Chapter 1 General Provisions
|
| Article 1 | These Regulations are prescribed pursuant to paragraph 4 of Article 22 of the Securities and Exchange Act ("the Act"). |
| Article 2 | Any Foreign Issuer that offers and issues securities within the territory of the Republic of China shall act in accordance with the provisions of these Regulations. |
| Article 3 | For the purposes of these Regulations, the meanings of the following terms are as defined respectively:
1. Foreign Issuer: A juristic person registered under the laws of a foreign nation, or a financial institution branch meeting the conditions set by the Financial Supervisory Commission (FSC), Executive Yuan.
2. Depositary Institution: A financial institution located within the territory of the Republic of China, which has been approved by the competent authority to engage in business relating to Taiwan Depositary Receipts.
3. Custodian Institution: Either (i) a financial institution that has entered into a custody contract or another document with a Depositary Institution, whereby the Custodian Institution maintains custody of the underlying securities represented by Taiwan Depositary Receipts; or (ii) an institution that maintains custody of securities issued by a Foreign Issuer.
4. Taiwan Depositary Receipts: Depositary receipts issued by a Depositary Institution in the Republic of China, the underlying securities of which have been placed in a Custodian Institution by a Foreign Issuer.
5. Sponsor Issuance: An act whereby a Foreign Issuer, acting in accordance with the terms of a deposit contract, assists in administering the issuance of Taiwan Depositary Receipts and provides financial information in accordance with contractual stipulations.
6. Primary exchange (or OTC) listed company: a Foreign Issuer whose issued stock has not been listed for trading on an overseas securities market, and whose stock is approved for exchange-listed or OTC-listed trading, respectively, by the Taiwan Stock Exchange Corporation ("TSEC") or the GreTai Securities Market ("GTSM").
7. Secondary exchange (or OTC) listed company: a Foreign Issuer whose issued stock is already listed for trading on an approved overseas securities market, and whose securities are approved for exchange-listed or OTC-listed trading, respectively, by the TSEC or GTSM.
8. Emerging stock company: a Foreign Issuer whose issued stock is not listed or traded on an offshore securities market, and its stock has been approved for registration by the GTSM as an emerging stock. |
| Article 4 | To offer and issue securities, a foreign issuer shall file for Effective Registration with the FSC, submitting all the relevant documents, after having obtained a consent letter from the Central Bank.
From the date the FSC and FSC-designated agencies receive the filing documents until the date of Effective Registration, the Foreign Issuer may not state or issue any financial or business forecast information to any specified or unspecified person, except for information issued pursuant to statutes or regulations. If the issuer publicly issues any information that is inconsistent with the filing documents, it shall amend the relevant materials and submit them to the FSC.
If there is any change in the particulars subsequent to Effective Registration, the amendment shall be registered promptly with the FSC.
For the purposes of these Regulations, the term "Effective Registration" refers to where a Foreign Issuer registers a planned offering and issuance with the FSC by duly submitting all required documents, with the registration to automatically become effective after a specified number of Business Days have elapsed from the date the filing documents are received by the FSC and any FSC-designated agencies, unless the required content of the filing documents is incomplete, or supplementary explanations are necessary to safeguard the public interest, or the FSC has returned the filing documents.
For the purposes of these Regulations, the term "Business Day" means days on which trading takes place in the securities markets. |
| Article 5 | Where a Foreign Issuer registers a planned offering and issuance with the FSC by duly filing all required documents, the registration will automatically become effective after twelve full Business Days from the day on which the filing documents were received by the FSC and any FSC-designated agencies, provided that the Effective Registration period shall be shortened to seven Business Days if the Foreign Issuer conducts the following:
1. Offering and issuance of ordinary corporate bonds.
2. The foreign issuer, through the TSEC or GTSM, files a primary exchange or primary OTC listing contract for its stock with the FSC, and subsequently conducts a public sale of new shares issued to effect a cash capital increase before the initial exchange or OTC listing.
The FSC may suspend an Effective Registration where the registration materials submitted by a Foreign Issuer are not complete or have not been completely filled out, or where it is necessary to do so in order to safeguard the public interest.
Where a Foreign Issuer submits incomplete registration materials or fails to fill out its registration materials completely and acts on its own to rectify such insufficiency before the FSC issues notification of the suspension of Effective Registration, the registration shall become effective after the Effective Registration period specified in paragraph 1 herein has elapsed from the day on which the materials rectifying the insufficiency were received by the FSC and any FSC-designated agencies.
Where a Foreign Issuer registers the offering and issuance of Taiwan Depositary Receipts or stocks and a subsequent change in the issue price prompts it to submit amended registration materials to the FSC and any FSC-designated agencies prior to the occurrence of Effective Registration, the registration will still become effective within the Effective Registration time period set forth under paragraph 1, and the provisions of the preceding paragraph shall not apply.
After receiving notice of suspension of Effective Registration, a Foreign Issuer may submit further materials to rectify the cause of suspension; if the FSC does not then reject the registration or notify the registrant to effect further rectification, the registration shall become effective after the Effective Registration period specified in paragraph 1 herein has elapsed from the day on which the rectified registration materials are received by the FSC and any FSC-designated agencies.
After the FSC suspends an Effective Registration, if the Foreign Issuer fails, within twelve Business Days from the day on which it receives a letter notifying it of said suspension, to act in accordance with the provisions of the preceding paragraph to apply for lifting the suspension, or it applies for lifting of the suspension but the cause of suspension has not been eliminated, the FSC may reject the registration. |
| Article 6 | Except in cases of issuance of ordinary corporate bonds or of an emerging stock company that conducts a cash capital increase through a new share issue without allocating a certain percentage of the total number of new shares for a public offering, a Foreign Issuer that files to offer and issue securities shall engage a securities underwriter to conduct an evaluation and issue an evaluation report pursuant to regulations. |
| Article 7 | The FSC may reject an offering and issuance of securities if any of the following circumstances exist:
1. The particulars registered are in violation of acts and regulations, or there are any misrepresentations or false statements contained in the application;
2. The attesting CPA issues an audit report containing a disclaimer of opinion or adverse opinion.
3. The attesting CPA issues an audit report containing a qualified opinion that affects the fair presentation of the financial report.
