| Title： |
Securities and Exchange Law Enforcement Rules(2002.03.25) |
| Date： |
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Article 1
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These Rules are prescribed in accordance with Article 182-1 of the Securities and Exchange Law (hereinafter referred to as "this Law").
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Article 2
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The term "shares held under the name of third parties" referred to in Paragraph 3 of Article 22-2 of this Law means any person who satisfies the following qualifications:
1.Directly or indirectly provides stocks to third parties, or provides funds to third parties to purchase such stocks.
2.Be entitled to manage, utilize, or dispose the stocks held under the name of such third parties.
3.Be allocated the complete or partial portions of profits or losses of stocks held under the name of such third parties.
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Article 3
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The term "the date such stocks or bonds may be issued pursuant to the Company Law" referred to in Article 34 of this Law means the date of approval for company incorporation or the date the new registration license reflecting the issuance of new shares is delivered to the company.
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Article 4
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The financial report to be publicly disclosed under Paragraph 1 of Article 36 of this Law shall specify the following items:
1.The financial report for each fiscal-year or semi-annual fiscal-year shall specify the name of the auditing accountant and his auditing opinion using the following words: "Unqualified Opinion Subsequent to Revision," "Unqualified Opinion," "Qualified Opinion," "Disclaimer of Opinion," or "Adverse Opinion." Any report containing an auditing opinion other than "Unqualified Opinion" shall specify the reasons for such opinion.
2.The quarterly financial report shall clearly specify the name of the reviewing accountant, and any special clarifying statement contained in the reviewing report.
3.In case the financial report is provided in concise form, such report shall clearly state the following words: "the financial report audited (or reviewed) by the accountant has been placed at the company for the shareholders to inspect, examine and/or copy."
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Article 5
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The publicly announced and filed operating status referred in Item 3 of Paragraph 1 of Article 36 of this Law shall include the following items:
1.The total monetary amount of invoices issued and the total operating income.
2.The total monetary amount of endorsements and guaranties provided for third parties.
3.Other items prescribed by the Competent Authority.
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Article 6
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In case the financial report to be publicly disclosed and filed under Article 36 of this Law was not made in conformance with the relevant laws and regulations and such non-conformance is to be corrected, the correction shall be completed by the filing party within the time period prescribed by the Competent Authority, and in accordance with the following procedures:
1. In case the total adjusted sum of the after tax profit and loss is equivalent to or more than NTD10,000,000, and reaches one percent (1%) of the originally audited operating revenue, or is five percent (5%) or more of the paid-in capital of the company, the financial reports shall be remade, and publicly disclosed. 2.In case the total adjusted sum of the after tax profit and loss fails to meet the preceding standard, the financial report does not need to be remade. Nevertheless, the said adjusted sum shall be reflected as the adjusted figure of the retained earnings.
The amended financial report to be publicly disclosed pursuant to the preceding paragraph shall state the reasons for such correction and specify its main differences with the original financial report.
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Article 7
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The term "any matter which has had a significant impact on shareholders rights or the price for the securities" referred to in Item 2 of Paragraph 2 of Article 36 of this Law shall mean one of the following matters:
1.The dishonoring of negotiable instruments due to insufficient deposit, the refusal to transact by banking services, or other events that result in the loss of good credit standing.
2.Litigation, non-litigious proceeding, administrative disposition, administrative dispute, security procedure, or compulsory execution, which has had a significant impact on the financial status or business of the company.
3.Serious drop in the output, complete or partial suspension of work, lease of the company factory or its main facilities, or complete or partial pledge of the material assets which has had a significant impact on the company business.
4.Events specified in any item of Paragraph 1 of Article 185 of the Company Law.
5.Judgment by the competent court to prohibit the transfer of the company's shares under Item 5 of Paragraph 1 of Article 287 of the Company Law.
6.Change in the chairman of the board, general manager, or more than one-third (1/3) of the directors of the company.
7.Change in the auditing and certifying accountant. However, where the change is due to internal adjustments in the accounting office, this [matter] shall not be included [in the above definition].
8.Execution, amendment, termination, and rescindment of the important memoranda, strategic alliances or other cooperative business plans, or important contracts, change in the material contents of the business plan, completion of new product development, successful development of trial products, and formal entrance into mass production, or acquisition of other enterprises, acquisition or assignment of patent rights, exclusive trademark use rights, copyrights, or other intellectual property rights transactions, which have a major effect on the finances or business of the company.
9.Other important events that have had significant impact on the continuation of company operation.
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Article 8
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With respect to the ratios for a capitalization of capital reserves stipulated in Paragraph 2, Article 41 of the Law, for those conducted pursuant to Paragraph 1, Subparagraph 1, Article 241 of the Company Law, the total sum of capital reserves capitalized per annum may not exceed 10 percent of the paid-in capital.
With respect to a capitalization of capital reserves conducted pursuant to Paragraph 1, Subparagraph 1, Article 241 of the Company Law, the capital reserves realized from a capital increase or other source shall be capitalized only in the following fiscal year after being registered by the company with the competent authority for approval.
