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Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings  CH

Amended Date： 2024.03.11 (Articles 4, 28-1, 40 amended,English version coming soon)
Current English version amended on 2023.09.05 
Categories： Primary Market > Review
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Attachment Legislative History Chinese 
   Chapter I General Provisions
1    These Rules are prescribed in accordance with Article 140 of the Securities and Exchange Act.
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2    For securities issued or supplementarily issued pursuant to the screening procedures of the Securities and Exchange Act, the issuer, applying with the Taiwan Stock Exchange Corporation (TWSE) for listing thereof in accordance with Article 139 of the Securities and Exchange Act, shall submit a relevant application for the listing of securities, specifying therein the particulars as required and attaching thereto the necessary supporting documents. The TWSE will examine the application in accordance with these Rules and the Procedures for Review of Securities Listings.
    In case the issuer and its securities underwriter have any of the following events, the TWSE will refuse to accept the due diligence report issued by the said underwriter, and will disagree to the listing of its securities:
  1. Where each of the issuer and its securities underwriter has issued a due diligence report in respect of the initial listing or trading on the over-the-counter market of each other's securities.
  2. Where there exists any of the events set forth in Article 26 of the Regulations Governing the Securities Firms.
  3. Where the issuer and its securities underwriter are enterprises within the same group.
    The application and the Procedures for Review of Securities Listings referred to in paragraph 1 hereof will be formulated by the TWSE, and will take effect after they have been approved by and recorded with the Competent Authority.
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2-1    Unless it is a state-owned enterprise, any domestic issuer applying for listing of shares in accordance with Chapter II shall first have applied for registration of its stock as emerging stock and have had it traded on the TPEx for not less than 6 months, and have remained on the TPEx general board for at least 2 months after completing registration with TPEx, before the TWSE will accept its listing application for processing.
    The TWSE will accept for processing an initial application by a foreign issuer for a first-time listing of stock issued by the foreign issuer that is not listed on any overseas securities exchange or securities market ("a TWSE primary listing") only after that foreign issuer has first been under listing advisory guidance by the lead securities underwriter, or has applied for registration of its stock as emerging stock and had it traded on the TPEx, for not less than 6 months, and has remained on the TPEx general board for at least 2 months when it is trading on the TPEx. Notwithstanding the foregoing, if there is any change of the lead securities underwriter during the period of listing advisory guidance, the period shall start to run again for a full 6 months, beginning with the date on which the new lead securities underwriter files for the listing advisory guidance.
    A foreign issuer whose stock or depositary receipts already are or have been listed on any major overseas securities exchange or securities market and that is applying for a TWSE primary listing of its issued stock, or a TPEx primary listed company applying for a TWSE primary listing of its issued stock, may be exempted from the requirement in paragraph 2 that the foreign issuer shall first undergo listing advisory guidance by the lead securities underwriter or apply for registration of its stock as emerging stock and have it traded on the TPEx for not less than 6 months; provided that this paragraph shall not apply if the foreign issuer has been delisted from a major overseas securities exchange or securities market for over 6 months.
    A foreign issuer that has passed the review of stock or depositary receipt listing at any major overseas securities exchange or securities market and that, within the period of validity following the passing of such review, applies for a TWSE primary listing of its issued stock may apply on a case-by-case basis to the TWSE to reduce the time period specified in paragraph 2 for which the foreign issuer must first undergo listing advisory guidance by the lead securities underwriter or apply for registration of its stock as emerging stock and have it traded on the TPEx, provided that the time period may be not less than 2 months, and the lead securities underwriter or the lead recommending securities firm may not be changed within such period.
    A domestic issuer or a foreign issuer that initially applies for the listing of stocks on the Taiwan Innovation Board (TIB) in accordance with Chapter IV “Listing of Securities on the Taiwan Innovation Board” must undergo listing advisory guidance by the lead securities underwriter or apply for registration of its stocks as emerging stocks and have them traded at the TPEx for at least 6 months before the TWSE may accept its application for listing, except where a domestic listed company or a foreign issuer is a subsidiary of a listed company and have met the conditions listed in the following paragraphs, subject to the approval of the TWSE:
  1. The listed company has had no material defects in its internal control system within the most recent year, for which the TWSE has imposed monetary penalties and a CPA has issued an internal control project audit report without qualification on the supervision and management of an applicant company for the most recent two quarters.
  2. The main securities underwriter has submitted the Material Financial and Business Incidents Checklist to the TWSE in accordance with Article 2 of the TWSE Rules Governing the Reporting of Basic Information of Advisory Client Companies by Securities Underwriters and there are no material irregularities.
    Paragraphs 3 and 4 may apply mutatis mutandis where a foreign issuer initially applies for the listing of stocks at the TIB.
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2-2    A domestic issuer applying for listing of shares shall engage a professional shareholder services agent to process shareholder services matters before the TWSE will accept its listing application for processing. A listed company that was listed at any time from 2 January 2013 onward shall engage a professional shareholder services agent to process shareholder services matters, and may not take those matters back into its own hands.
    The TWSE will accept for processing an application for a primary listing of shares, for a secondary listing of shares, or for sponsoring the issuance of Taiwan depositary receipts by a depositary institution, by a foreign issuer only after it has appointed a professional shareholder services agent within the Republic of China to handle shareholder services, and has also designated a litigious and non-litigious agent within the Republic of China in accordance with Article 165-3 of the Securities and Exchange Act.
    The professional shareholder services agent referred to in the preceding two paragraphs shall have shareholder services personnel and equipment that comply with the provisions of the Regulations Governing Handling of Shareholder Services by Public Companies, and it shall not have any record in the past three fiscal years of having been given post-audit recommendations in writing by the Taiwan Depository and Clearing Corporation and failing to make improvements by the deadline.
    Domestic issuers applying for listing shares and foreign issuers applying for primary listing of shares shall establish corporate governance officers conforming to the Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers and incorporate the following in the articles of incorporation before the TWSE will entertain their listing applications:
  1. Electronic means as one of the avenues for the exercise of voting rights by shareholders.
  2. Election of directors of the company through the nomination system.
  3. An audit committee to be established by the company.
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3    Where the listing of securities is approved, the TWSE shall enter into an Agreement for Listing with the entity which issues the securities and shall submit the Agreement for Listing to the Competent Authority for recordation, in accordance with Article 141 of the Securities and Exchange Act.
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   Chapter II The Listing of Domestic Securities
      Section 1 The Listing of Stock
4    Where an issuing company applying for the listing of its stock meets the criteria listed below, the TWSE will agree to list its stock:
  1. Duration of corporate existence: It has been incorporated and registered under the Company Act for at least three years at the time of the application for listing; provided, this restriction shall not apply to public (state-owned) enterprises or to privatized public enterprises.
  2. Paid-in capital: At the time it applies for listing, its paid-in capital is NT$600 million or more and the number of shares of its publicly offered and issued common stock is 30 million shares or more.
  3. Profitability: The profit before tax in its financial reports meets either of the following criteria, and it does not have any accumulated deficit in the final accounting for the most recent fiscal year:
    1. The profit before tax for the most recent two fiscal years represents 6 percent or greater of the share capital stated on the financial report for the annual final accounts.
    2. The profit before tax for the most recent two fiscal years represents on average 6 percent or greater of the amount of paid-in capital in its final accounts and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year; or
    3. The profit before tax for the most recent five years represents 3 percent or greater of the share capital stated on the financial report for the annual final accounts.
  4. Dispersion of share ownership: The number of registered shareholders is 1,000 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, the number of registered shareholders is at least 500, and the total number of shares they hold is 20 percent or greater of the total issued shares, or at least 10 million.
  5. An issuer listed in the food industry or whose income from catering business occupies at least 50 percent of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
    Where an issuing company applying for the listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the preceding paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flow from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    Where an issuing company applying for the listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    The TWSE will agree to list the stock of an issuing company applying for the listing of its stock in accordance with the second paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, except where its stock is already listed and traded on the GreTai Securities Market.
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5    Where the central authority in charge of the enterprise concerned has issued an unequivocal opinion certifying that the issuing company applying for the listing of its stock is a technology-based enterprise or a cultural and creative enterprise with market potential, and the said issuing company meets the criteria listed below, the TWSE will agree to list its stock:
  1. At the time it applies for listing, its paid-in capital is NT$300 million or more and the number of shares of its publicly offered and issued common stock is 20 million shares or more.
  2. (deleted)
  3. It is recommended in writing by the securities underwriter.
  4. Its net worth on its financial reports for the most recent quarter represents two-thirds or greater of the share capital stated on the financial report.
  5. The number of registered shareholders is 1,000 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, the number of registered shareholders is at least 500.
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6    Where the issuing company applying for the listing of its stock is an important enterprise involved in national economic reconstruction projects which has been recognized and certified in writing by the authority in charge of the enterprise concerned and meets the following requirements, the TWSE will agree to list its stock:
  1. It is incorporated under the encouragement of the government, and 50 percent or greater of the total number of its issued shares as of the date of its application is held jointly by the Central Government or by the local autonomy organization(s) at the level of province (or municipality under direct jurisdiction of Executive Yuan) designated by the Central Government and the juristic person(s) with 50 percent or greater of its capital fund is contributed by the Central Government or the local autonomy organization(s) designated by the Central Government.
  2. Its paid-in capital is NT$1 billion or more at the time when it applies for listing.
  3. The dispersion of share ownership meets the criteria set forth in subparagraph 4, Article 4 of these Rules.
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6-1    Where the issuing company applying for the listing of its stock is a private enterprise participating in major national public construction projects under encouragement of the government, where it has acquired the concession agreement for investment, construction, and operation approved by the Central Government, municipality under direct jurisdiction of the Executive Yuan, and the local autonomy organization(s) or the juristic person(s) with 50 percent or greater of its capital fund contributed by the Central Government, municipality under direct jurisdiction of Executive Yuan, or the local autonomy organization(s) and the certification issued by the said agency(ies), and where it meets the following requirements, the TWSE will agree to list its stock:
  1. The company is newly established for procurement of the concession agreement and its business items have been approved by the central authority in charge of the enterprise concerned.
  2. Its paid in capital is NT$5 billion or more at the time when it applies for listing.
  3. The total cost expected to be injected in the construction project at the time when the concession agreement is procured is NT$20 billion or more.
  4. The remaining term of the concession agreement is 20 years or more at the time when it applies for listing.
  5. Its directors, shareholders holding 5 percent or more of its total issued shares, or its shareholders or operators who make equity investment in the form of technical know-how and hold 0.5 percent or more of its total issued shares or 100,000 shares or more shall have the technical capability, financial means, and other necessary abilities as required for the completion of the concession agreement, and a certification issued by the agency approving the concession agreement has been obtained.
  6. The dispersion of share ownership meets the criteria set forth in subparagraph 4, Article 4 of these Rules.
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7     A financial report as referred to in Chapter II of these Rules shall mean a consolidated financial report prepared pursuant to the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry. However, if the issuing company does not have a subsidiary, individual financial reports shall be prepared. The aforementioned financial reports shall be duly audited and certified or reviewed by two or more certified public accountants (CPAs) of an accounting firm; provided that for a stated-owned enterprise, the financial reports for the most recent fiscal year shall be prepared pursuant to the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, and audited and attested by CPAs, and if in other years, the securities have not been publicly issued, the financial reports audited by the auditing agency may be used instead.
    The amount of capital referred to in Chapter II of these Rules shall be the amount shown on the certifying documents following registration (or amendment registration). However shares of privately placed securities that have not been publicly issued shall not be counted in the calculation of the aforesaid amount of capital.
     The net worth and profit before tax as referred to in Chapter II of these Rules shall mean, for consolidated reports, the amount attributable to owners of parent.
8    Where an issuing company merely applies with the TWSE for listing its common stock or any type(s) of preferred shares, the amount of paid-in capital required under Article 4, 5, 6, 6-1, 16 or 20-2 hereof shall be calculated on the basis of the total issue of all shares to be listed. In respect of the dispersion of share ownership, the number of registered shareholders and the ratio between the number of shares held by them and the total number of issued shares shall be computed and determined in accordance with the respective types of the stock to be listed.
    Where an issuing company applies for listing its common stock along with any type(s) of preferred shares, the total amount of issue of the common stock to be listed shall at least meet the paid-in capital as required by Article 4, 5, 6, 6-1, 16 or 20-2, and that of any type of preferred shares to be listed shall be NT$300 million or more with 30 million or more shares of such type issued. Each type of the stock to be listed shall meet the criteria governing the dispersion of share ownership.
    With respect to the criteria governing the dispersion of share ownership for the listing of any type(s) of preferred shares under the preceding two paragraphs, the requirement of 500 or more registered shareholders shall be met, and the combined total number of shares held by all the registered shareholders, excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, shall account for 20 percent or more of the total issued shares of each type of preferred stock or be at least 10 million shares.
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9    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:
  1. 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.
  2. Its financial or business affairs are not independent from other person(s).
  3. It has had any material labor dispute or environmental pollution sufficient to affect its normal financial and business operations, and has not made improvement.
  4. It has been discovered any material non-arms-length transaction and has not made improvement.
  5. 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.
  6. 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.
  7. There has been serious deterioration in its business operation.
  8. 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.
  9. 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.
  10. 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.
  11. 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:
    1. 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.
    2. 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.
