| Title： |
Taiwan Stock Exchange Corporation Regulations Governing Purchase of Listed Securities by Tender Offer(2005.01.28) |
| Date： |
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Article 1
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Handling by the Taiwan Stock Exchange Corporation, pursuant to Article 74 of the Operating Rules of the TSE, of applications by securities brokers to purchase listed securities by tender offer shall be in accordance with these Regulations, except where otherwise provided by law or regulation.
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Article 2
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A securities broker shall fill out an application form and submit it to this Corporation when consigned by a principal to conduct a purchase of securities by tender offer. If the principal is an Overseas Chinese or foreign person with special-case approval from the Ministry of Economic Affairs Investment Commission, the Science-based Industrial Park Administration, or the Export Processing Zone Administration, the application shall include evidentiary documentation of government approval of the investment and inward remittance of funds. If the principal is a domestic company, the total amount of any re-investment shall be handled in compliance with the provisions of Article 13 of the Company Law and supporting documentation shall be annexed.
The provisions of the preceding paragraph shall apply when a securities finance enterprise makes a tender offer for the purpose of settlement or return of securities. The procedures for such a tender offer may be undertaken on the day of the tender offer application.
Once applications by consignment as referred to in Paragraph 1 have been approved by this Corporation and reported to the competent authority for recordation, this Corporation will make a public announcement of the matters listed below three trading days prior to the implementation of the tender offer. However, for applications by consignment as referred to in Paragraph 2, the announcement may be made in this Corporation's market report on the day the tender offer procedures are implemented. Once this Corporation has made the public announcement, neither the principal nor the consigned securities broker may apply to amend or revoke the application. This restriction does not apply to revocation of tender offers or amendment of tender offer quantities pursuant to the provisions of Article 6, Paragraph 4.
1. The name and quantity of the securities to be purchased by tender offer.
2. The date and time of the tender offer.
3. The following information for the tender offerer:
(1) Background
(2) Purpose of the tender offer
(3) Source of the investment capital if an Overseas Chinese or foreign person
(4) Financial condition for the most recent year if a juristic person
4. Minimum price for the tender offer: Limited to within a range of 15 percent above or below the closing price from the previous trading day. At the commencement of the tender offer, the applying securities broker shall deliver a sealed bid letter to the TSE for on-the-spot announcement. A public notice of the tender offer must also be published in the Market Information System.
5. Means of tender: To be selected pursuant to Article 6, Paragraph 1.
6. Means of handling a shortfall between the confirmed tender amount and the publicly announced amount of the tender offer.
7. Time and method for quotes by securities firms participating in the price bidding.
8. Other relevant matters.
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Article 3
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Securities for purchase by tender offer pursuant to these Regulations shall be traded on the market of this Corporation through computer automated trading. Participants in the competitive selling shall be confined to those who have entered into a contract with this Corporation for use of the centralized securities exchange market.
Securities brokers participating in the competitive selling shall obtain a [letter of] consignment for competitive sale from the principal and may not accept any consignment for competitive sale by the tender offer principal; provided, this restriction shall not apply to those accepting tender offer consignments from securities finance enterprises.
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Article 4
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Securities enterprises that are participating competing sellers in the tender offer shall enter their quotes by means of a computer link to this Corporation's computer network from 3:00 p.m. to 3:30 p.m., and trades shall be confirmed on the same trading day as the quote is entered.
Except as otherwise provided by public announcement, the quantity of quotes as referred to in the preceding Paragraph, shall be expressed in the trading unit or multiple for the particular type of stock and shall not be subject to the limit of 500 trading units or less imposed upon ordinary consigned stock trades. Quotes that do not comply with this provision shall be invalid.
The tender offer base price and competing sellers' quoted prices shall be calculated on a per-share basis.
A securities firm consigned by competing sellers may, during the bidding period, rescind or alter its quoted quantity or price by means of computer link to this Corporation's computer network.
