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Title:

Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities  CH

Amended Date: 2020.08.17 
Categories: Primary Market > Management > Information Disclosure

Title: Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities(2011.10.27)
Date:
Article 1 These Procedures are promulgated pursuant to Article 2 of the Securities Listing Contract signed between the Taiwan Stock Exchange Corporation (TWSE) and listed companies and Article 3of the Contract for the Listing of Foreign Stock and the Contract for the Listing of Taiwan Depositary Receipts signed between the TWSE and foreign issuers.
Article 2 "Listed company" as used in these Procedures means listed companies as specified in Article 43 of the TWSE Operating Rules; "Material information of listed companies and primary listed companies" in these Procedures means the following matters:
1. Dishonor of a negotiable instrument due to insufficient deposits and notation of settlement subsequent to dishonor of a negotiable instrument, refusal of a financial institution to honor a transaction, or other loss of credit of a listed company or a responsible person, parent company, or subsidiary thereof, or a material change in shareholding of the parent company; or, after dishonor of a negotiable instrument of a listed company due to insufficient deposits or refusal of a financial institution to honor a transaction of a listed company, any alteration of trading method, suspension of trading, or delisting of the stock thereof, and the status of any application to restore the original conditions.
2. Any material effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution, with respect to a listed company or a responsible person thereof; or a chairperson or managerial officer of the company violates the Securities and Exchange Act, Company Act, Banking Act, Financial Holding Company Act, or Commercial Accounting Act, or is indicted for a crime of corruption malfeasance in office, fraud, breach of trust, or misappropriation.
3. Any material effect on company finances or business resulting from any serious decrease in output or complete or partial suspension of work, leasing out of a company plant or principal equipment, or pledge or mortgage of all or a principal portion of a company's assets.
4. Any event set forth in Paragraph 1 of Article 185 of the ROC Company Act.
5. Reorganization or bankruptcy procedure of a listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws, or any material change in any of the above matters.
6. Appointment of or change in chairman, general manager, a juristic-person director or supervisor or representative thereof, an independent director, a natural-person director or supervisor, or a member of the functional committee established pursuant to the Securities and Exchange Act, or change in one-third or more of directors, or in the case of a primary listed company, where there is no independent director with a registered household address in the Republic of China.
7. Change of certified public accountant (CPA) for any reason other than internal adjustments within the certifying accounting firm.
8. Change of spokesperson, acting spokesperson, principal financial officer, principal accounting officer, research and development officer, chief internal auditor, or in the case of a primary-listed company, of its litigious or non-litigious agent.
9. Change in accounting year.
10. Any material effect on company finances or business resulting from any signing, amendment, termination, or rescission of an important memorandum of understanding, a plan for a strategic alliance or other business cooperation or mutual non-competition commitment, or an important contract, change in any material respect of a business plan, completion of development of a new product, or successful development and formal entry into the full-scale production stage of an experimental product.
11. Resolution by the board of directors to carry out a capital reduction, merger or consolidation, spin-off, acquisition, exchange or conversion of shares or transfer of shares from another, dissolution, issue of new stock for capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of other securities, private placement of securities, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof, or any material change in any of the above matters; or failure by companies participating in a merger, consolidation, spin-off, acquisition, or transfer of shares from another, to convene on the same day and pass resolutions by their boards of directors or shareholders' meetings, or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or transfer of shares from another, or veto by either side of the proposal for merger, consolidation, spin-off, acquisition, or transfer of shares from another; or resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation.
12. The date of, and the financial and business information in connection with, any convening of a press conference, investor conference, or public disclosure by any other means of financial and business information that has not been entered into the Market Observation Post System, by a company.
13. Resolution by the board of directors to publish financial forecast information, inapplicability of such financial forecast information, or correction or updating of such financial forecast information, or a discrepancy, by a company that has published complete financial forecasts, between the self-assessed income before tax publicly announced and reported within one month after the close of the fiscal year and the most recently publicly announced and reported financial forecasts, where such discrepancy is 20 percent or more and of an amount reaching NT$30 million and 0.5 percent of paid-in capital, or a discrepancy between the income before tax in the financial report publicly announced and filed for a given fiscal year and the self-assessed income before tax for the preceding fiscal year publicly announced and reported within one month after the close of that fiscal year, where such discrepancy is 20 percent or more and of an amount reaching NT$30 million and 0.5 percent of paid-in capital.
