Section I Stock
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Subsection I Primary Exchange (or OTC) Listed Companies and Emerging Stock Companies
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| Article 12 | Before it may offer and issue stock, a primary exchange (or OTC) listed company or emerging stock company is required to have filed a Registration Statement for the Domestic Offering and Issuance of Stock by a foreign issuer (Attachments 1 to 5) specifying the required particulars, together with the required documentation, with the FSC and obtained effective registration therewith.
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| Article 13 | A primary exchange (or OTC) listed company that conducts a cash capital increase through a new share issue and whose listing and trading have not been restricted pursuant to Article 139, paragraph 2 of the Act shall allocate 10 percent of the total amount of new shares issued to a public issue to outside parties, provided that if a shareholders meeting resolution calls for allocation of a higher percentage, the resolution shall be complied with.
If an emerging stock company conducts a cash capital increase through a new share issue and meets the following conditions, it may allocate 10 percent of the total amount of new shares issued to a public issue to outside parties, provided that if a shareholders meeting resolution calls for allocation higher percentage, the resolution shall be complied with:
- Two full fiscal years have elapsed since incorporation registration. For an investment holding type company, the period of actual operation by its operating entity is 2 full fiscal years.
- Its final ratio of income before tax to shareholders equity in its year-end financial statement meets one of the criteria listed below, and its income before tax in the most recent fiscal year is NT$4 million or higher:
- 4 percent or higher in the most recent fiscal year, and after final accounting for the most recent fiscal year, there is no accumulated deficit.
- 2 percent or higher in both of the most recent 2 fiscal years.
- The average of the most recent two fiscal years is 2 percent or higher, and profitability in the most recent fiscal year is higher than that of the preceding fiscal year.
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| Article 14 | A primary exchange (or OTC) listed company or emerging stock company that applies for a listing on the Taiwan Stock Exchange or on the OTC market or for emerging stock registration shall appoint a domestic institution to handle foreign exchange settlement, payment of dividends, payment of tax and disclosure of information.
The dividends, bonuses or other benefits distributed to domestic shareholders by a primary exchange (or OTC) listed company or emerging stock company shall be paid in the same currency as that quoted on the listing.
Foreign exchange proceeds/payments or foreign exchange transactions that arise in connection with the matters set forth in the preceding paragraph shall be handled by a shareholder services agent in accordance with the applicable provisions of the Statute for Regulation of Foreign Exchange.
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| Article 15 | The following particulars shall be specified in the stock offering plan:
- Purpose of the offering.
- Total number of stocks to be issued, method for determining the issue price per share and total dollar amount.
- Method of underwriting and intended place of listing.
- In case of new share issuance for cash injection, the use of proceeds and the projected benefits to be derived therefrom.
- If the purpose of the issuance is issuance of new shares in connection with a merger, acquiring shares of another company, or an acquisition or demerger:
- The name, amount, and counterparty of the received shares, or the acquired business or assets, and conditions and restrictions on future transfers.
- The plan's projected implementation schedule and projected completion date.
- Method for deciding the share exchange ratio and the reasonableness thereof.
- Projected benefits.
- If the counterpart of the merger, acquisition, or share exchange is an affiliated enterprise or related party, the relationship with the affiliated enterprise or related party, the reason for and necessity of selecting that affiliated enterprise or related party, and the impact on shareholders' equity shall each be specified.
- The registration, printing, certification, distribution, and delivery by book-entry transfer stock and the method for settlement of domestic transactions.
- Time frame for the offering, and the approach to be taken in case of under-subscription.
- Other matters required to be specified by the FSC.
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| Article 16 | The following particulars shall be specified in the custody contract entered into by and between a foreign custodian institution and a domestic central securities depository:
- Name, nationality and location of principal place of business of the contracting parties.
- Name, type and volume of the securities under custody.
- The procedures and manners for safe-keeping and withdrawal of securities.
- The manner for handling rescission of the agreement and amendments thereto.
- The manner for handling the destruction, damage or loss of the securities under custody.
- The custodian institution shall notify the domestic central securities depository and domestic shareholder services agent after receipt of the securities under custody.
