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Amendments

Title:

Operating Rules of the Taiwan Stock Exchange Corporation  CH

Amended Date: 2024.03.11 (Articles 43 amended,English version coming soon)
Current English version amended on 2022.04.28 
Categories: Basic Laws and Regulations

Title: Operating Rules of the Taiwan Stock Exchange Corporation(2016.07.15)
Date:
Article 50     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, suspend the trading of such securities and report to the Competent Authority for recordation, or the listed company may apply for delisting pursuant to Article 50-1, paragraph 5:
  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 Article 287, paragraph 1, subparagraph 5 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 The securities transfer institution established at the location of the TWSE is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of the TWSE to correct the situation within a time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 attesting the publicly announced and registered 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 bylaws or 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 breached an 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 Article 49, paragraph 1, subparagraph 8, and failure to satisfy paragraph 2, subparagraph 8 of the same Article within 3 months.
  10. Violation of Article 49, paragraph 1, subparagraph 9, 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 paragraph 2, subparagraph 9 of the same Article and to submit relevant documentary proof.
  11. Loss of controlling interest, as defined in Article 4, subparagraph 1 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 Article 49, paragraph 1, subparagraph 10, 11, 12, or 13 and inability to achieve compliance with paragraph 2, subparagraph 10, 11, or 12 of the same article within 3 months from the business day next following the date of change of trading method.
  13. Violation of Article 49, paragraph 1, subparagraph 15, and inability to achieve compliance with paragraph 2, subparagraph 14 of the same article within 3 years from the business day next following the date of change of trading method.
  14. Change in managerial control, and a material change in the scope of business within a certain period of time before or after the change in managerial control, except in the event of a merger, private placement or public tender offer of a TWSE listed company and a TWSE (or GTSM) listed company or a TWSE (or GTSM) primary listed company according to the Business Mergers and Acquisitions Act or other laws and regulations.
  15. Where the requirements of Article 49, paragraph 2, subparagraph 15 cannot be met within two years after the securities have been placed under the altered trading method due to the circumstances in Article 49, paragraph 1, subparagraph 16.
  16. 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 Article 285-1, paragraph 3, subparagraph 2 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 or 13 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 within 6 months after trading is suspended pursuant to subparagraph 14 of the preceding paragraph, the underwriter's evaluation report has been provided and the following circumstance are met:
    1. The sum of the net pofit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 2 percent or more of the share capital stated in the financial report for the most recent period.
    2. The share capital of TWSE listed common shares is NT$300 million or more, and the number of TWSE listed common shares is 30 million shares or more.
    3. The CPA's project audit report for the internal control system is provided, with an unqualified opinion.
    4. The company is free of the conditions set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 12 of the Rules Governing the Review of Securities Listings.
    5. The requirements of Article 4, paragraph 1, subparagraphs 4 and 5 of the Rules Governing the Review of Securities Listings are met.
    6. The company's directors, supervisors, and greater than 10 percent shareholders have placed all of their common shares in the company into centralized custody (in the case of shares obained through public offering and issuance) or have provided written undertakings that they will not transfer shares (in the case of shares obtained through private placement ) and that during the period of the undertaking not to transfer shares, they shall place in centralized custody any of those shares that are approved for retrospective public issuance. They may withdraw or transfer the shares only after the requirements of this subparagraph have been met and one year has passed from the day that the normal trading method has reinstated by the TWSE for the company's securities.
  14. Within 6 months after trading is suspended pursuant to subparagraph 15 of the preceding paragraph, the sum of the net pofit before tax attributable to owners of the parent in the publicly announced and filed financial reports for the most recent four periods accounts reaches 3 percent or more of the share capital stated in the financial report for the most recent period, and the requirements of items B to F of the preceding subparagraph are met.
  15. Where suspension of trading was ordered pursuant to subparagraph 16 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant bylaws, rules, and regulations.