  12. 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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10    An application for initial listing of stock filed by an issuing company shall not be approved unless and until shares representing all of the number of shares held by each of the following persons of the issuing company specified in the application for listing (with the total number of such shares being not less than the ratio specified in paragraph 2 of this Article), less those offered for public sale, have been placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority; provided however, that if the number of shares represented by shares placed in central custody pursuant to the above is less than the ratio specifies in paragraph 2 of this Article, the shortage shall be made up by other shareholders:
  1. Where the application for listing is filed in accordance with the provisions of Article 4, 6, 16, or Article 20, paragraph 1, Article 20-1, or Article 20-2 of these Rules, its directors, and the shareholders holding 10 percent or greater of the total number of issued shares of the issuing company.
  2. Where the application for listing is filed in accordance with the provisions of Article 5 or Article 20, paragraph 3 of these Rules or where the applicant is an information software enterprise, its personnel who shall handle central custody of the stock are as listed in the items below. However, this restriction shall not apply where shareholding of a recommending securities firm during the period of registration as emerging stock exceeds 5 percent of the total issued shares of said issuing company as a result of subscription or trading of operating securities during the emerging stock trading period.
    1. Where the applicant is a creative enterprise or information software enterprise, its directors, shareholders holding 5 percent or greater of the total number of issued shares, and/or shareholders whose equity investment is made in the form of patent rights or technical know-how, and who are working for the issuing company and hold 0.5 percent or greater of the total number of shares or 100,000 or more shares as of the date on which the application for listing is filed.
    2. Where the applicant is a technology enterprise, its president, research and development supervisor, and personnel mentioned in the preceding item.
    The total number of shares with respect to the shares to be placed in central custody by the issuing company under the preceding paragraph refers to the aggregate sum of common shares that have already been publicly offered and issued, as stated on the listing application documents,; the total ratio of shares to be placed in central custody by the issuing company shall be calculated as set forth below:
  1. Where the total number of shares is 30 million or less, shares representing 25 percent thereof shall be placed in central custody.
  2. Where the total number of shares is more than 30 million but 100 million or less, shares representing 20 percent of the portion of shares in excess of 30 million shares shall be placed in central custody in addition to those required under the preceding item.
  3. Where the total number of shares is more than 100 million but 200 million or less, shares representing 10 percent of the portion of shares in excess of 100 million shall be placed in central custody in addition to those required under the preceding item.
  4. Where the total number of shares is more than 200 million, shares representing 5 percent of the portion of shares in excess of 200 million shall be placed in central custody in addition to those required under the preceding item.
    The remaining shares after deducting those required for the public offering, as referred to in paragraph 1, include the following:
  1. From the date of application for initial listing to the listing date, all new shares obtained through capital increase for which amendment registration has been completed with the Ministry of Economic Affairs, as well as any shares that have come to be held for any other reason; for any shares that have not yet been obtained by the listing date, an undertaking shall be made to place the shares in central custody after obtaining them.
  2. From among the old shares provided by directors and shareholders of the issuer for an overallotment (greenshoe) option for the securities underwriter, any shares that were not actually sold in exercise of the overallotment option and that have been returned by the securities underwriter.
    One-half of the shares placed in central custody by directors and shareholders pursuant to the provisions of paragraph 1 of this Article may be withdrawn only after the end of a 6-month period starting from the listing date thereof; all the shares may be withdrawn in full only after the end of a one-year period starting from the listing date thereof. However, a company applying for listing pursuant to Article 4, paragraphs 2 and 4, or a technology enterprise applying for listing pursuant to Article 5, and to Article 20, paragraph 3, may withdraw one-fourth of the shares only after the end of a 6-month period starting from the listing date thereof, and may further withdraw one-fourth of the shares every 6 months afterwards. All the shares in full only after the end of a two-year period starting from the listing date thereof.
    For an issuing company that applies for listing under the provisions of Article 4, where the total number of its shares required to be placed in central custody is assessed to exceed 50 percent of the issued shares of the issuing company, and the issuing company has paid-in capital of at least NT$30 billion, if the portion of the number of shares required to be placed in central custody exceeding the above-stated 50 percent of issued shares has been pledged to a financial institution by the director or shareholder of the issuing company who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in central custody; provided, if the pledge is released during the custody period, the director or major shareholder shall deposit the same amount of shares into central custody; or, if the subject of the pledge is disposed by the financial institution, the issuing company shall contact other directors or major shareholders to deposit the same amount of shares into central custody.
    Directors and shareholders shall not rescind the custodial agreement during the custody period. Shares and certificates in central custody shall not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody
    The provisions of paragraph 1 of this Article shall not apply to directors and shareholders of government authorities, government-owned enterprises, or which have obtained an approval from the authority in charge of the enterprise concerned for the sale of the shares held by them and have been determined to be inappropriate to place such shares in central custody.
    The total ratio of shares to be placed in central custody as specified in paragraph 2 of this Article shall not apply to government-owned enterprises.
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10-1    An application for initial listing of stock filed by an issuing company in accordance with Article 6-1 shall not be approved unless and until its directors, shareholders holding 3 percent or more of the total issued shares, and the shareholders whose equity investment is made in the form of technical know-how and who hold 0.5 percent or more of the total number of issued shares or 100,000 shares or more have placed all of their shares specified in the application for listing and in total not less than the ratio of shares as required in paragraph 2 of this Article, minus the shares required for public offering, with a central securities depository enterprise incorporated with the approval of the Competent Authority; provided however, that if the total number of shares held by directors is less than the total number of shares held by them at the time when they were elected as directors and supervisors, then the total number of shares at the time when they were elected shall be the basis for counting the number of shares under this Article. If the number of shares represented by shares placed in custody pursuant to the above is less than the total ratio of shares required under paragraph 2, the shortage shall be made up by other shareholders.
     The total of shares that the issuing company shall place in central custody with the central securities depository, as required under the preceding paragraph, shall mean the total ratio calculated by the method enumerated below based on the total number of issued common shares specified in the application for listing, and the shares placed in central custody shall be the offered and issued common shares only.
  1. If the total number of shares is one billion shares or less, 50 percent of the total number of shares shall be placed in custody.
  2. If the total number of shares exceeds one billion shares but not three billion shares, in addition to complying with the preceding subparagraph, 40 percent of the total number of shares shall be placed in custody for the portion exceeding one billion shares.
  3. If the total number of shares exceeds three billion shares but not five billion shares, in addition to complying with the preceding subparagraph, 30 percent of the total number of shares shall be placed in custody for the portion exceeding three billion shares.
  4. If the total number of shares exceeds five billion shares but not seven billion shares, in addition to complying with the preceding subparagraph, 20 percent of the total number of shares shall be placed in custody for the portion exceeding five billion shares.
  5. If the total number of shares exceeds seven billion shares, in addition to complying with the preceding subparagraph, 10 percent of the total number of shares shall be placed in custody for the portion exceeding seven billion shares.

    Among the shares placed in custody under paragraph 1, one-sixth of the portion thereof may be withdrawn only after the end of 3 full years from the listing date thereof; thereafter, one-sixth thereof may be withdrawn once every 6 months. If after the end of the said period, the project constructed by the company has not been fully completed and the operation has not commenced, the custody period may be extended until the project is fully completed and the operation commences; provided, however, that if partial operation has commenced before the project is fully completed, the custody period shall be extended until the company's annual financial report shows an net operating income and profit before tax. The custody agreement shall not be terminated during the custody period. Shares and certificates in custody shall not be transferred or pledged. The validity of custody shall not be affected by any change of the identity of the holders of shares in custody.
    At the time of applying for listing, the issuer shall undertake that, during the period of central custody of the stock, a shareholder that has already placed stock in central custody in accordance with paragraph 1 shall also carry out central custody placement for any shares of common stock that the shareholder may subsequently obtain through subscription or conversion of preferred shares or corporate bonds, according to the total ratio required to be placed in custody as calculated under paragraph 1 at the time of the listing application. The provisions of paragraph 3 shall apply mutatis mutandis to the time periods for custody and withdrawal thereof.    The provisions of paragraph 1 shall not apply where, during the period in which an issuing company applying for initial listing of its stock is registered as an emerging stock company, shareholding of its recommending securities firm exceeds 3 percent of the total issued shares of said issuing company as a result of subscription or trading of operating securities during the emerging stock trading period.
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10-2    Where a company is applying for listing and its stock is already listed and traded on the GreTai Securities Market in accordance with Article 3 of the GreTai Securities Market Rules Governing Review of Securities Traded on the TPEx, central custody of shares shall be made as set forth below, except that the provision of paragraph 2 of Article 10 in relation to the total ratio of shares does not apply:
  1. If the company makes the listing application before the end of the central custody period provided in Article 3 of the Provisions Relating to Article 3, paragraph 1, subparagraph 4 of the GreTai Securities Market Rules Governing Review of Securities Traded on the TPEx, personnel of the company that fall within the scope of Article 10 or Article 10-1 hereof at the time of the listing application shall place their shares in central custody in accordance with the provisions of those articles, except that those personnel who have placed their shares in central custody at the time when the company applied for TPEx listing shall keep their shares in central custody until the end of the original central custody period required for the TPEx listing.
  2. If the company makes the listing application after the end of the central custody period provided in Article 3 of the Provisions Relating to Article 3, paragraph 1, subparagraph 4 of the GreTai Securities Market Rules Governing Review of Securities Traded on the TPEx; unless the TWSE deems necessary, personnel that meet the requirements of Article 10 or Article 10-1 of these Rules at the time of its application for listing may be exempt from the requirement to place their shares in centralized custody.
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11    Where an issuing company applies for initial listing of its common stock or any type(s) of preferred shares it shall allocate a percentage, as specified by the TWSE, of the total number of shares as stated in its listing application documents and after deducting the number of shares to be retained for subscription by employees as specified by laws and regulations in connection with the Company Act, retain a securities underwriter to offer the balance of such allocated shares in full for sale to the public before the shares are listed, by means of a cash capital increase through a new share issue in accordance with the provisions of Article 71, paragraph 1, of the Securities and Exchange Act concerning underwriting of securities on a firm commitment basis. Provided, that a state-owned enterprise or an applicant under Article 6 or Article 6-1 may carry out underwriting with stock already publicly offered and issued by the company.
    The total number of shares to be allocated by the issuing company for public sale under the preceding paragraph shall be calculated by the method specified in Article 10, paragraph 2, and shares added during the period from the listing application date until the listing date shall be included in the calculation; provided, shares allocated for public sale shall be confined to shares of publicly offered and issued common stock.
    The requirements of paragraph 1 regarding a percentage of shares to be allocated shall not apply to a company applying for TWSE listing if the company's shares are already listed for trading on the TPEx in accordance with Article 3 of the GreTai Securities Market Rules Governing Review of Securities Traded on the TPEx and the company, because of non-compliance with the share ownership dispersion standards in these Rules, must retain a securities underwriter to conduct a pre-listing public sale of shares to deal with the amount of the shortfall in share ownership dispersion. However, if the amount of the shortfall is less than 2 million shares or 1 percent of paid-in capital, the company may be exempted from the public sale requirement, as long as it achieves compliance with share ownership dispersion standards before its shares are listed on the central exchange for trading.
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12    An issuing company applying for the listing of its stock shall, after its Agreement for Listing has taken effect, offer its stock to the public in accordance with the provisions of the preceding article. In case the stock applied for listing have not been listed within 3 months after the date of the aforesaid notice given by the TWSE, the TWSE shall after cancel the said Agreement for Listing, and report to the Competent Authority for recordation. However, if an application for extension is filed by the issuing company with adequate cause, the said deadline may be extended for 3 additional months after such application has been approved by the TWSE, provided that such extension shall be limited to one only, and the extension shall be reported to the Competent Authority for Recordation.
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12-1    An issuing company that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the company intends to apply for listed trading of the securities, it may file such application only after first completing public issuance examination and approval procedures with the Competent Authority.
    Securities that are privately placed by a listed company and securities subsequently distributed, converted, or subscribed may not be listed during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a listing application only after first applying to the TWSE for a letter of approval and, on the basis of that letter, completing issuance examination and approval procedures with the Competent Authority. However, it may be exempted from the requirement of carrying out public offering prior to listing under Article 11.
    When applying to the TWSE for a letter of approval under the preceding paragraph, a listed company shall meet the standards in each of the following subparagraphs:
  1. The financial reports for the most recent period and the most recent fiscal year show an absence of accumulated deficit.
  2. The profit before tax in the financial reports meets one of the following standards:
    1. The profit before tax for each of the most recent two fiscal years represents 4 percent or greater of the share capital stated on the financial report for the annual final accounts.
    2. The average profit before tax for the most recent two fiscal years represents 4 percent or greater of the share capital stated on the financial report for the annual final accounts, and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year.
  3. A CPA has audited the financial reports for the most recent two fiscal years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
  4. None of the events set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, or 12 is present.
  5. The total amount of registered shares held by the directors and supervisors as a whole is higher than the share ownership ratio prescribed by the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
  6. The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
  7. For an applicant company that had profit after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, better than that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
    2. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of any non-insider(s) or non related party(ies) of the applicant company.
  8. For an applicant company that had profit after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, not lower than 200 percent of that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
    2. The private placement did not introduce strategic investors.
    3. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of any insider(s) or related party(ies) of the applicant company.
    4. The conducting of the private placement of securities was not done in accordance with the Directions for Public Companies Conducting Private Placements of Securities ("the Directions for Private Placements"), where the circumstances were serious.