- The fact that the governing law shall be the laws of the ROC.
- The court with jurisdiction over any litigation that may arise in connection with the custody contract; if there is any stipulation for arbitration, the details of such stipulation.
- Other important matters agreed upon by the contracting parties or required to be specified by the FSC.
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| Article 17 | A primary exchange (or OTC) listed company or emerging stock company that offers and issues stock shall prepare a prospectus with the content in the Chinese language or a Chinese-English bilingual format, provided that if the English-Chinese bilingual format is used and there is any discrepancy in the interpretation of the meaning of the text, the Chinese version shall prevail.
The content of the prospectus referred to in the preceding paragraph shall meet the requirements listed below, and additionally shall comply, mutatis mutandis, with the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses:
- The content below shall be printed prominently on the front cover of the prospectus:
- Country of registration of the issuer.
- The issuer is a company that is a foreign enterprise listed in Taiwan using New Taiwan Dollars.
- If the issuer's shares do not have a par value of NT$10 per share, the par value per share, or that the shares are no-par-value shares, shall be noted.
- An investor shall carefully read the contents of this prospectus, and shall note the risks associated with the issuer. In addition, the internal page numbers to consult for the related content that text shall be noted. (An emerging stock company shall also add a note requesting that investors carefully read the risk disclosure statement.)
- The following matters shall be printed on the inside front cover of the prospectus:
- Name of the domestic lawyer who prepared the legal opinion, and the name, address, web address, and telephone number of the law firm. If opinions of any other lawyers are used (e.g. lawyers of the country of registration and the country of the principal place of business), the above information for those lawyers shall also be disclosed together.
- Name, job title, contact telephone number, and e-mail address of the litigious and non-litigious agent within the ROC.
- The following matters shall be printed in the content of the prospectus:
- Company overview, including a company introduction, the structure of the group, and the nationalities or places of registration of the directors, supervisors, managerial officers, and greater than 10 percent shareholders.
- An explanation of any material differences from the rules of the ROC in relation to the protection of shareholder equity.
- The financial statements printed in the prospectus shall be the consolidated financial statements audited and attested by a CPA, and the CPA audit report, for the most recent 2 fiscal years as of the time of the filing for the offering and issuance of stock. If the filing date falls more than 45 days after the end of each quarter, the consolidated financial statement for the most recent quarter reviewed by a CPA, and the CPA review report, shall additionally be submitted. If, before the printing of the prospectus, there is any most recent financial statement audited by a CPA, it shall also be disclosed therewith.
A primary exchange (or OTC) listed company or emerging stock company offering and issuing stock shall deliver the prospectus to subscribers in advance.
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| Article 18 | A primary exchange (or OTC) listed company or emerging stock company that offers and issues stock -- except in the case of a company issuing stock in connection with acquiring shares of a company or merging with or acquiring a company, or an emerging stock company offering and issuing stock without conducting a public issue to outside parties -- shall engage an underwriter to conduct a public underwriting.
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| Article 19 | A primary exchange (or OTC) listed company or emerging stock company shall appoint an agent to handle shareholder services business on its behalf. The agent shall prepare and maintain custody of the shareholders' register.
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| Article 20 | After the issuance of stocks, a primary exchange (or OTC) listed company or emerging stock company shall within 10 days after the end of each month submit to the Central Bank a Report on the Liquidity of Foreign Stocks Issued Domestically by a Foreign Issuer (Attachment 38), and shall input the information to the information disclosure website specified by the FSC.
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| Article 21 | A primary exchange (or OTC) listed company or emerging stock company shall, 7 days before the date on which the regular shareholders meeting is convened, transmit an electronic file of its annual report to the information reporting website specified by the FSC. The content of the annual report shall be in the Chinese language or a Chinese-English bilingual format. However, if an English-Chinese bilingual format is used and there is any discrepancy in the interpretation of the meaning of the respective texts, the Chinese version shall prevail.
