Chapter Content

Title：

Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings 

Amended Date： 2024.03.11 (Articles 4, 28-1, 40 amended,English version coming soon)
Current English version amended on 2023.09.05 
Categories： Primary Market > Review
 
   Chapter IV  Listing of Securities on the Taiwan Innovation Board
29    A domestic issuer that applies for the listing of stocks at the TIB must comply with the government’s industrial development strategies, have key core technologies and the ability to innovate or have an innovative operational model, and should meet the following qualifications:
  1. Years of establishment: Has been around for at least two years since its incorporation under the Company Act at the time of application for listing.
  2. Has issued 10 million or more shares at the time of application for listing.
  3. Market value and financial standards: Must meet one the following standards at the time of application for listing:
    1. Market value is NT$1 billion or more, total operating revenue as stated in the financial reports for the most recent four quarters is not less than NT$100 million and the applicant must prove it has the working capital sufficient for 12 months after listing in the market.
    2. For an applicant doing business in the biotechnology and pharmaceutical industry, its market value is NT$2 billion or more, and it must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market. If an applicant is developing new medicine, its core products must have passed stage 1 of a clinical trial.
    3. Market value is NT$4 billion or more, and the applicant must prove it has not less than 125 percent of the working capital required for 12 months after listing in the market.
  4. Dispersion of share ownership: The number of registered shareholders is 50 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the total issued shares, or at least 5 million shares.
  5. An applicant listed in the food industry or with income from dining and beverage services exceeding 50 percent of its total operating revenues in the most recent fiscal year must meet the requirements in the following items:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
  6. Recommended by 2 or more securities underwriters.
    A foreign issuer that applies for the listing of stocks at the TIB must meet, in addition to the requirements in the subparagraphs 2 to 6 of the preceding paragraph, the following qualifications:
  1. Meet the application regulations under the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, provided that if the people, juristic persons, group or other institutions directly or indirectly own shares or invest in the issuer for more than 30 percent of its value, or have control over the issuer, it must obtain an approval from the competent authority on a case-by-case basis.
  2. Years of establishment: The applicant or any of its subordinate companies must have 2 or more years of business records.
  3. The inspection institution under item B of subparagraph 5 of the preceding paragraph may be replaced by a laboratory or inspection institution certified by the local competent authority, international certification institution or an institution appointed by its competent authority.
    The TWSE will agree to list its stock of a domestic issuer or a foreign issuer applying for the listing of its stock at the TIB in the preceding two paragraphs only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application.
    A recommending securities underwriter should issue an evaluation opinion on the requirements on application for listing, i.e. compliance with the government’s industrial development strategies, key core technologies and the ability to innovate or an innovative operational model, in the first paragraph.
    The core products in item B of subparagraph 3 of paragraph 1 means the biotechnological and pharmaceutical products that are the focus of a domestic issuer or foreign issuer in its engagement in development, application and commercialization of new drugs at the time of application for listing.
    Article 28-2, paragraph 1 applies mutatis mutandis to the definition of securities underwriter in subparagraph 6 of paragraph 1.
    Financial reports as referred to in this chapter shall be governed mutatis mutandis by Article 7, paragraphs 1 and 2 in the case of a domestic issuer, or by Article 28-3, paragraphs 3 and 4 in the case of a foreign issuer.
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30    A foreign issuer applying for the listing of its stock at the TIB shall have five or more members in its board of directors, and a majority of these members should have a registered household in the Republic of China. Where a corporate shareholder is elected as director, the above shall apply to its beneficial owner. There should also be three or more independent directors who shall take no less than one fifth of the seats in the board. Among them, at least two independent directors should have a registered household in the Republic of China.
    Professional qualifications, restrictions on shareholding and outside employment, and determination of independence for the independent directors in the preceding paragraph shall be governed by the securities laws and regulations of the Republic of China mutatis mutandis.
    A foreign issuer applying for the primary listing of stocks at the TIB must establish an audit committee and a compensation committee. Professional qualifications, exercise of powers and duties and matters relating to these committee members shall be governed by the securities laws and regulations of the Republic of China mutatis mutandis.
