| Title： |
Operating Rules of the Taiwan Stock Exchange Corporation(2011.09.21) |
| Date： |
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Article 49
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If any of the following circumstances applies to a listed company, the TWSE may place its listed securities under an altered trading method:
1.The latest individual financial report, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report. However, when a listed company records as a deduction from shareholders equity the cost of shares bought back by it pursuant to Article 28-2 of the Securities and Exchange Act or of shares held in said listed company by subsidiaries thereof, the par value of treasury stock held in said listed company by the listed company and subsidiaries thereof may be deducted from the share capital stated on the financial report in the calculation of the above-stated ratio. When stock subscription proceeds are recorded as an addition to shareholders equity, the par-value share-issue equivalent of the stock subscription proceeds shall be added to the calculation of the share capital in the calculation of the above-stated ratio.
2. A shareholders meeting has not been held within 6 months after the end of the fiscal year; provided that with valid reasons and with the approval of the competent authority of the Company Act, the meeting is held within the approved time period, the above shall not be applicable.
3. Where an audit or review report issued by the CPA for the latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates substantial doubt about the going-concern assumption, or the certifying CPA issues a qualified audit report for the semi-annual or annual financial reports, or for a company other than a holding company issues a qualified review report for the semi-annual consolidated financial report, as publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act, because there were restrictions on the scope of the audit, or because the accountant deems there to be anything improper in the choices of accounting policies by the management or in the disclosure of the financial statement; however, this restriction shall not apply to a semi-annual financial report where the CPA has issued the qualified audit report for the reason that an amount of long-term equity investment and profit/loss thereupon is calculated on the basis of statements of the invested company that have not been certified by a CPA, and the certifying CPA fully discloses in the audit report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned invested company is a major subsidiary included in the preparation of the consolidated statement or a subsidiary of a financial holding company, its semi-annual financial report shall also be reviewed or audited by a CPA in accordance with applicable laws and regulations.
4. Violation of relevant rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
5. Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
6. An application for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
7. Half or more of the directors have changed, such that any of the following circumstances exists, and it fails to make improvement within a specified time period ordered by the TWSE:
(1) The shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing.
(2) The newly appointed directors, supervisors, or president meet any of the conditions under Article 9, paragraph 1, subparagraph 8 of the TWSE Rules Governing the Review of Securities Listings.
8. The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
9. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
10. After a demerger, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, paragraph 1, subparagraph 2 or Article 5, subparagraph 1, respectively, of the Rules Governing the Review of Securities Listings.
11. The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as the result of share conversion, sale and assignment, transfer of business, or demerger, this shall not apply within 1 year of the date of listing for trading.
12. Failure to abide by an undertaking to purchase the shares of minority shareholders of a TWSE listed (or GTSM listed) subsidiary in which it has shareholding of more than 70 percent.
13. Failure to handle shareholder services matters in compliance with Article 44, paragraph 3, or discovery in an audit by Taiwan Depository & Clearing Corporation of deficiencies and failure to make corrections by a deadline imposed for making corrections for a serious violation in a specific case.
14. Where explanations given in a press conference concerning material information fail to clarify points in question, and the TWSE deems it necessary to protect the rights and interests of investors.
15. Upon other necessary reasons as determined by the TWSE.
If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may resume trading of the company's securities by the normal trading method:
1. Where the change of trading method was ordered pursuant to subparagraph 1 of the preceding paragraph, the individual financial reports for the most recent two periods registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report, and the operations for exchange of securities upon capital reduction are completed.
2. Where the change of trading method was ordered pursuant to subparagraph 2 of the preceding paragraph, and the shareholders meeting has been held.
3. Where the change of trading method was ordered pursuant to subparagraph 3 of the preceding paragraph, and due to supplementation or correction, the circumstances specified in that subparagraph no longer exist.
4. Where the change of trading method was ordered pursuant to subparagraph 4 of the preceding paragraph, and disclosure proceeding is commenced in compliance with the notice.