4. A legal opinion issued by a lawyer indicates a violation of acts or regulations has occurred that affects the offering and issuance of the securities.
5. The evaluation report issued by the securities underwriter fails to clearly indicate the feasibility, necessity, and reasonableness of the current plan to offer and issue securities.
6. Breach or non-performance of a commitment made at the time of the application for listing or OTC trading of stock, where the circumstances are serious and the problem has not been corrected.
7. The FSC deems it necessary to reject the registration or application to protect the public interest. |
| Article 8 | The FSC may void or revoke an Effective Registration for the offering and issuance of securities granted to a Foreign Issuer where any of the following circumstances is discovered:
1. where the securities have not been fully subscribed and the cash proceeds therefrom have not been fully collected within three months from the date on which the notification of Effective Registration from the FSC is received; provided that the FSC may grant an extension of three months upon application therefor with legitimate reasons and provided further that such extension shall be limited to one;
2. where the particulars registered are in violation of laws and regulations, or there are any misrepresentations or false statements contained in the application;
3. where the Foreign Issuer has failed to apply to the TSEC or GTSM, respectively, for exchange or OTC listing or for emerging stock registration, for Taiwan Depositary Receipts, stocks, or bonds, or where the securities fail to meet exchange (or OTC) listing criteria, provided that these requirements shall not apply to straight corporate bonds issued in New Taiwan Dollars denominations and for which the foreign issuer does not apply for exchange or OTC listing; or
4. where such voidance or revocation is necessary for protection of the public interest or because there has been a violation of FSC regulations.
Where an Effective Registration is obtained by a Foreign Issuer for the offering and issuance of securities but is subsequently voided or revoked by the FSC pursuant to the provisions of the preceding paragraph, securities not yet issued shall not be issued, and in case the proceeds thereof have already been collected, the Foreign Issuer shall return the proceeds, along with interest computed in accordance with law, within ten (10) days after receiving the notice of voidance or revocation from the FSC; in case securities have already been issued, the Depositary Institution shall sell the securities under the custody of the Custodian Institution and deliver the sales proceeds, after deduction of indispensable fees and expenses, to the holders of securities.
Where an Effective Registration is obtained by a Foreign Issuer for the offering and issuance of bonds or stocks but is subsequently voided or revoked by the FSC pursuant to the provisions of paragraph 1 of this Article after the collection of the proceeds, the Foreign Issuer shall return the proceeds already collected, along with interest computed in accordance with law, through the designated institution within ten (10) days after receiving the notice of voidance or revocation from the FSC. |
| Article 9 | After a Foreign Issuer has obtained an Effective Registration for the offering and issuance of securities, it shall act in accordance with the following provisions:
1. Except in cases of a Foreign Issuer issuing stock or sponsoring the issuance of Taiwan Depository Receipts in connection with receiving transfer of shares of a domestic [Taiwan] company or merging with or acquiring a domestic [Taiwan] company in accordance with law, or of one issuing straight corporate bonds, a Foreign Issuer must retain a financial institution to collect proceeds on its behalf and deposit those proceeds in the segregated account that it has opened. Before beginning to collect proceeds, it shall enter into a payment collection agreement and a payment deposit agreement with the bank that collects proceeds on its behalf and deposits them in the segregated account. Within two days from the date on which it enters into those agreements, it shall input the relevant information such as the name of that contracted bank and the date on which the contract was signed into the FSC-designated information reporting website. The collection and deposit in the segregated account of proceeds by that bank may not be handled by the same business unit of that bank. The foreign issuer may draw on those proceeds only after they are collected in full, and must input the data regarding the collection of proceeds in full into the FSC-designated information reporting website within two days after the date on which those proceeds are collected in full.
2. The certificates shall be certified unless physical certificates are not printed, and such certification may be handled in accordance with the provisions of the Rules Governing Certification of Corporate Stock and Bond Issues by Public Companies; provided, that this shall not apply where an entire issue of Taiwan Depositary Receipts is deposited in the custody of the centralized securities depository enterprise, is delivered through the book-entry system, and can only be redeemed under limited conditions.
3. If there is any change in the items of the fund utilization plan or any adjustment to amounts of individual items, such that the aggregate amount of any decreases in, or the aggregate amount of any increases in, the amount of funds originally required for the individual items reaches 20% or more of the total amount of funds to be raised, the issuer shall report the change for approval by the Central Bank. After such approval is obtained, the issuer shall register the amendment to the plan and shall post amendment-related information to the information disclosure website specified by the FSC.
4. When there occurs any material event requiring immediate announcement under the securities laws and regulations of the country where the securities are listed and the rules of the listing securities exchange, the information shall simultaneously be posted to the information disclosure website specified by the FSC.
The funds raised in accordance with the provisions of subparagraph 1 of the preceding paragraph shall be remitted by the lead securities underwriter in accordance with the applicable provisions of the Statute for Regulation of Foreign Exchange. |
| Article 10 | Where the securities offered and issued by a Foreign Issuer are denominated in a foreign currency, the collection of the proceeds, payment of interest and repayment of the principal amount, and repayment of the funds upon occurrence of the events set forth in paragraph 3 of Article 8 hereof shall be handled by transferring funds through foreign currency accounts opened at designated banks. |
| Article 11 | Registered securities may be transferred upon endorsement by the holders of the securities; provided, that such transfer shall not be effective against the Foreign Issuer or the Depositary Institution unless and until the name or title of the transferee is inscribed on the securities, and the name or title, and domicile or residence of the transferee are inscribed in the roster of the holders of the securities.
