These Procedures are adopted pursuant to Article 2 of the Listing Contract for REIT and REAT Beneficial Interest Securities, which is executed between the Taiwan Stock Exchange Corporation (TSEC) and real estate securitization trustee institutions.
In these Procedures, "material information of a trustee institution" means the matters listed below:
- A trustee institution uses trust assets to borrow funds or enter into a loan contract.
- The creditor of the loan agreement in the preceding subparagraph is an insider of the trustee institution as set forth in Article 22-2 of the Securities and Exchange Act; is a blood relative of such insider within the second degree of kinship; or is a juristic person (or another juristic person controlled by the same party, or a juristic person with which the juristic person has a relationship of mutual control) where the creditor acts as a responsible person.
- A trustee institution uses trust assets to borrow funds and, within the scope of such borrowed funds, creates a real estate mortgage upon, or other security interest in, the trust assets.
- A trustee institution utilizes a REIT fund to execute a real estate or real estate-related rights transaction.
- Principal content of a trust asset assessment reported to the board of directors by the trust asset assessment committee established by a trustee institution.
- The net asset value per unit of beneficial interest in a REIT fund on the previous business day.
- The difference between the appraised value and carrying amount of trust assets is 10 percent or higher, or NT$100 million or more, and the trustee institution is required to make an adjusting entry to reflect that difference.
- A new trustee institution takes assignment of trust business or trust assets that the competent authority of the relevant industry, acting pursuant to Article 55 of the Real Estate Securitization Act, has ordered the original trustee institution to transfer.
- A trustee institution terminates a mandate contract agreement with a real estate management institution.
- A trust institution fails to distribute trust interest in accordance with a REIT contract or REAT contract.
- There is a likelihood that the conduct of a trustee institution is damaging to trust assets and a trust supervisor has requested that said conduct cease.
- A trustee institution is sanctioned by the competent authority of the relevant industry under the Real Estate Securitization Act due to violation thereof.
- A trustee institution has a negotiable instrument dishonored due to insufficient funds, is blacklisted by a financial institution, or otherwise experiences a loss of creditworthiness.
- A litigious or non-litigious matter, administrative disposition, or administrative litigation has a material influence on the trustee institution's financial or business affairs.
- A situation under any of the subparagraphs under Article 185, paragraph 1 of the Company Act exists at a trustee institution.
- There is a change of a trustee institution's chairman (or chief trustee), general manager (or president), or one-third or more of its directors (or trustees).
- A trustee institution enters into an important contract or changes material content of a business plan.
- Trust assets are insufficient to pay expenses incurred in the handling of trust affairs.
- A change to a REIT plan or REAT plan has been submitted to the competent authority of the relevant industry and granted either prior approval or effective registration.
- A REIT or REAT contract is changed, rescinded, or terminated.
- A trustee institution resigns or is dismissed; or there is an appointment of, or a petition to select, a new trustee institution.
- A trust supervisor is switched.
- A decision is made regarding the date of a beneficiaries meeting, the dates of a book closure period for the register of beneficiaries, or the date of record for a distribution of income.
- Major resolutions of a beneficiaries meeting.
- Any one of the situations set out in Article 6, paragraph 1, subparagraphs 1 through 3 of the Regulations Governing the Public Offering or Private Placement of REIT and REAT Beneficial Interest Securities by a Trustee arises at a trustee institution. (Where a trustee institution, acting pursuant to subparagraph 4 of the same article and paragraph, has notified a holder of beneficial interest securities as referred to in the preceding three subparagraphs to transfer beneficial interest securities within one month, the holder's response to the notification also qualifies as material information.)
- When a trustee institution issues a fund management performance report.
- When a material change in the real estate's annual appraised value impacts the price of the beneficial interest securities and the trustee institution shall make a public announcement at the end of the month in which such change occurs.
- When a promoter provides the holding status of beneficial interest securities to the trustee institution at the end of each quarter.
- Other circumstances having a material effect on beneficiary rights and interests or the price of beneficial interest securities.
If a situation set out in any of the subparagraphs of the preceding article arises, the trustee institution shall input the information into the TSEC-designated Internet reporting system prior to the beginning of trading hours on the first business day following either the date of occurrence or the date on which it is reported upon in the mass media, provided that where it issues a news release prior to that time, the trustee institution shall input the information at the same time. Where a trustee institution discovers that there has been a mass media report regarding a situation set forth in any of the subparagraphs of the preceding article, or that matters reported are factually inaccurate, it shall input an explanation regarding that information into the TSEC-designated Internet reporting system prior to the first business day after the day on which the media report is published.
If the TSEC discovers, either on its own or from information faxed by an investor (Attachment 1) making an inquiry with the TSEC, that a trustee institution has failed to report material information set out in Article 2, the TSEC may, as it deems necessary, fill out an "Order for Disclosure by Trustee Institution of Material Information, Form 1" (Attachment 2), furnishing the source and content of the information, and query that trustee institution's spokesperson or deputy spokesperson by facsimile or telephone. The trustee institution shall input the relevant explanation regarding the inquiry into the TSEC-designated Internet reporting system prior to the deadline set by the TSEC.
"Prior to the deadline set by the TSEC" in the preceding paragraph means if the trustee institution receives a TSEC inquiry by facsimile or telephone before 12:30 p.m. on a given business day, it shall input the explanation into the TSEC-designated Internet reporting system prior to market close; if the trustee institution receives the TSEC's inquiry by facsimile or telephone after 12:30 p.m. on a given business day, it shall input the required explanation into the TSEC-designated Internet reporting system prior to 5 p.m. on the same day.
The written investor inquiry of the first paragraph shall be filled out with the investor's true name, national ID number, address, and contact telephone number. The TSEC may use either the original document or a summary thereof in directing inquiries to the trustee institution during normal business hours.
To ensure the accuracy and universal availability of information, a trustee institution may not privately announce any information prior to an announcement of material information.
Material information reported by a trustee institution shall state in detail what has occurred and why. It shall further estimate the impact thereof, and indicate the measures to be taken in response.
If a trustee institution is unable for any other reason to input material information into the TSEC-designated Internet reporting system and instead uses an "Order for Disclosure by Trustee Institution of Material Information, Form 2" (Attachment 3) to report material information, the TSEC may publicly announce such material information in accordance with applicable requirements or disclose it through the TSEC information transmission system. The TSEC may also transmit photocopies of the aforesaid form to securities brokers for public posting at their place of business, and display it at the TSEC Public Relations Office for reference by the investing public.
Where a trustee institution violates these Procedures, the TSEC may, as the situation merits, impose a penalty of NT$30,000.
Where a penalty is imposed, the trustee institution shall remit payment to the TSEC Finance Department within five days after the date on which it receives notification thereof.
These Procedures, and any amendments hereto, shall be implemented after approval and/or recordation by the competent authority.