5. After the trading method was changed pursuant to subparagraph 5 of the preceding paragraph, the preliminary injunction order was cancelled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
6. After the trading method was changed pursuant to subparagraph 6 of the preceding paragraph, the application for re-organization was withdrawn; provided that the execution period of the altered trading method shall not be less than 3 months.
7. After the trading method was changed pursuant to subparagraph 7 of the preceding paragraph, correction and improvement was made.
8. After the trading method was changed pursuant to subparagraph 8 of the preceding paragraph, the company repaid liabilities or reached settlement agreement with the creditors.
9. Within 3 months of the trading day next following the date the trading method was changed pursuant to subparagraph 9 of the preceding paragraph, the listed company has completed any of the remedial procedures enumerated herein below, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by the TWSE. The form shall be signed and certified by a CPA and a lawyer and submitted to the TWSE along with the other relevant documents and materials for approval and recordation:
(1) Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
(2) Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
(3) Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
10. Where correction or improvement has been made by the listed company within 3 months of the trading day next following the date the trading method of the securities was changed pursuant to subparagraph 10 of the preceding paragraph.
11. Where correction or improvement has been made within 3 months after the change of trading method of the securities pursuant to subparagraph 11 or subparagraph 12 of the preceding paragraph.
12. Where correction or improvement has been made after the trading method was changed pursuant to subparagraph 13 of the preceding paragraph.
13. Where the points in question have been clarified after the trading method was changed pursuant to subparagraph 14 of the preceding paragraph, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least 3 months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
14. After the trading method was changed pursuant to subparagraph 15 of the preceding paragraph, correction or improvement is made upon the request of the TWSE.
Where the TWSE changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where the TWSE restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within 1 month of such action, the TWSE shall report such action to the Competent Authority for recordation.
If the listed company under Chapter IV and IV-1 is a holding company or a TWSE primary listed company, its net worth refers to the amount of shareholders' equity stated on the consolidated financial report, less minority interest.
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Article 50
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If any of the following circumstances applies to a listed company, the TWSE shall in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to suspend the trading of such securities, or such company may apply for delisting pursuant to paragraph 5 of Article 50-1; provided, where the circumstance in subparagraph 2 applies to a listed company, the TWSE may first proceed to announce suspension of trading of its listed securities and then apply to the Competent Authority for recordation:
1. Failure to produce and file and publicly announce financial reports or financial forecasts by the deadlines provided in laws and regulations.
2. Where any condition specified in Article 282 of the Company Act exists, and a court has prohibited the transfer of its shares pursuant to subparagraph 5 of paragraph 1 of Article 287 of the Company Act.
3. Any document or information that has been submitted is suspected to be untrue, and upon the request of the TWSE to explain the matter, no explanation is provided within the prescribed time period.
4. The securities transfer institution established at the location of the TWSE is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of the TWSE to correct the situation within a time period, no correction is made.
5. The financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act was not produced pursuant to relevant laws and regulations and generally accepted accounting principles, such violations were serious and corrections or rewrites were not made within the specified time period; or the CPA certifying the publicly announced and registered semi-annual or annual financial report issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse opinion or disclaimer of opinion in the review report. Where, in a publicly announced and registered financial forecast of the listed company reviewed by a CPA, the attesting CPA issues an adverse opinion or disclaimer of opinion in the review report.
6. Violation of relevant rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
7. Where a listed company has violated the undertaking it gave when applying for listing.
8. Where a listed company, going public in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, critically delays its construction schedule or materially violates provisions prescribed in the concession contract.
9. Violation of the provisions of subparagraph 8 of paragraph 1 of Article 49, and failure to satisfy subparagraph 8 of paragraph 2 of the same Article within 3 months.
10. Violation of the provisions of subparagraph 9 of paragraph 1 of Article 49, and failure to carry out, within 3 months of the trading day next following the date the trading method was changed, remedial procedures as provided in subparagraph 9 of paragraph 2 of the same Article and to submit relevant documentary proof.
11. Loss of controlling interest, as defined in subparagraph 1 of Article 4 of the Financial Holding Company Act, in a subsidiary, where a competent authority has ordered it to make corrections within a certain period.