14. Resolution by the board of directors to distribute or not to distribute dividends, or a change in dividend distributions by a resolution of the board of directors or a shareholders' meeting, or resolution of a record date for dividend distribution.
15. Resolution by the board of directors or a shareholders' meeting to directly or indirectly carry out an investment plan of an amount reaching not less than 20 percent of the company's paid-in capital or NT$1 billion, or any material change in any of the above matters.
16. A change by resolution of the board of directors in a plan for capital increase by cash or offering of corporate bonds after such plan has become effective upon registration, or a change by resolution of the board of directors in a plan for private placement of securities after passage of the plan by a resolution of the board of directors or a shareholders' meeting.
17. Resolution of the board of directors on the date for convening a shareholders' meeting or special shareholders' meeting, the cause or subjects of such a meeting, or the date of suspension of changes to entries in the shareholders' roster
18. Important resolution of a shareholders' meeting or special shareholders' meeting.
19. There is any material event of internal control fraud, non arms-length transaction, or defalcation of assets.
20. Acquisition or disposal of assets by the listed company, or a subsidiary thereof whose shares have not been publicly issued domestically, where within the applicable scope of assets under Article 3 of the Regulations Governing Acquisition or Disposal of Assets by Public Companies adopted by the Competent Authority and moreover in the presence of any of the circumstances set forth in Article 30 or 31 [of said Regulations] as requiring public announcement and reporting, with the exceptions of merger, consolidation, spin-off, acquisition, and transfer of shares from another, with respect to which a public announcement is to be made under Article 2, Paragraph 1, Subparagraph 11, of these Procedures, and of derivatives trading for which the information is reported on a monthly basis.
Where a listed company under this subparagraph acquires or disposes of any domestic open-end fund, announcement of material information is not necessary, unless it is a privately placed fund; public announcement and reporting is required in the event of any unrealized losses on derivatives trading amounting to 3 percent or more of shareholders equity.
21. Resolution by the board of directors (or a shareholders' meeting) to permit a managerial officer (or director) to engage in competitive conduct, or knowledge by the company that a managerial officer is operating the same kind of business independently or on behalf of another person, or a director is involved in conduct within the company's scope of business independently or on behalf of another person, and the investment or business engaged in is a mainland China area enterprise, and there has been any failure to duly obtain permission from the board of directors (or a shareholders' meeting), or there is any material change in any of the above matters.
22. Public announcement and filing of endorsements and guarantees by the listed company as required under Article 25 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies.
23. Public announcement and filing of monetary loans to other persons by the listed company as required under Article 22 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the Competent Authority.
24. Acquisition or disposal of privately placed securities by a listed company or a subsidiary thereof.
25. Suspension in whole or in part of business transactions between the listed company and a major purchaser or supplier, where such purchaser or supplier accounted for 10 percent or more of the company's total amount of sales or purchases in the most recent fiscal year.
26. Occurrence of a disaster, group protest, strike, environmental pollution event, or any other material event, where the company incurs a material loss, or where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes or voids a permit pertaining to pollution, or imposes administrative fines reaching NT$100,000 or more.
27. Finalization of negotiation results of a negotiation meeting called between the listed company and a creditor bank.
28. Dishonor of a negotiable instrument, filing for bankruptcy or reorganization, or any other similar circumstance, on the part of a related party of the listed company or principal debtor to the company or a joint and several guarantor of a principal debtor; or inability by a principal obligor, in favor of whom the listed company has made an endorsement or guarantee, to settle a matured negotiable instrument, loan, or other obligation.
29. Any re-filing and public announcement of the regular annually filed internal control system statement due to any change in the content thereof; or obtaining of the Internal Control Special Audit Report for the special audit of internal controls conducted by the CPA.