  9. For an applicant company that had net loss after tax or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to the share capital stated on the financial report for the annual final accounts for the most recent fiscal year shall be 6 percent or higher:
    1. Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
    2. The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
  10. Others consistent with the provisions of the Competent Authority.
    A company applying for listing in accordance with Article 4, paragraph 2 or 3, and Article 5, Article 6, or Article 6-1 may waive the application of subparagraph 2 of the preceding paragraph if the company, which has never obtained a letter of approval from the TWSE in accordance with the preceding paragraph, applies for said letter in accordance with paragraph 2 upon the adoption of a special resolution in a shareholders’ meeting on the registration of the retroactive handling of public issuance procedures of privately placed securities, subject to compliance with the following subparagraphs:
  1. No assignment is conducted within six years from the date of delivery of the privately placed securities, except transfers taking effect in accordance with the law.
  2. The price of the privately placed securities is not lower than 80 percent of the reference price or theoretical price.
  3. No placee of the privately placed securities is an insider or related party of the company.
  4. In the last three years, the sum of the number of privately placed securities in respect of which an application for a letter of approval is made in accordance with this paragraph and the number of securities with equity characteristics that may exercise or be converted into common shares has not exceeded 20 percent of the total number of listed shares at the time of the application, except where, in the event of excess shares, the holder has undertaken through coordination that such shares would all be placed in central custody before listing. The withdrawal period and withdrawn number of shares placed in central custody are governed by the proviso in paragraph 4 of Article 10 mutatis mutandis.
  5. No material change in the scope of business as in Article 50, paragraph 1, subparagraph 14 of the Operating Rules of the TWSE has occurred since the listing date, except as caused by the special characteristics of the industry or other reasonable causes.
    Prior to the listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in paragraph 3, subparagraph 8 or 9 shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the end of a 6-month period starting from the date of commencement of listed trading; the remaining shares may be withdrawn in full only after the end of a 1-year period starting from the date of commencement of listed trading. The custodial agreement may not be rescinded during the custody period, and the shares in central custody may not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody.
    Where the Competent Authority has restricted the listed trading of securities issued by a listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer of the privately placed shares has elapsed.
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13    In case an issuing company whose stock has been de-listed and is traded on the over-the-counter market as a managed stock files an application again for the listing of its stock, it will be handled in accordance with the conditions for listing as set out in these Rules.
14    Where a listed company issues new shares that are of the same type of stocks as those which has already been listed and applies for listing the new shares, such new shares may be listed in accordance with the provisions of Article 139, paragraph 2 of the Securities and Exchange Act, and any certificates carrying right to convert bonds into stock issued by the listed company may also be listed on the TWSE in accordance with the said provisions of the Securities and Exchange Act.
    Where a listed company issues new shares that are not of the same type of stocks as those which have already been listed and applies for listing of the new shares, the TWSE may agree to list the new shares if the following conditions are met:
  1. the total issue amount of the shares under application for listing is NT$300 million or more, with 30 million or more shares issued.
  2. the company offers the shares for sale to the public before listing in accordance with Article 11, paragraph 1.
  3. the share ownership dispersion standards in Article 8, paragraph 3 are met.
    A listed company applying for listing of shares issued by it that are not of the same type of stock as those already listed and that are redeemable for cash upon maturity shall comply with the provisions of the preceding paragraph; however, the share ownership dispersion standards in Article 8, paragraph 3 of these Rules shall not apply.
    A listed company shall promptly report on the Internet information reporting system designated by the TWSE any common shares created through the exercise of conversion rights or subscription rights under any preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, convertible corporate bonds, and detached company warrants offered and issued by it, and may be exempted from the requirement of public offering under Article 11.
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      Section 2 The Listing of Special Business Enterprises or Companies Having Special Type of Orga
15    In addition to complying with the relevant provisions of these Rules, securities, financial and insurance enterprises, and enterprises exclusively engaged in futures commission merchant business, that apply for listing of their stock shall first obtain a letter of consent from the authority in charge of the enterprises concerned, before the TWSE will accept their applications. Provided, that if a financial enterprise or insurance enterprise applying for listing of its stock has previously obtained and provided such a letter before its stock began to be traded on the TPEx in accordance with Article 3 of the GreTai Securities Market Rules Governing Review of Securities Traded on the TPEx, it does not need to provide such letter again.
    Aside from complying with the relevant provisions of these Rules, a securities company applying for listing its stock shall have contemporaneously engaged in securities underwriting, buying and selling for its own account and such activities as commission agent or intermediary for at least 5 full fiscal years.
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16    Where an issuing company other than a government-owned enterprise applies for the listing of its stock and, in the financial reports for the most recent two fiscal years, its operating revenue derived from construction business represents 20 percent or greater of its total operating revenue, or its gross profit derived from construction business represents 20 percent or greater of its gross profit, or its operating revenue or gross profit derived from construction business is more than the operating revenue or gross profit derived from other items of its business activities, it shall in addition to complying with the relevant provisions of these Rules, meet the following conditions:
  1. There shall have been 8 full fiscal years since its incorporation.
  2. The amount of its paid-in capital shall be NT$600 million or more at the time when it applies for listing.
  3. The total equity shown in the most recent financial report and in the financial report for the most recent fiscal year shall reach 30 percent or more of the total value of its assets.
  4. The combined net value of houses and land held for sale and investment property shown in the most recent financial report and for the most recent fiscal year shall not exceed 70 percent of its total equity. However, if the company has obtained the use license for less than one year, or the company has reclassified under investment property any construction project that it launched with respect to superficies it had obtained under an agreement stipulating that it may only be leased and not sold, or the lease-out rate of the investment property reaches 50 percent or higher, such portion need not be included in the calculation.
  5. Its profit before tax for each of the most recent three fiscal years shall be in positive figures, and it does not have accumulated deficit in the most recent three fiscal years.

  6. Where its profitability remains in compliance with the criteria for listing of its stock after the profit derived from each project as prescribed below is deducted according to the calculation of CPAs:
    1. Purchase or sale of completed or uncompleted construction projects by others (referring to those for which invested construction cost has reached 40 percent or more of total construction cost).
    2. Purchase or sale of bare-land or house units already built.
    3. Acquisition and subsequent sale of either land or house originally held by the opposite party/parties as co-contractor.
    4. Sale of house or land to related party.
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17    Where an issuing company referred to in the immediately preceding article other than a government-owned enterprise, in the past two fiscal years, contracted with any construction company with an annual contract sum in excess of NT$200 million, or the contract sum did not exceed NT$200 million but the construction company is a related party of the issuing company, then in each of the said two fiscal years the following provisions shall have been complied with:
  1. The construction company must be a Class A construction firm; its financial statements and gross profit gained from each individual project in the most recent two fiscal years shall each have been jointly audited and attested by two CPAs of an accounting firm.
  2. The gross profit for each individual project undertaken by the issuing company and construction company in the most recent two fiscal years does not show abnormal circumstances.
  3. The contracting process, formation of the contract price, and payment terms have been evaluated by a professional institution as reasonable.
  4. The construction company did not in the most recent two years materially violate any relevant building and construction laws and regulations, nor did the construction company materially breach any construction contract with a development company in the most recent two years.
  5. There has been no unusual or abnormal fund transmission between the issuing company and the construction company.
  6. There does not exist between the issuing company and the construction company any of the events set forth in Article 9, paragraph 1, subparagraph 2 hereof.

     If the issuing company and the construction company are not related parties, and a complete internal control system has been established, and the bidding procedures and payment method for contracting meet trade practices, the application of the provisions in subparagraphs 1 to 3 of the preceding paragraph may be excluded.
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18    Where an issuing company of a group enterprise, other than a government-owned enterprise, applies for the listing of its stock but does not meet the following requirements, the TWSE shall disagree to its listing, notwithstanding the fact that its application is otherwise in compliance with these Rules:
  1. The principal business or products of the applicant company are not in mutual competition with those of any other companies within the same group enterprise. However, this requirement shall not apply if the applicant company has independent operational decision-making ability.
  2. Where there are financial business dealings or transactions between the applicant company and other companies within the same group enterprise, written rules and regulations governing the financial and business affairs among them shall have been formulated and approved by the board of directors of each such company, and in addition, each company within a group enterprise shall execute an undertaking in writing to the effect that its financial and business affairs with other companies are free from any non-arms-length transaction. Where there is no business transaction between them, the applicant company shall execute an undertaking in writing to the effect that in case there is any business dealing in the future, it will be free from non-arms-length transaction.
  3. There shall be no material irregularities in its financial and business conditions or in its above-cited operational guidelines.
  4. The applicant company shall have the potential to develop independent marketing of the products that it sells to other companies within the same group enterprise.
  5. The purchase amount in the most recent period or most recent fiscal year from the time of the application for listing from a company within the same group enterprise does not exceed 70 percent, provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
  6. The operating revenue or operating profit derived from other companies within the same group enterprise, at the time of the application for listing, in the most recent period, and in the most recent fiscal year, does not exceed 50 percent, or the operating revenue derived from the use of a critical technology or asset provided by the companies mentioned above does not exceed 50 percent; provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes, which situation accounts for not more than 70 percent.
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19    Where, upon application, a subsidiary, other than a government-owned enterprise, applies for the listing of its stock but is unable to meet the requirements set forth in all the subparagraphs below, the TWSE shall disagree to the listing, notwithstanding the fact that its application meets the criteria set forth in these Rules:
  1. A consolidated financial statement of the parent company and all of its subsidiaries which is prepared in accordance with the accounting principles of the home country of its parent company and an audit opinion issued by a CPA in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the parent company and the impact of such differences on such financial statement shall be submitted along with the application, unless the applicant company is applying for listing pursuant to paragraph 2 or 4 of Article 4, or Article 5, Article 6, or Article 6-1, or in the fiscal year of the application for listing and the most recent fiscal year the amount of purchase/sales transactions between it and its parent company is less than 10 percent of its total purchase/sales amount.
  2. According to the consolidated financial statement submitted pursuant to the preceding paragraph, the total amount of net worth shall be NT$1 billion or more in the most recent fiscal year and the profit before tax shall each represent 3 percent or greater of the total amount of net worth in each of the most recent two fiscal years, provided that such shall not apply where such event is the product of business nature, market demand and supply condition, government policy, or any other reasonable cause.
  3. The total number of shares of the applicant company held by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, shall not exceed 70 percent of the total number of its issued shares. If this 70 percent limit is exceeded, the applicant company shall conduct a pre-listing initial public offering to reduce the percentage of shares held by the aforesaid persons to 70 percent or lesser. However, the same does not apply where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 300 million shares in the applicant company; or, in the case the share has no par value or the par value per share is not NT$10, where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of such shares with a net value of not less than NT$6 billion in the applicant company.
  6. If the stock of the parent company is already traded on the TWSE (or the TPEx), at the time of its application for TWSE listing, the pro forma operating revenue or net operating income as stated in the pro forma consolidated financial statements for each of the most recent 4 quarters, excluding the financial data for the applicant company, and reviewed by a CPA, was not down by 50 percent or more from the operating revenue or operating income stated in the consolidated financial statements for the same period, and the parent company has not transferred any material customers or business within the most recent two fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.
    When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interest of the shareholders of the parent.
    The proviso of the sixth subparagraph of paragraph 1 shall not apply where the parent company of the applicant company is a TWSE- or TPEx-listed investment holding company.
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20     An investment holding company applying for listing of its stock may apply only as a professional investment company and only with the purpose of controlling the business operations of other companies, and shall be approved for the listing of its stock if it meets the requirements of the following subparagraphs:
  1. Years of incorporation: Three full years have elapsed following registration of incorporation, or the years of actual operation of any of its held companies exceed three years.
  2. Equity: The net worth on the financial reports for the most recent quarter reaches NT$1 billion or more.
  3. Profitability: The ratio of profit before tax to net worth as stated on the financial report for each of the most recent two fiscal years reaches three percent or higher.
  4. Dispersion of share ownership: The standard of Article 4, subparagraph 4 is met.
  5. The company does not engage in any business other than investment.
  6. The company shall have two or more held companies, and the held companies may not be professional investment companies and may not hold shares of the applicant company.
  7. At least 70 percent of the net operating income in the financial reports shall come from the held companies.
  8. The sum total of the book value of its investment in the held companies shall equal 50 percent or more of each of its investments accounted for using equity method and net worth, as stated in the parent company only financial report.
  9. The company has not engaged in any borrowing or lending of funds with a non-financial institution.
  10. The ratio of total equity to total assets in the financial report for the most recent fiscal year shall reach one-third or more.
  11. In the event of an issuer listed in the food industry or whose income from catering business occupies at least 50 percent of its total operating revenue in the last fiscal year, at least one of the held companies that it holds shall comply with Article 4, paragraph 1, subparagraph 5.
     A held company shall mean any of the following:
  1. An invested company of which an investment holding company directly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  2. An invested company of which an investment holding company through its subsidiaries indirectly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  3. An invested company of which an investment holding company directly, and indirectly through its subsidiaries, holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  4. A company of which an investment holding company directly or indirectly elects or appoints more than half of the directors for the board of directors.
     If an investment holding company applying for listing of its stock has a net worth on the financial reports for the most recent quarter reaching NT$800 million or more, and its held company or companies contribute 50 percent of its total operating revenues, and the central competent authority for the relevant industry has provided an unequivocal opinion stating that such company or companies are technology enterprises or cultural and creative enterprises with market potential, it may be exempted from the application of paragraph 1, subparagraphs 1 and 3.
     If the held company is required to be a professional investment company because the investment holding company has invested via a third location, it may be exempted from application of the provision of paragraph 1, subparagraph 6 that a held company may not be a professional investment company.
