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Title:

Procedures for Review of Listing of Exchange Traded Notes  CH

Announced Date: 2018.09.10 
Categories: Primary Market > Review
Article 1     These Procedures are established in accordance with Article 4, paragraph 3 of the Taiwan Stock Exchange Corporation Rules Governing Review of Listing of Exchange Traded Notes (the "Review Rules").
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Article 2     The Taiwan Stock Exchange Corporation (TWSE) shall follow these Procedures in processing an application for acceptance of qualifications of underlying indexes and listing of exchange traded notes (ETNs) unless otherwise provided by the laws and regulations. When there are changes to the regulations based on which these Procedures are established, the new regulations shall govern.
Article 3     Before applying for issuance of ETNs, a securities firm shall receive an approval letter for acceptance of qualifications of the underlying indexes of the ETNs. When applying for determination of qualifications of the underlying indexes of the ETNs, the securities firm shall submit the application form for acceptance of qualifications of underlying indexes of ETNs, stating the particulars to be specified, and the enclosed documents to the general mail office of the TWSE for signing for receipt by the office staff. The application will then be forwarded to the responsible department for processing. The staff handling the case, after it is accepted, shall process the application in accordance with the Procedures.
Article 4     When accepting an application for acceptance of qualifications of underlying indexes of ETNs, the TWSE will not have its responsible staff to proceed to review the application form and enclosed documents until the applicant company has paid the examination fee of NT$100,000 to the TWSE. Below is the information about the review procedure, key issues for review, index qualification acceptance meeting, and deadline to complete the review.
  1. Check documents submitted against the list of enclosures to the application form to see if all listed documents have been provided, and complete the "Inspection list to application form for acceptance of qualifications of underlying indexes of ETNs" (Schedule 1). If it is found not all documents are submitted, specify a certain period of time for submitting the missing documents. If the applicant fails to provide the requested documents, the TWSE may reject its application and notify the competent authority of the rejection.
  2. Key issues to be examined during document reviews:
    1. If the underlying indexes meet the conditions specified in Article 2 of the Regulations Governing the Issuance of Exchange Traded Notes by Securities Firms (the "Issuance Regulations").
    2. If the securities firm meets the requirements under Article 4, paragraph 2 of the Review Rules.
    3. If the index compiler meets the qualification requirements under Article 5 of the Review Rules.
    4. If components of indexes meet the required qualifications under Article 6 of the Review Rules.
    5. If components of indexes lack liquidity, whether the explanation is justifiable.
    6. Is the index licensing agreement is complete.
    7. If the securities firm has prepared its explanation in consistent with the Explanation to acceptance of qualifications of underlying indexes of ETNs (Schedule 2).
    8. Others.
  3. Index qualification review meeting: Prior to the meeting, the responsible staff shall prepare a proposal, write down the review opinion, and request to convene an index qualification acceptance meeting. After the review meeting, the staff shall prepare the meeting minutes for approval.
  4. After accepting the application for acceptance of qualifications of underlying indexes, the responsible staff of the TWSE shall within 12 business days check the particulars and information contained in the application form and enclosed documents are complete, and complete the "Inspection list to application for acceptance of qualifications of underlying indexes of ETNs" (Schedule 3), and convene an index qualification review meeting. If it is found the particulars or information are incomplete, the applicant shall be asked to provide the requested information within a specified period of time. If it fails to provide the requested information by the deadline or the additional information provided fails to meet the requirements, its application will be rejected and the competent authority will be notified of the rejection. In a special circumstance, however, where a securities firm needs to provide an additional explanation or submit other documents, the review period may be extended, subject to approval.
    If the request for an approval letter of qualifications of underlying indexes is approved as resolved at an index qualification review meeting, the TWSE will issue an approval letter and the competent authority will be notified of the approval. If the request is rejected upon resolution, the application will be dismissed and the competent authority will be notified of the dismissal.
