Chapter 3 Overseas Corporate Bonds |
| Article 22 | An issuer intending to issue and offer overseas corporate bonds shall submit a Registration to Offer and Issue Overseas Corporate Bonds (Tables 12 to 17) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the registration filed with the FSC becomes effective.
An issuer who has issued and offered overseas corporate bonds and wishes to use overseas depositary receipts for the conversion of or subscription to overseas corporate bonds in accordance with conversion rules or warrant exercise rules shall file a Registration to Offer and Issue overseas depositary receipts (Tables 10 to 11) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the registration filed with the FSC becomes effective.
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| Article 23 | When registering to offer and issue overseas convertible bonds with conditions of conversion, an issuer shall specify in the issuance rules the following particulars:
- The conversion procedure.
- The method for determining the terms and conditions of the conversion (including conversion price and conversion period).
- The conversion price and its adjustment.
- Entitlements to interest and dividends in the converting year.
- The method for handling funds that are not sufficient to convert into one unit of the securities upon conversion.
- When sponsoring issuance of overseas depositary receipts for conversion purposes, the issuer shall specify the type of underlying securities evidenced by overseas depositary receipts, the volume of securities evidenced by each unit of overseas depositary receipts, the names of depositary institutions and custodian institutions, the issuance plan for the overseas depositary receipts, and other agreed-upon terms and conditions.
- Statement of issuance methods: The statement of issuance methods shall state whether all the depositary receipts shall be publicly issued or a portion thereof shall be subscribed to by a specific person or persons through negotiation; if a portion thereof shall be subscribed to by a specific person or persons, then the statement of underwriting procedures shall state why the specific person or persons are being contacted to subscribe through negotiation, the number of depositary receipts to be subscribed to by a specific person or persons, the total dollar amount thereof, and the relationship between the specific person or persons and the issuer.
- Whether the obligation to convert the shares will be fulfilled by issuing new shares or delivery of outstanding shares (must be one or the other); provided that an emerging stock company shall fulfill the obligation only by issuing new shares.
- Other important matters agreed upon by the contracting parties.
When overseas corporate bonds are converted to shares, such conversion shall not be subject to the prohibition against issuance of shares below par value as set forth in Article 140 of the Company Act.
Unless there is applicable precedent in international practice, Section 2 of Chapter III of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to matters relating to conversion of overseas corporate bonds.
Paragraph 1 shall apply to overseas convertible bonds where the issuer intends to meet future demand for bond conversions by using the shares it owns in a company listed on either the stock exchange or an OTC market, where such company meets the provisions of Article 3 of the TPEx Securities Review Regulations; unless there is applicable precedent in international practice, Article 26 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis thereto.
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| Article 24 | When registering to offer and issue overseas convertible bonds with warrants, an issuer shall specify in the issuance rules the following particulars:
- For bonds with separable warrants: the total number of warrant units to be issued and the method for calculating the price of each unit.
- The methods of determining warrant exercise conditions (including exercise price, warrant exercise period, type of shares covered by the warrant, exercise ratio, and the number of shares that each warrant provides the right to purchase).
- Adjustment of exercise price.
- Procedures for exercising warrant rights and method of payment for shares.
- Where sponsoring issuance of overseas depositary receipts to fulfill warrant obligations: the type of underlying securities evidenced by the overseas depositary receipts, their source, the number of underlying securities evidenced by each unit of overseas depositary receipts, the names of depositary institutions and custodian institutions, the issuance plan for the overseas depositary receipts, and other agreed-upon terms and conditions.
- Statement of issuance methods: The statement of issuance methods shall state whether all the depositary receipts shall be publicly issued or whether a portion thereof shall be subscribed to by a specific person or persons through negotiation; if a portion thereof shall be subscribed to by a specific person or persons, then the statement of underwriting procedures shall state why the specific person or persons are being contacted to subscribe through negotiation, the number of depositary receipts to be thus subscribed to, the total dollar amount thereof, and the relationship between the specific person or persons and the issuer.
