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Chapter Content

Title:

Regulations Governing Information to be Published in Financial Institution Prospectuses for Offering and Issuance of Securities  CH

Amended Date: 2020.03.24 
   Chapter 2 Content
      Section 2 Overview of Operations
Article 20The section on company operations shall include the following information:
1. Business activities:
A. Scope of business: Set forth the principal lines of business engaged in by the company, the share of each as a percentage of the company's total business, and new financial products planned for future development.
B. Industry overview: Describe the financial industry's current conditions and state of development, development trends for different types of financial products, and the status of competition.
C. Overview of financial product research and business development:
a. Indicate principal financial products and any new lines of business added in the past two years, and indicate their scale and profitability as of the date of publication of the prospectus.
b. List research and development expenditures incurred in the past two fiscal years and the results achieved, and briefly describe any future research and development projects.
D. Long-term and short-term business development plans.
2. Market and business overview:
A. Market analysis: Analyze the financial market's supply/demand conditions and growth, market segments and the targeted markets, competition strategies, competitive niche, and advantages and disadvantages for future development and response measures. For a financial holding company, in addition to describing the company's basic operating policies, the operation and profitability of each subsidiary shall be separately set out with respect to its market and production and sales situation.
B. Description of any material change in operating margin for a major department in the most recent two fiscal years: When the operating margin fluctuates over 20% from the previous year's rate, analyze the key factors which cause the price/volume changes and the impact on the operating margin.
C. List of principal obligors: Set forth the names of the customers to whom the amount of credit extended represents 5% or more of the company's net worth or ranks among the top fifty customers being extended credit, whichever is fewer, for any one year in the past three years and up to the quarter immediately preceding the date of publication of the prospectus, and the balance of credit extended. (Attachment 42)
D. Description of credit accepted from or (extended to) related parties: Set forth the names of the related parties from whom (or to whom) the amount of credit accepted (or extended) represents 0.1% or more of the total credit amount for any one year in the most recent three years and up to the quarter immediately preceding the publication date of the prospectus, and the balance of credit accepted (or extended). (Attachment 43)
E. The amount of funds on deposit (or under trust management) during the most recent two fiscal years: Separately set forth balances and average interest rates for funds on deposit and funds under trust management during the most recent two fiscal years and during the current fiscal up to the quarter immediately preceding the date of publication of the prospectus. (Attachment 44)
F. The amount of credit extended in the most recent two fiscal years: Separately set forth balances and average interest rates for discounts and loans, guarantees (including endorsements), and other types of credit extended during the most recent three fiscal years and during the current fiscal year up to the quarter immediately preceding the date of publication of the prospectus. (Attachment 45)
G. The amount of purchase/sale of bills and underwriting of commercial notes for the most recent two fiscal years: Set forth the transaction amount and profit amount derived from the buy/sale of bills and underwriting of commercial notes during the most recent three fiscal years and during the current fiscal year up to the quarter immediately preceding the date of publication of the prospectus. (Attachment 46)
3. Number of employees for the most recent two fiscal years: Provide statistical information on employees for the past three fiscal years and for the current fiscal year up to date of publication of the prospectus. The statistics shall be broken down according to job category, and shall include the number of employees, average age, average years of service, educational background, and professional licenses held. (Attachment 47)
4. Labor-management relations:
A. Set forth all employee benefit measures, opportunities for professional development and training, and the pension system, and the status of their implementation. Also describe any negotiations/agreements between employer and employees and any measures to safeguard employee interests.
B. Describe any loss (including any violation of the Labor Standards Act found during the labor inspection; specifying the disposition date, disposition reference No., provisions of the regulations breached, description of the violation, and the disposition) suffered by the company due to labor disputes in the most recent two fiscal years and in the current fiscal year up to the date of publication of the prospectus, and disclose an estimate for the amount of losses that have been incurred to date and may be incurred in the future, as well as response measures. If a reasonable estimate cannot be made, explain why not.
In providing the information called for in items 2.(3) and 2.(4) of the preceding paragraph, the company shall take care to maintain the confidentiality of customers' names, national identification card numbers (or company uniform invoice numbers), and account information, as required under Article 48, paragraph 2 of the Banking Act, and may use code numbers to express certain information.
Article 21For property and equipment, other real properties, or right-of-use assets therein, the following items shall be recorded:
1.Owned assets:
A.For banks and financial holding companies, provide the names, number, acquisition date, acquisition cost, re-appraised increased value and non-depreciated balance of the real properties and equipment where the acquisition cost is 10% or more of paid-in capital or NT$300 million or more; for bills finance companies, provide the same for real properties and equipment where the acquisition cost is 20% or more of paid-in capital or NT$100 million or more. The status of the real properties and equipment's use, insurance, encumbrances, and any other restriction of rights shall also be disclosed. (Attachment 48)
B.Set forth the names, lot size, premises locations, acquisition dates, acquisition costs, re-appraised increased value, non-depreciated balance amount, published value or house/apartment's appraised value, fair value and the proposed future disposition or development plans of the idle real properties and the real properties which have been held for five years or more for investment purposes. (Attachment 49)
2.Right-of-use assets: For banks and financial holding companies, provide the names, number, lease period, lessor name, original book value, and balance not yet depreciated of the right-of-use assets where the acquisition cost is 10% or more of paid-in capital or NT$300 million or more; for bills finance companies, provide the same for right-of-use assets where the acquisition cost is 20% or more of paid-in capital or NT$100 million or more. The insurance information and important stipulations of the lease shall also be disclosed. (Attachment 50)
Article 22The section on investee enterprises shall include the following items:
1.Overview of investee enterprises: Describing the names of investee enterprises, the businesses engaged in, the cost of the company's investments in such investee enterprises, book value, number of shares held, percentage of shareholding, net worth of shares, accounting treatment method, book investment profit and loss for the most recent year, distributed cash dividends and the number of the company's shares held by each investee enterprise. If there is market value information available on the investee enterprise, such market value information shall also be included. (Attachment 51)
2.Consolidated shareholding percentage: Set forth the following information on each investee enterprise: the number of shares held by the company, the number of shares held by the company's directors, supervisors, the personnel whose positions are managerial or higher, and the number of shares of the same investee enterprise which are held by the entities directly or indirectly controlled by the company. Calculate the consolidated shareholding percentage of the above categories. (Attachment 52)
3.For an exchange-listed or OTC-listed company, disclose the status of acquisition and disposal of the shares of the company by the subsidiary(ies) and the condition of pledge created for the most recent three years and up to the prospectus' publication date. The sources of funds and the impact on the company's financial performance and financial position shall also be revealed. (Attachment 53)
4.In the event of occurrence of the situations under Article 185 of the Company Act or transfer of a portion of the operations to the subsidiary(ies) for the most recent three years and up to the publication date of the prospectus, disclose any waiver of subscription related to the cash capital increase of the subsidiary(ies), the name of the subscriber, its relationship with the company, directors, supervisors, and shareholders holding 1% or more of the shares, and the number of shares subscribed.
5.List any sanctions imposed for violation of laws and regulations on the investee enterprise in which the company has invested an amount of more than 50% of the paid-in capital of such invested company, and corrective actions taken in the most recent two years.
The definition of subsidiaries under subparagraphs 3 and 4 of the preceding paragraph shall be determined by the regulations governing the preparation of financial reports for the relevant industry.
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Article 23The section on important contracts shall include all technical cooperation contracts and construction contracts that are currently effective or expired in the most recent year, and all other important contracts which are likely to impact investors' rights, and shall include the parties, major content, restrictive provisions, and the commencement and expiration/termination dates of the contracts. (Attachment 54)