Article 52     Unless otherwise provided, 40 days prior to the delisting of securities by the TWSE, the TWSE shall publicly announce the delisting and inform the GTSM and the listed company that the securities may be applied for as managed stocks. However, the TWSE may shorten the time period for public announcement for delisting of the securities of a TWSE secondary listed company in special circumstances.
    The TWSE shall announce the delisting of securities in accordance with Article 50-2, Article 50-6, Article 50-7 or Chapter IV-1, 5 days prior to such event.
    After a listed company, SITE, or FTE is notified by the TWSE of the delisting of its securities, it shall make a public announcement of the matter within 2 days from the date on which it receives such notification, provided that it may be exempted from the aforesaid requirement concerning public announcement date, where for reason of maturity of the bond issue period or other exceptional circumstance, and subject to approval of the Competent Authority.
    The preceding paragraph shall apply mutatis mutandis when a trustee institution is notified by the TWSE of the delisting of its beneficial securities; when a special purpose company is notified by the TWSE of the delisting of its asset-backed securities; when a real estate securitization trustee institution is notified by the TWSE of the delisting of its REIT or REAT beneficial securities; when the master agent of an offshore fund institution is notified by the TWSE of the delisting of its offshore ETF beneficial certificates; when a foreign issuer and its depository institution are notified by the TWSE of the delisting of their Taiwan Depositary Receipts; when a secondary listed company is notified by the TWSE of the delisting of its shares; and when an issuer is notified by the TWSE of the delisting of its call (put) warrants.
Article 53-2     Where a TWSE listed company merges with a company that is neither listed on the TWSE nor on the GTSM, by using as consideration a follow-on issue (whether by public offering and issuance or private placement) of shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger remains a TWSE listed company, except in the case of a securities, financial, or insurance company with special approval from the authority in charge of the industry concerned, all the following conditions shall be met by the company that is neither listed on the TWSE nor on the GTSM:
  1. The financial data of the merged company that is neither listed on the TWSE nor the GTSM and the consolidated financial data of the merging and merged companies satisfy the profitability requirements of TWSE listed companies enumerated in Article 4 of the TWSE Rules Governing the Review of Securities Listings; provided, the above shall not apply under either of the following circumstances:
    1. The net worth per share of the surviving company, both in the most recent financial year and on the most recent pro forma financial report, is higher than the net worth per share of the original TWSE listed company. Where the above proviso is satisfied, if the TWSE listed company or the merged company that is neither TWSE listed nor GTSM listed, from the date next following the date of the balance sheet in the most recent financial report to the date the application is filed with the TWSE, undergoes any material change in capital affecting the net worth per share, such as a capital increase or reduction or distribution of dividends, the net worth per share of the surviving company shall be higher than the net worth per share of the original TWSE listed company, and the attesting CPA shall submit a review opinion following the imputed adjustment.
    2. An express opinion of the Industrial Development Bureau, Ministry of Economic Affairs is obtained concluding that the merger will improve synergy effectively.
  2. The merged company that is neither listed on the TWSE nor the GTSM is free of the circumstances specified in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 7, 8, and 12 of the TWSE Rules Governing the Review of Securities Listings.
  3. The most recent annual financial reports of the merged company that is neither listed on the TWSE nor the GTSM have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and the auditor issues an unqualified opinion.
    Where a TWSE listed company merges with a foreign company meeting the conditions set forth in the Business Mergers and Acquisitions Act, the foreign company, unless it is a TWSE (or GTSM) primary listed company or TWSE (or GTSM) secondary listed company or its stock is listed and traded on the main board of an overseas securities market approved by the Competent Authority, shall comply with the provisions of Article 53-3, subparagraph 2, and the TWSE listed company additionally shall submit the following documents:
  1. Documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
  2. An opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
  3. A written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the TWSE listed company and the foreign company, issued by a CPA other than the original attesting CPA who is approved by the Competent Authority to perform auditing and attestation of financial reports of public companies.
    For the purposes of this chapter, an overseas securities market approved by the competent authority is as defined in Article 23 of the Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.
