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Taiwan Stock Exchange Corporation Procedures for the Review of Issuance of Overseas Depositary Receipts in a Foreign Over-the-Counter Market  CH

Announced Date： 2014.10.27 
Categories： Primary Market > Review
Article Content Content Search Article No. Search Legal Basis Legislative History Chinese
Article 1     These Procedures are adopted pursuant to the provisions of Article 12-1, Paragraph 1 of the Regulations Governing the Offering and Issuance of Overseas Securities by Issuers Regulation promulgated by the competent authority ("Overseas Regulation").
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Article 2     The review by TWSE of applications of listed companies for using outstanding shares to sponsor issuance of overseas depository receipts by depositary institutions in a foreign over-the-counter market ("Depositary Receipts") is governed by these Procedures, unless laws and regulations provide otherwise.
Article 3     A listed company to register with the competent authority the issuance of Depositary Receipts pursuant to Article 12-1 of the Overseas Regulation shall apply to the TWSE for an Consent to Issuance Eligibility with an application for eligibility (Attachment 1) accompanied by attachments submitted.
    The deposit contract between a listed company and a depositary institution shall state the following:
  1. Procedures prescribed by the TWSE shall govern.
  2. Mainland Area investors applying for redemption of the original shares shall comply with the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors.
  3. No person identified in Article 22-2 of the Securities and Exchange Act may issue Overseas Depositary Receipts pursuant to these Procedures.
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Article 4     An application made to the TWSE by a listed company for issuance eligibility shall conform to the following provisions:
  1. The requirements in Article 12-1 of the Overseas Regulation shall be met, and none of the circumstances for rejection as set out in Article 9 applies.
  2. The applicant is not in a prohibited or restricted industry under the Statute For Investment By Overseas Chinese and Statute For Investment By Foreign Nationals.
  3. The applicant is in an industry permitted to make investments under the Measures Governing Investment Permits for the People of the Mainland Area and is not subject to other laws and regulations that restrict the shareholding of Mainland Area investors.
  4. The applicant is a FTSE TWSE Taiwan 50 Index or FTSE TWSE Taiwan Mid-Cap 100 Index company.
    The TWSE will issue an eligibility consent if the requirements are confirmed met upon a review of the above application documents, stating that the listed company is qualified and that the consent will cease to be effective under any of the following circumstances, with a copy provided to the competent authority and the Central Bank of The Republic of China (Taiwan).
  1. Any of the circumstances from Subparagraphs (1) to (3) of the preceding paragraph applies before the registration of the issuance of Depositary Receipts with the competent authority, pursuant to Article 12-1 of the Overseas Regulation.
  2. The effective registration granted under Article 12-1 of the Overseas Regulation is revoked or voided.
  3. The deposit contract is terminated by the listed company or depositary institution.
    The applicant shall register the issuance of Depositary Receipts with the competent authority within three months of the day the consent in the preceding paragraph is received, and shall re-apply to the TWSE if it fails to so register within said prescribed period.
    The TWSE may reject an application for eligibility, with the competent authority copied, if the application documents submitted by the applicant are not complete and no cure is made within the time limit prescribed by the TWSE in a written notice of cure, or if the first paragraph is violated.
    The TWSE review period is five business days either from the day the application is received, or from the day the required documents are received in the event of cure required.
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Article 5     If a depositary institution issuing Depositary Receipts is to request a custodian institution to purchase the underlying securities evidenced by the Depositary Receipts from the exchange market or to apply to Taiwan Depository & Clearing Corporation ("TDCC") for the transfer of said securities to the Depositary Receipts account, the depositary institution shall make an application to the TWSE with an application for approval submitted (Attachment 2) on the buy order day or transfer application day. The TWSE shall pay attention to the following:
  1. None of the circumstances in Article 10 and Article 12-1, Paragraph 4 of the Overseas Regulation which entitle the competent authority to revoke or void the effective registration granted applies.
  2. No abnormal change in the stock price of the underlying securities evidenced by the Depositary Receipts occurs in the month prior to the application date.
    The TWSE will issue a written approval, with the competent authority, Central Bank of The Republic of China (Taiwan), TDCC and the listed company copied, if the conditions in the preceding paragraph are confirmed met upon inspection by the TWSE.
    The depositary institution shall issue the Depositary Receipt within three business days of the day of service of the aforementioned written approval.
    The depositary institution must pay a review fee in the amount of NT$20,000 for the initial issue of Depositary Receipts in respect of their underlying securities pursuant to the first paragraph.
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Article 6     If any of the following applies to the depositary institution applying for issuance of Depositary Receipts, the TWSE may, in addition to issuing a letter to request that cure be made with care, further notify the depositary institution of the disposition within the prescribed time limit of the underlying securities evidenced by the Depositary Receipts in the Depositary Receipts account as purchased from the exchange market:
  1. The account and number of underlying securities of the shareholders of which the depositary institution requests the custodian institution to apply to TDCC for transfer to the Depositary Receipts account do not conform to those specified in the application for approval.
  2. The number of underlying securities which the depositary institution purchases from the Depositary Receipts account via the custodian institution from the exchange market exceeds the number stated in the application for approval.
  3. The depositary institution fails to conduct the initial issue pursuant to the preceding article within six months from the day the notice of effective registration is received or within any extended period requested from the competent authority.
    The TWSE may refuse to entertain an application of the depositary institution for issuance approval for three months if any of the following circumstances applies to the depositary institution in its issuance of Depositary Receipts:
  1. The depositary institution requests a custodian institution to apply to TDCC for transfer the underlying securities evidenced by the Depositary Receipts or purchases the underlying securities from the exchange market, without applying to the TWSE for approval.
  2. The preceding paragraph is violated two or more times.
  3. Article 7 is materially violated.
Article 7     Information regarding a listed company sponsoring the issuance of Depositary Receipts shall be reported according to relevant laws and regulations. A report shall further be made if any of the following occurs:
  1. In the event of a change in its capital amount, the listed company shall report the date of registration of the change and the difference, as a result of the change, in the number of underlying securities evidenced by the Depositary Receipts that may be issued, within two days of the completion of said registration.
  2. In the event of a change in the issuance plan reported to the competent authority and that sought from the competent securities authority of the foreign place of issuance, a report shall be made on the Market Observation Post System of the TWSE concurrently.
  3. If the circumstance in Article 11, Paragraph 1, Subparagraph 7 of the Overseas Regulation applies to the Depositary Receipts after issuance, a report shall be made on the Market Observation Post System of the TWSE concurrently.
  4. If trading of the Depositary Receipts is ceased or their issuance restricted by the securities regulatory authority of the foreign country, a report shall be made on the Market Observation Post System of the TWSE concurrently.
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Article 8     These Procedures shall take effect after having been submitted to and approved by the competent authority. The attachments to these Procedures shall take effect after having been approved by the president upon written request. Subsequent amendments thereto shall be effected in the same manner.