The annual report of the preceding paragraph shall contain the information listed below, and additionally shall comply, mutatis mutandis, with the Regulations Governing Information to be Published in Annual Reports of Public Companies:
- Inside front cover of the annual report:
- Board of directors name list (for independent directors domiciled in Taiwan, nationality and principal job experience shall also be specified).
- Name, title, contact phone number, and e-mail address of the designated agent within the ROC.
- Content of the annual report:
- Company overview, including company and group introductions, group structure, and risk matters.
- The matters of special note shall include an explanation of any material differences from the rules of the ROC in relation to the protection of shareholder equity.
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Subsection II Secondary Exchange (or OTC) Listed Companies |
| Article 22 | A secondary exchange (or OTC) listed company offering and issuing stock shall file a Registration Statement for the Domestic Offering and Issuance of Stock by a foreign issuer (Attachments 6 to 9) based on the nature of its case specifying the required particulars, and annexing the required supporting documents, and may proceed to the issuance only after obtaining effective registration from the FSC.
The stock for which a secondary listed company applies for exchange listing or OTC trading are limited to stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets.
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| Article 23 | Where a secondary exchange (or OTC) listed company registers the offering and issuance of stocks, the stocks in question shall carry the same rights and obligations as other stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets.
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| Article 24 | A secondary exchange (or OTC) listed company may not restrict stockholders from selling the stocks on a foreign stock exchange.
Where stocks issued in Taiwan by a secondary exchange (or OTC) listed company are sold in an overseas securities market by the investor who holds the stocks, the investor shall engage a local securities firm to process related foreign exchange proceeds/payments or foreign exchange transactions pursuant to the Statute for Regulation of Foreign Exchange.
After sale of the stocks in an overseas market, the investor may subsequently buy stocks in an overseas market and trade them on the domestic market, provided that the number of subsequently purchased and traded shares shall not exceed the number of shares originally sold.
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| Article 25 | A secondary exchange (or OTC) listed company that offers and issues stock shall prepare a prospectus. In addition to the particulars required in accordance with the laws and regulations of the foreign issuer's country of registration and the country where its shares are listed, the following particulars shall be specified in the prospectus:
- Company overview (including company and group introductions, group structure, risk matters, capital stock, and director, supervisor, managerial officer, and major shareholder information).
- Operations overview (including business scope, competitive strategy, business objectives, strategy, and plan; market, production, and sales overview; major contracts, and other matters requiring supplementary explanation).
- Issue plan and fund utilization plan (including the price-setting method for the current issue and an analysis of the fund utilization plan) and matters stipulated therein.
- Financial overview (including summary financial data, financial statements, and a review and analysis of the financial condition and operating results, for the most recent 5 fiscal years, and other important matters).
- Status of corporate governance operations and other matters requiring supplementary explanation.
- The concluding opinion of the securities underwriter's evaluation.
- A legal opinion issued by a lawyer.
- The shareholder services agent.
- Main content of the custody contract.
- Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the foreign issuer's country of registration and country in which its shares are listed.
- The highest, lowest, and average market price of the stock for the most recent 6 months on any securities trading market on which it is listed. However, if the period of listing of the underlying securities has been less than 6 months, the highest, lowest and average market prices for such period.
- Method for exercise of shareholder rights.
- Those who have retained an FSC-approved or -recognized credit rating institution to conduct a credit rating shall disclose the credit rating report issued by the credit rating institution.
- Any other important stipulations, or other matters that the FSC requires to be specified.
The draft prospectus shall be transmitted, as an electronic file in the format prescribed by the FSC, to the information disclosure website specified by the FSC and, within 30 days from the date of receipt of the notice of effective registration, the final amended prospectus shall be transmitted as an electronic file to the information disclosure website specified by the FSC.
A secondary exchange (or OTC) listed company offering and issuing stock shall deliver the prospectus to subscribers in advance.
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| Article 26 | A secondary exchange (or OTC) listed company shall appoint a shareholders services agent to prepare and maintain custody of its shareholders' register.
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| Article 27 | The provisions of Articles 14 to 16, Article 18, and Article 20 shall apply mutatis mutandis to a secondary exchange (or OTC) listed company offering and issuing stock.
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