Article 53-3     Where a TWSE primary listed company, under the laws and regulations of the country in which it is registered, merges with any other company by using as consideration a follow-on issue of new shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger is to remain a TWSE primary listed company, the TWSE primary listed company shall submit the documents prescribed in Article 53-2, paragraph 2, subparagraphs 2 and 3, and the other company shall meet all of the requirements listed below:
  1. If the other company is a domestic company that is neither listed on the TWSE nor the GTSM, it shall comply with the conditions set out in all of the subparagraphs of Article 53-2, paragraph 1.
  2. If the other company is a foreign company that is neither a TWSE (or GTSM) primary listed companynor a TWSE (or GTSM) secondary listed company, or whose stock is not listed and traded on the main board of an overseas securities market approved by the Competent Authority, it shall comply with all the conditions set out in each following item;
    1. The financial data of the merged company and the consolidated financial data of the merging and merged companies each satisfy the requirements of Article 28-1, paragraph 1, subparagraph 4 of the TWSE Rules Governing the Review of Securities Listings, unless the proviso of Article 53-2, paragraph 1, subparagraph 1 is conformed to.
    2. The company is free of the circumstances under which TWSE listing is inappropriate as specified in Article 28-8, subparagraphs 1, 3, 4, and 5 of the TWSE Rules Governing the Review of Securities Listings; and is also free of any circumstance under which there has been a material deficiency in the execution of the company's internal control system.
    3. The company's financial reports of the most recent fiscal year have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and the auditor issues an unqualified opinion.
Article 53-9     Where a TWSE listed company, pursuant to Article 27 of the Business Merger and Acquisition Act, conducts a general purchase and assumption of, or pursuant to Article 185, paragraph 1, subparagraph 3 of the Company Act or other laws or regulations, receives transfer of shares, business, or assets from, another company that is neither TWSE listed nor GTSM listed, and uses as consideration shares, or securities that may be converted into or may be used to subscribe shares, if such transaction reaches any of the following standards, that company that is neither TWSE listed nor GTSM listed shall additionally comply with the conditions set out in each subparagraph of Article 53-2, paragraph 1, and that company that is neither TWSE listed nor GTSM listed and any director, supervisor, or shareholder holding 10 percent or more of the shares thereof who has holdings of the new common shares or overseas depositary receipts issued (whether by public offering or private placement) by the TWSE listed company for such capital increase additionally shall, in accordance with the provisions of Article 53-6, deposit the share certificates into central custody, or issue a written undertaking not to redeem or transfer them within a certain period of time:
  1. If the book entry amount of the shares, or securities that may be converted into or may be used to subscribe shares, that are obtained by the unlisted company as a result of being acquired reaches 70 percent or more of the book net asset value thereof, or the shares, or securities that may be converted into or may be used to subscribe shares, that are paid by the listed company for the acquisition reach 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed company.
  2. If the total number of shares acquired from shareholders of the unlisted company reaches 70 percent or more of its issued shares.
  3. If the operating revenue or operating income or book net asset value of a division being demerged from the unlisted company to the listed company reaches 70 percent or more of its entire operating revenue or operating income or book net asset value, or reaches 10 percent or more of the entire operating revenue or operating profit or book net asset value on the listed company's pro forma financial statements.
    If the acquired company referred to in the preceding paragraph is a foreign company, Article 53-2, paragraph 2 shall apply mutatis mutandis.
    When a TWSE primary listed company, under the laws and regulations of the country in which it is registered, receives transfer of shares, business, or assets of any other company, and uses shares, or securities that may be converted into or may be used to subscribe shares, as consideration, if such transaction reaches any of the standards set out in paragraph 1, that other company shall also meet the requirements set out in each subparagraph of Article 53-3.
    When a TWSE listed company or TWSE primary listed company is to conduct an acquisition under this article, it shall complete an application form and attach the relevant documents (attachments). After the TWSE has examined and approved the application, it shall send a written opinion approving the acquisition to the company. The written opinion shall state "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of acquisition. If the registration filing fails to become effective, this approval letter shall become void."
