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Article 22
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In the following types of securities underwriting cases, the part put up for public sale may be undertaken entirely by book building or partly by book building and partly by public subscription:
- cash capital increase through an issue of preferred shares by a company already listed on a stock exchange or an OTC market;
- preferred shares with detachable warrants;
- corporate bonds with detachable warrants;
- offerings of corporate bonds and financial bonds;
- offerings of Taiwan depositary receipts;
- secondary distributions.
In underwriting cases under subparagraphs 1 through 4 and subparagraph 6 of the preceding paragraph where part of the securities are allocated by book building and part by public subscription, if the book building and public subscription procedures are carried out simultaneously, the timetable for the procedures shall be subject to mutatis mutandis application of Article 42-1. However, if subscription volume exceeds by a specified multiple the number of units earmarked for public subscription, there is no need to upwardly adjust the public subscription volume or to observe the requirements of Article 42-1, paragraph 1, subparagraph 4, item 2.
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Article 22-1
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Where either of the following types of underwriting cases are undertaken through the use of book building, the part put up for public sale shall be underwritten entirely by book building:
- underwriting of a public offering by a company already listed on a stock exchange or an OTC market in which the offering involves a cash capital increase through the issue of common shares and the entire offering is put up for underwritten distribution;
- underwriting of an offering of beneficial interest securities by a trustee institution, or underwriting of an offering of asset-backed securities by a special-purpose company;
- real estate asset trust beneficial interest securities.
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Article 31
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An underwriting case involving the offering of ordinary corporate bonds, financial bonds not involving stock equity, corporate bonds from which the detachable warrants have been detached, real estate asset trust beneficial interest securities; the secondary distribution of beneficial interest securities by a trustee institution; or the secondary distribution of asset-backed securities by a special-purpose company, may be undertaken entirely or partly by negotiated sale. The offering price shall be determined as prescribed by Article 30.
The underwriting of call (put) warrants shall be undertaken entirely by negotiated sale.
An underwriting case involving a secondary distribution by a public enterprise may be undertaken entirely or partly by negotiated sale if units are released to the general public. The method of allocation shall be determined by negotiations between the securities underwriter and the government agency that regulates the government-owned enterprise in question.
In an underwriting case involving an initial listing of shares in common stock on a stock exchange or OTC market through competitive auction, if an overallotment is exercised, those shares allocated via overallotment shall be sold by means of negotiated sale at an offering price determined in accordance with the provisions of Article 16, 17, or 18.
In an underwriting case involving a public enterprise (or any other party acting in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings, or in accordance with the provisions of the Taipei Exchange Supplemental Provisions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing) that conducts an initial offering of shares in common stock on a stock exchange or an OTC market and allocates the entire amount of said shares through public subscription, if an overallotment is exercised, the overallotment may be handled by means of negotiated sale. The offering price shall be the same as that applying to shares allocated through public subscription.
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Article 40
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Where a company listed on a stock exchange or an OTC market carries out a cash capital increase through an issue of ordinary shares in which all shares are put up for underwritten distribution, and all shares put up for public sale are allocated through the book building method, after the price has been set and the underwriting contract has been registered with the Taiwan Securities Association, the following matters shall be carried out:
- Day One: Publish an underwriting announcement and mail prospectuses and notices of payment due.
- Day Two: Payment period commences, and book building bid deposits not corresponding to allocated shares are returned to unsuccessful bidders.
- Day Three: Specified parties make payment; issuer applies to the TWSE or the TPEx to list certificates of payment for shares on a stock exchange or an OTC market.
- Day Four: Underwriter carries out underwriting on standby commitment basis; shareholders' register is completed.
- Day Five: Certificates of payment for shares are listed on a stock exchange or an OTC market.
- Day Six: Certificates of payment for shares are issued and listed on a stock exchange or an OTC market.
If any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
The dates set forth under paragraph 1 may be changed if necessary by applying for approval with the Taiwan Securities Association.
Where a company listed on a stock exchange or an OTC market carrying out a cash capital increase through an issue of ordinary shares uses the book building method to allocate all shares (other than those securities set aside for subscription by the company's employees) that are put up for underwritten distribution and public sale, those shares allocated to the company's employees may be handled in accordance with the provisions of paragraph 1, provided that said employees can comply with the payment period specified in paragraph 1.
Where matters are undertaken in the manner set forth under paragraph 1, shares may be allocated on a priority basis to existing shareholders; provided, however, that the restrictions listed in Articles 27 and 43-1, paragraph 2 shall still apply.
When a bidder submits a book building bid form, the securities underwriter may collect a bid deposit from the bidder of not more than 20 percent of the value of the securities bid for.
The book building bid deposits not corresponding to allocated shares as referred to in the above paragraph 1 subparagraph 2 means the book building bid deposits paid by unsuccessful bidders, and bid deposits paid by lottery winners in excess of the amount required for securities actually allocated to them.
The payment to be made by the bidder as referred to in paragraph 1 subparagraph 2 above shall be the price of the securities subscribed less any book building bid deposit remaining after the bidder has received (or not received) a refund in accordance with the provisions of the preceding paragraph. In the event a bidder does not fulfill his payment obligation within the allotted time, the securities underwriter may confiscate the book building bid deposit and shall retain for its own account said securities at the price offered to the bidder.
A securities underwriter when collecting book building bid deposits as prescribed by paragraph 6 above shall do so by means of a trust, and shall specify in the trust contract the handling of default by the bidder and the damages for default..
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