If the securities are deposited in the custody of the centralized securities depository institution, the holders of securities shall be deemed registered in the roster of the holders of securities after such depository has notified the Foreign Issuer or the Depositary Institution of the serial numbers of securities under its custody, the name or title, domicile or residence of the holders, and the number of securities held by the holders. |
| Article 12 | The particulars inscribed on Taiwan Depositary Receipts or bonds issued as certificated securities shall be written in the Chinese language or in bilingual form in Chinese and a foreign language, provided that if such matters are recorded in bilingual form using Chinese and a foreign language, and there is any discrepancy between the Chinese and foreign-language texts, the Chinese version shall prevail. |
Chapter 2 Taiwan Depositary Receipts
|
| Article 13 | A Foreign Issuer that is a secondary exchange (or OTC) listed company may sponsor issuance of Taiwan Depositary Receipts by a Depositary Institution only after it submits, based on the nature of its case, the Registration Form for Sponsoring Issuance of Taiwan Depositary Receipts (Attachments 1 to 4) recording the required matters together with the required documentation to the FSC to file for effective registration. |
| Article 14 | After the issuance of Taiwan Depositary Receipts, no additional depositary receipts shall be issued without obtaining an Effective Registration from the FSC, except under the following circumstances:
1. Where new shares are issued as a result of cash capital increase and the original shareholders have the pre-emptive rights under the laws and regulations of the Foreign Issuer's home country, or the Foreign Issuer issues bonus shares, additional depositary receipts corresponding to the amount of the newly issued shares may be issued; provided, that the additional depositary receipts shall carry the same rights and obligations as those of the depositary receipts for which Effective Registration was previously obtained from the FSC.
2. Where Taiwan Depositary Receipts have been redeemed, depositary receipts within the amount of the original facility may be re-issued by the Depositary Institution; provided that the re-issuance by the Depositary Institution within the amount of the original facility shall have been authorized and specified in the deposit contract and custody contract.
For additional Taiwan Depositary Receipts corresponding to the amount of the newly issued shares pursuant to subparagraph 1 of the preceding paragraph, the Depositary Institution shall deliver the additional depositary receipts to the holders within thirty (30) days after the Foreign Issuer is permitted to issue new shares in accordance with the laws and regulations of its home country and shall, before delivery of the additional depositary receipts, make public announcement and file a report to the Central Bank of the total dollar amount and units of the issuance, the ratio of additional depositary receipts that a holder of each unit of the original depositary receipts is entitled to receive and the total amount of securities represented by the additional depositary receipts, and shall post the relevant information to the information disclosure website specified by the FSC.
The additional Taiwan Depositary Receipts issued in accordance with subparagraph 1 of paragraph 1 above shall be listed on the stock exchange or an OTC market on the date when such depositary receipts are delivered to the holders. |
| Article 15 | The following particulars shall be specified in the offering plan for Taiwan Depositary Receipts:
1. purpose of the offering;
2. projected date of issuance, total dollar amount, total number of units to be issued, number of the underlying securities represented by Taiwan Depositary Receipts, and method for determining the issue price;
3. rights and obligations of the holders of Taiwan Depositary Receipts;
4. source of the underlying securities represented by Taiwan Depositary Receipts;
5. method of underwriting and intended place of listing;
6. the use intended for the proceeds; where the party raising funds is a Foreign Issuer, the offering plan shall also specify the projected benefits to be derived therefrom;
7. if the offering is for the purpose of receiving transfer of shares of a domestic [Taiwan] company or for a merger or acquisition that involves a domestic [Taiwan] company and is carried out in accordance with the law, the following particulars shall be set forth:
(1) the number of shares received (or the name of the business or assets acquired), the party from which the acquisition is to be made, and conditions and limitations attaching to any future transfer;
(2) the expected rate of progress, and expected date of completion;
(3) the method of deciding the share exchange ratio and the reasonableness thereof;
(4) the expected benefit; and
(5) where the counterparty in any merger, acquisition, or share swap is an affiliated enterprise or affiliated person, the offering plan shall state the nature of the affiliation with such enterprise or person, the reason for selecting the affiliated enterprise or affiliated person, the need for such selection, and the effect of the selection upon shareholders' equity.
8. allocation of relevant fees incurred during the offering period and the duration of the facility; provided, that this requirement does not apply if the Taiwan Depositary Receipts are issued by a Foreign Issuer for cash increase;
9. the time frame for the offering, and the approach to be taken in case of under-subscription; where a Foreign Issuer receives transfer of shares of a domestic [Taiwan] company or participates in a merger or acquisition that involves a domestic [Taiwan] company and is carried out in accordance with the law, the offering plan shall set forth the time period for completion of the issue, and the approach to be taken in case no issuance is carried out before the deadline; and
10. other matters required to be specified by the FSC. |
| Article 16 | The following particulars shall be specified in the deposit contract:
1. the name, nationality and location of principal place of business of the contracting parties;
2. the total dollar amount, total number of units, and number of the underlying securities represented by and the projected issue price per unit of the Taiwan Depositary Receipts to be issued by the Depositary Institution with sponsorship by the Foreign Issuer;
3. the Depositary Institution shall use its reasonable and diligent efforts to select a Custodian Institution for the interest of the holders of Taiwan Depositary Receipts and to enter into a custody contract or other documents for custody of the underlying securities represented by the depositary receipts;
4. the obligations and responsibilities of the Depositary Institution;
5. the method for calculation of the remuneration payable to the Depositary Institution and the manner and term for payment thereof;
6. an undertaking from the Foreign Issuer to provide reports to the Depositary Institution in accordance with the requirements of the FSC and the securities laws and regulations of its home country and the country where its securities are listed;
7. the underlying securities represented by Taiwan Depositary Receipts shall all be placed under the custody of a Custodian Institution;
8. the fees and expenses for the purchase of Taiwan Depositary Receipts;
9. the manner for registration of the transfer of Taiwan Depositary Receipts;
10. taxation to be leviable on Taiwan Depositary Receipts;
11. the method for fixing the record date for determination of entitlement to any right or dividend;
12. the consent by the Foreign Issuer to allow the Depositary Institution to exercise the shareholders' rights on behalf of the holders of Taiwan Depositary Receipts;
13. the fact that the Depositary Institution is authorized to handle subscription of new shares on behalf of the holders of Taiwan Depositary Receipts;
14. the method for distribution of dividends, bonus, interest or other benefits by the Depositary Institution for the Foreign Issuer;