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Article 5     A securities firm that applies for listing of ETNs to be issued to the competent authority shall pay the examination fee of NT$100,000 to the TWSE, complete the "application form for issuance of (additional) ETNs by securities firm" and the "application form for listing of ETNs", published by the competent authority, stating the particulars to be specified, and the enclosed documents to the general mail office of the TWSE for signing for receipt by the office staff. The application will then be forwarded to the responsible department for processing. The responsible staff, after accepting the application, shall perform document review in accordance with this article. Upon acceptance by the TWSE, the relevant review procedure, key issues for review, and deadline to complete review are as follows:
  1. Check documents submitted against the list of enclosures to the application form to see if all listed documents have been provided, and complete the "Inspection list to application form for listing of ETNs" (Schedule 4). If it is found not all documents are submitted, specify a certain period of time for submitting the missing documents. If applicant fails to provide the requested documents, a written reply, upon authorization, will be sent to the securities firm, indicating no approval letter for listing will be issued and its application will be rejected, and the competent authority will be notified of the rejection. The paid examination fee is not refundable.
  2. Key issues regarding the securities firm's qualification requirements to be examined:
    1. If the requirements under Article 4 of the Issuance Regulations are met.
    2. The securities firm has obtained the TWSE's approval letter for qualifications of underlying indexes, and the approval letter remains valid.
    3. Others.
  3. Key issues regarding ETNs to be examined:
    1. If the requirements under Article 9 of the Review Rules are met.
    2. If there is a circumstance under Article 11 of the Review Rules.
    3. Review its issuance plan to see if the items and information therein are in compliance with the requirements under Article 10 of the Review Rules.
    4. Review its prospectus and summary prospectus to see if the format and information therein are in compliance with the template prospectus for ETNs.
    5. Review the lawyer's opinion and the information in the schedules enclosed therewith and determine if he or she has carefully reviewed and evaluated the securities firm's issuance plan, prospectus and summary prospectus, the securities firm's various statements, and whether the securities firm has the circumstances under Article 11 of the Review Rules, and if he or she has provided the opinion that these documents are valid and the securities firm has complied with the applicable regulations, and complete the "Inspection list to lawyer's opinion on listings of ETNs" (Schedule 5).
    6. In case of ETNs that track the performance of underlying indexes on foreign exchange, if the Central Bank of the Republic of China has been notified of the application and provided with application form and documents.
    7. Others.
  4. 4. After accepting the application for issuance and listing of ENTs by a securities firm, the responsible staff of the TWSE shall within 12 business days check the particulars and information contained in the application form and enclosed documents are complete, and complete the "Review of application for issuance of (additional) ETNs" and "Inspection list to listing of ETNs" (Schedule 6), published by the competent authority. If it is found the particulars or information are incomplete, the applicant shall be asked to provide the requested information within a specified period of time. If it fails to provide the requested information by the deadline or the additional information provided fails to meet the requirements, the securities firm will receive a notice indicating no approval letter will be issued, subject to approval, and its application will be rejected, and the competent authority will be notified of the rejection. In a special circumstance, however, where a securities firm needs to provide an additional explanation or submit other documents, the review period may be extended, subject to approval.
    The TWSE will review the application for issuance of ETNs in the preceding paragraph in accordance with the applicable regulations. If the review indicates the application has met the listing requirements, the TWSE will issue an approval letter for listing, including its review opinion, and the letter will be forwarded to the competent authority.
    The approval letter for listing in the preceding paragraph shall state that the "TWSE has approved its application for listing of ETNs to be issued on the condition that its application for issuance of ENTs has been approved by the competent authority, and the ETNs it has issued continue to meet the requirements in Article 12 of the Taiwan Stock Exchange Corporation Rules Governing Review of Listing of Exchange Traded Notes".
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Article 6     After accepting an application for listing at the Taiwan Stock Exchange or Taipei Exchange, the responsible staff of the TWSE shall check if its "Application for listing of ETNs at the Taiwan Stock Exchange or Taipei Exchange" is properly completed and if all the required documents have been submitted, and perform the review of the application form and enclosed documents. Below is the information about the review procedure, key issues for review, and deadline to complete the review.