     Notwithstanding that an investment holding company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE shall disagree to its listing if the circumstance in Article 9, paragraph 1, subparagraph 8 applies to any of its held companies, and the TWSE may disagree to its listing if any of the circumstances in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, or 12 applies to any of its held companies and the TWSE deems the listing inappropriate.
    In case a held company more than 70 percent of whose shares are held by an investment holding company that is already domestically listed on the TWSE (or TPEx) shall have public sales of shares prior to listing to reduce the shareholding to below 70 percent.
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20-1     A financial holding company applying for listing of its stock, shall be approved for the listing of its stock if it meets the requirements of the following subparagraphs:
  1. It has obtained a letter of approval for the TWSE listing application from the competent authority for the relevant industry.
  2. Years of Incorporation: Three full years have elapsed since registration of incorporation, or the years of actual operation of any of its subsidiaries exceed three years.
  3. Profitability: The ratio of profit before tax to net worth as stated on the financial reports for most recent two fiscal years reaches 3 percent or higher.
  4. Dispersion of share ownership: The standard of Article 4, subparagraph 4 is met.
     Notwithstanding that a financial holding company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE shall disagree to its listing if the circumstance of Article 9, paragraph 1, subparagraph 8 applies to any of its subsidiaries, and the TWSE may disagree to its listing if any of the circumstances of Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, or 12 applies to any of its subsidiaries and the TWSE deems the listing inappropriate.
     A subsidiary more than 70 percent of whose shares are held by a financial holding company that is already domestically listed on the TWSE (or TPEx) may not apply for domestic TWSE listing.
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20-2     An application by a venture capital company for the listing of its stock will be granted if said companymeets the conditions set forth in Article 4 and below:
  1. Its articles of incorporation states the company’s intent of sustainable operations.
  2. Capital: At the time it applies for listing, its paid-in capital is NT$2 billion or more and the number of shares of its publicly offered and issued common stock is 100 million or more.
  3. It does not engage in any business other than as stipulated by the Rules Governing Guidance to Venture Capital Enterprises.
  4. At the time it applies for listing, the number of shares it holds in any public company does not exceed 30 percent of the total issued voting shares of said company.
  5. At the time it applies for listing, the total investment it holds in any invested company does not exceed 20 percent of the total assets shown in the applicant’s current financial reports.
  6. Both at the time it applies for listing and as at the date of financial reports in the last two fiscal years, its total investment reaches 60 percent or more of its total assets, except where the percentage requirement is met after the adjustments for change in value being a net increase in investment assessed at fair value are deducted from the total assets.
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      Section 3 The Listing of Other Securities
21    Stock warrant certificates and certificates of entitlement to new shares issued by a listed company may be listed on the TWSE only after a listing application with the TWSE is submitted within 15 days after the filing for effective registration of a capital increase with the Competent Authority; its certificates of payment for shares may be listed on the TWSE only after a listing application for such certificates is submitted to the TWSE within 15 days after the filing for effective registration of the capital increase with the Competent Authority and the share subscription proceeds are collected in full.
    In the case where a listed company issues securities with detachable warrants, it shall, upon effective registration with the Competent Authority, apply to the TWSE for listing of the detached company warrants, and such warrants may be listed and traded on the TWSE market only when the total number of warrants specified in the application for listing and trading is five million units or more and they are offered for sale to the public, and also upon satisfaction of either of the following share ownership dispersion standards, provided that in the case of preferred shares with detachable warrants that do not meet the listing conditions for preferred shares as specified in Article 14, paragraph 2, the detached company warrants may not be listed:
  1. If the total number of stock subscription options is less than 20 million units, the number of holders of the warrants shall be 50 persons or more.
  2. If the total number of stock subscription options is 20 million units or more, the number of holders of the warrants shall be 100 persons or more.
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22    The TWSE will, upon receiving a letter of notification from the Competent Authority, publicly announce the listing of bonds issued by government. Where an issuer applies for listing financial bonds that have been approved for issuance and for listing corporate bonds issued by a listed company, the TWSE may agree to its listing.
23    Where a securities investment trust enterprise applies for the listing of a domestic closed-end mutual fund raised by the securities investment trust enterprise which complies with the following requirements and has been approved for public offering, the TWSE may agree to the listing of its beneficiary certificates:
  1. The total issuing amount of the mutual fund is NT$2 billion or more.
  2. The number of holders of such mutual fund holding beneficial units of NT$1 million or less shall not be less than 1,000, and the total amount of all beneficial units held by such holders shall not be less than NT$400 million.
    Where a domestic securities investment trust enterprise (SITE) or futures trust enterprise applies for the listing of an exchange traded fund (ETF) or exchange-traded futures trust fund (futures ETF) raised by it which has been publicly offered and established by it with the approval from the Competent Authority, and which has a minimum net asset value of NT$200 million, the TWSE may agree to the listing of its beneficiary certificates, unless otherwise provided by the TWSE.
    With respect to the ETF or futures ETF that the domestic SITE or futures trust enterprise referred to in the preceding paragraph plans to issue, unless the index that the ETF tracks, simulates, or replicates is an index compiled by the TWSE or Taiwan Index Plus Corporation, a wholly owned company of the TWSE, solely or jointly with a foreign index compilation company, or the ETF is a linked ETF as set forth in Article 37, paragraph 4 of the Regulations Governing Securities Investment Trust Funds, before applying to the Competent Authority for approval to publicly issue the ETF or futures ETF, the SITE or futures trust enterprise shall complete an application and apply to the TWSE for a letter of approval of eligibility to issue an ETF or futures ETF. Directions governing applications for such approval letters shall be prescribed by the TWSE.
    Where a domestic SITE applies for listing of the foreign currency-linked beneficiary certificates of its listed exchange-traded funds, the TWSE may agree to the listing subject to approval of the competent authority if the minimum conversion quantity of such foreign currency-linked beneficiary certificates reaches a purchase and redemption unit or more,unless the TWSE otherwise stipulates.
    Where a domestic SITE applies for listing of its exchange traded funds that it issues, together with the foreign currency-linked beneficiary certificates, said funds and certificates shall conform to paragraph 2 and the preceding paragraph respectively.
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23-1    Where a trustee institution or special purpose company applies for the listing of beneficiary securities or asset-backed securities offered by it that have been approved for public issuance and meet all of the below-listed conditions, the TWSE may agree to the listing of such securities:
  1. The total issue amount of the beneficiary securities or asset-backed securities under application for listing is NT$500 million or more.
  2. The date of maturity of the securities is at least one year from the date of listing for trading.
  3. The number of beneficiaries or holders is not less than five persons, and the total amount of any individual holdings of such beneficiary securities or asset-backed securities shall not exceed 20 percent of the total issue amount. Provided, this 20 percent holding restriction shall not apply where the holder is an independent institutional investor.
  4. The limit on par value is NT$10,000.
    The term "independent institutional investor" in the preceding paragraph means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean an originator as referred to in the Financial Asset Securitization Act, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party as defined under Article 18 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
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23-2    Where approved real estate investment trust beneficiary securities offered and issued by a domestic closed-end real estate investment trust fund established by a trustee institution meet all the below-listed conditions, and the offering trustee institution applies for listing, the TWSE may agree to the listing thereof:
  1. The total issue amount is NT$3 billion or more.
  2. The duration of the contract must be one year or more from the date of listing for trading.
  3. The number of beneficiaries holding a total amount of NT$1 million or less of the beneficial units shall not be less than 500, and the total amount of all beneficial units held by such beneficiaries shall not be less than NT$200 million.
  4. The total price amount of the beneficial units held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficiary securities. Provided, this restriction shall not apply where the holder is an independent institutional investor.
  5. Each beneficiary security shall represent 1,000 beneficial units, and have a par value limited to NT$10,000.
  6. The owner of the real estate or rights owner of rights related to the real estate invested in by the fund, in accordance with Article 8, paragraph 4 of the Regulations Governing the Offering or Private Placement of Real Estate Investment Trust or Real Estate Asset Trust Beneficiary Securities by Trustee Institutions, shall place in full the beneficiary securities it holds from the assignment of the real estate or real estate related rights in central custody, and shall undertake that it shall neither release the beneficiary securities from custody, nor transfer or pledge the beneficiary securities or certificates under custody, nor shall it use those beneficial securities as collateral to engage in any repo transaction, before one year has elapsed from the time it comes to hold them, and only after one year has elapsed may it retrieve them in full.
    Where approved real estate asset trust beneficiary securities offered and issued by a trustee institution meet all the below-listed conditions, and the offering trustee institution applies for listing, the TWSE may agree to the listing thereof:
  1. The total issue amount of the real estate asset trust beneficiary securities under application for listing is NT$500 million or more.
  2. The date of maturity is at least one year from the date of listing for trading.
  3. The number of beneficiaries shall be no less than five, and furthermore the total amount of the first-payment-priority beneficiary securities held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficiary securities. Provided, this 50 percent holding restriction shall not apply where the holder is an independent institutional investor.
  4. The par value shall be limited to NT$100,000.
  5. Beneficiary securities under application for listing shall be rated by a credit rating institution.
    The term "independent institutional investor" in this Article means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean a promoter of a real estate investment trust or a settler of a real estate asset trust, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party or substantially related party as defined under Article 18 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
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24    Guidelines governing examination of the listing of other securities that are not stipulated in these Rules shall be separately stipulated by the TWSE.
 
   Chapter III The Listing of Foreign Securities
25    The TWSE shall publicly announce the listing of government bonds issued by foreign governments and bonds issued by international organizations, upon being notified by the Competent Authority.
    Where foreign issuers apply for the listing of bonds and the underlying pricing of which is computed in New Taiwan Dollars or foreign currency, the TWSE may issue documentation evidencing approval of the listing thereof if they meet the criteria as set out by the Competent Authority.
    Where the issuer has obtained a certificate from the TWSE approving its application for listing bonds under the preceding paragraph, the TWSE will, after a filing for effective registration of the issuance of such bonds has been made with the Competent Authority and the issuance is completed, publicly announce the listing thereof, and report the Agreement for Listing Foreign Bonds to the Competent Authority for recordation.
25-1    If an offshore ETF is approved by the Competent Authority, the net asset value of its onshore offering and sales in the ROC is NT$200 million or higher, and its application for TWSE listing is submitted by the master agent appointed by the offshore fund management institution or its designated institution, then except where the TWSE provides otherwise, the TWSE may approve the listing of its beneficial interest certificates, fund shares, and investment units.
26    Approval will be granted for the application submitted by a foreign issuer or its depositary institution for listing of Taiwan depositary receipts proposed to be issued if the application meets the following requirements:
  1. Units of Taiwan depositary receipts to be listed: 20 million units or more or market value of NT$300 million or more; provided that the listed units may not exceed 50 percent of the total number of shares issued by the foreign issuer.
  2. The stock, or the securities representing the stock, issued by the foreign issuer in accordance with the laws of its country of registration are already listed and traded on the main board of one of the overseas securities markets approved by the Competent Authority before the listing of the Taiwan depositary receipts under the listing application.
  3. Net worth: At the time of application for listing, the net worth stated on the financial report audited and attested by a CPA for the most recent period shall not be less than the equivalent of NT$600 million.
  4. Profitability: It does not have accumulated deficit in the most recent fiscal year and meets one of the following criteria:
    1. The ratio of profit before tax to net worth in the final accounting for the most recent year is 6 percent or higher.
    2. The ratio of profit before tax to net worth in the final accounting for each of the past two fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
    3. The profit before tax for each of the most recent two years shall be NT$250 million or more.
  5. Dispersion of share ownership: At the time of proposed listing, the number of holders of the Taiwan depositary receipts in the Republic of China is not less than 1,000 persons, and the total number of units held by holders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding is not less than 20 percent of the total units issued or is 10 million units or more.
  6. There shall be no restriction on transfer of stock, or securities representing such stock, represented by Taiwan depositary receipts.
  7. The rights and obligations of the holders of stock, or securities representing such stock, represented by Taiwan depositary receipts shall be identical with those of other stock, or securities representing such stock, of the same class issued at the same time.
  8. There is no abnormal fluctuation in the price of the stock represented by the Taiwan depositary receipts during the 3 months before the listing agreement for Taiwan depositary receipts takes effect.
  9. The depositary institution has not, within the past year, been sanctioned by the TWSE for any error in information reporting, where the circumstances were serious.
    The financial information referred to in subparagraphs 3 and 4 of the preceding paragraph will be examined [by the TWSE] based on the consolidated report or the consolidated financial statement prepared by the said foreign issuer in accordance with the laws and regulations of its country of registration or the country of listing and the audit opinion issued by a CPA in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the country of registration or the country of listing of the said foreign issuer and the impact of such differences on such financial reports.
    The net worth and profit before tax as referred to in paragraph 1, subparagraphs 3 and 4 shall mean, for consolidated financial reports, the amount attributable to owners of the parent.
    Unless otherwise prescribed by the Competent Authority, after the listing agreement with respect to the application for listing of Taiwan Depositary Receipts has taken effect, the foreign issuer shall conduct a public sale pursuant to regulations from the date of the TWSE's written notification. If the Taiwan Depositary Receipts for which the foreign issuer applied for listing are not listed for trading within 3 months from the date of the TWSE's written notification, the TWSE shall void the listing agreement, and report to the Competent Authority for recordation. Notwithstanding, if the foreign issuer, with legitimate reason, applies for an extension, then after the TWSE approves such extension, the foreign issuer may be granted a one-time only 3-month extension, which shall be reported to the Competent Authority for recordation.    The foreign issuer shall undertake in writing that, after listing, it will establish a reporting system with the TWSE for automatic synchronous reporting of material information.