30. Failure to make a public announcement or a filing within a prescribed time limit; an error or omission in a financial report prepared by a listed company, with respect to which Article 6 of the Enforcement Rules to the Securities and Exchange Act requires a correction to and further a restatement of the financial report; a CPA issues an audit or review report containing an opinion other than an unqualified or modified unqualified opinion on a publicly announced and filed annual or semiannual financial report, except in cases where the CPA issues a qualified audit or review report for the reason of annual amortization of losses, as permitted by law, or for the reason that an amount of long-term equity investment and profit/loss thereupon presented in the first-quarter, third-quarter, or semiannual financial report is calculated on the basis of financial statements of the investee company that have not been audited or reviewed by a CPA.
31. Mass media reportage or provision of information by investors sufficient to affect the market status of a listed company's securities.
32. Insufficient centralized custody ratio after stocks have been placed in centralized custody pursuant to regulations and prior to expiry of the custody period, as the result of withdrawal, due to a court execution order or some other reason, of stocks of personnel whose stocks had been placed in centralized custody.
33. Occurrence of any of the changes in shareholding set forth in Paragraphs 1 or 2 of Article 369-8 of the ROC Company Act and receipt of notice of the same.
34. A provisional injunction ruling suspending one of the directors or supervisors from the exercise of powers or a provisional injunction ruling suspending a director from the exercise of powers, making it impossible for the board of directors to exercise its powers.
35. Any matter required to be publicly announced and reported by the company pursuant to the Regulations Governing Share Repurchase by Listed and OTC Companies or the TWSE Rules Governing the Repurchase of Listed Securities by Foreign Issuers.
36. Where capital amendment registration has been carried out due to capital reduction, planned share replacement operations, or any subsequent failure to execute such share replacement plan, or where upon announcement of financial reports, the listing procedures for the new shares replacing the old ones during a capital reduction have yet to be completed, resulting in a discrepancy between the number of common shares used as the calculation basis for net worth per share in the financial statement and the number of outstanding shares.
37. Issuance of an undertaking upon applying for listing and subsequently inability to perform the undertaking; failure to carry out remedial procedures within three months of the day of the aforesaid occurrence.
38. Any matter required to be publicly announced and reported pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
39. Voidance of the permit of a financial holding company by the competent authority thereof, or penalization of a financial holding company by the competent authority thereof because of a violation of any applicable provision of the Financial Holding Company Act, or loss by a financial holding company of controlling shareholding (as defined in Subparagraph 1 of Article 4 of the Financial Holding Company Act) in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
40. (deleted)
41. Increase or decrease in the number of held companies of an investment holding company.
42. Resolution by the board of directors or a shareholders' meeting to apply for termination of listing for trading of its securities, or any material change in such a matter.
43. (deleted)
44. Objection or expression of reservation by an independent director or a member of the remuneration committee about a resolution by, respectively, the board of directors or a remuneration committee meeting, that has been included in a record or stated in written; for a listed company that has established an audit committee, any matter adopted with the approval of two-thirds or more of all directors without having been passed by the audit committee; any remuneration passed by the board of directors that is more favorable than the suggestion by the Remuneration Committee.
45. Forfeiture by the directors and supervisors as a whole of subscription rights to shares in a number reaching one-half or more of subscribable shares upon cash capital increase of a listed company, and opening of the shares for subscription by a specific person or persons through negotiation.
46. Where a listed company holds more than 70 percent of the total issued shares or total capital of an exchange-listed (or OTC-listed) subsidiary thereof; or where 70 percent of the total issued shares or total capital of a listed company is held by another exchange-listed (or OTC-listed) company.
47. If a listed company issues securities outside of Taiwan, the making of any adjustment for differences in the overseas financial report due to inconsistency in the accounting principles applied in the two places with respect to financial information reported for any period in the place of overseas listing; or if the financial report of a primary-listed company is not prepared according to ROC accounting standards, the differences in items between the accounting principles employed and those of the Republic of China and the monetary amounts affected, and the certifying CPA's opinion on the aforementioned matters.