15. the manner for the Depositary Institution's exercise of the shareholders' rights on behalf of holders;
16. the manner for handling the destruction, damage or loss of Taiwan Depositary Receipts;
17. any amendments to the agreement;
18. the manner for handling the rescission of the agreement:
19. the fact that the governing law shall be the laws of the Republic of China;
20. the fact that, in case of litigation, the District Court of Taipei, Taiwan shall have jurisdiction; if there is any stipulation for arbitration, the details of such stipulation; and
21. other important matters agreed upon by the contracting parties or required to be specified by the FSC. |
| Article 17 | The following particulars shall be specified in the custody contract or other custodian documents:
1. the name, nationality and location of the principal place of business of each contracting party;
2. the name, type and volume of the securities under custody;
3. the method for calculation of the remuneration payable to the Custodian Institution and the manner and term for payment thereof;
4. the procedures and manners for safe-keeping and withdrawal of securities;
5. the manner for handling the rescission of the agreement or amendments thereto;
6. the method for handling the destruction, damage or loss of the securities under custody;
7. the fact that the Custodian Institution shall notify the Depositary Institution after receipt of the securities under custody;
8. the fact that the governing law shall be the laws of the Republic of China;
9. the court with jurisdiction over any litigation that may arise in connection with the custody contract; if there is any stipulation for arbitration, the details of such stipulation; and
10. other important matters agreed upon by the contracting parties or required to be specified by the FSC. |
| Article 18 | For offering and issuance of Taiwan Depositary Receipts, a prospectus shall be prepared. In addition to the particulars required in accordance with the laws and regulations of the Foreign Issuer's home country and the country where its shares are listed, the following particulars shall be specified in the prospectus:
1. the offering plan for Taiwan Depositary Receipts and stipulations set forth therein;
2. the evaluation report of the underwriter;
3. major terms and conditions of the custody contract (or other custodian documents) and the deposit contract;
4. any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the foreign issuer's home country and country in which its shares are listed;
5. rights exercisable by, or restrictions placed on, the holders of Taiwan Depositary Receipts or holders of the underlying securities represented by the Taiwan Depositary Receipts;
6. the highest, lowest and average market prices for the most recent six (6) months of the underlying securities represented by the Taiwan Depositary Receipts on the stock exchange where such securities are listed; and
7. other important matters agreed upon by the parties or required to be specified by the FSC. |
| Article 19 | The Depositary Institution shall prepare and keep a roster of the holders of Taiwan Depositary Receipts. |
| Article 20 | When a Foreign Issuer sponsors a Depositary Institution in the issuance of Taiwan Depositary Receipts, it shall first deliver a prospectus to the subscribers, and except where it Sponsors the Issuance of Taiwan Depositary Receipts in connection with receiving transfer of shares of a domestic [Taiwan] company or in connection with a merger or acquisition that involves a domestic [Taiwan] company and is carried out in accordance with the law, the Foreign Issuer shall engage securities underwriter(s) to handle a public offering and related matters. A Depositary Institution shall not concurrently act as an underwriter for the same issue of Taiwan Depositary Receipts. |
| Article 21 | Except in cases where no physical certificates are printed, Taiwan Depositary Receipts shall be numbered and the following matters shall be specified therein, with the format thereof to be separately prescribed by the FSC:
1. name, nationality and location of the principal place of business of the Foreign Issuer, Depositary Institution and Custodian Institution;
2. number of underlying securities and the par value per unit;
3. date of issuance;
4. issue price of each unit of Taiwan Depositary Receipts;
5. name or title of the holders;
6. obligations and responsibilities of the Foreign Issuer and the Depositary Institution;
7. method for making public announcements and filing of financial statements and provision of annual reports by the Depositary Institution for the Foreign Issuer;
8. method for making public announcements and filing by the Depositary Institution of the matters that may have significant impact on the shareholders' rights and interests or on the price of the securities for the Foreign Issuer;
9. manner for the transfer of Taiwan Depositary Receipts;
10. method for fixing the record date for determining the entitlement to right and dividend;
11. scope and manner for exercising the shareholders' rights by the Depositary Institution on behalf of the holders of Taiwan Depositary Receipts;
12. manner for distributing dividends, bonus or interest or other benefits by the Depositary Institution on behalf of the Foreign Issuer, and the manner for public announcements thereof;
13. the fact that the Depositary Institution enters into a custody contract or other documents with the Custodian Institution for the custody of the underlying securities for the interest of the holders of the Taiwan Depositary Receipts;
14. manner for exercising pre-emptive right by Depositary Institution to purchase new shares on behalf of holders;
15. procedures, method, and fees for redemption at the request of the holders;
16. manner for handling amendments to the agreement;
17. the fact that the governing law shall be the laws of the Republic of China;
18. the fact that, in case of litigation, the District Court of Taipei, Taiwan shall have jurisdiction; if there is any stipulation for arbitration, the details of such stipulation; and
19. other important matters agreed upon by the contracting parties or required to be specified by the FSC. |
| Article 22 | Taiwan Depositary Receipts shall be issued only after they have been signed by the Depositary Institution. |
| Article 23 | When a holder of Taiwan Depositary Receipts request for redemption, it may request the Depositary Institution to transfer the underlying securities to the holder so requested, or to sell the underlying securities and then pay the sales proceeds after deducting tax and other relevant fees to the holder.
The payment of the sales proceeds referred to in the immediately preceding paragraph or the payment of dividend, bonus, interest or other benefits distributed by the Depositary Institution on behalf of the Foreign Issuer shall be made in New Taiwan Dollars.
Settlement of foreign currency receivable or payable or transactions pursuant to the immediately preceding paragraph and paragraph 1 of Article 14 hereof shall be applied for by the Depositary Institution and shall be handled in accordance with the relevant provisions of the Statute for Regulation of Foreign Exchange.
When a holder of Taiwan Depositary Receipts requests for redemption pursuant to paragraph 1 and sells the underlying securities represented by the Taiwan Depositary Receipts in a foreign securities market, it shall engage the depositary to handle foreign exchange payment/receipt or transactions resulting therefore according to the relevant provisions of the statute for Regulation of Foreign Exchange. |
| Article 24 | After a Foreign Issuer has obtained Effective Registration from the FSC to Sponsor Issuance of Taiwan Depositary Receipts, it shall file the following documents with the FSC within ten (10) days after issuance of the Taiwan Depositary Receipts:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. copy of the deposit contract;
3. copy of the custody contract;
4. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the actual offering terms and the contents granted Effective Registration by the FSC; and
5. other documents required by the FSC.
