Financial Holding Company Act Article 16

When a financial institution is converted into a financial holding company, a same person or same related party who singly, jointly or collectively holds more than ten percent (10%) of the financial holding company's outstanding voting shares shall report such fact to the competent authority.After a financial holding company has been established, a same person or same related party who singly, jointly or collectively holds more than five percent (5%) of the financial holding company's outstanding voting shares shall report such fact to the competent authority within ten (10) days from the day of holding; the preceding provision applies to each cumulative increase or decrease in the shares of the same person or same related party by more than one percent (1%) thereafter.After a financial holding company has been established, a same person or same related party who intends to singly, jointly or collectively acquire more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of the financial holding company's outstanding voting shares shall apply for prior approval of the competent authority.A third party who holds shares of a financial holding company on behalf of the same person or same related party in trust, by mandate or through other types of contract, agreement or authorization shall fall within the purview of the same related party.The regulations governing the qualifications and requirements for the same person or same related party who applies for approval pursuant to Paragraph 3 hereof, required documentation, number of shares to be acquired, purpose of acquisition, sources of funding, state of pledging of shares held, existing shareholding, and the reporting and announcement of changes in other important events, and other matters to be complied with shall be prescribed by the competent authority.The same person or same related party who holds more than ten percent (10%) of the outstanding voting shares of a financial holding company shall not pledge his or her shares to a subsidiary of the financial holding company. The preceding provision does not apply to shares of a financial holding company already pledged to a financial institution before the financial institution was converted into the financial holding company’s subsidiary, provided the original pledge continues to be in effect.If a same person or same related party referred to in Paragraph 1 hereof does not meet the qualifications or requirements stipulated in the regulations as referred to in Paragraph 5 hereof, the same person or related party may continue to hold shares of such company, but may not increase his or her shareholding.The application referred to in Paragraph 3 hereof shall be deemed approved if the competent authority does not object thereto within fifteen (15) business days from the next day following the receipt of such application.The same person or same related party who singly, jointly or collectively holds more than five percent (5%) but no more than ten percent (10%) of a financial holding company's outstanding voting shares prior to the enforcement of the amendment to the Act on December 30, 2008 shall report such fact to the competent authority within six (6) months from the enforcement date of the said amendment.Where the same person or same related party who holds outstanding voting shares issued by a financial holding company fails to report to the competent authority in accordance with the provisions of paragraph 2 and the preceding paragraph or fails to obtain approval in accordance with paragraph 3, the same person or same related party shall have no voting rights for the unreported or unapproved excess shares and the competent authority shall order the person to dispose the excess shares within a prescribed period.