| Title： |
Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings(2022.07.13) |
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Article 9
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The phrase "material labor dispute sufficient to affect normal financial and business operations of the company" as used in Article 9, paragraph 1, subparagraph 3 of the Rules refers to any one of the following circumstances:
- The occurrence of a material labor dispute.
- The occurrence of a material workplace accident due to inadequate safety or sanitation facilities, or a disposition issued with respect to violation of the Occupational Safety and Health Law requiring suspension of part or all of operations, or dangerous machinery or facilities have been installed without passing inspection, provided that where approval is obtained after an application for re-inspection, the above shall not apply.
- Failure to make payment for labor insurance premiums and default penalties following initiation of a lawsuit for the same.
The phrase "material pollution of environment sufficient to affect normal financial and business operations of the company" as used in the same subparagraph means any of the following circumstances with respect to the company or venues for its activities:
- Failure to obtain permits required by law for [pollution] discharge or installation or operation [of pollution control equipment].
- A pollution incident in which the environmental protection authority has imposed penalties accruing on a daily basis, or failure to make rectification within a specified period of time where rectification has been ordered.
- Involvement in a public nuisance incident where the company has no effective pollution control facilities, or failure to provide records of normal operation and regular maintenance of pollution prevention equipment.
- A pollution incident in which the competent authority has ordered the company to stop work, suspend operations, or terminate operations or the relevant pollution permits have been revoked.
- Careless disposal of waste materials, or failure to store, clean up, or process such materials in accordance with regulations, or a material pollution incident occurring during processing of such materials, resulting in death, serious bodily harm, or endangerment of health leading to illness.
- Designation of the land of the company designated by the competent authority of the Soil and Groundwater Pollution Remediation Act as a controlled site or a pollution remediation site due to soil or underground water pollution, unless the pollution control plan or survey and assessment plan has been approved by the environmental protection authority, the remediation fee has been entered in accordance with generally accepted accounting principles and no material impact has been caused to the operation.
- Manufacturing, processing, or importation by a juristic person of banned or counterfeited agricultural chemicals, resulting in a conclusive judgment against the responsible person.
The phrase "has not made improvement" in the same subparagraph shall mean the existence of any of the above circumstances after receipt of the company's application for listing by the TWSE.
With respect to a material environmental pollution incident as referred to in Subparagraph 2 of the Paragraph 2, the standard for determining whether rectification has been made shall be that the company has requested inspection and testing by an agency authorized by the competent environmental authority, that such agency has prepared a report on the inspection, and that the report is the basis for a report to the environmental authority on completion of rectification procedures, and further, that the company has received no additional penalty within 3 months of issuing the report.
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Article 13
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The term "has failed to prepare financial reports in accordance with relevant laws and regulations and generally accepted accounting principles" as used in Article 9, paragraph 1, subparagraph 6 of the Rules shall mean any of the following:
- The financial report is not prepared in accordance with relevant laws and regulations and generally accepted accounting principals, and a certified public accountant issues an adverse opinion or a disclaimer of opinion, or a certified public accountant issues an audit report with a qualified opinion, thereby affecting fair presentation of the financial report.
- Failure by a company to make correction in its financial report after being instructed to do so by the competent authority in a letter.
- The audit working papers of the certified public accountant are reviewed by the TWSE and found to contain a significant deficiency such that it cannot be ascertained whether fair presentation is achieved in the financial report.
The term "has failed to effectively implement its written accounting system, internal control system, or internal audit system" in the same subparagraph shall mean the occurrence of any of the following circumstances:
- During the year in which it applies for market listing, the applicant company fails to establish a sound accounting system, internal control system, or internal audit system in writing in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry or the laws and regulations relating to internal control systems.
- Where the TWSE finds, through on-site audit, that the company fails to operate in reasonable accordance with its written accounting system.
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Article 17
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The phrase "the board of directors is unable to independently exercise their functions" as used in Article 9, paragraph 1, subparagraph 9 of the Rules means none of the following circumstances may be present:
- A person serving as an independent director of the applicant company fails to satisfy any prerequisite set forth in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
- Where a person serving as independent director of the applicant company has failed to receive training of at least 3 hours per year to acquire professional knowledge in the areas of law, finance, or accounting and obtain relevant certification documents issued from any of the continuing education systems under Article 6, subparagraphs 1, 2, and 4 of the Rules Governing Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.
- Where more than one-half of the directors of the applicant company are mutually related in any of the following ways:
- Spouses.
- Relatives within the second degree of kinship.
- Representatives of the same juristic person.