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Article 8-1
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Acts of general advertising or public inducement in Article 43-7 of the Law refers to acts of offer or inducement to any unspecified persons other than persons under Article 43-6, Paragraph 1 of the Law by means of public announcement, advertisement, broadcast, video/teletext, internet, letter, telephone, visit, inquiry, presentation, seminar, or other means.
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Article 9
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The term "associated persons employed by securities firms whose duties relate to the securities business" referred to in Paragraph 1 of Article 54, and Paragraph 2 of Article 18-1 of this Law, and the persons employed by enterprises referred to in Article 18 of this Law shall include the following persons:
1.Any persons employed by securities underwriters to process the underwriting, trading negotiation, or trading implementation of securities.
2.Any persons employed by securities dealers to process the dealing and clearance and settlement of securities, stock business agency, or risk management and brokerage of derivative financial products.
3.Any persons employed by securities brokers to process the account opening, credit search/review, solicitation, recommendation and introduction, commissioning, filing, clearance, and settlement of securities trading, margin lending and short selling, or the acceptance, delivery, and custody of securities and payment.
4.Any persons employed by securities investment trust enterprises to process the offer and issuance of beneficial certificates, or the research, analysis, or advice, or implementation of related business of securities trading on behalf of the trust fund.
5.Any persons employed by the securities investment consulting enterprises to provide research, analysis, opinion, investment recommendations and introductions, , publishing, securities investment analysis activities, or lecturing services.
6.Any persons employed by the securities investment consulting enterprises or securities investment trust enterprises to provide research and analysis, investment strategy, or execution of trading in relation to discretionary account investment services.
7.Any persons employed by securities financing enterprises to process the account opening, credit search/review, clearance and settlement of securities trading, or the acceptance and delivery of securities and payment.
8.Any persons employed by securities depository enterprises to implement the custody or book entry transfer of securities, or process matters related to the custody of securities.
9.Any accountant in charge, investment analysts and internal auditors employed by the securities firms or enterprises referred to in the preceding 8 subparagraphs.
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Article 10
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The term "the interval between two such transfer is less than three months" referred to in Paragraph 3 of Article 150 of this Law shall be construed in accordance with the following definitions:
1.Each direct sale and purchase between the private parties shall be separately counted as one act.
2.The date of transfer shall be determined by the date the act of transfer takes place.In case this cannot be shown, the date of transfer shall be based on the date the transferee files the request with the company to amend the shareholders registry.
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Article 11
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The term "Other Securities With Rights" referred to in Paragraph 6 of Article 157 of the Law shall include convertible corporate bonds, corporate bonds with warrants, warrant certificates, call (put) options, stock share payment certificates, new share subscription right certificates, new share right certificates, convertible bond right certificates, and other securities with rights.
The term "profit" referred to in Paragraph 1 of Article 157 of this Law shall be calculated in accordance with the following methods:
1.Where the types of securities obtained or sold are of the same types, the price difference shall be calculated in a manner that the highest selling price matches the lowest purchasing price, the second highest selling price matches the second lowest purchasing price, and so on. Any losses resulting from the securities trading shall not be counted into the said calculation.
2. Where acquired or sold securities are of different types, the profit shall be calculated, in the case of ordinary shares, on the basis of the trade price and the number of shares traded; calculation of profit for other securities shall be based on the closing acquisition or sales prices of the ordinary shares on the day each such security was acquired or sold and the number of ordinary shares for which such security was exercisable or convertible; matching of the acquisition and sales prices shall be based on the provisions in the preceding paragraph.
3.The dividends received by the traded stocks shall be included into the price difference calculation in the preceding two subparagraphs.
4.A five-percent (5%) legally mandated interest under Article 203 of the Civil Code shall be added into the price difference. Such interest shall be calculated based on the date of last trading until the date of disgorgement to the company, in the case of subparagaphs1 and 2 of this Article, and the date cash dividends are received until the date of disgorgement to the Company, in the case of Item 2.
The commissions charged by securities firms and the securities transaction tax arising from those trading shall be deducted from the profit in calculating the profit differential of Item 1 of the preceding Paragraph.
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Article 12
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Any securities exchange, securities firm, securities investment trust enterprise, securities financing enterprise, securities investment consulting enterprise, the securities depository enterprise, or any other enterprise which operates securities-related services that applies to the Competent Authority for the issuance of a new license or renewal license shall be required to pay a licensing fee. In case the said application is made for the incorporation of such firm or enterprise, such fee shall be one four-thousandth (1/4000) of the lowest legally required paid-in capital of such corporation. In case the said application is made for the establishment of branch offices, the fee shall be two thousand New Taiwan Dollars (NTD 2,000).In case the application is made for the renewal of license, the fee shall be one thousand New Taiwan Dollars (NTD 1,000).
The preceding licensing fee shall be collected in accordance with the budgetary procedure.
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Article 13
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These Rules shall come into effect as of the date of promulgation.
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