12. Violation of paragraph 1, subparagraph 10, subparagraph 11, or subparagraph 12 of Article 49, and inability to achieve compliance with paragraph 2, subparagraph 10, subparagraph 11, or subparagraph 12 of the same article within 3 months from the trading day next following the date of change of trading method.
13. Other events deemed necessary to suspend the trading in securities.
Where trading of the listed securities of a listed company has been suspended because of a circumstance in a subparagraph of the preceding paragraph, upon satisfying the below conditions, and being free of any other of the above circumstances, the TWSE may in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
1. Where the suspension of trading was ordered pursuant to subparagraph 1 of the preceding paragraph, and a supplementary financial report or financial forecast is duly announced and filed, and there is no audit report containing a qualified opinion or qualified review report as specified in Article 49, paragraph 1, subparagraph 3. If the financial forecast has not yet been duly announced on a make-up basis in the current fiscal year, the already announced and filed financial report for the same fiscal year may be used as a substitute.
2. Where the suspension of trading was ordered pursuant to subparagraph 2 of the preceding paragraph, and the judicial order prohibiting transfer has expired, and reorganization has not been ordered by the court, or a dismissal of application for reorganization has not been rendered pursuant to subparagraph 2 of paragraph 3 of Article 285-1 of the Company Act.
3. Where the suspension of trading was ordered pursuant to subparagraph 3 of the preceding paragraph, and corrections have been made in accordance with regulations or explanations have in fact been provided upon the request of the TWSE.
4. Where the suspension of trading was ordered pursuant to subparagraph 4 of the preceding paragraph, and substantive improvements have in fact been made in accordance with regulations.
5. Where the suspension of trading was ordered pursuant to subparagraph 5 of the preceding paragraph, and due to supplementation or correction the circumstance specified by that subparagraph no longer exists, and there is no audit report containing a qualified opinion or qualified review report as specified in Article 49, paragraph 1, subparagraph 3.
6. Where the suspension of trading was ordered pursuant to subparagraph 6 of the preceding paragraph, and corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
7. Where the suspension of trading was ordered pursuant to subparagraph 7 of the preceding paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
8. Where the suspension of trading was ordered pursuant to subparagraph 8 of the preceding paragraph, and substantive corrections or improvements have in fact been made pursuant to relevant laws and regulations.
9. Where the suspension of trading was ordered pursuant to subparagraph 9 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant regulations.
10. Where the suspension of trading was ordered pursuant to subparagraph 10 of the preceding paragraph, and remedial procedures as set forth in subparagraph 9 of paragraph 2 of the preceding article have been carried out within 6 months of the trading day next following the date of suspension of trading, and the listed company has produced relevant documentary proof that it has carried out the remediation.
11. Where the suspension of trading was ordered pursuant to subparagraph 11 of the preceding paragraph, and corrections have been made by the deadline set by the competent authority for the target industry.
12. Where the suspension of trading was ordered pursuant to subparagraph 12 of the preceding paragraph, and corrections or improvements have been made within 6 months of the trading day next following the date of suspension of trading.
13. Where suspension of trading was ordered pursuant to subparagraph 13 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant rules and regulations.
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Article 50-1
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If any of the following circumstances applies to any listed company, the TWSE shall, in accordance with Article 144 of the Securities and Exchange Act, report to and obtain the approval of the Competent Authority to delist its securities:
1. Any conditions specified in Article 9, Article 10, Article 11, paragraph 2 of Article 17, subparagraphs 1 through 8 of paragraph 1 of Article 315, or Article 397 of the Company Act or Article 21 or Article 54 of the Financial Holding Company and a relevant competent authority has revoked its company license, ordered its dissolution, or voided its approval.
2. Any conditions specified in Article 251 or Article 271 of the Company Act or the relevant authority has revoked its approval for other reasons.
3. Confirmation of bankruptcy by any court.
4. Confirmation of reorganization by any court, or denial of reorganization motion issued in accordance with subparagraph 2 of paragraph 3 of Article 285-1 of the Company Act.
5. The scope of the business of the company has changed substantially, and the TWSE believes that it is no longer appropriate for listing.