31    In addition that the TWSE must reject the application of a domestic issuer, foreign issuer or its subordinate company for the listing of its stock in any of the circumstances under subparagraphs 7, 8 and 9, the TWSE may also reject the application of a domestic issuer or a foreign issuer for the listing of stocks at the TIB if any of the following circumstances exists and the TWSE decides against listing, despite that it meets the requirements on listing set forth in Article 29:
  1. Has the circumstances described in Article 156, paragraph 1, subparagraphs 1 and 2 of the Securities and Exchange At, or its act is false, fraudulent or illegal to such an extent the price of the securities after listing may be affected which is therefore likely to jeopardize the market order or public interest.
  2. Fails to have its finance or business independently separated from another person’s.
  3. Is involved in a major labor and management dispute or environmental pollution incident that would affect the company’s normal finance and business operation, and no improvement has been made.
  4. Is found to have major irregular transactions, and no improvement has been made.
  5. Has failed to effectively implement its written accounting system, internal control system or internal audit system, or failed to prepare its financial reports in accordance with applicable laws and the general accepted accounting principle, and the failure is significant.
  6. It is experiencing a serious decline in the business activities it engages in.
  7. The director, general manager or real responsible person of the applicant or its incumbent director, general manager or real responsible person has been in breach of the principle of honesty and good faith in the most recent years.
  8. The board of directors of the applicant comprises less than five members, only same-sex members, or less than three independent directors, or its independent directors take less than one-third of the seats of the board; its board of directors is unable to perform its duties independently; or it fails to establish the compensation committee in accordance with Article 14-6 of the Securities and Exchange Act and its applicable rules. Further, at least one of its elected independent directors must be a professional in accounting or finance. The above shall, however, not apply if a domestic issuer, prior to application for the listing of stocks and its stocks have not been registered with the TPEx for trading, has undertaken to complete the election of its independent directors and establish its functional committees no later than commencement of listing and trading of its stocks.
  9. Where the applicant has registered its stocks at the TPEx for trading during the fiscal year of its application for the listing and its most recent fiscal year, since its listing date, its incumbent directors and shareholders holding more than 10 percent of its total issued shares have not traded any stocks issued by the applicant at the TPEx market. The above shall, however, not apply if it engages in prelisting public sale in accordance with Article 36 or has other legitimate reasons.
  10. Where the shares of the applicant are held by a TWSE/TPEx listed company and it meets one of the following conditions, the shares transfer by the TWSE/TPEx listed company for purpose of reducing its shareholding in the applicant in the most recent three years was not done by having the company’s existing shareholders to subscribe the shares on a priority basis or otherwise in a manner not detrimental to the shareholders’ equity of the company:
    1. The applicant is an existing or newly incorporated company to which business or assets will be transferred by a TWSE/TPEx listed company after split.
    2. The applicant is a subsidiary of a TWSE/TPEx listed company in which the TWSE/TPEx listed company has reduced its direct or indirect shareholding by a total of 20 percent or more within the three years prior to the application for listing.
  11. Is otherwise deemed by the TWSE as inappropriate for listing due to business cope, nature or special circumstances.
    The provisions under all the subparagraphs of the preceding paragraph shall apply until the day before the day when its listing contract takes effect.
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32    An application for listing of its stock at the TIB by a domestic issuer or foreign issuer of the group enterprise shall be rejected if it fails to meet the following requirements, despite that it has complied with the applicable provisions of these Rules:
  1. The major business or products of the applicant and those of the other companies within the same group enterprise are not competing with each other, except where the applicant has the ability to make independent operation decisions.
  2. Where the applicant has financial business dealings or transactions with the other companies within the same group enterprise, each entity shall establish a specific written system for operating policies on finance and business between them, for approval by their respective board of directors, and shall issue a written undertaking or guarantee on the absence of irregular transactions. If there is no business dealings between them, the applicant shall issue a written statement, undertaking they will never have irregular transactions if there are business dealings between them in the future.
  3. There shall be no material irregularities in Its financial and business conditions or in its above-cited operational guidelines.
  4. It should have the development potential for independent marketing of the products to be sold to the other companies within the same group enterprise.