27    Approval will be granted for an application by a foreign issuer for a secondary listing of stock issued by that foreign issuer ("a TWSE secondary listing") if the requirements listed below are met:
  1. Number of shares to be listed: 20 million shares or more, or the market price of the shares to be listed is NT$300 million or more; provided that the number of shares may not exceed 50 percent of the total number of shares issued by the foreign issuer.
  2. The registered shares issued by the foreign issuer in accordance with the laws of its country of registration are already listed and traded on the main board of one of the overseas securities markets approved by the Competent Authority before the listing of the stocks under the listing application.
  3. Net worth: At the time of application for listing, the net worth stated on the financial report audited and attested by a CPA for the most recent period shall be the equivalent of NT$600 million or more.
  4. Profitability: It does not have accumulated deficit for the most recent fiscal year and meets one of the following criteria:
    1. The profit before tax for the most recent year represents not less than 6 percent of the net worth as shown in its final accounts; or
    2. The ratio of profit before tax to net worth in the final accounting for each of the past two fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
    3. The profit before tax for the most recent two years shall be NT$250 million or more.
  5. Dispersion of share ownership: At the time of the proposed listing, the number of registered shareholders in the Republic of China is not less than 1,000 persons, and the total number of shares held by shareholders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding is 20 percent or more of the total number of issued shares or is 10 million shares or more.
  6. The stock under the application for listing shall be the same class of stock listed and traded on the overseas securities market, and the rights and obligations of the holders of stock shall be identical with those of the same class of stock listed and traded on the other securities market, and local holders of the stock shall not be restricted from selling the stock in which they have invested on the overseas securities market.
  7. During the 3 months before the listing agreement for the foreign stock takes effect, there is no abnormal fluctuation in the price of the stock that is already listed and traded on the overseas securities market.

    The provisions of Article 26, paragraphs 2 and 3 shall apply mutatis mutandis to the financial reports referred to in subparagraphs 3 and 4 of the immediately preceding paragraph.
    After the listing agreement with respect to the foreign issuer's application for listing of shares has taken effect, the foreign issuer shall conduct a public sale pursuant to regulations as from the date of the TWSE's written notification. If the stock for which the foreign issuer applied for listing is not listed for trading within 3 months from the date of the TWSE's written notification, the TWSE shall void the listing agreement, and report to the Competent Authority for recordation. Notwithstanding, if the foreign issuer, with legitimate reason, applies for an extension, then after the TWSE approves such extension, the foreign issuer may be granted a one-time-only 3-month extension, which shall be reported to the Competent Authority for recordation.
    The foreign issuer shall undertake in writing that, after listing, it will establish a reporting system with the TWSE for automatic synchronous reporting of material information.
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27-1    Approval will be granted for listing of the stock or Taiwan depositary receipts of a foreign issuer that applies for a TWSE secondary listing or that sponsors issuance of Taiwan Depositary Receipts by a depositary institution if the Industrial Development Bureau of the Ministry of Economic Affairs or a professional institution engaged by the TWSE issues an unequivocal opinion it is a technology enterprise, has successfully developed marketable goods or technology, and meets each of the following criteria:
  1. Number of shares to be listed or units of Taiwan depositary receipts to be listed: 20 million shares or more, or shares with a market price of NT$300 million or more; or 20 million units or more, or units with a market price of NT$300 million or more; provided that it may not exceed 50 percent of the total number of shares issued by the foreign issuer.
  2. The securities underwriter has provided a written recommendation.
  3. The stock, or the securities representing such stock, issued by the foreign issuer in accordance with the laws of its country of registration is already listed and traded on the main board of one of the overseas securities markets approved by the Competent Authority before the listing of the stocks or Taiwan depositary receipts under the listing application.
  4. At the time of application for listing, the net worth stated on the financial report audited and attested by a CPA for the most recent period shall be the equivalent of NT$300 million or more and not less than two-thirds of the sum of share capital and capital surplus; evidence shall also be required supporting that there is a sufficient amount of working capital covering the period of 12 months after the listing and half or more of such working capital is derived from the principal operating activities.
  5. At the time of the proposed listing, the number of registered shareholders or holders of the Taiwan depositary receipts in the Republic of China is not less than 1,000 persons, and the total number of shares held by the shareholders or holders of the Taiwan depositary receipts other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding is 20 percent or more of the total number of issued shares or is 10 million shares or more.
  6. The stock to be listed shall be the same class of stock listed on other stock exchanges or securities markets. The rights and obligations of the holders of stock shall be identical with those of the same class of stock listed on other stock exchanges or securities markets. Local holders of the stock shall not be restricted from selling the stock on foreign stock exchanges or securities markets.
  7. There is no abnormal fluctuation in the price of the stock, or securities representing the stock, issued by the foreign issuer under the law of the country of registration, during the 3 months before the agreement takes effect for listing of shares or Taiwan depositary receipts with respect to which the listing application is submitted.
  8. The depositary institution has not, within the past year, been sanctioned by the TWSE for any error in information reporting, where the circumstances were serious.
     The provisions of Article 26, paragraphs 2 and 3 shall apply mutatis mutandis to the financial reports referred to in subparagraph 4 of the preceding paragraph.
    The foreign issuer shall undertake in writing that, after listing, it will establish a reporting system with the TWSE for automatic sychronous reporting of material information.
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27-2    If a foreign issuer that applies for a TWSE secondary stock listing, or to sponsor issuance of Taiwan Depositary Receipts by a depositary institution, complies with all listing requirements specified in these Rules, but any of the circumstances listed in the subparagraphs below exists, and the TWSE deems the listing inappropriate, the TWSE need not approve the listing:
  1. Any circumstance having a serious impact on the company's financial or business condition, or sufficient to cause its dissolution or changes to its organization or capital, or the company acts deceptively or illegally such that the post-listing price of its securities is affected, with a likelihood of affecting market order or harming the public interest.
  2. The applicant company, or any incumbent director, supervisor, general manager or de facto responsible person of the company, has acted in violation of the principle of good faith in the most recent three years.
  3. The applicant company, or any incumbent director, supervisor, general manager or de facto responsible person of the company, has had a sanction or disposition imposed by a competent securities authority or securities exchange of the country of listing in the most recent three years, and the circumstances are serious.
  4. There has been serious deterioration in its business operation.
  5. The TWSE deems listing inappropriate on any other grounds.
27-3     A foreign issuer that applies for a TWSE secondary stock listing, or to sponsor issuance of Taiwan Depositary Receipts by a depositary institution, shall continuously engage a lead securities underwriter from the date of listing to the end of the 2 subsequent fiscal years to assist it in compliance matters regarding Republic of China securities laws and regulations, the bylaws, rules, and public announcements of the TWSE, and the listing contract. However, if the foreign issuer applies for TWSE secondary listing pursuant to Article 27-1, the continuous engagement period shall not be less than 3 full fiscal years.
    During the engagement period referred to in the preceding paragraph, the lead underwriter shall make the issuer's financial and business information available on its website on a quarterly basis.
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28    Where a foreign issuer and its agent or depositary institution apply for the listing of stock or Taiwan depositary receipts issued as a result of capital increase by cash and having rights and obligations identical with those of the stock or depositary receipts already listed; or where a foreign issuer, using its previously issued shares, sponsors issuance of Taiwan depositary receipts with the same rights and obligations as Taiwan depositary receipts that are already listed, the TWSE may, after examining and verifying the completeness of the submitted supporting documents and finding that the foreign issuer meets all of the requirements listed below, issue documents evidencing approval of the listing and, after the foreign issuer has filed for and obtained effective registration with the Competent Authority and the issue has been completed, publicly announce the listing:
  1. Compliance with Article 26, paragraph 1, subparagraph 4 and Article 27, paragraph 1, subparagraph 4.
  2. No violation of TWSE rules and regulations relating to material information within the most recent year, where the violation is serious in nature.
  3. No abnormal fluctuation in the trading price within 1 month before the date of application.
  4. No violation of the laws and regulations of the country of registration or the country of listing within the most recent year, where the individual violation is serious in nature.
  5. The number of additional shares planned to be issued in the current issue of new shares or Taiwan depositary receipts plus the number of the already listed shares or Taiwan depositary receipts does not exceed 50 percent of the total number of issued shares.

    Where a foreign issuer and its depositary institution apply to sponsor issuance, by means of shelf registration, of Taiwan depositary receipts with the same rights and obligations as Taiwan depositary receipts that are already listed, they shall, in addition to meeting the requirements in all the subparagraphs of the preceding paragraph, meet all of the conditions in the subparagraphs of paragraph 1, Article 39 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, before the TWSE will issue a document evidencing its approval of the listing of the Taiwan depositary receipts and, after the issuer has filed and obtained effective registration with the Competent Authority and completed the issue, publicly announce the listing thereof.
    Where a foreign issuer and its agent or depositary institution files for the listing of additional stock due to the allocation to existing shareholders of preemptive subscription rights or bonus shares resulting from a cash capital increase with a new share issue, or due to requests for conversion or subscription of already-issued convertible corporate bonds, corporate bonds with warrants, or any other type of securities that can be converted to equity, and the rights and obligations of the holders of stock or Taiwan depositary receipts to be newly issued are identical with those of the stock or depositary receipts already listed, the TWSE will, after having verified that the related documents reported and uploaded are complete, publicly announce the listing thereof.
    Where a foreign issuer and its depositary institution re-issue, within the amount that has been redeemed, or re-issue, within the scheduled issuance period and permitted number of units for issue under a shelf registration, Taiwan depositary receipts with the same rights and obligations as Taiwan depositary receipts that are already listed, the TWSE shall, after having verified the related documents reported and uploaded are complete, proceed directly to publicly announce the listing thereof.    When a foreign issuer sponsors issuance of Taiwan depositary receipts and the depositary receipts have been listed, if shareholders of the foreign issuer, using shares that are already issued and held by such shareholders, engage a depositary institution to apply to domestically issue Taiwan depositary receipts for listing, if all of the conditions listed below are met, the TWSE, upon examining and verifying the completeness of the submitted documents, may issue documents evidencing its agreement to the listing of the depositary receipts, and after the filing and effective registration with the Competent Authority, publicly announce the listing thereof:
  1. The foreign issuer meets the conditions in all the subparagraphs of paragraph 1.
  2. The number of units for which listing is applied is not less than 10 million.
  3. The engaged depositary institution and custodian institution shall be the same depositary institution and custodian institution engaged by the foreign issuer for its sponsored issuance of Taiwan depositary receipts. .
  4. The rights and obligations of the stock represented by the Taiwan depositary receipts shall be the same as the rights and obligations of the stock represented by the Taiwan depositary receipts of which the foreign issuer sponsored issuance.
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28-1    The TWSE may issue documentation evidencing listing approval of the application by a foreign issuer for a TWSE primary listing if that issuer meets all of the requirements listed below:
  1. It complies with regulations in connection with the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  2. At the time it applies for listing, the applicant company or any of its controlled companies shall have an operational track record of three years or longer.
  3. The company scale meets one of the following criteria:
    1. At the time of application for listing, paid-in capital or net worth is NT$600 million or higher.
    2. At the time of listing, market capitalization is NT$1.6 billion or higher.
  4. Its cumulative profit before tax for the most recent three fiscal years is NT$250 million or higher, and its profit before tax for the most recent fiscal year is NT$120 million or higher, and it does not have any accumulated deficit.
  5. Its number of shareholders of record is 1,000 or more, and the number of shareholders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding is no less than 500 and their total shareholdings constitute 20 percent or more of the total issued shares or not less than 10 million shares.
  6. An issuer listed in the food industry or whose income from catering business occupies at least 50 percent of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
  7. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
  8. It is recommended, in writing, by two or more securities underwriters.
    Where a foreign issuer applies for a TWSE primary listing of stock, if, for the foreign issuer or a company controlled by it contributing 50 percent of its overall operating revenue, there has been issued an unequivocal opinion by an R.O.C. competent authority of a target business in accordance with the business attributes of foreign issuer, or a TWSE-designated professional institution, indicating that the company is a technology enterprise or a cultural and creative enterprise with market potential, if the foreign issuer meets the requirements of the following subparagraphs, the TWSE may issue evidentiary documentation indicating its approval of the listing:
  1. It complies with the relevant provisions of the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  2. At the time of the listing application, the applying company or the controlled company that is a technology enterprise shall have a business record of one full fiscal year or more.
  3. At the time of the listing application, the paid-in capital or net worth reaches NT$300 million or more, or the market capitalization reaches NT$800 million or more.
  4. At the time of the listing application, the net worth on the most current financial report audited and attested by a CPA is not lower than two-thirds of the capital stock, with proof that the company has operating capital sufficient for 12 months of operation following the listing. In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the issuer's net worth shall be not less than two-thirds of the sum of the share capital plus capital reserves minus original issue premium.
  5. Its number of shareholders of record is 500 or more, and the total shareholdings of the shareholders of record other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding constitute 20 percent or more of the total issued shares or not less than five million shares.
  6. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
  7. It is recommended by two or more securities underwriters.
    When a foreign issuer applies for a TWSE primary listing of stock, if its operating revenue derived from construction business as stated in the financial reports represents 20 percent or greater of its total operating revenue, or its gross profit from operations derived from construction business represents 20 percent or greater of its total gross profit, or its operating revenue or gross profit derived from construction business is more than that derived from other business items, during the most recent two fiscal years, it shall meet all of the requirements provided in Articles 16 and 17 herein, in which case, the TWSE may issue evidentiary documentation indicating its approval of the listing thereof; in the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the requirement of Article 16, paragraph 1, subparagraph 2 shall be calculated on the basis of the net worth reaching NT$600 million or more.
