Section One Allocation by Competitive Auction |
| Article 33 | When an underwriter conducts public sale to outside parties partly by competitive auction and partly by public subscription, the underwriter shall carry out the following matters after the bid opening date:
- Day One:
- File the underwriting contract for registration with the Taiwan Securities Association.
- Send award notifications, prospectuses, and payment due notices.
- Refund bid deposits for unsuccessful and disqualified bids.
- Day Two:
- Publish underwriting announcement.
- Deadline for successful bidders' payment of the award price and award processing fee to the designated bank.
- Public subscription commencement date.
- Day Three: Date of deduction of successful bidders' award prices and award processing fees. Broker's bank undertakes matters regarding the deduction of the successful bidders' award prices and award processing fees.
- Day Four:
- Date of settlement of award prices, bid processing fees, award processing fees, and confiscated deposit prices.
- Public subscription period closes.
- Deadline for subscriber's payment of subscription processing fees, subscription payments, and postage expenses for lottery winner notification to the designated bank.
- Day Five: Date of deduction of subscription processing fees, subscription payments, and postage expenses. Broker's bank undertakes matters regarding deduction of subscribers' subscription processing fees, subscription payments, and postage for lottery winner notifications.
- Day Six: Date of public drawing of lots. TWSE undertakes the public drawing of lots. TWSE produces and sends a report of winner information to each broker. TWSE compiles and reports the information to the lead underwriter for provision to subscribers for their review.
- Day Seven:
- Brokers make no-interest refunds to non-lottery winners of bid deposits and prepaid postage; the subscription processing fees of non-lottery winners are not returned.
- Day Seven: Date of settlement of subscription processing fees, subscription payments, and postage expenses.
- Underwriters shall send lottery winner notifications, prospectuses (or subscription forms), and other relevant materials to lottery winners.
- Issuer applies to the TWSE or the TPEx for a securities listing on a stock exchange or OTC market.
- Day Eight: Specified parties make payment (the lead underwriter shall ascertain prior to 12 o'clock noon on that day whether the specified parties have made payment of the price) or underwriters carry out underwriting on standby commitment basis.
- Day Nine:
- Shareholders' register is completed.
- Issuer delivers certificates of payment to the Taiwan Depository & Clearing Corporation, or company applying for listing on a stock exchange or OTC market delivers shares to the Taiwan Depository & Clearing Corporation.
- Listing of securities on a stock exchange or OTC market is publicly announced.
- Day Ten: Securities are listed on the stock exchange or OTC market.
If any of the dates set forth in any subparagraph of the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
The dates specified under paragraph 1 may be changed if necessary by applying to the Taiwan Securities Association for approval.
The award price referred to in paragraph 1 subparagraphs 2 and 3 shall be the purchase price for the securities, less the bid deposit as prescribed in Article 12 paragraph 2. In the event that the successful bidder fails to fulfill his payment obligation within the specified time period, the securities underwriter may confiscate the bid deposit, and shall subscribe on its own account, at the price offered to said successful bidder, to the units that were to have been allocated to said successful bidder.
The procedures related to the allocation of securities by competitive auction by securities firms under paragraph 1 shall be separately prescribed by the Taiwan Securities Association.
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| Article 34 | When an underwriter conducts public sale to outside parties entirely by competitive auction, the underwriter shall carry out the following matters after the bid opening date:
- Day One: File the underwriting contract for registration with the Taiwan Securities Association. Begin mailing notifications of award, prospectuses, and payment due notices. Refund bid deposits for unsuccessful and disqualified bidders.
- Day Two:Publish underwriting announcement; deadline for successful bidders' payment of the award price and award processing fee to the designated bank.
- Day Three: Date of deduction of award prices and award processing fees. Broker's bank undertakes matters regarding the deduction of the successful bidders' award prices and award processing fees.
- Day Four: Date of settlement of award prices, bid processing fees, award processing fees, and confiscated deposit prices. Issuer applies to the TWSE or the TPEx for a securities listing on a stock exchange or an OTC market.
- Day Five: Specified parties make payment; underwriter carries out underwriting on standby commitment basis.
- Day Six: Compilation of related registers is completed. Announcement of securities listing on a stock exchange or an OTC market.
- Day Seven: Securities are issued and listed on a stock exchange or an OTC market.
In a secondary distribution, the procedures set forth in subparagraphs 6 and 7 under the preceding paragraph, which are connected with application for listing of securities on a stock exchange or an OTC market, need not be carried out.
Where any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be postponed by one day, and the dates that follow shall be postponed accordingly.
The dates specified under paragraph 1 may be changed if necessary by applying to the Taiwan Securities Association for approval.
The award price referred to in paragraph 1, subparagraphs 2 and 3 shall be the purchase price for the securities, less the bid deposit as prescribed by Article 12 paragraph 2. In the event that the successful bidder fails to fulfill his payment obligation within the specified time period, the securities underwriter may confiscate the bid deposit, and shall subscribe on its own account, at the price offered to said successful bidder, to the units that were to have been allocated to said successful bidder.
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| Article 35 | In the underwriting of securities by competitive auction, the securities underwriter is limited to accepting bids from the following persons:
- ROC nationals at least 20 years of age.
- ROC institutional investors and securities investment trust funds offered by securities investment trust enterprises.
- Overseas Chinese and foreign nationals, as permitted under the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals.
- The Development Fund of the Executive Yuan, the Postal Savings System, the Public Employees Pension Fund, the Labor Pension Fund, and the Labor Insurance Fund.
- Other parties granted permission by the government.
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| Article 36 | When a securities underwriter accepts competitive auction bids, it shall obtain from each subscriber a declaration that it does not meet any of the descriptions set out in the following subparagraphs, and the underwriter shall refuse a bid if its discovers that the subscriber does meet one of the following descriptions:
- an equity-method investee of the issuing company (issuing institution);
- an investor that has equity-method investments in the issuing company (issuing institution);
- a company whose chairman or general manager is the same person as the chairman or general manager of the issuing company (issuing institution) or is the spouse thereof;
- a foundation that has received one-third or more of its paid-in endowment from the issuing company (issuing institution);
- the issuing company's (issuing institution's) directors, supervisors, general manager, assistant general manager(s), deputy assistant general managers, or any division officer serving directly under the general manager;
- the spouse of a director, a supervisor, or the general manager of the issuing company (issuing institution);
- a director, supervisor, or employee of the underwriting syndicate, or a spouse thereof;
- any person as set out in the preceding subparagraphs who participates in the offering under the name of another person (i.e. a person who meets the criteria of a de facto related party as defined in Article 2 of the Securities and Exchange Act Enforcement Rules).
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| Article 37 | Securities underwriters shall send award notifications and prospectuses to successful bidders by express registered mail or by electronic means.
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| Article 38 | Award notifications are nontransferable.
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| Article 39 | Bidding materials for disqualified bids, successful bids, and opened bids shall be retained by the securities firms for a period of one year after the opening of the bids. However, if the FSC or the Taiwan Securities Association deems it necessary, it may request an extension of the storage period.
The TWSE shall keep its bid opening records on file for five years after the bid opening.
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