- Whether the obligation to fulfill warrant rights will be made by issuing new shares or delivery of outstanding shares (must be one or the other) ; provided that an emerging stock company shall fulfill the obligation only by issuing new shares.
- Other important matters agreed upon by the contracting parties.
When warrant obligations are fulfilled by the issuer, such fulfillment shall not be subject to the prohibition against issuance of shares below par value as set forth in Article 140 of the Company Act.
Unless there is applicable precedent in international practice, Section 3 of Chapter III of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to matters relating to the exercise of warrants attached to overseas corporate bonds.
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| Article 25 | Where overseas depositary receipts are obtained through the conversion of overseas corporate bonds or the exercise of warrant rights, Article 16 of these Regulations shall apply mutatis mutandis when the holder of such overseas depositary receipts requests the depositary institution to redeem the overseas depositary receipts.
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| Article 26 | With regard to the offering plan of overseas corporate bonds, after the registration becomes effective, the issuer shall, within 2 days after pricing the offering, publicly announce the following matters on the information reporting website specified by the FSC:
- Total dollar amount of the offered overseas corporate bonds, the face value of each bond certificate, the issue price, and the projected date of issuance.
- Interest rate(s) for the overseas corporate bonds to be offered.
- Repayment method and term of maturity of the overseas corporate bonds to be offered.
- Type of security (where the bonds are secured).
- Conversion terms and important stipulations (where the issuance rules provide for conversion).
- Method of warrant exercise and important stipulations (where the issuance rules set forth warrant exercise conditions).
- Place of issuance and transaction.
- The reason why a specific person or persons are being contacted to subscribe through negotiation (in the event that such is the case), the total number of certificates to be subscribed to by the specific person or persons, the total dollar amount thereof, and the relationship between the specific person or persons and the issuer.
- A funds utilization plan, and a statement of the expected benefits thereof.
- The principal impact on shareholders' equity.
After the announcement of the items referred to in the preceding paragraph, should there be any change to any of these items, a public announcement of such change shall be made within 2 days after the closing of the offering.
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| Article 27 | With regard to an issuance of overseas corporate bonds, after the registration becomes effective, the issuer shall submit one of each of the following documents to the FSC within 10 days of the issuance of the overseas corporate bonds:
- A prospectus prepared in accordance with the securities acts and regulations of the country in which the bonds are offered.
- A duplicate copy of the issuance agreement.
- A duplicate copy of the deposit contract and custody contract (if the bonds are convertible or have warrants for the purchase of overseas depositary receipts).
- A duplicate copy of the paying agency agreement.
- A duplicate copy of the purchase agreement.
- A duplicate copy of the trust deed.
- An opinion letter in Chinese issued by an ROC attorney-at-law confirming that there is no material discrepancy between the issuance rules for the overseas corporate bonds and the particulars of the issuance as set forth in a registration that the FSC has allowed to become effective.
- Documentary evidence providing proof of deposit of funds collected in full.
- A list of those whose subscriptions account for 10 percent or more of the total value of the issue as well as the individual subscription prices and quantities thereof.
- Other items as specified by the FSC.
Any information that the issuer is required, pursuant to the acts and regulations of the country where the stocks are issued, to provide or disclose, shall also be filed with the FSC within 3 days after such provision.
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| Article 28 | After the issuance of overseas corporate bonds, an issuer shall, both by the 20th day and within 5 days after the end of each month, post separately a Statement of Outstanding Overseas Corporate Bonds (Table 15) as of the 15th day of the current month or as of the end of the previous month, to the information reporting website specified by the FSC and shall also submit a report to the Central Bank.
After conversion of the overseas corporate bonds or exercise of the warrants is accepted by an issuer, the issuer shall report any instances of warrant exercise by overseas investors in accordance with the requirements of the Investment Commission of the Ministry of Economic Affairs.
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