    "Controlled company" in paragraphs 1 and 2 means any of the following circumstances:
  1. Any controlled company in which the foreign issuer directly holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  2. Any controlled company in which the foreign issuer, indirectly through a subsidiary company, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  3. Any controlled company in which the foreign issuer directly, or indirectly through a subsidiary, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
  4. A company of which a foreign issuer directly or indirectly elects or appoints more than half of the directors for the board of directors.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flow from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    The TWSE will agree to list the stock of a foreign issuer applying for the primary listing of its stock who shall meet the conditions in paragraph 1, subparagraph 3, item 2, or whose application is filed in accordance with the fifth paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, except where its stock is already listed and traded on the GreTai Securities Market.
    If a foreign issuer is a professional investor and its purpose is to directly, or indirectly through a subsidiary company, control the operations of a held company or companies, 70 percent or more of that foreign issuer's net operating income in its consolidated financial statement shall be derived from a controlled company or companies.
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28-2    The securities underwriter referred to in the preceding article shall be registered as a member of the Taiwan Securities Association and establish a place of business within the Republic of China.
    A lead securities underwriter must undertake, in writing, that it has performed due diligence procedures, that the evaluation report, other documentation, and attachments it issues all are true, and that it has not concealed or omitted any material financial or operating information regarding the foreign issuer.
    The foreign issuer and its directors shall assist the securities underwriter to conduct due diligence procedures, and provide any required information.
    A foreign issuer shall continuously engage a lead securities underwriter from the date of listing to the end of the 3 subsequent fiscal years to assist it in compliance matters regarding Republic of China securities laws and regulations, the bylaws, rules, and public announcements of the TWSE, and the listing contract.
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28-3    The standard basis for the paid-in capital of Article 28-1 is the amount of paid-in capital recorded in the evidentiary documents of the foreign issuer's registration or amendment registration translated into New Taiwan Dollars based on the average of the daily foreign exchange rates at market close, as announced by the designated foreign exchange bank in the Republic of China, for the 1-month period before the foreign issuer applied for listing.
    The standard basis for the "net worth" and "profit before tax" specified by Articles 28-1, 28-6, and 28-13 shall be the CPA audited and attested consolidated financial report, and shall refer to the amount attributable to owners of the parent.
    The financial report referred to in Article 28-1 and Article 28-13 shall be prepared in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, the generally accepted accounting principles of the United States, or the International Financial Reporting Standards, with an audit report issued by two ROC-licensed CPAs of a joint accounting firm approved by the Competent Authority to attest to the financial reports of public companies, or audited by an international CPA firm that has a cooperative relationship with the aforementioned accounting firm accompanied by an audit report issued by an ROC-licensed CPA.
    A consolidated financial report of the preceding paragraph that is not prepared in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry shall disclose any items with material discrepancies and the amount of any monetary impact of those discrepancies, and provide an opinion by an ROC-licensed CPA regarding those items.
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28-4    A foreign issuer that applies for a TWSE primary listing of its stock may not have less than five directors or same-sex directors on its board, among them a majority of directors shall be domiciled in the Republic of China; where a corporate shareholder is elected as shareholder, the above requirement shall apply to its beneficial owner; and shall also appoint independent directors numbering not less than two persons and not less than one-third of the number of directors, and at least one of the independent directors shall be domiciled in the Republic of China.
    A foreign issuer shall install an audit committee. That audit committee shall comprise all the independent directors; it may not have less than three members, one of whom shall be the convener.
    ROC laws and regulations regarding securities shall apply mutatis mutandis to the professional qualifications, restrictions on shareholding and the holding of concurrent posts, and the determination of independence, of the independent directors of the two preceding paragraphs.
    A foreign issuer shall appoint a remuneration committee. ROC securities laws and regulations shall apply mutatis mutandis to the professional qualifications of and the exercise of powers by the committee members and related matters.
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28-5    If a foreign issuer that applies for a TWSE primary listing of its stock is part of a consortium and complies with the provisions of this chapter, but does not meet all of the conditions below such that the TWSE deems the listing inappropriate, the TWSE shall not approve its stock listing:
  1. There is no mutual competition between the primary businesses or primary products of the applicant company and the companies in the same consortium However, this requirement shall not apply if the applicant company has independent operational decision-making ability.
  2. The products that the applicant company sells to other companies within the same group enterprise shall have the potential for the development of independent marketing.
  3. If the applicant company and a company in the same group enterprise have financial business dealings or transactions, they shall each adopt concrete, written systems of operational guidelines for their mutual finances and business, and after having those guidelines approved by the board of directors, shall declare or undertake in writing that there are no non-arms-length transactions. If they do not have a business relationship, the applicant company shall undertake in writing that in the event of any subsequent business relationship, there will be no non-arms-length transactions.
  4. There shall be no material irregularities in its financial or business condition or in its above-cited operational guidelines.
  5. The purchase amount in the most recent period or most recent fiscal year from the time of the application for listing from companies within the same group enterprise does not exceed 70 percent, provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
  6. The amount of its operating revenue or operating profit derived from companies within the same group enterprise in the most recent period and most recent fiscal year from the time of its application for listing does not exceed 50 percent, or the operating revenue derived from the use of a critical technology or asset provided by the companies mentioned above does not exceed 50 percent, provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes, which situation accounts for not more than 70 percent.
    Subparagraph 5 of the preceding paragraph need not be applied if circumstances under that subparagraph are due to special industry characteristics, conditions of supply and demand in the market, or another legitimate reason.
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28-6    If a foreign issuer that is a subsidiary of a parent company applies for TWSE primary listing of its stock, and complies with the provisions of this Chapter but cannot meet all of the following requirements, the TWSE shall not approve its stock listing:
  1. It shall submit the consolidated financial statement of the parent company and all of its subsidiaries. If that statement is not prepared in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, the foreign issuer shall disclose any items with material discrepancies and the amount of any monetary impact of those discrepancies, and an opinion expressed by an ROC-licensed CPA regarding those items, unless the applicant company is applying for listing pursuant to Article 28-1, paragraph 2, 5 or 6, or in the fiscal year of the application for listing and the most recent fiscal year the amount of purchase/sales transactions between it and its parent company is less than 10 percent of its total purchase/sales amount.
  2. As calculated based on the consolidated financial statement submitted pursuant to the preceding subparagraph, the profitability shall meet the requirement in Article 28-1, paragraph 1, subparagraph 4, provided that the aforesaid profitability requirement need not apply where such event is the product of business nature, market demand and supply condition, government policy, or any other reasonable cause.
  3. The total holdings of its shares by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, may not be more than 70 percent of the total number of its shares. If those total holdings exceed 70 percent, the foreign issuer shall reduce that percentage to 70 or lower when it conducts the pre-listing public sale of its shares. The same does not apply, however, where one or more persons, other than those subject to the shareholding restriction in terms of the total number of shares as set out in this subparagraph, hold 300 million shares or more; in the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the same shall apply where one or more persons, other than those subject to the shareholding restriction in terms of the total number of shares as set out in this subparagraph, hold a total of such shares with a net value of not less than NT$6 billion in the applicant company.
  6. 6.If the stock of the parent company is already traded on the TWSE (or the TPEx), at the time of its application for TWSE listing, the pro forma operating revenue or net operating income as stated in the pro forma consolidated financial statements for each of the most recent 4 quarters, excluding the financial data for the applicant company, and reviewed by a CPA, was not down by 50 percent or more from the operating revenue or operating income stated in the consolidated financial statements for the same period, and the parent company has not transferred any material customers or business within the most recent two fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.
    When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interests of the shareholders of the parent.
    The proviso of the sixth subparagraph of paragraph 1 shall not apply where the parent company of the applicant company is a TWSE- or TPEx-listed investment holding company.
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28-7    A foreign issuer that applies for a TWSE primary listing of its stock shall in writing undertake as follows:
  1. When the TWSE deems it necessary to audit the foreign issuer's financial operations or money flow, the foreign issuer is willing to fully cooperate with the investigations of the TWSE and any attorney, CPA, or professional institution designated by the TWSE, to provide any and all information required by the TWSE, and agrees to be responsible for payment of investigation expenses.
  2. The foreign issuer will appoint a professional shareholder services agent in the Republic of China to handle shareholder services, and will continuously engage a lead securities underwriter from the date of listing to the end of the 3 subsequent fiscal years to assist it in complying with ROC securities laws and regulations, and the listing contract.
  3. The foreign issuer will add important matters concerning the protection of shareholders' equity in its articles of incorporation or organizational documents. If they are added to the organizational documents, the issuer shall state in its articles of incorporation that those matters will be separately handled in accordance with the organizational documents, and the procedures for additions to and amendments of the organizational documents shall be the same as those for the articles of incorporation. If, however, there is a conflict with mandatory provisions in the laws and regulations of the issuer's country of registration, such that the foreign issuer is unable to add these matters to its articles of incorporation or the organizational documents, the foreign issuer shall enhance disclosure of these matters by including any material discrepancies regarding protection of shareholder equity in the section of its prospectus for matters of special note.
  4. The shares under the listing application shall be delivered by the book-entry method.
  5. After listing, it will continue to comply with ROC securities laws and regulations, the listing contract, and the bylaws, rules, and public announcements of the TWSE.
    If the laws and regulations of a foreign issuer's country of registration contain mandatory provisions conflicting with provisions requiring mutatis mutandis application of the ROC Securities and Exchange Act, the mutatis mutandis application of the Securities and Exchange Act may only be eliminated when the foreign issuer is included in the scope of a prior public announcement of the competent authority allowing exemption from the application of specific provisions of the Securities and Exchange Act.
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28-8    If a foreign issuer that applies for a TWSE primary stock listing complies with all listing requirements specified in Article 28-1, but any of the circumstances listed below exists at that foreign issuer or any controlled company thereof, and the TWSE deems the listing inappropriate, the TWSE need not approve its stock listing:
  1. Any circumstance having a serious impact on the company's financial or business condition, or sufficient to cause its dissolution or changes to its organization or capital, or it acts deceptively or illegally such that the post-listing price of its securities is affected, with a likelihood of affecting market order or harming the public interest.
  2. Its finances or operations cannot be independently and clearly distinguished from those of another person.
  3. Any material non arms-length transaction has occurred and has not been corrected.
  4. The applicant company or any controlled company thereof, or any incumbent director, supervisor, general manager or de facto responsible person of any of those companies, has acted in violation of the principle of good faith in the most recent three years.
  5. There has been serious deterioration in the applicant company's business operation.
  6. Any of the applicant company's board of directors are unable to independently exercise their functions.
  8. The TWSE deems listing inappropriate for any other reason related to the scope or nature of the enterprise or any other special circumstance.
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28-9    The TWSE will approve the application for primary listing of a foreign issuer's stock only after the following persons place in centralized custody in a central securities depository established with the approval of the Competent Authority the stocks comprising their respective individual shareholdings in full as recorded in the listing application documentation and whose sum total is not lower than the percentage specified by the TWSE minus the number of shares provided for public sale upon listing, provided that if the number of shares submitted is insufficient to meet the required percentage, the foreign issuer shall coordinate other shareholders to make up the shortfall.
  1. If the foreign issuer applies for TWSE primary listing pursuant to Article 28-1, paragraph 1, 5 or 6, its directors, and shareholders holding more than 10 percent of the total number of shares.
  2. If the foreign issuer applies for TWSE primary listing pursuant to Article 28-1, paragraph 2, its persons required to deposit their shares into central custody are described as the following items, provided that this requirement shall not apply to a recommending securities firm that holds 5 percent or more of the issuer's total issued shares as a result of subscription or trading, during the emerging stock registration period, of securities held for operations:
    1. in case of a cultural and creative enterprise, its directors, shareholders holding more than 5 percent of the total number of shares, and shareholders providing patent rights or technical know-how as capital contribution and holding a position in the company and also holding 0.5 percent or more, or at least 100,000 shares, of the total issued shares of the company at the time of the listing application, provided that this requirement shall not apply to a recommending securities firm holds 5 percent or more of the issuer's total issued shares as a result of subscription or trading, during the emerging stock registration period, of securities held for operations.
    2. in case of a technology-based enterprise, its president, research and development supervisor, and all such persons described in the above item.
    The provisions of Article 10, paragraphs 2, 3, 4, and 6 shall apply mutatis mutandis to the allocation percentage, centralized custody period, withdrawal method, disposal of stocks in centralized custody, and the effect of custody, provided the centralized custody period of a technology enterprise applying for primary listing pursuant to Article 28-1, paragraph 2 and of an issuer applying for primary listing pursuant to Article 28-1, paragraph 5 or 6 is governed by the proviso of Article 10, paragraph 4 mutatis mutandis.
     A TPEx primary listed company applying for TWSE primary listing shall carry out centralized custody of stocks by mutatis mutandis application of Article 10-2.
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28-10    A foreign issuer applying for TWSE primary listing of its stock shall first allocate at least 10 percent of the total number of shares that are to be listed to a cash capital increase through a new share issue after deducting the number of shares retained for employee purchases as provided in the articles of incorporation, then engage a securities underwriter to conduct a pre-listing public sale of those shares under mutatis mutandis application of the provisions of the Securities and Exchange Act, Article 71, paragraph 1 regarding securities underwriting on a firm commitment basis, provided that where this would require the allocation of 20 million shares or more for underwriting, the company may allocate a minimum of 20 million shares for public sale.