6. The total amount of its listed preferred shares is less than NT$200 million.
7. The trading of its securities has been suspended pursuant to the provisions of the preceding Article, and after 6 consecutive months trading of its securities is not resumed; or, where trading of the securities is resumed after having been suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article for less than 6 months, and, within 6 months from the resumption of trading, trading is again suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article, and the aggregate period of suspension of trading exceeds 6 months.
8. Record of refusal of financial institutions to transact with the company or of the circumstances referred to in subparagraph 9 of paragraph 1 of the preceding Article where the company has failed to carry out remedial procedures as set forth in subparagraph 9 of paragraph 2 of Article 49 and submit relevant documentary proof within 6 months of the trading day next following the date of suspension of trading. However, if the negotiable instrument is retrieved by means of a settlement within 3 months of the trading day next following the date of suspension of trading, an application may be filed with the TWSE for re-calculation of the duration of the period of suspension of trading as from a date approved by the TWSE. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials. Only one such extension may be granted.
9. Where the latest individual financial report as publicly announced and registered in accordance with Article 36 of the Securities and Exchange Act shows a negative net worth. Likewise, where a subsequently publicly announced and registered individual financial report of a non-holding company or consolidated financial report of a holding company shows a negative net worth.
10. The business of the company has completely stopped for 6 months and cannot commence quickly, or the publicly announced business revenue has been zero or negative for 6 consecutive months; provided such provisions shall not be applicable to a company, listed in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, which has no business income during the period of construction under the concession contract.
11. Any conditions specified in Article 156 of the Securities and Exchange Act exists and the Competent Authority has ordered the suspension of trading of all of its securities for at least 3 months.
12. A demerger from, or a general assignment to, or a merger with another company, where the resulting entity does not satisfy, respectively, the requirements for continued listing under Article 53-19, Article 53-10, or Article 53-2.
13. Material breach of the Agreement for Listing.
14. Final confirmation by a judicial authority that any of the following circumstances applies to the listed company:
i. The financial reports, accounting books, etc. provided by the company during the application for listing contain false and concealed items, and upon discounting for such false and concealed items, its profitability does not conform to the listing requirements; provided, the above shall not be applicable if 5 years have passed between the listing date and the date of confirmation by a judicial authority.
ii. Satisfies the proviso of the preceding sub-item, and the false and concealed items still exists at the time of the final confirmation of judgment, and upon discounting for such false and concealed items, its current revenue generating ability does not conform to the listing requirements.
15. Over 70 percent of its total issued shares or total capital is held by another TWSE listed (or GTSM listed) company.
16. Circumstances set forth in paragraph 1, subparagraph 12 of the preceding article and inability to achieve compliance with paragraph 2, subparagraph 12 of the same article within 6 months from the trading day next following the suspension of trading.
17. The competent authority for the target industry duly appoints a receiver to take receivership of the financial institution.
18. Other events requiring delisting.
If a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, or if the circumstance in subparagraph 8 of the preceding paragraph existed, and the TWSE has announced but not yet implemented the delisting of its securities, if the listed company satisfies the requirements of the respective subparagraphs below, is free from any other circumstance in the subparagraphs of the preceding paragraph, and submits an application to the TWSE together with relevant materials and evidence at least 8 business days prior to the delisting implementation date, then after filing for and receiving approval from the Competent Authority, the TWSE may publicly announce an exemption from implementation of the delisting.
1. Where a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, and it meets the supplementation requirements of paragraph 2, subparagraph 1 or 5 of the preceding Article.
2. Where, after public announcement of delisting for reasons in subparagraph 8 above, the record of refusal of transaction by a financial institution or the dishonor of a negotiable instrument because of insufficient funds on deposit has been resolved by carrying out remedial procedures as set forth in subparagraph 9 of paragraph 2 of Article 49 and submitting relevant documentary proof.
A listed company that makes full supplementations or corrections before the implementation date after its listed securities have been publicly announced for delisting shall be eligible for an exemption from implementation of delisting only if such listed company has never previously been granted a exemption from delisting based on the same reasons.
