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Taiwan Stock Exchange Corporation Procedures for Applications by TWSE Listed Companies for the Delisting of Securities  CH

Amended Date: 2018.08.07 
Categories: Primary Market > Management > Delisting
Article 1     These Procedures apply whenever a TWSE listed company submits an application to delist its securities from the TWSE and when the TWSE processes such applications, pursuant to Article 145 of the Securities and Exchange Act and Article 3 of the TWSE Rules Governing Contracts for the Listing of Securities, except in the case of mergers and acquisitions conducted under Chapter IV-1 of the TWSE Operating Rules.
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Article 2     To safeguard the interests of investors, a TWSE listed company's application to delist its securities shall have been passed by a resolution of a board of directors meeting and then submitted to a shareholders meeting for resolution, and the resolution of the shareholders meeting shall require the approval of shareholders representing no less than two-thirds of the total number of issued shares of the company. This requirement need not be applied, however, when a TWSE listed company submits an application to delist its convertible corporate bonds from the TWSE for the purpose of switching to trading on the GreTai Securities Market (GTSM).
    Before the TWSE listed company holds a board of directors meeting to resolve on delisting of its securities, it shall form a special committee to review the fairness and reasonableness of the plan for delisting from the TWSE and then report the review results to the board of directors and to the shareholders meeting.
    The functions under the preceding paragraph will, for a company that has an audit committee in accordance with the Securities and Exchange Act, be exercised by the audit committee. The audit committee shall handle the review matters in this article in accordance with the provisions of the Securities and Exchange Act related to resolutions of an audit committee.
    When the special committee or audit committee conducts the review, it shall engage an independent expert to provide opinions on the reasonableness of the share buyback price proposed by the directors and whether the justification and plan to apply for delisting from the TWSE conform with the overall interests of the TWSE listed company and its shareholders.
    Matters in connection with the establishment of the special committee and related matters shall be governed mutatis mutandis by the relevant provisions of the Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Merger/Consolidation and Acquisition.
Article 3     When a TWSE listed company submits an application to delist its securities, as a minimum the directors, other than independent directors, who expressed consent at the relevant board of directors meeting to submit the delisting application proposal to the shareholders meeting for deliberation, shall be jointly and severally liable for committing to purchase the shares of the company.
    For the commitment to purchase the shares of the company described in the preceding paragraph, the proposal for submitting the application for delisting shall specify the following:
  1. The starting date of purchase.
  2. The method for calculating the purchase price.
  3. The purchase period.
  4. The number of shares held by each director and supervisor and the corresponding percentage to the total number of issued shares of the company, current as of the day immediately preceding the delivery of the notice of the board of directors meeting and shareholders meeting.
  5. The individual purchase percentages of the directors jointly and severally liable for the purchase commitment, provided that in the case the percentages cannot be confirmed in resolutions of the Board of Directors, this individual purchase percentage information may be specified at a later time, either in a proposal submitted to a subsequent shareholders meeting or when the delisting application is submitted to the TWSE.
  6. The results of the review by the special committee or audit committee.
    The starting date of purchase under the preceding paragraph shall be the date of delisting. The purchase period shall be 50 days, and settlement shall be conducted upon the end of the purchase period. The purchase price may not be lower than the simple arithmetic mean of the closing prices of the company's shares during the one-month period immediately preceding the resolution date of either the shareholders meeting or board of directors meeting, whichever is higher, and may not be less than the net worth per share of the company as shown in the latest financial report audited or reviewed by a CPA.
    "Net worth" in the preceding paragraph means the equity attributable to owners of the parent on the balance sheet prepared under the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry.
Article 4     A TWSE listed company submitting an application to delist its securities shall annex the minutes of the board of directors meeting and shareholders meeting described in Article 2.
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Article 5     Upon receiving an application for the delisting of securities, the TWSE shall direct the application to its board of directors for review, and shall submit the application to the competent authority for recordation.
Article 6     After a TWSE listed company's application for delisting of its securities has been reviewed and approved by the TWSE, the TWSE shall make a public announcement 20 days prior to the date of delisting and shall promptly notify the company. Notwithstanding the foregoing, if the application is made to delist convertible corporate bonds from the TWSE for the purpose of switching to listing for trading on the GTSM as described in the latter part of Article 2 of these Procedures, the TWSE public announcement may be made on any day before 5 days before the date of delisting.
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Article 7     A TWSE listed company, upon receipt of a notice from the TWSE of the delisting of its securities, shall promptly enter the relevant information into the Internet-based information reporting system designated by the TWSE and submit the downloaded information to the TWSE for recordation.
Article 8     These Procedures shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.