| Title： |
Criteria Governing Applications for Issuance of Call (Put) Warrants by Issuers(2003.12.31) |
| Date： |
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Article 7
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If any one of the following conditions applies to an issuer applying for qualification for issuance of call (put) warrants, the SFC may reject the application:
1. where the application documents are incomplete and, upon the expiration of a specified time period for completion, the documents remain incomplete;
2. where the items applied for violate the law or involve concealment;
3. where the issuer suffers a major event of loss of creditworthiness and such event has not been settled, or four years have not elapsed since such settlement;
4. where the issuer fails to meet any of the requirements in the subparagraphs of Article 38, subparagraphs 2 to 5 of the Standards Governing the Establishment of Securities Firms; and where the issuer is a foreign institution and a similar failure exists on the part of its head office;
5. where the issuer's self-owned capital adequacy ratio for the half year preceding the application date is lower than 200 percent, or such circumstance applies to the head office of the issuer if it is a foreign institution;
6. where the issuer fails to have proper risk management measures;
7. where the issuer has previously issued call (put) warrants and was unable to perform the contracts;
8. where in the most recent year the issuer has failed to process matters in accordance with the TSE's or the GTSM's regulations relevant to call (put) warrants, and improvement within the specified time period is not possible;
9. where the issuer fails to prepare financial reports in accordance with generally accepted accounting principles, or where efficient operation of its internal control system is not possible;
10. where the issuer violates Article 6, or where an assessment shows that the matters reported by it might have significant impact on its financial status;
11. where there is a major dispute or violation with respect to rights and interests sufficing to influence the issuer's finances or business, and there is no resolution or improvement;
12. where there are facts proving that there are major irregularities with the issuer's finances or business; or
13. where the SFC considers it necessary to protect the public interest.
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Article 8
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After an issuer has been issued a qualification certificate for issuance of call (put) warrants by the SFC, if it is discovered or reported in writing by the TSE or the GTSM that the issuer meets the conditions in any one of the preceding subparagraphs, the issuer's rights and interests with respect to issuance of call (put) warrants shall be discontinued.
For issuers which have already obtained a qualification certificate for issuance of call (put) warrants by the SFC, if the issuer's self-owned capital adequacy ratio is lower than 200 percent for three consecutive months, or if its credit rating falls below a required grade, the issuer's qualification certificate for issuance of call (put) warrants shall be discontinued until improvement is made. The same shall apply where the issuer is a foreign institution and where any such circumstance applies to its head office.
If the issuer's rights and interests with respect to the issuance of call (put) warrants are discontinued pursuant to the provisions in the preceding two paragraphs, where warrants have already been approved for issuance but have not yet been issued, their issuance shall be discontinued. However, the validity of the call (put) warrants already issued shall not be impaired.
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Article 9
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[Deleted]
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