account for transfer and sale through that account. As this matter has already been addressed in that prior communication, further elaboration is hereby not required.

(III) At the request of an heir, when a public company transfers the stock dividends derived from the inherited stocks to a joint securities account opened in the name of the executor, this account must be legally opened. The relevant implementation details are based on the specific content of the court’s ruling made in the exercise of its authority.

(IV) Pursuant to the interpretation letter from the Ministry of Finance, there is no doubt that income generated from an estate jointly inherited by multiple heirs after the testator’s death constitutes the income of the heirs. However, from the perspective of practical stock affairs, there appears to be no precedent for the distribution or transfer of only the stock dividends arising from an estate.

(V) Unless it is formally required to use the account opened in the name of the executor of the testator, prior to relaxing policies – pursuant to Article 82-1, Paragraph 2 of the Operating Rules of the TWSE and regulations stipulated in the Guidelines for the Reporting of Sales by Engaged Securities Firms of Stocks Not Owned by the Principal – securities inherited, gifted, or acquired through a final court judgment must be sold through a third-party account. The account may be opened by either a natural person or a legal entity. Therefore, whether the account is opened in the name of the executor, a professional firm, or an enterprise providing services, the account opening process may be completed. This substantively fulfills the original intent of liquidating the estate.

III. Disposition of Securities Held in Joint Accounts:

(I) Whether based on a specific court ruling or an exception granted by the competent authority for special cases, stocks lawfully transferred into an investor’s TDCC account through the prescribed procedures may be disposed of in whole or in part at the discretion of the account holders, including but not limited to the executor.

(II) The provisions regarding the precedent for permitting estate administrators to apply for account openings in their own names, as stated in Letter Tai-Zheng-FU-Zi No. 1110500136 dated January 14, 2022, must still be followed. The executor must submit the tax ID number assigned by the local tax bureau where the estate administrator is registered, along with identification documents and proof of qualification as the estate administrator. The TWSE will first add specific fields for the executor’s ID code and tax ID number to the investor account opening system before proceeding with further processing.

(III) The aforementioned accounts are opened solely for the disposition of inherited stocks. The stocks in the account can only be sold and the account is restricted from making any purchase.

To assist in specific inheritance distribution cases where multiple heirs jointly inherit a large number of securities left by the decedent, a certain district court previously approached the TWSE regarding whether it could serve as both trustee and principal for the aforementioned securities sale through a borrowed third-party account. This bypassed the role of securities firms in the original transaction framework, enabling the TWSE to directly dispose of the securities.

However, the TWSE is a platform provider of the centralized securities exchange market, and its services are provided solely to securities brokers or dealers that have entered into the “Contract for the Usage of the Centralized Securities Exchange Market” with the TWSE. Generally accepted legal doctrine recognizes that investors and securities firms constitute a commission agency relationship under Article 576 of the Civil Code based on “Securities Trading Brokerage Contract.” In other words, securities firms conduct transactions in listed securities in their own names but on behalf of investors, charging a service fee as remuneration.

Upon examination, regulatory oversight of the current operating structure of the securities market centers on risk management. Therefore, investors should simultaneously open a central custody account for securities and a deposit account with a financial institution upon opening their account. When a securities firm consigned to trade in securities receives from and pays funds to the principal, it shall do so by way of book-entry transfer through the Book-Entry Account opened by the principal. Therefore, TWSE, TPEx, or ESB listed stocks held under an investor’s name are centrally registered and held in dematerialized form by the TDCC. As TWSE does not handle investors’ settlement funds, it has no authority to directly dispose of stocks held under their names, let alone transfer the proceeds to the multiple heirs’ accounts other than the testator’s.

Therefore, pursuant to Article 24 of the Regulations Governing the Administration of Shareholder Services of Public Companies, the legal heir may submit valid documents, such as a household registration transcript, a certification of payment of taxes or tax exemption, and court judgments, to the shareholder services department of the issuing company or its stock transfer agent. They may apply to have the testator’s shares transferred and registered in the heirs’ names according to the distribution ratio of the estate. Whether the court may, at request by the heirs, order the conversion of stocks into cash for distribution among the heirs is subject to the court’s statutory authority.

The aforementioned services provided by the TWSE – including consolidated data of securities brokerage accounts previously opened by the decedent in the centralized trading market, as well as historical transaction statements of listed securities over the years (including order placement records and trade execution records) – are not generally free of charge. However, the fee does not exceed NT$500 per person, and the TWSE will issue a GUI as proof of payment. For example, regarding an applicant’s inquiry into the account opening records of the testator at various securities firms, total labor and computer processing fees of NT$300 must be paid per person per inquiry. However, the scope of this data does not include any transaction records. In light of the complexity and volume of transaction data, total labor and computer processing fees of NT$500 must be paid per person per inquiry. However, applicants requesting both types of data simultaneously should pay only NT$500, rather than NT$800.

Moreover, Taiwan has entered a super-aged society, defined by the World Health Organization (WHO) as an age structure where the proportion of people aged 65 and above reaches 20% or more of the total population. To accommodate the government’s age-friendly policies regarding economic security, healthcare, social engagement, and a friendly environment, the TWSE has initiated senior-friendly services. Those aged 65 or older who personally visit the TWSE to request any of the aforementioned data will be exempt from all fees. Both labor and computer processing fees are fully waived, with no limit on the number of requests.

As for the methods of applying for the aforementioned data, in addition to personally visiting the TWSE to fill out and submit an application, another person may be authorized to handle the application procedures on their behalf. In addition, to spare applicants from taking long journeys, those not registered as Taipei City residents may also submit an application by mail through a nearby securities firm located in their registered domicile or place of residence. During this time, the securities firm should designate a member of the registered and qualified business personnel to verify the applicant’s identity and application documents. Once confirmed, a certificate will be issued, and a formal inquiry, along with the application documents, will be submitted to the TWSE. Upon application, a return envelope with sufficient registered mail postage must be enclosed. The TWSE will mail the inquiry results directly to the applicant, legal representative, or guardian.