When the Foreign Issuer provides the Depositary Institution with any information pursuant to the deposit contract, a report thereof shall be filed with the FSC within three (3) days after such provision. |
| Article 25 | After the issuance of Taiwan Depositary Receipts, the Depositary Institution shall, within ten (10) days after the end of each month, submit to the Central Bank a Monthly Report on the Liquidity and Redemption of Taiwan Depositary Receipts (Attachment 19), and post the information to the information disclosure website specified by the FSC. |
Chapter 3 Bonds
|
| Article 26 | A Foreign Issuer intending to issue and offer bonds shall file a Registration Statement for Offering and Issuance of Bonds by Foreign Issuers corresponding to the nature of the issue (Attachments 5, 6, 7, 8, and 9), specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after Effective Registration has been obtained from the FSC.
Where a Foreign Issuer, having already Sponsored Issuance of Taiwan Depositary Receipts on the Taiwan Stock Exchange or on an OTC market, registers the offering and issuance of convertible corporate bonds or corporate bonds with warrants, may Sponsor Issuance of Taiwan Depositary Receipts to enable execution of conversions or the performance of stock option obligations, in which case such Taiwan Depositary Receipts shall carry the same rights and obligations as Taiwan Depositary Receipts traded on the Taiwan Stock Exchange or on an OTC market. |
| Article 27 | A Foreign Issuer registering the offering and issuance of bonds shall obtain a credit rating from a bond rating institution approved or recognized by the FSC, indicating that its credit worthiness is above a certain required rating; provided, that the above shall not apply to those who register the offering and issuance of convertible bonds or corporate bonds with warrant and are in compliance with Article 28-4 of the Law and Articles 249 and 250 of the ROC Company Law. |
| Article 28 | In the event a Foreign Issuer filing to register offering and issuance of straight corporate bonds meets the conditions set by the FSC, it may submit the Shelf Registration Statement for Issuance of Straight Corporate Bonds by a Foreign Issuer (Attachment 7) complete with all required information, together with the required documents, to the FSC for effective registration and complete the issuance within the expected issue period.
Article 5 shall apply mutatis mutandis to a Foreign Issuer that files for registration in accordance with the preceding paragraph.
The expected issue period referred to in paragraph 1 shall not exceed two years counting from the date of Effective Registration. The Foreign Issuer shall set the period at the time of registering with the FSC. |
| Article 29 | When issuing straight corporate bonds within the expected issue period as referred to in the preceding article, the Foreign Issuer shall, on the next business day after it has completed collecting the payment, submit the Supplementary Shelf Registration Statement for Issuance of Straight Corporate Bonds by a Foreign Issuer (Attachment 8) complete with all required information, together with the required documents, to the FSC for recordation.
With respect to issuance by a Foreign Issuer of straight corporate bonds during the expected issue period referred to in the preceding article, the FSC may cancel a Foreign Issuer's current supplementary issue of straight corporate bonds if there is any violation of Article 7 or paragraph 1 of the preceding article. |
| Article 30 | If any of the following events occurs after Effective Registration of a shelf registration for issuance of straight corporate bonds by a Foreign Issuer, the shelf registration shall be terminated:
1. An event referred to in paragraph 2 of the preceding article.
2. Expiration of the expected issue period.
3. The expected total issue amount under the shelf registration has been fully issued.
4. The FSC deems cancellation of the shelf registration necessary to protect the public interest.
Before the current shelf registration has been duly terminated, the Foreign Issuer may not file for any further registration of issuance of straight corporate bonds. |
| Article 31 | A Foreign Issuer shall designate the following agents in the territory of the Republic of China to handle the related matters:
1. agent for the issuance of bonds;
2. agent for payments (of interests and principal);
3. agent for conversion or subscription of shares; and
Foreign exchange matters relating to the proceeds resulted from issuance and offering of the bonds shall be handled pursuant to paragraph 2 of Article 9 hereof.
Foreign exchange matters relating to the payment (of interest and principal), conversion or share subscription as specified in paragraph 1 above shall be handled in accordance with the relevant provisions of the Statute for Regulation of Foreign Exchange |
| Article 32 | When offering and issuing bonds, a Foreign Issuer shall specify in the offering plan the following particulars:
1. projected date of issuance;
2. interest rate;
3. method for payment of interest;
4. interest payment date(s);
5. type of the bonds, price per unit and total issue size;
6. security;
7. Name of the trustee for the creditors and the major terms and conditions. (The trustee shall be limited to a financial institution or trust enterprise only.) However, this restriction shall not apply to offering and issuance of straight corporate bonds, where the conditions set by the FSC are met.
8. method for repayment (e.g. repayment at maturity, pre-mature repayment, redemption or put) and the relevant dates thereof;
9. paying agent;
10. method of underwriting and intended place of listing;
11. use of proceeds and projected benefits thereof; however, for offering and issuance of straight corporate bonds, the projected benefits from use of the proceeds are not required to be specified;
12. offering period and approach to be taken in case of under-subscription;
13. In case of issuance and offering of convertible bonds, the following particulars shall be specified:
(1) conversion procedure;
(2) conversion agent;
(3) method for determining the terms and conditions of the conversion (including conversion price, conversion period, types of the securities to be converted, etc.)
(4) A Foreign Issuer that Sponsors Issuance of Taiwan Depositary Receipts to enable the execution of conversions shall state the type of the underlying securities represented by the Taiwan Depositary Receipts, the quantity of securities underlying each unit of Taiwan Depositary Receipts, the names of the Depositary Institution and Custodian Institution, the schedule for issuance of the Taiwan Depositary Receipts, and other particulars as required per stipulation.
(5) conversion price adjustment;
(6) entitlement to interest and dividends in the converting year;
(7) method for handling the money that is not enough to convert into one unit of the securities issuable upon conversion;
(8) rights and obligations after the conversion.
