In response to the needs for review of listings of securities, the Taiwan Stock Exchange Corporation (the "TWSE") establishes the Securities Listing Review Committee (hereinafter the "Committee") in accordance with the provisions of Article 10 of the Articles of Incorporation of the TWSE.
The Committee shall be responsible for the review of the following:
- a company's initial stock listing applications;
- reconsideration requests;
- a company's application for listing of shares in accordance with Article 53-22 or 53-23 of the TWSE Operating Rules;
- the dispositions of rejecting the financial reports of the listing applicant companythat have been attested by the CPAs are rejected for a certain period; and
- cases involving listing of securities assigned by the board of directors or chairman of the board of directors.
Where an issue is required to be submitted to the board of directors for resolution, the Committee's review conclusions or comments are submitted to the board of directors for reference and adoption only.
Members of the Committee shall include internal reviewers, external reviewers and directors of the TWSE:
- Internal reviewers: the President, Vice President, and supervisors of the Domestic Listing Department, Foreign Listing Department and Corporate Governance Department of the TWSE, provided if the supervisor of the Domestic Listing Department, Foreign Listing Department or Corporate Governance Department is unable to attend Committee meetings, the deputy supervisor of such department may act as the member of the Committee.
- External reviewers: Two specialists from the industry, one legal specialist and one finance/accounting specialist.
- Directors of the TWSE: Two directors appointed by the competent authority to be elected from among the members of the board of directors of the TWSE.
For review of issues described in Article 2, paragraph 1, subparagraphs 1, 3, 4 and 5, the Committee should be comprised of reviewers in subparagraphs 1 and 2 of the preceding paragraph. For review of issues described in Article 2, paragraph 2, subparagraph 2 , the Committee should be comprised of reviewers in subparagraphs 1 to 3 of the preceding paragraph.
When an internal reviewer is dismissed due to change of job position, his successor shall resume the position as reviewer. For external reviewers with expertise in law and finance/accounting, after an application for listing is accepted by the TWSE, a legal specialist and a finance/accounting specialist will be appointed subject to approval of the President upon written request. As for external reviewers with industrial expertise, specialists with an in-depth understanding of the industry where the applicant company undertakes business or specialists recommended by professional research institutes appointed by the TWSE, competent authority for the enterprise in question, local public or private colleges or universities and business associations of the relevant industry will be selected by the TWSE and appointed subject to approval of the President upon written request.
A meeting of the Committee shall be convened by the TWSE and chaired by the President. In the absence of the President, a Committee member appointed by the President shall chair the meeting.
All meetings of the Committee must be attended by five or more internal reviewers and four or more external reviewers, provided that for review of requests for reconsideration, in addition to the above attendees, two directors of the TWSE should also attend the meeting.
Committee members shall attend Committee meetings in person instead of by proxy. No Committee member may exercise his duties by proxyin a meeting, nor may he exercise voting rights if he leaves early. The chairperson of a meeting shall adjourn the meeting and schedule another one for re-deliberation if due to an early departure of a member the quorum in the preceding paragraph is not met.
Issues to be reviewed at the Committee shall be resolved in the following manner:
- Issues in Article 2, paragraph 1, subparagraphs 1 to 3 shall be resolved by recorded vote. Each reviewer shall be entitled to cast one vote for either approval or non-approval. If the number of votes meets the following requirements, an application for listing will be deemed approved:
- Where none of the circumstances described in Article 9, paragraph 1 of the Rules Governing Review of Securities Listings exists and there is no violation of any applicable provisions of the same rules, a majority consent of the reviewers present at the meeting is required.
- If there is a circumstance as described in Article 9, paragraph 1, (other than those in subparagraphs 8, 9 and 10) of the Rules Governing Review of Securities Listings or a violation of the applicable provisions other than those in Articles 18 and 19 of the same rules, and for requests for reconsideration, consent of two-thirds or above of the reviewers present at the meeting is required, provided that the Committee must provide specific reasons, based on comprehensive consideration, for approval of listing.
- Issues in Article 2, paragraph 1, subparagraphs 4 and 5 shall be resolved by secret ballot cast by reviewers present at a meeting and a majority consent vote is required.
The ballots used in recorded votes in the preceding paragraph shall be designed and provided by the TWSE. When casting a vote, the reviewer shall clearly indicate his approval or non-approval on his ballot and specify the reasons of approval or non-approval. A blank ballot indicating neither approval nor non-approval will be deemed a dissenting vote. Ballots will be counted and recorded by the chairperson of the meeting, who will announce the voting results and issue a resolution, which will then be put into a sealed official envelope on which the chairperson will sign and affix the chop. The envelope will be handled in confidentiality by the TWSE. When necessary, the TWSE may request to unseal the envelope and review the document inside subject to approval of the competent authority.
After conclusion of a meeting of the Committee, the administering department shall prepare and keep in file documents containing information such as the written review opinion or questions raised by the reviewers at the meeting, voting results, and list of reviewers, which may be publicly displayed.
In order to further understand the business and financial status of the applicant, the Committee may invite the applicant company and relevant personnel and the certified public accountant of the lead securities underwriter and also said underwriter’s lawyer issuing the legal opinion to meetings of the Committee as nonvoting delegates to provide explanations and answer questions, and may request relevant information such as the CPA's working papers or written explanations from these parties.
This Charter shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.