    The total number of shares retained for employee purchase referred in the preceding paragraph may not exceed 15 percent of the total number of new shares issued.
     The requirements of paragraph 1 regarding a percentage of shares to be allocated shall not apply to a TPEx primary listed company that is applying for TWSE primary listing if the company, because of non-compliance with the share ownership dispersion standards in Article 28-1, paragraph 1, subparagraph 5 of these Rules, must retain a securities underwriter to conduct a pre-listing public sale of shares to deal with the amount of the shortfall in share ownership dispersion.
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28-11    A foreign issuer applying for TWSE primary listing of its stock shall, after the listing contract has taken effect, proceed to conduct the public sale pursuant to the preceding Article. If the stock for which the foreign issuer applied for listing has not been listed for trading within 3 months from the date on which the issuer was notified in writing, the TWSE shall void the listing contract, and report to the Competent Authority for approval. If the foreign issuer applies for an extension with a legitimate reason, it may be granted a 3-month extension, one time only, subject to the approval of the TWSE and review and recordation by the Competent Authority.
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28-12    If a primary listed company issues new shares of a stock that is the same type as a stock already listed and applies for listing of the new shares, the new shares will be listed in accordance with the provisions of Article 139, paragraph 2, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act.
    Where a primary listed company issues new shares that are not of the same type of stocks as those which have already been listed and applies for listing of the new shares, the TWSE may agree to list the new shares if the following conditions are met:
  1. the total issue amount of the shares under application for listing is NT$300 million or more, with 30 million or more shares issued.
  2. the company offers the shares for sale to the public before listing in accordance with Article 28-10, paragraph 1.
  3. the share ownership dispersion standards in Article 8, paragraph 3 are met.
    A primary listed company applying for listing of shares issued by it that are not of the same type of stock as those already listed and that are redeemable for cash upon maturity shall comply with the provisions of paragraph 2; however, the share ownership dispersion standards in subparagraph 3 shall not apply.
    In the case where a primary listed company issues securities with detachable warrants, it shall, upon effective registration with the Competent Authority, apply to the TWSE for listing of the detached company warrants, and such warrants may be listed and traded on the TWSE market only when the total number of warrants specified in the application for listing and trading is five million units or more and they are offered for sale to the public, and also upon satisfaction of either of the following share ownership dispersion standards, provided that in the case of preferred shares with detachable warrants that fail to meet the listing conditions for preferred shares as specified in paragraph 2, the detached company warrants may not be listed:
  1. If the total number of stock subscription options is less than 20 million units, the number of holders of the warrants shall be 50 persons or more.
  2. If the total number of stock subscription options is 20 million units or more, the number of holders of the warrants shall be 100 persons or more.
    If a primary listed company has issued common shares in response to the exercise of conversion rights or subscription rights under preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, convertible corporate bonds, or detached company warrants issued by the company, the company shall promptly file a report on the Internet information reporting system designated by the TWSE, and may be exempted from the requirement of public sale under Article 28-10.
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28-13    A foreign issuer that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the issuer intends to apply for listed trading of the securities, it may file such application only after first supplementarily completing public issuance examination and approval procedures with the Competent Authority.
    Securities that are privately placed by a primary listed company and securities subsequently distributed, converted, or subscribed may not be listed during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a listing application only after first applying to the TWSE for a letter of approval and, on the basis of that letter, supplementarily completing issuance examination and approval procedures with the Competent Authority. However, the company may be exempted from the requirement of carrying out public sale prior to listing under Article 28-10.
    When applying to the TWSE for a letter of approval under the preceding paragraph, a primary listed company shall meet the standards in each of the following subparagraphs:
  1. The financial reports for the most recent period and the most recent fiscal year show an absence of accumulated deficit.
  2. Its cumulative profit before tax for the most recent three fiscal years is NT$160 million or higher, and its profit before tax for the most recent fiscal year is NT$80 million or higher.
  3. A CPA has audited the consolidated financial reports for the most recent two fiscal years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
  4. None of the events set out in Article 28-8, subparagraphs 1, 3, 4, or 8 is present.
  5. The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
  6. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, better than that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
    2. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
  7. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities, provided such restriction on profitability does not apply where the average of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, not lower than 200 percent of that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4 percent or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    2. The private placement did not introduce strategic investors.
    3. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    4. The conducting of the private placement of securities was not done in accordance with the Directions for Private Placements, where the circumstances were serious.
  8. For an applicant company that had net loss or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the profit before tax for the most recent fiscal year shall be NT$120 million or higher:
    1. Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
    2. The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
  9. Others consistent with the provisions of the Competent Authority.
    A company applying for primary listing in accordance with Article 28-1, paragraph 2, 5 or 6 may waive the application of subparagraph 2 of the preceding paragraph if the company, which has never obtained a letter of approval from the TWSE in accordance with the preceding paragraph, applies for said letter in accordance with paragraph 2 upon the adoption of a special resolution in a shareholders’ meeting on the registration of the retroactive handling of public issuance procedures of privately placed securities, subject to compliance with the following subparagraphs:
  1. No assignment is conducted within six years from the date of delivery of the privately placed securities, except transfers taking effect in accordance with the law.
  2. The price of the privately placed securities is not lower than 80 percent of the reference price or theoretical price.
  3. No placee of the privately placed securities is an insider or related party of the company.
  4. In the last three years, the sum of the number of privately placed securities in respect of which an application for a letter of approval is made in accordance with this paragraph and the number of securities with equity characteristics that may exercise or be converted into common shares has not exceeded 20 percent of the total number of listed shares at the time of the application, except where, in the event of excess shares, the holder has undertaken through coordination that such shares would all be placed in central custody before listing. The withdrawal period and withdrawn number of shares placed in central custody are governed by the proviso in paragraph 4 of Article 10 mutatis mutandis.
  5. No material change in the scope of business as in Article 50-3, paragraph 1, subparagraph 11 of the Operating Rules of the TWSE has occurred since the listing date, except as caused by the special characteristics of the industry or other reasonable causes.
    In the provisions regarding the ratio of profit before tax to year-end share capital in paragraph 3, subparagraphs 6 and 7, if the stock of a primary listed company has no par value or a par value per share other than NT$10, the calculation shall be of the ratio of profit before tax to the sum of the share capital plus capital surplus, additional paid-in capital.
    Prior to the listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in paragraph 3, subparagraph 7 or 8, shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the end of a 6-month period starting from the date of commencement of listed trading; the remaining shares may be withdrawn in full only after the end of a 1-year period starting from the date of commencement of listed trading. The custodial agreement may not be rescinded during the custody period, and the shares in central custody may not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody.
    Where the Competent Authority has restricted the listed trading of securities issued by a primary listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer of the privately placed shares has elapsed.
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   Chapter IV  Listing of Securities on the Taiwan Innovation Board
29    A domestic issuer that applies for the listing of stocks at the TIB must comply with the government’s industrial development strategies, have key core technologies and the ability to innovate or have an innovative operational model, and should meet the following qualifications:
  1. Years of establishment: Has been around for at least two years since its incorporation under the Company Act at the time of application for listing.
  2. Has issued 10 million or more shares at the time of application for listing.
  3. Market value and financial standards: Must meet one the following standards at the time of application for listing:
    1. Market value is NT$1 billion or more, total operating revenue as stated in the financial reports for the most recent four quarters is not less than NT$100 million and the applicant must prove it has the working capital sufficient for 12 months after listing in the market.
    2. For an applicant doing business in the biotechnology and pharmaceutical industry, its market value is NT$2 billion or more, and it must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market. If an applicant is developing new medicine, its core products must have passed stage 1 of a clinical trial.
    3. Market value is NT$4 billion or more, and the applicant must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market.
  4. Dispersion of share ownership: The number of registered shareholders is 50 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the total issued shares, or at least 5 million shares.
  5. An applicant listed in the food industry or with income from dining and beverage services exceeding 50 percent of its total operating revenues in the most recent fiscal year must meet the requirements in the following items:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
  6. Recommended by 2 or more securities underwriters.
    A foreign issuer that applies for the listing of stocks at the TIB must meet, in addition to the requirements in the subparagraphs 2 to 6 of the preceding paragraph, the following qualifications:
  1. Meet the application regulations under the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, provided that if the people, juristic persons, group or other institutions directly or indirectly own shares or invest in the issuer for more than 30 percent of its value, or have control over the issuer, it must obtain an approval from the competent authority on a case-by-case basis.
  2. Years of establishment: The applicant or any of its subordinate companies must have 2 or more years of business records.
  3. The inspection institution under item B of subparagraph 5 of the preceding paragraph may be replaced by a laboratory or inspection institution certified by the local competent authority, international certification institution or an institution appointed by its competent authority.
    The TWSE will agree to list its stock of a domestic issuer or a foreign issuer applying for the listing of its stock at the TIB in the preceding two paragraphs only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application.
    A recommending securities underwriter should issue an evaluation opinion on the requirements on application for listing, i.e. compliance with the government’s industrial development strategies, key core technologies and the ability to innovate or an innovative operational model, in the first paragraph.
    The core products in item B of subparagraph 3 of paragraph 1 means the biotechnological and pharmaceutical products that are the focus of a domestic issuer or foreign issuer in its engagement in development, application and commercialization of new drugs at the time of application for listing.
    Article 28-2, paragraph 1 applies mutatis mutandis to the definition of securities underwriter in subparagraph 6 of paragraph 1.
    Financial reports as referred to in this chapter shall be governed mutatis mutandis by Article 7, paragraphs 1 and 2 in the case of a domestic issuer, or by Article 28-3, paragraphs 3 and 4 in the case of a foreign issuer.
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30    A foreign issuer applying for the listing of its stock at the TIB shall have five or more members in its board of directors, and a majority of these members should have a registered household in the Republic of China. Where a corporate shareholder is elected as director, the above shall apply to its beneficial owner. There should also be three or more independent directors who shall take no less than one fifth of the seats in the board. Among them, at least two independent directors should have a registered household in the Republic of China.
    Professional qualifications, restrictions on shareholding and outside employment, and determination of independence for the independent directors in the preceding paragraph shall be governed by the securities laws and regulations of the Republic of China mutatis mutandis.
    A foreign issuer applying for the primary listing of stocks at the TIB must establish an audit committee and a compensation committee. Professional qualifications, exercise of powers and duties and matters relating to these committee members shall be governed by the securities laws and regulations of the Republic of China mutatis mutandis.
31    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:
  1. 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.
  2. Fails to have its finance or business independently separated from another person’s.
  3. 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.
  4. Is found to have major irregular transactions, and no improvement has been made.
  5. 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.
  6. It is experiencing a serious decline in the business activities it engages in.
  7. 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.
  8. 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.
  9. 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.
  10. 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:
    1. 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.
    2. 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.
  11. 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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32    An application for listing of its stock at the TIB by a domestic issuer or foreign issuer of the group enterprise shall be rejected if it fails to meet the following requirements, despite that it has complied with the applicable provisions of these Rules:
  1. The major business or products of the applicant and those of the other companies within the same group enterprise are not competing with each other, except where the applicant has the ability to make independent operation decisions.
  2. Where the applicant has financial business dealings or transactions with the other companies within the same group enterprise, each entity shall establish a specific written system for operating policies on finance and business between them, for approval by their respective board of directors, and shall issue a written undertaking or guarantee on the absence of irregular transactions. If there is no business dealings between them, the applicant shall issue a written statement, undertaking they will never have irregular transactions if there are business dealings between them in the future.
  3. There shall be no material irregularities in Its financial and business conditions or in its above-cited operational guidelines.
  4. It should have the development potential for independent marketing of the products to be sold to the other companies within the same group enterprise.
  5. The purchase amount in the most recent period or most recent fiscal year from the time of the application for listing from a company within the same group enterprise does not exceed 70 percent, provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
  6. The operating revenue or operating profit derived from other companies within the same group enterprise in the most recent period, and in the most recent fiscal year the time of application for listing does not exceed 50 percent, or the operating revenue derived from the use of a critical technology or asset provided by the companies mentioned above does not exceed 50 percent; provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
    Subparagraph 5 of the preceding paragraph may be waived if the circumstance under this subparagraph is due to characteristics of the trade, market supplies and demands, government policies or other reasonable cause.
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33    An application for listing of stocks at the TIB by a subsidiary that maintains the parent and subsidiary relationship at the time of the application shall be rejected if it fails to meet the following requirements, despite that it has complied with the applicable provisions of these Rules:
  1. The parents company and all its subsidiaries and their directors, supervisors and representatives, and shareholders holding more than 10 percent of the company’s total shares, and their related parties all together shall not hold more than 80 percent of the total issued shares of the applicant. Where the above shareholding exceeds 70 percent, there should be prelisting public sales of shares to reduce the shareholding to less than 80 percent. However, the same does not apply where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 50 million shares; or, in the case the share has no par value or the par value per share is not NT$10, where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of such shares with a net value of not less than NT$1 billion in the applicant company.
  2. Where the stocks of its parent company are traded at the TWSE/TPEx centralized securities exchange market, the pro forma operating revenues or operating income shown in the pro forma consolidated financial statements that excludes the applicant’s financial data, audited by CPA, for the most recent four quarters at the time of the application indicate no decline of over 50 percent compared to the consolidated financial statements for the current term, and no transfer of business of any major client of the parent company has occurred during the most recent two fiscal years. The above, however, may be waived if the parent company and the subsidiary engage in different types of business, conduct business in different industries or have different types of products and are not competing with each other, or it is due to other reasonable cause.