14. In case of issuance and offering of corporate bonds with warrants, it shall be specified that the corporate bond and the warrant shall not be separable, and the following particulars shall also be specified:
(1) total number of units of the warrants to be issued, number of shares that can be subscribed per warrant and total number of shares to be issued upon exercise of warrants;
(2) warrant exercise procedure;
(3) subscription agent;
(4) method for determining the terms and conditions for the warrants (including warrant price, warrant exercise period, and the types of securities that can be subscribed for);
(5) Where a Foreign Issuer Sponsors Issuance of Taiwan Depositary Receipts to perform its stock option obligations, it shall state the type of the underlying securities represented by the Taiwan Depositary Receipts, the quantity of securities underlying each unit of Taiwan Depositary Receipts, the names of the Depositary Institution and Custodian Institution, the schedule for issuance of the Taiwan Depositary Receipts, and other particulars as required per stipulation;
(6) warrant price adjustment;
(7) manner for payment of the share price upon exercise of warrants; and
(8) rights and obligations after exercise of warrants.
15. The fact that the governing law of the contract shall be the laws of the Republic of China. However, for offering and issuance of straight corporate bonds, where the conditions set by the FSC are met, law other than the laws of the Republic of China may be adopted as the governing law of the contract.
16. The fact that, in case of litigation, the District Court of Taipei, Taiwan shall have jurisdiction; if there is any stipulation for arbitration, the details of such stipulation. However, if the governing law of the contract is law other than that of the Republic of China, other courts may be stipulated as having jurisdiction over litigation.
17. other important matters agreed upon by the contracting parties.
Foreign Issuers filing to offer and issue straight corporate bonds, convertible bonds, or corporate bonds with warrants shall be limited to primary exchange (or OTC) listed companies and secondary exchange (or OTC) listed companies, unless the Foreign Issuer meets FSC-specified conditions or is an emerging stock company entitled to file to offer and issue straight corporate bonds denominated in New Taiwan Dollars.
Where Taiwan Depositary Receipts are obtained through conversion of corporate bonds or the exercise of stock options, the provisions of Article 23, paragraph 1 shall apply when the holder of the receipts asks the depositary institution to redeem them. |
| Article 33 | For issuance and offering of bonds, a prospectus shall be prepared. In addition to the particulars required in accordance with the laws and regulations of the Foreign Issuer's home country or the country where its shares are listed, the following particulars shall be specified in the prospectus:
1. offering Plan for the bonds and the agreed-upon matters;
2. the evaluation report of the securities underwriter;
3. credit rating certificate issued by a credit rating institution;
4. other outstanding bonds;
5. trustee agreement;
6. paying agency agreement, conversion agency agreement or subscription agency agreement;
7. letter of creation of security or provision of guarantee, if any;
8. any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the foreign issuer's home country and country in which its shares are listed;
9. the highest, lowest and average market prices for the most recent six (6) months of the securities issuable upon conversion, in case of convertible bonds or upon exercise of warrant, in case of corporate bonds with warrants, on the stock exchange where its stocks are listed; and
10. other important matters agreed upon by the parties or required to be specified by the FSC.
Where a Foreign Issuer meets the provisions set out in the proviso to subparagraph 15 of paragraph 1 of the preceding article, the governing law and the court with jurisdiction over litigation shall be disclosed in prominent lettering on the cover of the prospectus. |
| Article 34 | A Foreign Issuer offering and issuing bonds shall provide offerees with a prospectus. A Foreign Issuer issuing convertible corporate bonds or corporate bonds with warrants shall engage securities underwriter(s) to handle a public offering. |
| Article 35 | Except in cases where no physical certificates are printed, bonds shall be numbered and the following matters shall be specified therein:
1. name of the Foreign Issuer;
2. types of bonds, price per unit and total volume to be issued;
3. date of issuance;
4. interest rate of the bonds;
5. date and method for payment of interest;
6. method and time limit for repayment;
7. trustee;
8. paying agent;
9. certification institution;
10. in the case of convertible bonds, conversion agent and terms and conditions for the conversion;
11. in the case of corporate bonds with warrants, the subscription agent and terms and conditions for the warrant;
12. an indication of the security, if any;
13. the governing law of the contract;
14. the court having jurisdiction over litigation; if there is any stipulation for arbitration, the details of such stipulation; and
15. other important matters agreed upon by the contracting parties or required to be specified by the FSC.
The provisions of the preceding paragraph shall not be applicable to the issuance of bonds whose volume of issuance has been confirmed in writing by an international clearance and settlement institution. |
| Article 36 | A Foreign Issuer that has obtained Effective Registration from the FSC for issuance of bonds shall file the following documents with the FSC within ten (10) days after issuance of the bonds:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. issuance agreement;
3. certificate issued by a credit rating institution confirming the rating of the bond currently being issued;
4. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the terms and conditions of the bonds and the contents granted Effective Registration by the FSC; and
5. other matters required to be specified by the FSC. |
| Article 37 | After issuing bonds, a Foreign Issuer shall before the tenth (10th) day of each month submit to the Central Bank a Report on the Liquidity of the Bonds for the preceding month (Attachment 20), and shall further post the information to the information disclosure website specified by the FSC. |
Chapter 4 Stock
|
Section 1 Primary Exchange (or OTC) Listed Companies and Emerging Stock Companies
|
| Article 38 | Before it may offer and issue stock, a primary exchange (or OTC) listed company or emerging stock company is required to have filed a Registration Statement for the Offering and Issuance of Stock by a Foreign Issuer (Attachments 10 to 14) specifying the required particulars, together with the required documentation, with the FSC and obtained effective registration therewith. |
| Article 39 | A primary exchange (or OTC) listed company that conducts a cash capital increase through a new share issue and whose listing and trading have not been restricted pursuant to Article 139, paragraph 2 of the Act shall allocate 10 percent of the total amount of new shares issued to a public issue to outside parties, provided that if a shareholders meeting resolution calls for allocation of a higher percentage, the resolution shall be complied with.
If an emerging stock company conducts a cash capital increase through a new share issue and meets the following conditions, it may allocate 10 percent of the total amount of new shares issued to a public issue to outside parties, provided that if a shareholders meeting resolution calls for allocation higher percentage, the resolution shall be complied with:
1. Two full fiscal years have elapsed since incorporation registration. For an investment holding type company, the period of actual operation by its operating entity is two full fiscal years.