  5. The purchase amount in the most recent period or most recent fiscal year from the time of the application for listing from a company within the same group enterprise does not exceed 70 percent, provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
  6. The operating revenue or operating profit derived from other companies within the same group enterprise in the most recent period, and in the most recent fiscal year the time of application for listing does not exceed 50 percent, or the operating revenue derived from the use of a critical technology or asset provided by the companies mentioned above does not exceed 50 percent; provided that this provision may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
    Subparagraph 5 of the preceding paragraph may be waived if the circumstance under this subparagraph is due to characteristics of the trade, market supplies and demands, government policies or other reasonable cause.
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33    An application for listing of stocks at the TIB by a subsidiary that maintains the parent and subsidiary relationship at the time of the application shall be rejected if it fails to meet the following requirements, despite that it has complied with the applicable provisions of these Rules:
  1. The parents company and all its subsidiaries and their directors, supervisors and representatives, and shareholders holding more than 10 percent of the company’s total shares, and their related parties all together shall not hold more than 80 percent of the total issued shares of the applicant. Where the above shareholding exceeds 70 percent, there should be prelisting public sales of shares to reduce the shareholding to less than 80 percent. However, the same does not apply where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 50 million shares; or, in the case the share has no par value or the par value per share is not NT$10, where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of such shares with a net value of not less than NT$1 billion in the applicant company.
  2. Where the stocks of its parent company are traded at the TWSE/TPEx centralized securities exchange market, the pro forma operating revenues or operating income shown in the pro forma consolidated financial statements that excludes the applicant’s financial data, audited by CPA, for the most recent four quarters at the time of the application indicate no decline of over 50 percent compared to the consolidated financial statements for the current term, and no transfer of business of any major client of the parent company has occurred during the most recent two fiscal years. The above, however, may be waived if the parent company and the subsidiary engage in different types of business, conduct business in different industries or have different types of products and are not competing with each other, or it is due to other reasonable cause.
    Where a subsidiary applies for listing at the TIB in accordance with the proviso of subparagraph 3 of the preceding paragraph, when the parent company transfer shares to reduce its shareholding in the subsidiary during the three years prior to the application for listing, the shares to be transferred should be offered for subscription by existing shareholders on a priority basis or the transfer should be made in a way that will not injure the equity of the shareholders’ of the parent company.
    The proviso of the third subparagraph of paragraph 1 shall not apply where the parent company of the applicant company is a TWSE- or TPEx-listed investment holding company.
34    A domestic issuer or foreign issuer applying for the listing of stocks at the TIB shall issue a written guarantee to undertake the following:
  1. Has completed registration of non-physical securities prior to the listing, except where its stocks have been registered for trading at the TPEx.
  2. Continue to appoint the lead securities underwriter to assist its compliance with the securities laws of the Republic of China, listing contract and other regulations from the listing date until the end of the third fiscal year thereafter, or a longer period of time if the TWSE believes it is necessary the appointment should continue. When it terminates the appointment with the lead securities underwriter during the listing, it shall appoint a new securities underwriter as successor within one month of the day when termination of appointment takes effect. Where it has become a listed company or primary listed company in accordance with Article 40, the appointment contract may be terminated.
  3. During the first three fiscal years from the following year after its listing, disclose the annual report at the Internet information reporting system designated by the TWSE at the same time when submitting the written annual report, and report in writing the CPA’s project audit report for the previous year.
    In case of a foreign issuer, in addition to the preceding paragraph, it shall issue a written guarantee to further undertake the following:
  1. If the TWSE deems it necessary to audit a foreign issuer’s finance and business or fund flows, the issuer is willing to fully cooperate in the investigations conducted by the TWSE and the lawyers, CPAs or professional institutions appointed by the TWSE, and furnish all information requested by the TWSE, and agrees to pay the costs for all investigations.
  2. Important matters relating to protection of shareholders’ equity should be added in the articles of incorporation or organic documents. In case of these matters are added in the organic documents, the articles of incorporation must specify that these matters shall be separately governed by the organic documents, and the organic documents may be added and/or amended through the same procedure accordance to which the articles of incorporation may be added and/or amended. Where such addition to the articles of incorporation or organic documents is contradictory to the mandatory requirements under the laws of the jurisdiction of incorporation, information specifically about enhanced disclosure of major differences must be contained in the prospectus.
  3. It will continue to comply with the securities laws of the Republic of China, listing contract, the TWSE policies and rules and other publications after listing.