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Article 5
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If the total number of issued shares of the security for which the tender offer application is made under these Regulations is 20 million or less, the quantity of shares to be bid on may not be less than 20 percent of the total issued shares; where the issued shares exceed 20 million, the quantity of the shares to be bid on among the excess part may not be less than 10 percent of the excess part. However, this restriction shall not apply to overseas Chinese or foreign persons with special-case approval, or securities finance enterprises applying for purchase by tender offer.
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Article 6
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The principal making the tender offer shall select from between the following methods for determining the confirmed tender price:
1. During the tender period, the highest quoted selling price at which the tender offer quantity requirements can be satisfied without exceeding the tender offer base price shall be the confirmed tender price. All securities with a quoted selling price lower than the confirmed tender price shall be purchased at the confirmed tender price. If the total amount of securities offered cannot be purchased at the confirmed tender price, purchases shall be distributed in proportion to the quantities quoted by each consignment until the trading unit quota is fulfilled. If there is still a remainder, distribution shall be conducted randomly by computer, with each consignment limited to one trading unit.
2. During the tender offer period, the lowest quoted selling price that does not exceed the tender offer base price shall have priority in transactions. If the quoted selling price is the same, purchases shall be distributed among the consignments based on the ratio of the tendered shares to total outstanding shares until the trading unit quota is fulfilled. If shares remain, distribution shall be conducted randomly by computer, with each consignment limited to one trading unit.
Failure of the quantity of confirmed tenders under the preceding Paragraph to meet the publicly announced tender offer quantity shall be handled by means as publicly announced by this Corporation.
The tender offer shall be invalid if the principal placing the tender offer violates the provisions against participating in competitive sale in Article 3, Paragraph 2; or if the quoted selling price is higher than the tender base price; or if the principal placing the tender offer is unable to achieve a confirmed tender by its quote pursuant to Paragraph 1.
Where an overseas Chinese or foreign person engages a securities firm to apply to make a tender offer, and on the day of the tender the tender quantity exceeds the remaining balance that the entity is allowed to invest by law or regulation, the purchase by tender shall be made in the amount of such remaining balance. However, if the remaining balance is insufficient to comply with the minimum tender quantity provisions in the preceding Article, or cannot be confirmed, the tender purchase procedures shall be cancelled.
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Article 7
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When two or more securities brokers make tender offer applications for the same securities on the same day, this Corporation shall handle each application separately.
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Article 8
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(Rescinded)
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Article 9
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Unless the public announcement expressly provides that settlement shall take place on the transaction date, settlement of confirmed tender purchase trades shall be carried out in the same way as for ordinary trades.
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Article 10
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The securities broker applying to place a tender offer shall collect in advance the full amount of funds for the tender offer price from the principal at the time it accepts the consignment to place the tender offer.
Securities brokers participating in a tender offer as competing sellers shall collect in advance all share certificates from the principal at the time they are engaged by the principal.
Where a securities broker accepts consignment to conduct a tender offer or to participate as a competing seller as provided in Article 2, Paragraph 1, the consignment contract shall contain express provisions for handling breaches of contract and damages therefor.
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Article 11
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Where a securities broker accepts consignment to file an application for a tender offer or participate as a competing seller and a transaction is confirmed, the broker shall collect handling charges from the principal in accordance with regulations.
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Article 12
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Handling charges collected by this Corporation from the securities brokers of buyers and sellers in tender offer purchases of listed securities shall be jointly drafted by this Corporation and the Securities Dealers' Association and submitted to the competent authority for approval before implementation.
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Article 13
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When handling tender offers for listed securities, this Corporation may suspend auction of those securities during the tender period; provided, this shall not apply to tender offers under Article 2, Paragraph 2. Confirmed tender prices shall not be subject to the daily fluctuation limits for ordinary trading, and shall not be taken as the opening, high, low, or closing price for the current day.
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Article 14
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Matters on which these Regulations are silent shall be handled in accordance with other applicable laws and regulations and the Articles of Incorporation of this Corporation.
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Article 15
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These Regulations shall be implemented by public announcement after approval by the competent authority.
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