2. Its final ratio of income before tax to shareholders equity in its year-end financial statement meets one of the criteria listed below, and its income before tax in the most recent fiscal year is NT$4 million or higher:
(1) 4 percent or higher in the most recent fiscal year, and after final accounting for the most recent fiscal year, there is no accumulated deficit.
(2) 2 percent or higher in both of the most recent two fiscal years.
(3) The average of the most recent two fiscal years is 2 percent or higher, and profitability in the most recent fiscal year is higher than that of the preceding fiscal year. |
| Article 40 | A Foreign Issuer that applies for a listing on the Taiwan Stock Exchange or on the OTC market or for emerging stock registration shall appoint a domestic institution to handle foreign exchange settlement, payment of dividends, payment of tax and disclosure of information.
The dividends, bonuses or other benefits distributed by the Foreign Issuer shall be paid in the same currency as that quoted on the listing.
Foreign exchange proceeds/payments or foreign exchange transactions that arise in connection with the matters set forth in the preceding paragraph shall be handled by a shareholder services agent in accordance with the applicable provisions of the Statute for Regulation of Foreign Exchange. |
| Article 41 | The following particulars shall be specified in the stock offering plan:
1. purpose of the offering;
2. total number of stocks to be issued, method for determining the issue price per share and total dollar amount;
3. method of underwriting and intended place of listing;
4. in case of new share issuance for cash injection, the use of proceeds and the projected benefits to be derived therefrom;
5. if the purpose of the issuance is receiving transfer of shares of a domestic [Taiwan] company, or a merger with or acquisition of a domestic [Taiwan] company in accordance with law:
(1) the name, amount, and counterparty of the received shares, or the acquired business or assets, and conditions and restrictions on future transfers.
(2) the plan's projected implementation schedule and projected completion date.
(3) method for deciding the share exchange ratio and the reasonableness thereof.
(4) projected benefits.
(5) if the counterpart of the merger, acquisition, or share exchange is an affiliated enterprise or related party, the relationship with the affiliated enterprise or related party, the reason for and necessity of selecting that affiliated enterprise or related party, and the impact on shareholders' equity shall each be specified.
6. registration, printing, certification and delivery of share certificates and the method for settlement for domestic transactions;
7. time frame for the offering, and the approach to be taken in case of under-subscription; and
8. other matters required to be specified by the FSC. |
| Article 42 | The following particulars shall be specified in the custody contract entered into by and between a foreign Custodian Institution and a domestic centralized securities depository institution:
1. name, nationality and location of principal place of business of the contracting parties;
2. name, type and volume of the securities under custody;
3. the procedures and manners for safe-keeping and withdrawal of securities;
4. the manner for handling rescission of the agreement and amendments thereto;
5. the manner for handling the destruction, damage or loss of the securities under custody;
6. the Custodian Institution shall notify the domestic centralized securities depository institution and domestic shareholder services agent after receipt of the securities under custody;
7. the fact that the governing law shall be the laws of the Republic of China;
8. the court with jurisdiction over any litigation that may arise in connection with the custody contract; if there is any stipulation for arbitration, the details of such stipulation; and
9. other important matters agreed upon by the contracting parties or required to be specified by the FSC. |
| Article 43 | A primary exchange (or OTC) listed company or emerging stock company that offers and issues stock shall prepare a prospectus with the content in the Chinese language or a Chinese-English bilingual format, provided that if the English-Chinese bilingual format is used and there is any discrepancy in the interpretation of the meaning of the text, the Chinese version shall prevail.
The matters below shall be printed on the front cover of the prospectus:
1. Company name.
2. Purpose of issue (including type, number of shares, dollar amount, terms and conditions of issuance, and the underwriting and allocation methods).
3. Outline of the purpose of the fund utilization plan and anticipated benefits of the current issue, and explanatory notes referencing the page numbers of the full text.
4. Stock code.
5. The following text shall be printed prominently:
(1) Place of registration.
(2) This company is a foreign enterprise listed in Taiwan using New Taiwan Dollars.
(3) An investor shall carefully read the contents of this prospectus, and shall note the risks associated with this company. In addition, the internal page numbers to consult for the related content that text shall be noted. (An emerging stock company shall also add a note requesting that investors carefully read the risk disclosure statement.)
(4) Web address for querying prospectus information of the company.
The prospectus shall have the following matters regarding the current issue printed on the inside front cover:
1. The prospectus distribution plan (including display location, distribution method, and method by the prospectus may be obtained on request).
2. Information regarding any institution or expert connected with the current issue (including the securities underwriter, shareholder services agent, attesting CPA of the financial report for the most recent fiscal year, and the full name, firm name, address, web address, and phone number of the lawyer that issued the legal opinion). If the opinion of any other lawyer (such as a lawyer of the foreign issuer's home country) is used, the information regarding that lawyer shall also be disclosed.
3. Company information (including addresses, web addresses, and phone numbers of the head office and any branch office, and the name, title, contact telephone number, and e-mail address of the designated agent within the Republic of China).
The content of the prospectus shall specify the following matters:
1. Company overview (including a company and group introduction, group structure, risk matters, capital stock, directors, supervisors, managerial officers, and major shareholder information).
2. Operations overview (including business scope, competitive strategy, business objectives, strategy, and plan; market, production, and sales overview; major contracts, and any other matters requiring supplementary explanation).
3. Issue plan and fund utilization plan (including the price-setting method for the current issue and an analysis of the fund utilization plan) and matters stipulated therein.
4. Financial overview (including summary financial data, financial statements, and a review and analysis of the financial condition and operating results, for the most recent five fiscal years, and other important matters).