  1. Check documents submitted against the list of enclosures to the application form to see if all listed documents have been provided. If it is found not all documents are submitted, specify a certain period of time for submitting the missing documents. If the applicant fails to provide the requested documents, the TWSE may reject its application and notify the competent authority of the rejection for recordation.
  2. Key issues to be examined during document reviews: Review that if the particulars and information contained in the application form and enclosed documents are complete, if the prospectus and summary prospectus contain the most updated information, if they have been uploaded to the Market Observation Post System (MOPS), and if the application complied with the requirements under Article 12 of the Review Rules.
  3. Deadline: A securities firm shall contact the TWSE for matters relating to listing and trading not later than three business days before the date when trading of ETNs is scheduled to start. The scheduled first trading day shall not be later than 10 business days after the date of communication. After the responsible staff's review indicates the requirements have been met, an approval letter of listing will be sent, and a public announcement regarding the listing will be made two business days prior to the first trading date.
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Article 7     In the case a securities firm has issued ETNs and applies to the TWSE for listing of additional ETNs, after the responsible staff accepted the application, they shall check if the "application form for issuance of (additional) ETNs by securities firm" and the "application form for listing of additional ETNs", published by the competent authority, are properly completed and if all the required documents have been submitted, and perform the review of the application form and enclosed documents. Below is the information about the review procedure, key issues for review, and deadline to complete the review.
  1. Check documents submitted against the list of enclosures to the application form to see if all listed documents have been provided. If it is found not all documents are submitted, specify a certain period of time for submitting the missing documents. If the applicant fails to provide the requested documents, the TWSE may, subject to approval, issue a reply letter indicating its application will not be forwarded to the competent authority, and reject its application and notify the competent authority of the rejection.
  2. Key issues to be examined during document reviews:
    1. Review the ETNs to determine if they have met the requirements under Article 16, paragraph 1 of the Review Rules.
    2. If the requirements under Article 16, paragraph 2 of the Review Rules are met.
    3. Check against the "Inspection list to lawyer's opinion on listings of additional ETNs" (Schedule 7).
    4. In case of ETNs that track the performance of underlying indexes on foreign exchange, if the Central Bank of the Republic of China has been notified of the application and provided with application form and documents.
  3. Deadline: After accepting the application for listing of additional ETNs, the responsible staff shall complete the "Review of application for issuance of (additional) ETNs" and "Inspection list to listing of additional ETNs" (Schedule 8), published by the competent authority, and perform document reviews within five business days. If the review indicates the application has met the listing requirements, the TWSE will issue an approval letter for listing, including its review opinion, and the letter will be forwarded to the competent authority. In a special circumstance, however, the TWSE may request additional time for review subject to approval.
    The approval letter for listing in the preceding paragraph shall state that the "TWSE has approved its application for listing of additional ETNs to be issued on the condition that its application for issuance of additional ENTs has been approved by the competent authority, and the ETNs it has issued continue to meet the requirements in Article 12 of the Taiwan Stock Exchange Corporation Rules Governing Review of Listing of Exchange Traded Notes".
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Article 8     When the period of listing of ETNs is to expire, the securities firm shall send a written notice to the TWSE 30 business days prior to the expiry.
    In case of early redemption of ETNs listed at the exchange or delisting required in accordance with the TWSE's regulations, the securities firm shall send a written notice, including the delisting schedule and other documents, to the TWSE on the business day immediately after the day when the requirements are met, and redeem the units held by the investors according to the schedule set forth in the prospectus. The TWSE shall issue a public announcement about delisting of the ETNs and notify the competent authority of the delisting for recordation.
Article 9     The responsible department of the TWSE shall prepare a general report covering all applications for listing of ETNs submitted in a month to the board of directors on a monthly basis.
Article 10     These Procedures shall come into force after having been submitted to and approved by the competent authority, and appendixes relating to these Procedures shall be implemented after having been submitted to and signed by the TWSE's general manager for approval. Subsequent amendments thereto shall be effected in the same manner.