Article 53-12     The provisions of the preceding article shall also apply in cases where a single or multiple company(ies) limited by shares or foreign company(ies) convert shares into a newly established or already TWSE listed or TWSE primary listed existing company; provided that if a company(ies) that is neither TWSE listed nor GTSM listed converts shares together therewith, the operating revenue or operating income from said unlisted company(ies) shall not exceed 50 percent of the total operating revenue or operating income on the pro forma post-conversion financial statements of the said newly established or already TWSE listed or TWSE primary listed existing company for the most recent fiscal year, and the said unlisted company(ies) limited by shares furthermore shall conform to the provisions of all the following subparagraphs:
  1. Profitability shall comply with subparagraph 3 of paragraph 1 of Article 4 of the TWSE Rules Governing the Review of Securities Listings, unless the proviso of Article 53-2, paragraph 1, subparagraph 1 is conformed to.
  2. There shall not exist any circumstance specified in subparagraphs 1, 3, 4, 6, 7, 8, or 12 of paragraph 1 of Article 9 of the TWSE Rules Governing the Review of Securities Listing.
  3. The financial report for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies and issued an unqualified opinion from such CPA.
    If any company participating in the share conversion is a foreign company, Article 53-2, paragraph 2 shall apply mutatis mutandis.
Article 53-14     When a company limited by shares or a foreign company converts its shares to another newly established company under Article 53-11 to 53-13, the TWSE listed company or TWSE primary listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the newly established company shall carry out with the TWSE the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and after the TWSE has reviewed the application for compliance with regulations, the trading of such company's(ies') originally listed securities shall be suspended 2 trading days prior to (and non-inclusive of) the book closure date, and the securities shall be delisted from the record date of the share conversion; provided, if shares of a single or multiple TWSE listed or GTSM listed companies are converted into a newly established company to form an investment holding company, the securities of the investment holding company may be listed and traded from the record date of the share conversion, but trading of the originally listed securities shall be suspended beginning 8 days before the record date of the share conversion (counting non-inclusively of that date):
  1. An Application for Listing of Shares of a Newly Established Company (TWSE Listed Company) Receiving Assignment of Shares shall be completed and filed, along with all specified attachments, with the TWSE no later than 30 trading days prior to (and non-inclusive of) the record date of the share conversion.
  2. An Application for Share Transfer Book Closure shall be completed and the TWSE shall directly make an announcement to the market of book closure of the shareholder registers of the TWSE listed companies participating in the share conversion.
    When a company(ies) limited by shares or a foreign company(ies) converts shares into another company that is an already TWSE listed existing company pursuant to Articles 53-11 to 53-13, and that already TWSE listed existing company uses as consideration shares, or securities that may be converted into or may be used to subscribe for shares, said company limited by shares or foreign company shall complete the application form in subparagraph 1 of the preceding paragraph and submit the application to the TWSE. And if the companies that are converting shares into the already TWSE listed existing company are themselves TWSE listed or TWSE primary listed companies, those companies shall do as specified in subparagraph 2 of the preceding paragraph.
    The Agreement for Listing of the securities of a newly established company, and the termination of the Agreement for Listing of the securities of the original listed company, under the preceding two paragraphs, shall be reported by the TWSE to the Competent Authority for recordation.
Article 53-28     Within 2 years from the commencement date of TWSE (or GTSM) listed trading of securities of a transferee company of a demerger of a TWSE listed company pursuant to any of Articles 53-21, 53-22 and 53-23 herein, or to any of Articles 15-22, 15-23 and 15-24 of the GreTai Securities Market Rules Governing Securities Trading on the GTSM, any transferee company of any further demerger of the TWSE listed company may not apply for listing of its securities pursuant to Article 53-21 through Article 53-23.
    Where a GTSM listed company carries out a demerger and the transferee company of the demerger applies for TWSE listing, the applicable provisions of the TWSE Regulations for the Review of Securities Listings and Procedures for the Review of Securities Listings shall be complied with.