5. Status of corporate governance operations and other matters requiring supplementary explanation.
6. The concluding opinion of the securities underwriter's evaluation.
7. Legal opinion issued by a lawyer.
8. Method for the exercise of shareholder rights.
9. Other important stipulations or matters as required by the FSC.
The prospectus shall be signed by the company's responsible person to indicate their responsibility. |
| Article 44 | A primary exchange (or OTC) listed company or emerging stock company that offers and issues stock shall deliver a prospectus to subscribers, and -- except in the case of a company issuing stock in connection with receiving transfer of shares of a domestic [Taiwan] company or merging with or acquiring a domestic [Taiwan] company in accordance with law, or an emerging stock company offering and issuing stock without conducting a public issue to outside parties -- shall engage an underwriter to conduct a public underwriting. |
| Article 45 | A primary exchange (or OTC) listed company or emerging stock company shall appoint an agent to handle shareholder services business on its behalf. The agent shall prepare and maintain custody of the shareholders' register. |
| Article 46 | A primary exchange (or OTC) listed company or emerging stock company that has obtained Effective Registration from the FSC to issue and offer stocks shall file the following documents with the FSC within ten (10) days after issuance:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. copy of the custody contract;
3. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the terms and conditions of actual offering and the contents granted Effective Registration by the FSC; and
4. other documents required by the FSC. |
| Article 47 | After the issuance of stocks, a primary exchange (or OTC) listed company or emerging stock company shall within ten (10) days after the end of each month submit to the Central Bank a Report on the Liquidity of Foreign Stocks (Attachment 21), and shall post the information to the information disclosure website specified by the FSC. |
| Article 48 | A primary exchange (or OTC) listed company or emerging stock company shall, before the date on which the regular shareholders meeting is convened, transmit an electronic file of its annual report to the information reporting website specified by the FSC. The content of the annual report shall be in the Chinese language or a Chinese-English bilingual format. However, if an English-Chinese bilingual format is used and there is any discrepancy in the interpretation of the meaning of the respective texts, the Chinese version shall prevail.
The front cover of the annual report shall specify the following:
1. Company name.
2. Year
3. Date of printing.
4. Stock code.
5. Web address for querying annual report information for the current year.
The inside front cover of the annual report shall specify the following:
1. Board of directors name list (for independent directors domiciled in Taiwan, nationality and principal job experience shall also be specified).
2. Name, title, contact phone number, and e-mail address of the designated agent within the Republic of China.
3. Address and phone number of the head office and any branch office.
4. Name, address, web address, and phone number of the shareholders services agent.
5. Name, firm name, address, and phone number of the attesting CPA of the financial report for the most recent fiscal year.
6. Company web address.
The content of the annual report shall specify the following:
1. Report to the shareholders.
2. Company overview (including company and group introductions, group structure, risk matters, capital stock, directors, supervisors, managerial officers, and major shareholder information).
3. Status of corporate governance operations and other matters requiring supplementary explanation.
4. Capital-raising status and implementation status of the capital allocation plan.
5. Operations overview (including business scope, competitive strategy, business objectives, strategy, and plan; market, production, and sales overview; major contracts, and other matters requiring supplementary explanation).
6. Financial overview (including summary financial data, financial statements, and a review and analysis of the financial condition and operating results, for the most recent five fiscal years, and other important matters).
7. Matters of special note: matters having a material impact on shareholders' equity or the securities price, and the method for exercise of shareholders rights.
The annual report shall be signed by the company's responsible person to indicate their responsibility. |
Section 2 Secondary Exchange (or OTC) Listed Companies
|
| Article 49 | A secondary exchange (or OTC) listed company offering and issuing stock shall file a Registration Statement for the Offering and Issuance of Stock by a Foreign Issuer (Attachments 15 to 18) based on the nature of its case specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after obtaining Effective Registration from the FSC.
The stockfor which a secondary listed company applies for exchange listing or OTC trading are limited to stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets. |
| Article 50 | Where a secondary exchange (or OTC) listed company registers the offering and issuance of stocks, the stocks in question shall carry the same rights and obligations as other stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets. |
| Article 51 | A secondary exchange (or OTC) listed company may not restrict stockholders from selling the stocks on a foreign stock exchange.
Where stocks issued in Taiwan by a Foreign Issuer are sold offshore by the investor, the investor shall engage a local securities firm to process related foreign exchange proceeds/payments or foreign exchange transactions pursuant to the Statute for Regulation of Foreign Exchange.
After sale of the stocks offshore, the investor may subsequently buy stocks offshore and trade them on the domestic market, provided that the number of subsequently purchased and traded shares shall not exceed the number of shares originally sold offshore. |
| Article 52 | A secondary exchange (or OTC) listed company that offers and issues stock shall prepare a prospectus. In addition to the particulars required in accordance with the laws and regulations of the Foreign Issuer's home country and the country where its shares are listed, the following particulars shall be specified in the prospectus:
1. Company overview (including company and group introductions, group structure, risk matters, capital stock, and director, supervisor, managerial officer, and major shareholder information).
2. Operations overview (including business scope, competitive strategy, business objectives, strategy, and plan; market, production, and sales overview; major contracts, and other matters requiring supplementary explanation).
3. Issue plan and fund utilization plan (including the price-setting method for the current issue and an analysis of the fund utilization plan) and matters stipulated therein.
4. Financial overview (including summary financial data, financial statements, and a review and analysis of the financial condition and operating results, for the most recent five fiscal years, and other important matters).
5. Status of corporate governance operations and other matters requiring supplementary explanation.
6. The concluding opinion of the securities underwriter's evaluation.
7. A legal opinion issued by a lawyer.
8. The shareholder services agent.
9. Main content of the custody contract.
10. Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the foreign issuer's home country and country in which its shares are listed.
11. The highest, lowest, and average market price of the stock for the most recent six months on any securities trading market on which it is listed.
12. Method for exercise of shareholder rights.
13. Any other important stipulations, or other matters that the FSC requires to be specified. |
| Article 53 | A a secondary exchange (or OTC) listed company shall establish or appoint a shareholders services agent to prepare and maintain custody of its shareholders' register. |
| Article 54 | The provisions of Articles 40 to 42, Article 44, and Articles 46 to 47 shall apply mutatis mutandis to a secondary exchange (or OTC) listed company offering and issuing stock. |
Chapter 5 Supplementary Provisions |
| Article 55 | After securities have been offered and issued, the Foreign Issuer shall make public announcements and file the reports with the FSC in accordance with the regulations of the FSC.
The particulars to be publicly announced and reported pursuant to the preceding paragraph shall be separately prescribed by the FSC. |
| Article 56 | These Regulations shall enter into force from the date of their promulgation. |