48. If the circumstances set forth in Article 53-25 of the Operating Rules of the Taiwan Stock Exchange Corporation exist. Additionally, if the listed company is required to carry out share replacement operations due to a capital reduction, and the transferee company of the demerger is not an exchange-listed (or OTC-listed) company, then three business days before the date on which trading resumes, public announcement and registration shall be made of the following information for the demerged company and the transferee company of the demerger for the day prior to the record date of the demerger: the unaudited or CPA-reviewed capital stock, net worth, and net worth per share, and the CPA-attested (or reviewed) earnings per share for the most recent period.
49. Any other material policy resolution of the board of directors or other event having a material effect on shareholders' equity or securities prices of the listed company or an affiliated company thereof.
If an "other loss of credit" in Subparagraph 1 of the preceding paragraph is inability to redeem issued matured straight corporate bonds, convertible corporate bonds, corporate bonds with warrants, or corporate bonds privately placed under Paragraph 2 of Article 248 of the Company Act, the monetary amount and quantity unredeemed and status of negotiations with creditors as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until redemption has been completed in full. If dishonor of negotiable instruments due to insufficient deposits has occurred and remediation has not yet been made after the TWSE has rendered a disposition of altered trading method or suspension of trading, the date of dishonor, number, monetary amount, and correspondent bank(s) of any dishonored negotiable instrument(s) not yet notated as settled as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until remediation has been carried out.
With respect to a resolution by the board of directors to carry out a merger or consolidation, spin-off, acquisition, or transfer of shares from another as referred to in subparagraph 11 of Paragraph 1, if the counterparty is a foreign company, the listed company shall promptly, completely, and accurately input information related to the resolution for, process of, and method of the merger or consolidation, acquisition, or transfer of shares from another, of the foreign business.
Under the circumstances in Subparagraph 32 of Paragraph 1, in addition to complying with the requirements set forth in Article 3, the listed company shall, by the day next following the expiry of the time limit of which the company is notified by letter of the TWSE for replacing shares withdrawn from custody, input the amount of shares replaced and date of replacement.
The term "subsidiary" in these Procedures means a subsidiary as defined in Statement of Financial Accounting Standards No. 7. If a subsidiary experiences any circumstance specified in any subparagraph of paragraph 1 as required to be reported for a subsidiary, the listed company shall report it on behalf of the subsidiary.
Article 2-1 Where any circumstance in any subparagraph of Paragraph 1 of Article 2 applies to any non-exchange-listed (and non-OTC-listed) major subsidiary of a listed company, it shall be deemed material information of the listed company. An investment holding company, holding company, or financial holding company, in addition to being required to report material information of their major subsidiaries, are also required to report material information of any subsidiary as described below, which shall be deemed to be that of the listed company:
1. any non-exchange-listed (and non-OTC-listed) subsidiary held by an investment holding company or a holding company;
2. a financial holding company subsidiary in the name of which appears any of the terms "bank," "insurance," "securities," "futures," or "bills," or the shareholders' equity of which accounts for 2 percent or more of the shareholders' equity of the parent company on the consolidated financial statement for the most recent fiscal year.
The term “major subsidiary” means any subsidiary of the listed company to which any of the following circumstances has applied in each of the most recent two fiscal years (with the information being based on the annual financial reports audited and attested by a CPA), or any subsidiary that the CPA deems to have a significant effect on the financial report of an audited company:
(1) Where 30 percent or more of the listed company's operating revenue is derived from the single subsidiary.
(2) Where 50 percent or more of a listed company's major materials or major commodities, in terms of its quantities or dollar purchase amounts thereof, is derived from the single subsidiary.
(3) Where 50 percent or more of the listed company's total output value (including from self-production, contracting, and outsourcing) is derived from the single subsidiary.
(4) Where the listed company's dollar amount of original investment in the single subsidiary reaches 40 percent of the capital stock stated on the listed company's financial report and also NT$300 million or more.