    Where the mandatory requirements under the laws of the jurisdiction where the foreign issuer is incorporated as described in the preceding paragraph contradict to the mutatis mutandis provisions of the ROC Securities and Exchange Act, mutatis mutandis application of these provisions may only be excluded to such extent that certain requirements under the Securities and Exchange Act may be waived as indicated in the public announcement of the competent authority of the ROC government.
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35    The director, general manager, core technology specialist and shareholder holding more than 5 percent of the total issued shares of a domestic issuer or foreign issuer applying for the listing of stocks at the TIB should deposit all shares held by each individual, after deducting such number of shares offered for listing and public sale, under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of stocks may be approved.
    For purpose of the preceding paragraph, core technology specialists refer to R&D officers, operation-related technology officers, and shareholders making investments in the form of patents or know-hows and holding a position in the company.
    The shares other than those offered for listing and public sale as in the first paragraph include new shares issued with increased capital received between the application date for initial listing and the date of listing for which registration of change has completed, as well as shares held for other reason. The applicant shall guarantee to deposit shares that have not been received on the date of listing under centralized custody.
    For the shares that must be deposited under centralized custody under the first paragraph, one fourth of them may be withdrawn after full six months from the first day of listing and trading. Another one fourth may be further withdrawn at the end of the second six-month period and so on. All the shares under centralized custody may be fully withdrawn after two full years from the first day of listing and trading.
    Where the total number of shares of a domestic issuer or a foreign issuer applying for listing under the first paragraph that are placed in central custody is assessed to exceed 50 percent of its issued shares, and the issuer has paid-in capital of at least NT$10 billion, if the portion of the number of shares required to be placed in central custody exceeding the above 50 percent of issued shares has been pledged to a financial institution by the director or shareholder of the issuer who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in central custody; provided, if the pledge is released during the custody period, the director and major shareholder shall deposit the same amount of shares into central custody; or, if the subject of the pledge is disposed by the financial institution, the applicant shall contact other directors or shareholders to deposit the same amount of shares into central custody.
    Shareholders required to deposit their shares under centralized custody under the first paragraph shall not rescind the contract prior to expiry of the term of custody. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
    The first paragraph does not apply to directors and shareholders being government authorities, government-owned enterprises, or having obtained approval from the competent authority of a target business for the sale of the shares held by them rendering the placing of such shares in central custody inadvisable.
36    A domestic issuer filing an initial application for listing of its common stocks at the TIB shall appoint a securities underwriter to handle prelisting public sale of all its shares stated in its listing application documents at the allocation ratio, after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the applicable regulations under the Company Act, through issue of new shares by cash offering in accordance with the regulations of firm commitment underwriting of securities under Article 71, paragraph 1 of the Securities and Exchange Act.
    The requirements on issue of new shares by cash offering in the preceding paragraph may apply mutatis mutandis to a foreign issuer’s initial application for listing of its common stocks at the TIB for prelisting public sale, when the issuer shall appoint a securities underwriter to handle the sale of these shares after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the articles of incorporation.
    The value of shares reserved for subscription by the company’s employees as in the two preceding paragraphs shall not exceed 15 percent of the total new shares issued by cash offering.
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37    After its listing contract takes effect, a domestic issuer or foreign issuer applying for the listing of stocks at the TIB shall engage in public sale in accordance with the preceding article. If the stocks applied for listing are not offered for trading at the market within three months after the date of the notice sent by the TWSE, its listing contract shall be withdrawn with the competent authority being notified of the withdrawal. Where a request for extension with legitimate reason is approved by the TWSE, a three-month extension may be allowed and only one extension may be granted, with the competent authority being notified of the extension.
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38    When a TIB listed company or a TIB primary listed company is issuing new shares of the same class, listing of these shares shall be governed by Article 139, paragraph 2 of the Securities and Exchange Act. The issued certificates of entitlement to new shares from convertible bond shall also be listed and traded at the TWSE markets in accordance with the above regulations.