    Where a subsidiary applies for listing at the TIB in accordance with the proviso of subparagraph 3 of the preceding paragraph, when the parent company transfer shares to reduce its shareholding in the subsidiary during the three years prior to the application for listing, the shares to be transferred should be offered for subscription by existing shareholders on a priority basis or the transfer should be made in a way that will not injure the equity of the shareholders’ of the parent company.
    The proviso of the third subparagraph of paragraph 1 shall not apply where the parent company of the applicant company is a TWSE- or TPEx-listed investment holding company.
34    A domestic issuer or foreign issuer applying for the listing of stocks at the TIB shall issue a written guarantee to undertake the following:
  1. Has completed registration of non-physical securities prior to the listing, except where its stocks have been registered for trading at the TPEx.
  2. Continue to appoint the lead securities underwriter to assist its compliance with the securities laws of the Republic of China, listing contract and other regulations from the listing date until the end of the third fiscal year thereafter, or a longer period of time if the TWSE believes it is necessary the appointment should continue. When it terminates the appointment with the lead securities underwriter during the listing, it shall appoint a new securities underwriter as successor within one month of the day when termination of appointment takes effect. Where it has become a listed company or primary listed company in accordance with Article 40, the appointment contract may be terminated.
  3. During the first three fiscal years from the following year after its listing, disclose the annual report at the Internet information reporting system designated by the TWSE at the same time when submitting the written annual report, and report in writing the CPA’s project audit report for the previous year.
    In case of a foreign issuer, in addition to the preceding paragraph, it shall issue a written guarantee to further undertake the following:
  1. If the TWSE deems it necessary to audit a foreign issuer’s finance and business or fund flows, the issuer is willing to fully cooperate in the investigations conducted by the TWSE and the lawyers, CPAs or professional institutions appointed by the TWSE, and furnish all information requested by the TWSE, and agrees to pay the costs for all investigations.
  2. Important matters relating to protection of shareholders’ equity should be added in the articles of incorporation or organic documents. In case of these matters are added in the organic documents, the articles of incorporation must specify that these matters shall be separately governed by the organic documents, and the organic documents may be added and/or amended through the same procedure accordance to which the articles of incorporation may be added and/or amended. Where such addition to the articles of incorporation or organic documents is contradictory to the mandatory requirements under the laws of the jurisdiction of incorporation, information specifically about enhanced disclosure of major differences must be contained in the prospectus.
  3. It will continue to comply with the securities laws of the Republic of China, listing contract, the TWSE policies and rules and other publications after listing.
    Where the mandatory requirements under the laws of the jurisdiction where the foreign issuer is incorporated as described in the preceding paragraph contradict to the mutatis mutandis provisions of the ROC Securities and Exchange Act, mutatis mutandis application of these provisions may only be excluded to such extent that certain requirements under the Securities and Exchange Act may be waived as indicated in the public announcement of the competent authority of the ROC government.
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35    The director, general manager, core technology specialist and shareholder holding more than 5 percent of the total issued shares of a domestic issuer or foreign issuer applying for the listing of stocks at the TIB should deposit all shares held by each individual, after deducting such number of shares offered for listing and public sale, under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of stocks may be approved.
    For purpose of the preceding paragraph, core technology specialists refer to R&D officers, operation-related technology officers, and shareholders making investments in the form of patents or know-hows and holding a position in the company.
    The shares other than those offered for listing and public sale as in the first paragraph include new shares issued with increased capital received between the application date for initial listing and the date of listing for which registration of change has completed, as well as shares held for other reason. The applicant shall guarantee to deposit shares that have not been received on the date of listing under centralized custody.
    For the shares that must be deposited under centralized custody under the first paragraph, one fourth of them may be withdrawn after full six months from the first day of listing and trading. Another one fourth may be further withdrawn at the end of the second six-month period and so on. All the shares under centralized custody may be fully withdrawn after two full years from the first day of listing and trading.
    Where the total number of shares of a domestic issuer or a foreign issuer applying for listing under the first paragraph that are placed in central custody is assessed to exceed 50 percent of its issued shares, and the issuer has paid-in capital of at least NT$10 billion, if the portion of the number of shares required to be placed in central custody exceeding the above 50 percent of issued shares has been pledged to a financial institution by the director or shareholder of the issuer who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in central custody; provided, if the pledge is released during the custody period, the director and major shareholder shall deposit the same amount of shares into central custody; or, if the subject of the pledge is disposed by the financial institution, the applicant shall contact other directors or shareholders to deposit the same amount of shares into central custody.
    Shareholders required to deposit their shares under centralized custody under the first paragraph shall not rescind the contract prior to expiry of the term of custody. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
    The first paragraph does not apply to directors and shareholders being government authorities, government-owned enterprises, or having obtained approval from the competent authority of a target business for the sale of the shares held by them rendering the placing of such shares in central custody inadvisable.
36    A domestic issuer filing an initial application for listing of its common stocks at the TIB shall appoint a securities underwriter to handle prelisting public sale of all its shares stated in its listing application documents at the allocation ratio, after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the applicable regulations under the Company Act, through issue of new shares by cash offering in accordance with the regulations of firm commitment underwriting of securities under Article 71, paragraph 1 of the Securities and Exchange Act.
    The requirements on issue of new shares by cash offering in the preceding paragraph may apply mutatis mutandis to a foreign issuer’s initial application for listing of its common stocks at the TIB for prelisting public sale, when the issuer shall appoint a securities underwriter to handle the sale of these shares after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the articles of incorporation.
    The value of shares reserved for subscription by the company’s employees as in the two preceding paragraphs shall not exceed 15 percent of the total new shares issued by cash offering.
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37    After its listing contract takes effect, a domestic issuer or foreign issuer applying for the listing of stocks at the TIB shall engage in public sale in accordance with the preceding article. If the stocks applied for listing are not offered for trading at the market within three months after the date of the notice sent by the TWSE, its listing contract shall be withdrawn with the competent authority being notified of the withdrawal. Where a request for extension with legitimate reason is approved by the TWSE, a three-month extension may be allowed and only one extension may be granted, with the competent authority being notified of the extension.
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38    When a TIB listed company or a TIB primary listed company is issuing new shares of the same class, listing of these shares shall be governed by Article 139, paragraph 2 of the Securities and Exchange Act. The issued certificates of entitlement to new shares from convertible bond shall also be listed and traded at the TWSE markets in accordance with the above regulations.
    When a TIB listed company or TIB primary listed company applies for listing of stocks of a class different from its listed stocks, its application for listing may be approved if the following conditions are met:
  1. The total value of shares applied for listing exceeds NT$50 million and 5 million or more shares will be issued.
  2. It shall engage in relisting public sale in accordance with Article 36, paragraph 1 or 2.
  3. Dispersion of share ownership: The number of registered shareholders is 30 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the all issued special shares, or at least 3 million shares.
    The requirements under paragraph 2 shall govern if a TIB listed company or a TIB primary listed company is applying for listing of stocks of a class different from its listed stocks that may be redeemed in cash upon maturity, in which case the criteria on dispersion of share ownership under subparagraph 3 shall not apply.
    A TIB listed company or primary listed company shall apply for listing of the stock warrant certificates and certificates of entitlement to new shares it issues within 15 days after the cash increase plan is reported to the competent authority and takes effect, or apply for listing of the certificates of payment within 15 days of the cash increase plan is reported to the competent authority and takes effect and all payments of shares have been received to be allowed for listed and trading at the TWSE markets.
    If a TIB listed company or a TIB primary listed company issues securities with detachable share options, it shall, after its plan has been reported to the competent authority and taken effect, apply to the TWSE for listing of detached share options. The number of units of share options it applies for listing must be 3 million or more, and these options must be offered for public sale and meet the following criteria on dispersion of share ownership before they may be listed and traded at the TWSE markets. Notwithstanding, if special shares with detachable share options fail to meet the conditions of listing of special shares under subparagraph 2, their detached share options may not be listed:
  1. If the total units of share options are less than 10 million, there should be at least 30 holders of these share options.
  2. If the total units of share options are 20 million or more, there should be at least 50 holders of these share options.
    A TIB listed company or a TIB primary listed company shall complete registration of its common shares issued at the Internet information reporting system designated by the TWSE after having exercised conversion rights or share options based on preferred shares with stock options, convertible preferred shares, bonds with share options, convertible bonds and detached share options, in which case the public sale required under Article 36 may be waived.
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39    A domestic issuer or foreign issuer engaging in private placement of securities shall not apply for initial listing of privately placed securities at the TIB during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the issuer wishes to apply for listing and trading at the TIB, it may complete the issue review procedure retrospectively with the competent authority before making the application.
    No privately placed securities of a TIB listed company or a TIB primary listed company, as well as securities allotted, converted or subscribed thereafter, shall be listed during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the company wishes to apply for listing, it shall obtain an approval letter from the TWSE and then use the letter to complete the issue review procedure retrospectively with the competent authority before making the application, in which case the prelisting public sale required under Article 36 may be waived.
    A TIB listed or a TIB primary listed company must meet the following criteria when requesting an approval letter from the TWSE in accordance with the preceding paragraph:
  1. No accumulated losses are indicated in the financial reports for the most recent quarter and the most recent fiscal year.
  2. Profits before tax in the financial report meet one of the following standards:
    1. Ratio of profits before tax to share capital listed in the financial report for annual account has been above 4 percent in the most recent two fiscal years.
    2. Average ratio of profits before tax to share capital listed in the financial report for annual account in the most recent two fiscal years is above 4 percent, and profitability in the most recent fiscal year is better than the previous fiscal year.
  3. The financial reports for the most recent two fiscal years have been audited by CPA who has issued an audit report with unqualified opinion. If an audit report other than one with unqualified opinion is issued, there is no circumstance that would prevent financial report from presenting fairly.
  4. There are no circumstances under Article 31, paragraph 1, subparagraphs 1, 3, 4, 5, 7 or 11.
  5. Total number of registered shares held by all the directors is higher than the shareholding set forth under the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
  6. Funds from private placement of securities have been fully utilized in accordance with the fund implementation plan and reasonable effects have been created, except when there is a legitimate reason.
  7. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year is better than the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is better than the ratio for the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
    2. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
  8. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should not be lower than 200 percent of the ratio the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is not lower than 200 percent of ratio of the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    2. The purpose of the private placement is not to introduce strategic investors.
    3. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    4. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  9. Where there are losses after tax or accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should be over 6 percent:
    1. Insiders or related parties participate in the private placement and the subscription price fails to meet the percentage requirement set forth by the competent authority.
    2. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  10. It has otherwise satisfied the requirements of the competent authority.
    Where a TIB listed company or a TIB primary listed company has never obtained the approval letter from the TWSE in accordance with the preceding paragraph and the a special resolution for filing the retrospective public issuance with respect to a private placement of securities has been approved at the shareholders’ meeting, when the company requests an approval in accordance with paragraph 2, it may not be subject to the circumstances under subparagraph 2 of the preceding paragraph and Article 12-1, paragraph 4 or Article 28-13, paragraph 4 may respectively apply mutatis mutandis.
    Parties other than strategic investors, insiders and related parties under paragraph 3, subparagraphs 8 and 9 shall deposit the privately placed securities they hold under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of these securities. One half of these securities may be withdrawn only after full six months from the first day of listing and trading. The remaining securities may be withdrawn only after a full year from the first day of listing and trading. No rescission of contract prior to expiry of the term of custody is allowed. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
    Where the competent authority restricts the listing and trading of the securities issued by a listed company, the privately placed securities shall not be listed before these restrictions have been removed despite that the period when transfers of these privately placed securities are restricted has expired.
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40    After one full year from the date of listing of a TIB listed company or a TIB primary listed company, it may apply to the TWSE for being relisted as listed company or primary listed company in accordance with Chapters II and III of these Rules.
    Before the company in the preceding paragraph is relisted as listed or primary listed company for listing and trading shall appoint a securities underwriter to handle prelisting public sale of all its shares stated in its listing application documents at the allocation ratio, after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the applicable regulations under the Company Act, through issue of new shares by cash offering in accordance with the regulations of firm commitment underwriting of securities under Article 71, paragraph 1 of the Securities and Exchange Act.
    The shares to be allocated for public sale in the preceding paragraph are limited to shares of common stocks.
    A TIB listed company or a TIB primary listed company relisted as listed company or primary listed company shall place their shares in central custody in accordance with Articles 10 and 28-9.
    For personnel who shall place the shares in central custody in accordance with the preceding paragraph, except for those who already did so at the time of TIB listing, in which case they shall keep the shares in central custody until the expiration of the original central custody period, the rest of them shall place the shares in central custody in accordance with the regulations, and the central custody period shall be handled in accordance with the following manner:
  1. Where Article 10, paragraph 4 shall apply mutatis mutandis, all securities may be withdrawn only after full six months from the first day of listing and trading.
  2. Where Article 10, the proviso of paragraph 4 shall apply mutatis mutandis, one half of securities may be withdrawn only after full six months from the first day of listing and trading, and all securities may be withdrawn only after a full year from the first day of listing and trading.
    Under the circumstances in the preceding paragraph, the TWSE may request the relevant personnel to place the shares in central custody for the period prescribed in the preceding paragraph if it deems necessary.
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   Chapter V Miscellaneous Provisions
41    Supplementary provisions to these Rules may be separately stipulated by the TWSE.
    These Rules and other supplementary provisions stipulated pursuant to these Rules shall take effect after having been submitted to and approved by the Competent Authority and publicly announced. Attachments to these Rules shall be implemented after having been submitted in writing to and signed by the president of the TWSE. Subsequent amendments thereto shall be effected in the same manner.