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Chapter Content


Regulations Governing Securities Firms  CH

Amended Date: 2021.05.06 
   Chapter IV Merger
Article 46    Securities firms applying for merger shall meet the following conditions:
  1. The regulatory capital adequacy ratio has reached 200 percent or more 6 months before the merger.
  2. The pro forma consolidated regulatory capital adequacy ratio shall reach 200 percent 1 month before the application.
  3. Have not been subject to a disposition under Article 66, subparagraphs 2 to 4 of the Act or under paragraph Article 100, paragraph 1, subparagraphs 2 to 4 of the Futures Trading Act or under Article 103, subparagraphs 2 to 5 of the Securities Investment Trust and consulting Act within the last 6 months.
  4. In the most recent 1 year, the TWSE and TPEx have found, according to their inspection of the condition of internal control operations of the applicant's head office and branches to be satisfactory and meeting the standards set by the FSC.
    In the case that the securities firm applying for merger does not meet the criteria in the preceding paragraph, the FSC may approve the application as a special case based on the goals of facilitating the healthy expansion of the securities market and increasing the competitiveness of securities firms.
Article 47    Securities firms applying for merger shall provide the following documents to the FSC:
  1. The application.
  2. Merger plan: shall specify the content of the merger plan (including particulars such as the merger method, evaluation of economic efficiency, post-merger business regions, business items, business development plan, and financial forecasts for the next 3 years) and analyze the forecasted timetable, feasibility, necessity, rationality, and legality and assessment of the factors for consideration under Article 6 of the Financial Institutions Merger Act.
  3. Merger contract: in addition to the particulars required under Article 8, paragraph 2 of the Financial Institutions Merger Act, shall also include material particulars such as treatment of employee equity.
  4. Minutes of the general shareholders meetings of the institutions to survive and to be extinguished. However, a securities firm conducting a merger under Article 18, paragraph 6, or Article 19, of the Business Mergers and Acquisitions Act may substitute the minutes of the board of directors meeting.
  5. Content of the merger resolutions (board of directors meeting minutes) and documentation of publication (notification) of relevant required contract content.
  6. Information on prospective shareholders seeking to purchase shares.
  7. Certified public accountant's opinion on the reasonableness of the share conversion ratio for the merger and valuation method.
  8. An itemized report on the pro forma consolidated regulatory capital adequacy ratio at the end of the month before the merger.
  9. Balance sheets, statements of comprehensive income, inventories of assets, statements of changes in equity, and cash flow statements audited and attested by the certified public accountant for the record date of the merger share swap.
  10. Legal opinion of an attorney at law.
  11. Consent letter, or documentation, of compliance by the TWSE listed or TPEx listed securities firm with the merger-related provisions of the Operating Rules of the Taiwan Stock Exchange or the Taipei Exchange Rules Governing Securities Trading on the TPEx.
  12. Other documents required by the FSC.
    For a securities firm to be newly created by a merger, in addition to complying with requirements of the preceding paragraph, the promoters of the securities firm to be newly created shall apply to the FSC for approval of establishment, annexing the following documents:
  1. Roster of promoters.
  2. Minutes of the promoters' meeting.
  3. Certification of qualifications of presidents, vice presidents, and assistant vice presidents.
  4. Articles of incorporation of the securities firm to be newly created.
  5. Other documents required by the FSC to be submitted.
    The formats of the documents required under the preceding two paragraphs shall be prescribed by the FSC.
Article 48    Where the securities firm surviving after the merger is a TWSE listed or TPEx listed securities firm, the securities firm shall have the certified public accountant make a special auditing of its internal control system within 6 months after the merger, and after sending the report to the TWSE or the TPEx, respectively, for inspection, shall file it with the FSC for recordation.