    When a TIB listed company or TIB primary listed company applies for listing of stocks of a class different from its listed stocks, its application for listing may be approved if the following conditions are met:
  1. The total value of shares applied for listing exceeds NT$50 million and 5 million or more shares will be issued.
  2. It shall engage in relisting public sale in accordance with Article 36, paragraph 1 or 2.
  3. Dispersion of share ownership: The number of registered shareholders is 30 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, registered shareholders hold 5 percent or more of the all issued special shares, or at least 3 million shares.
    The requirements under paragraph 2 shall govern if a TIB listed company or a TIB primary listed company is applying for listing of stocks of a class different from its listed stocks that may be redeemed in cash upon maturity, in which case the criteria on dispersion of share ownership under subparagraph 3 shall not apply.
    A TIB listed company or primary listed company shall apply for listing of the stock warrant certificates and certificates of entitlement to new shares it issues within 15 days after the cash increase plan is reported to the competent authority and takes effect, or apply for listing of the certificates of payment within 15 days of the cash increase plan is reported to the competent authority and takes effect and all payments of shares have been received to be allowed for listed and trading at the TWSE markets.
    If a TIB listed company or a TIB primary listed company issues securities with detachable share options, it shall, after its plan has been reported to the competent authority and taken effect, apply to the TWSE for listing of detached share options. The number of units of share options it applies for listing must be 3 million or more, and these options must be offered for public sale and meet the following criteria on dispersion of share ownership before they may be listed and traded at the TWSE markets. Notwithstanding, if special shares with detachable share options fail to meet the conditions of listing of special shares under subparagraph 2, their detached share options may not be listed:
  1. If the total units of share options are less than 10 million, there should be at least 30 holders of these share options.
  2. If the total units of share options are 20 million or more, there should be at least 50 holders of these share options.
    A TIB listed company or a TIB primary listed company shall complete registration of its common shares issued at the Internet information reporting system designated by the TWSE after having exercised conversion rights or share options based on preferred shares with stock options, convertible preferred shares, bonds with share options, convertible bonds and detached share options, in which case the public sale required under Article 36 may be waived.
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39    A domestic issuer or foreign issuer engaging in private placement of securities shall not apply for initial listing of privately placed securities at the TIB during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the issuer wishes to apply for listing and trading at the TIB, it may complete the issue review procedure retrospectively with the competent authority before making the application.
    No privately placed securities of a TIB listed company or a TIB primary listed company, as well as securities allotted, converted or subscribed thereafter, shall be listed during the period when transfers of these securities are restricted under Article 43-8 of the Securities and Exchange Act. At the end of the period of restrictions, if the company wishes to apply for listing, it shall obtain an approval letter from the TWSE and then use the letter to complete the issue review procedure retrospectively with the competent authority before making the application, in which case the prelisting public sale required under Article 36 may be waived.
    A TIB listed or a TIB primary listed company must meet the following criteria when requesting an approval letter from the TWSE in accordance with the preceding paragraph:
  1. No accumulated losses are indicated in the financial reports for the most recent quarter and the most recent fiscal year.
  2. Profits before tax in the financial report meet one of the following standards:
    1. Ratio of profits before tax to share capital listed in the financial report for annual account has been above 4 percent in the most recent two fiscal years.
    2. Average ratio of profits before tax to share capital listed in the financial report for annual account in the most recent two fiscal years is above 4 percent, and profitability in the most recent fiscal year is better than the previous fiscal year.
  3. The financial reports for the most recent two fiscal years have been audited by CPA who has issued an audit report with unqualified opinion. If an audit report other than one with unqualified opinion is issued, there is no circumstance that would prevent financial report from presenting fairly.
  4. There are no circumstances under Article 31, paragraph 1, subparagraphs 1, 3, 4, 5, 7 or 11.
  5. Total number of registered shares held by all the directors is higher than the shareholding set forth under the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies.
  6. Funds from private placement of securities have been fully utilized in accordance with the fund implementation plan and reasonable effects have been created, except when there is a legitimate reason.
  7. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year is better than the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is better than the ratio for the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
    2. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, privately placed shares have not been transferred, or have been transferred to parties other than insiders or related parties for holding.