Where delisting is occasioned by the circumstances set out in subparagraph 17 of paragraph 1, after receiving the notice of receivership from the Competent Authority, the TWSE shall immediately announce that beginning from the next day the trading of the company's listed securities shall be suspended for a period of 10 days, and before the expiration of the period of suspended trading shall announce that beginning from the next day following expiration of the suspension, the securities shall be traded for 20 days under the altered trading method in periodic call auction trading, after which the listed securities shall be delisted.
A listed company applying for delisting of its securities in accordance with Article 145 of the Securities and Exchange Act shall process the application in accordance with "Procedures for Handling Applications for Delisting by Listed Companies."
Where a listed company delists in accordance with paragraph 1, subparagraph 15 herein, the listed parent company shall undertake to unconditionally purchase the remaining outstanding shares of the company.
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Article 53-7
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Where a TWSE listed company or TWSE primary listed company will undergo, as a non-surviving company, a statutory merger with any other company that is not listed on the TWSE (nor listed on the GTSM), the TWSE listed company or TWSE primary listed company shall submit an application, with relevant documentation, to the TWSE no later than 30 business days before the record date of the merger or consolidation. After the TWSE has filed for and received approval from the Competent Authority, trading of the company's securities shall be suspended beginning 2 business days prior to (and non-inclusive of) the book closure date, and its securities shall be delisted from the record date of the merger.
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Article 53-19
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If a TWSE listed company that has carried out a demerger of one or more departments capable of operating independently pursuant to applicable law wishes to continue listed trading of its TWSE listed securities, or if the existing company or newly incorporated company that acquired the business of the aforesaid department(s) after the demerger (the "transferee company of the demerger") wishes to list its securities for trading, the company shall without exception comply with the provisions of this Article, and shall carry out applicable procedures for a company demerger and for TWSE listing.
The provisions of the preceding paragraph shall also apply where a single TWSE listed company demerges simultaneously into multiple transferee companies of the demerger, or multiple TWSE listed companies carry out demergers simultaneously to a single transferee company of the demergers.
A TWSE listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies shall apply to the TWSE at least 30 business days before the record date of the demerger. Where the TWSE has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them to be free of all of the [negative] criteria set out in the subparagraphs below, the company may continue to be listed:
1. The pro forma operating revenue (including discontinued operations) or pro forma operating income (including discontinued operations) as shown on the pro forma financial statements for each of the most recent 2 accounting years excluding the financial data for the demerged department(s) and audited by a CPA, is down by 50 percent or more from the operating revenue or the operating income shown on the financial statements for the same period.
2. The pro forma operating loss (including discontinued operations) as shown on the pro forma financial statements for each of the most recent 2 accounting years excluding financial data for the demerged department(s) and audited by a CPA, is greater than the operating loss shown on the financial statements for the same period.
When a TWSE listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies files an application for continuation of listing, it shall submit an opinion of an independent expert on the share exchange ratio for the demerger, the reasonableness of the acquisition price, and the effect on the shareholders’ equity of the TWSE listed company.
Except under any of the circumstances listed below, a TWSE listed company to which any circumstance set forth in paragraph 1 or 2 applies shall file to carry out the procedures for the demerger and the capital reduction and issuance of new securities certificates as a consolidated case. The trading of its listed securities shall be suspended 10 trading days prior to the record date of the demerger and such suspension shall continue until 30 trading days (or 15 trading days if the securities are not issued in physical form) after the record date of the demerger (i.e. the record date of the capital reduction), during which period the company shall have completed the procedures for issuing the new securities certificates in accordance with Article 45 and points 1, 2, and 3 of the Procedures for the Exchange of Securities Certificates by Listed Companies :
1. Where a TWSE listed company demerges but does not carry out a capital reduction, and issue of replacement shares is unnecessary.
2. Where the demerger of the TWSE listed company does not involve subsequent confirmation of the shareholder register, or there is no difference in shareholder equity before and after the record date of the share transfer book closure, and suspension of margin purchase and short sale or compulsory covering of short sale positions are unnecessary.
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