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Article 9
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Notwithstanding the fact that an issuing company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE may disagree to its listing if the issuing company has any of the events listed below, except for any of those in subparagraphs 8, 9, or 10 under which the TWSE shall disagree to its listing, and is deemed by the TWSE to be inappropriate for listing:
- It has any of the events set forth in Article 156, paragraph 1, subparagraphs 1 and 2 of the Securities and Exchange Act, or has made misrepresentation or false statement or conducted unlawful activities that may affect the price of its securities after listing thereof, and will cause fear that the market order may be affected or the public interests may be harmed.
- Its financial or business affairs are not independent from other person(s).
- It has had any material labor dispute or environmental pollution sufficient to affect its normal financial and business operations, and has not made improvement.
- It has been discovered any material non-arms-length transaction and has not made improvement.
- After the capital increase through a new share issue which has been effected or is being effected in the year in which it applies for listing is included in the amount of paid-in capital in its final account for the respective year, it does not meet the listing criteria.
- It has failed to effectively implement its written accounting system, internal control system, or internal audit system, or has failed to prepare financial reports in accordance with relevant laws and regulations and generally accepted accounting principles, and the event of this failure is considered as material.
- There has been serious deterioration in its business operation.
- Where the applicant company conducted any activities in violation of the principle of good faith in the most recent five years, or where its directors, general manager or de facto responsible person violated the same principle in the most recent three years.
- If an applicant company has less than five directors or same-sex directors on its board of directors, or its independent directors number less than three persons or less than one-third of the number of directors; or if any of its board of directors are unable to independently exercise their functions; or if it has not appointed the remuneration committee pursuant to Article 14-6 of the Securities and Exchange Act and related provisions. Additionally, among the elected independent directors, at least one of them must be a professional in accounting or finance.
- Where the applicant company has been registered for trading as an emerging stock on the TPEx in the fiscal year of the listing application and the most recent fiscal year thereto, and there has been, from the TPEx registration date onward, any trading of stock issued by the applicant company by any incumbent director, or shareholder holding 10 percent or greater of its total issued shares other than on the emerging stock market; provided, this restriction shall not apply where such trading is for purposes of underwriting under Article 11 of these Rules or for other legitimate reason.
- Where the shares of the applicant company are held by a TWSE (or TPEx) listed company and TPExmeet any of the following conditions, and any equity transfer conducted by the TWSE (or TPEx) listed company during the most recent three years for purposes of reducing its shareholding ratio in the applicant company has not been conducted in a manner giving pre-emptive subscription rights to the existing shareholders, or in other manner not detrimental to the rights and interests of the shareholders of the TWSE (or TPEx) listed company:
- The applicant company is the existing or newly established company being transferred business or assets due to a demerger of the TWSE (or TPEx) listed company.
- The applicant company is a subsidiary of the TWSE (or TPEx) listed company, and during the three-year period before the application for TWSE listing, the TWSE (or TPEx) listed company has cumulatively reduced its direct or indirect shareholding in the applicant company by 20 percent or more.
- Where the listing is considered by the TWSE as inappropriate due to its scope of business, nature or special circumstances.
Subparagraph 2 of the immediately preceding paragraph shall not apply to companies applying for listing which are government-owned enterprises.
The ending date of the applicable periods referred to in various subparagraphs of paragraph 1 of this Article shall be the day immediately before the date on which the Agreement for Listing takes effect.
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Article 31
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In addition that the TWSE must reject the application of a domestic issuer, foreign issuer or its subordinate company for the listing of its stock in any of the circumstances under subparagraphs 7, 8 and 9, the TWSE may also reject the application of a domestic issuer or a foreign issuer for the listing of stocks at the TIB if any of the following circumstances exists and the TWSE decides against listing, despite that it meets the requirements on listing set forth in Article 29:
- Has the circumstances described in Article 156, paragraph 1, subparagraphs 1 and 2 of the Securities and Exchange At, or its act is false, fraudulent or illegal to such an extent the price of the securities after listing may be affected which is therefore likely to jeopardize the market order or public interest.
- Fails to have its finance or business independently separated from another person’s.
- Is involved in a major labor and management dispute or environmental pollution incident that would affect the company’s normal finance and business operation, and no improvement has been made.
- Is found to have major irregular transactions, and no improvement has been made.
- Has failed to effectively implement its written accounting system, internal control system or internal audit system, or failed to prepare its financial reports in accordance with applicable laws and the general accepted accounting principle, and the failure is significant.
- It is experiencing a serious decline in the business activities it engages in.
- The director, general manager or real responsible person of the applicant or its incumbent director, general manager or real responsible person has been in breach of the principle of honesty and good faith in the most recent years.
- The board of directors of the applicant comprises less than five members, only same-sex members, or less than three independent directors, or its independent directors take less than one-third of the seats of the board; its board of directors is unable to perform its duties independently; or it fails to establish the compensation committee in accordance with Article 14-6 of the Securities and Exchange Act and its applicable rules. Further, at least one of its elected independent directors must be a professional in accounting or finance. The above shall, however, not apply if a domestic issuer, prior to application for the listing of stocks and its stocks have not been registered with the TPEx for trading, has undertaken to complete the election of its independent directors and establish its functional committees no later than commencement of listing and trading of its stocks.
- Where the applicant has registered its stocks at the TPEx for trading during the fiscal year of its application for the listing and its most recent fiscal year, since its listing date, its incumbent directors and shareholders holding more than 10 percent of its total issued shares have not traded any stocks issued by the applicant at the TPEx market. The above shall, however, not apply if it engages in prelisting public sale in accordance with Article 36 or has other legitimate reasons.
- Where the shares of the applicant are held by a TWSE/TPEx listed company and it meets one of the following conditions, the shares transfer by the TWSE/TPEx listed company for purpose of reducing its shareholding in the applicant in the most recent three years was not done by having the company’s existing shareholders to subscribe the shares on a priority basis or otherwise in a manner not detrimental to the shareholders’ equity of the company:
- The applicant is an existing or newly incorporated company to which business or assets will be transferred by a TWSE/TPEx listed company after split.
- The applicant is a subsidiary of a TWSE/TPEx listed company in which the TWSE/TPEx listed company has reduced its direct or indirect shareholding by a total of 20 percent or more within the three years prior to the application for listing.
- Is otherwise deemed by the TWSE as inappropriate for listing due to business cope, nature or special circumstances.
The provisions under all the subparagraphs of the preceding paragraph shall apply until the day before the day when its listing contract takes effect.
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