  8. Where there are profits after tax and there are no accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should not be lower than 200 percent of the ratio the fiscal year before the resolution of the shareholders’ meeting for private placement of securities, provided that due to changes in conditions of the relevant industry, the above profitability requirement does not apply if the average ratio for the three fiscal years prior to the application is not lower than 200 percent of ratio of the fiscal year or the average ratio for the three fiscal years before the resolution of the shareholders’ meeting for private placement of securities, and the average is above 4 percent:
    1. The sole purpose of the private placement is to introduce strategic investors, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    2. The purpose of the private placement is not to introduce strategic investors.
    3. When the circumstances under Articles 7 and 8 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers are likely to happen, public offering is not possible because no reasonable improvement can be made for a legitimate cause, funds are desperately needed, private placement is to take place upon the approval of the TWSE, and when an approval letter is requested, part or all privately placed shares have been transferred to insiders or related parties for holding.
    4. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  9. Where there are losses after tax or accumulated losses in the fiscal year before the shareholders’ meeting has resolved for private placement of securities to take place, in one of the following circumstances, profitability should meet the requirements under subparagraph 2 and the ratio of profits before tax to share capital listed in the financial report for annual account in the most recent fiscal year should be over 6 percent:
    1. Insiders or related parties participate in the private placement and the subscription price fails to meet the percentage requirement set forth by the competent authority.
    2. Private placement of securities is not compliant with the requirements under the directions for private placement and it is a material violation.
  10. It has otherwise satisfied the requirements of the competent authority.
    Where a TIB listed company or a TIB primary listed company has never obtained the approval letter from the TWSE in accordance with the preceding paragraph and the a special resolution for filing the retrospective public issuance with respect to a private placement of securities has been approved at the shareholders’ meeting, when the company requests an approval in accordance with paragraph 2, it may not be subject to the circumstances under subparagraph 2 of the preceding paragraph and Article 12-1, paragraph 4 or Article 28-13, paragraph 4 may respectively apply mutatis mutandis.
    Parties other than strategic investors, insiders and related parties under paragraph 3, subparagraphs 8 and 9 shall deposit the privately placed securities they hold under centralized custody at the centralized securities depository enterprise established upon approval of the competent authority before the listing of these securities. One half of these securities may be withdrawn only after full six months from the first day of listing and trading. The remaining securities may be withdrawn only after a full year from the first day of listing and trading. No rescission of contract prior to expiry of the term of custody is allowed. No shares or certificates under custody may be transferred or mortgaged. Change of status of a holder will not affect the validity of the custody.
    Where the competent authority restricts the listing and trading of the securities issued by a listed company, the privately placed securities shall not be listed before these restrictions have been removed despite that the period when transfers of these privately placed securities are restricted has expired.
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40    After one full year from the date of listing of a TIB listed company or a TIB primary listed company, it may apply to the TWSE for being relisted as listed company or primary listed company in accordance with Chapters II and III of these Rules.
    Before the company in the preceding paragraph is relisted as listed or primary listed company for listing and trading shall appoint a securities underwriter to handle prelisting public sale of all its shares stated in its listing application documents at the allocation ratio, after deducting such number of shares reserved for subscription by the company’s employees and those offered for subscription by lead securities underwriter in accordance with the applicable regulations under the Company Act, through issue of new shares by cash offering in accordance with the regulations of firm commitment underwriting of securities under Article 71, paragraph 1 of the Securities and Exchange Act.
    The shares to be allocated for public sale in the preceding paragraph are limited to shares of common stocks.
    A TIB listed company or a TIB primary listed company relisted as listed company or primary listed company shall place their shares in central custody in accordance with Articles 10 and 28-9.
    For personnel who shall place the shares in central custody in accordance with the preceding paragraph, except for those who already did so at the time of TIB listing, in which case they shall keep the shares in central custody until the expiration of the original central custody period, the rest of them shall place the shares in central custody in accordance with the regulations, and the central custody period shall be handled in accordance with the following manner:
  1. Where Article 10, paragraph 4 shall apply mutatis mutandis, all securities may be withdrawn only after full six months from the first day of listing and trading.
  2. Where Article 10, the proviso of paragraph 4 shall apply mutatis mutandis, one half of securities may be withdrawn only after full six months from the first day of listing and trading, and all securities may be withdrawn only after a full year from the first day of listing and trading.
    Under the circumstances in the preceding paragraph, the TWSE may request the relevant personnel to place the shares in central custody for the period prescribed in the preceding paragraph if it deems necessary.
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