The provisions of subparagraph 3 of the preceding paragraph shall also apply to the natural person who, when the government or a juristic person is the shareholder, and in its capacity as government or juristic person is elected as director, and designates a natural person as representative to exercise those functions on its behalf, and shall also apply to the government's or juristic person's representative who is elected to serve as director.
The provisions of subparagraph 3 of paragraph 1 shall not apply when the relationship set out in item 3 of that subparagraph exists between more than half of the directors and with the approval of the competent authority for the relevant industry.
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Article 29
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The phrase "any of the applicant company's board of directors is unable to independently exercise their functions" as used in Article 28-8, subparagraph 6 of the Rules means that none of the following circumstances may be present:
- A person serving as an independent director of the applicant company fails to satisfy any prerequisite set forth in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.
- Where a person serving as independent director of the applicant company has failed to receive training of at least 3 hours per year to acquire professional knowledge in the areas of law, finance, or accounting and obtain relevant certification documents issued from any of the continuing education systems under Article 6, subparagraphs 1, 2, and 4 of the Rules Governing Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.
- Where more than one-half of the directors of the applicant company are mutually related in any of the following ways:
- Spouses.
- Relatives within the second degree of kinship.
- Representatives of the same juristic person.
- The provisions of the preceding subparagraph shall also apply to the natural person who, when the government or a juristic person is the shareholder, and in its capacity as government or juristic person is elected as director, and designates a natural person as representative to exercise those functions on its behalf; and shall also apply to the government's or juristic person's representative who is elected to serve as director.
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Article 30
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Where a foreign issuer applies for primary listing on the Taiwan Innovation Board in accordance with Chapter 4 of the Rules, the “material labor dispute sufficient to affect its normal financial and business operations” as in Article 31, paragraph 1, subparagraph 3 of the Rules shall mean any of the following:
- the occurrence of a serious labor dispute
- the failure to contribute to or pay statutory labor insurance at important operation outlets
- the occurrence of a serious occupational accident due to inadequate safety or health facilities, rendering of a disposition by an administrative authority or court for violation of occupational safety and health related laws and regulations requiring the foreign issuer to suspend its operations in part or in whole, or installation of dangerous machinery or of equipment that have not passed inspection, except where re-inspection conducted by the inspection agency upon application made is passed.
The "material pollution of environment sufficient to affect its normal financial and business operations” as in the same subparagraph shall mean any of the following with respect to the company or its business activity-related venues:
- failure to obtain permits required by laws and regulations for pollution installation, operation, or discharge
- an environmental pollution event resulting in the fiscal year of the listing application or in the most recent fiscal year in the rendering by the environmental protection authority of an administrative disposition imposing successive penalties or requiring rectification within a prescribed time limit, and rectification is not completed
- a public nuisance dispute where the company has no effective pollution control equipment, or is unable to provide records of normal operation and regular maintenance of pollution prevention equipment
- an environmental pollution event in which the environmental protection authority or court orders the company to stop work or to suspend or terminate its operations, or revokes its pollution-related permits
- arbitrary disposal of waste, or failure to store, clean up, or process waste in accordance with regulations, or occurrence of a serious pollution event during the treatment process, causing death, serious physical injury, harm to human health resulting in illness
- manufacturing, processing, or importation by the juristic person of banned or counterfeit environmental agents, for which its responsible person is convicted of the violation by a final and unappealable judgment
The phrase “has not made improvement” in the same subparagraph means the continuance any of the above circumstances after the date the TWSE accepts and handles the company's listing application.
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Article 31
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Where a foreign issuer applies for primary listing on the Taiwan Innovation Board in accordance with Chapter 4 of the Rules, the failure “to effectively implement its written accounting system, internal control system, or internal audit system” as in Article 31, paragraph 1, subparagraph 5 of the Rules shall mean any of the following:
- where during the year in which the listing application is filed the company fails to establish a sound written accounting system, internal control system or internal audit system in conformity with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards, or relevant internal system laws and regulations
- where the TWSE finds in accordance with regulations governing listing review procedures that the company fails to operate reasonably under its written accounting, internal control, and internal audit systems
The failure “to prepare financial reports in accordance with relevant laws and regulations and generally accepted accounting principles” as in the same subparagraph means any of the following:
- where a financial report is not prepared in conformity with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards, and the CPA issues an audit report containing an adverse opinion or disclaimer of opinion, or the CPA issues an audit report containing a qualified opinion affecting the fair presentation of the financial report
- where the competent authority instructs the company by letter to rectify its financial reports and the company fails to do so
- where the TWSE reviews by requisition the audit working papers of the CPA and discovers significant defects therein, so it is impossible to determine whether the financial reports are a fair presentation
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