(5) Where the aggregate dollar amount of the company's monetary loans and guarantees and endorsements to the single subsidiary reaches 40 percent of its net worth and also NT$300 million or more.
(6) Where a single subsidiary's profit/(loss) before tax accounts for 50 percent of the listed company's profit/(loss) before tax on its consolidated financial statements and also NT$300 million or more.
Where the dollar amount of the combined investment in any single enterprise by a listed company and/or any of its subsidiaries exceeds 10 percent of the company's net worth, if such invested single enterprise is not a domestic public company, and there occurs in respect thereof any of the events set out in Article 7, Subparagraphs 1 to 8, of the Securities and Exchange Act Enforcement Rules, the Listed Company shall report on its behalf before the opening of trading hours on the business day next following the day it learns of the occurrence of an above-stated event or of the media reportage of the event.
Where any circumstance in any subparagraph of Paragraph 1 of Article 2 applies to a non-exchange-listed (non-OTC-listed) parent company of a listed subsidiary company thereof, it shall be deemed material information of the listed company, which shall report the information on behalf of the parent company.. If the parent company is a foreign company, [the listed subsidiary] shall report on its behalf any of the particulars set forth in the following subparagraphs before the opening of trading hours on the business day next following the day it learns of the occurrence or media reportage of such event with respect to the parent company:
(1) Material change in shareholder equity.
(2) Material change in business policy.
(3) Material disaster resulting in serious reduction or complete cessation of production.
(4) Material effect on shareholders' equity or company operations resulting from a change in laws, regulations, or rules of the home country
(5) Mass media reportage about the parent company sufficient to affect securities prices of a listed subsidiary in Taiwan.
(6) Occurrence of any other material event that shall be immediately reported pursuant to law or regulation of the foreign company's home country.
Article 2-2 "Material information of a secondary listed company" as used in these Procedures means the following matters:
1. An event set out in Article 36, paragraph 2, subparagraph 2 of the Securities and Exchange Act.
2. Material information events whose simultaneous reporting is required by the laws, regulations, or bylaws of the foreign issuer's home country or its country of listing.
3. Any circumstance in regard to the company itself set out in Article 50-3 of the TWSE Operating Rules.
4. A change in the foreign issuer's articles of incorporation or any capital increase or decrease by the foreign issuer.
5. Circumstances with respect to the issuance, maturity, or repurchase of the foreign issuer's preferred stock or corporate bonds, and for corporate bonds convertible to stocks, the allotment of shares in accordance with company rules.
6. A change to the foreign issuer's principal line of business, custodian institution, or to the depositary institution located in the Republic of China.
7. Any pledge, lease, sale, or retirement of major operating assets of the foreign issuer.
8. A reduction in, or stoppage of, production of some or all products by the foreign issuer due to a major disaster.
9. The pendency or conclusion of a material litigation case or tax disposition case involving the foreign issuer, its custodian institution, depositary receipts, or the agent institution in the ROC of a secondary listed company, or the commencement of lawful reorganization, bankruptcy, or liquidation proceedings by the foreign issuer.
10. Any circumstance set out in subparagraphs 6 through 9 of this article occurs to a subsidiary in which the foreign issuer holds more than a 50 percent share or a sub-subsidiary at any level beneath the foreign issuer that it directly or indirectly controls, and that materially affects its business or finances.
11. Conduct by a promoter or director of the foreign issuer that, under the law of the foreign issuer's home country, entails joint and several liability for damages with the secondary listed company.
12. A decision by a court of the foreign issuer's home country that duly voids or declares invalid a resolution of the foreign issuer's shareholders meeting.
13. A change in the laws or regulations of the foreign issuer's home country that materially affects shareholder equity or corporate operations.
14. A resolution by the board of directors of the foreign issuer to carry out a merger or consolidation, demerger, acquisition, exchange or transfer of shares to or from another, dissolution, or any material change in any of the above matters; failure for any reason by a company participating in a merger or consolidation, demerger, acquisition, or transfer of shares from another, to convene a subsequent shareholders' meeting, or a veto by either side of such a proposal; or a resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation; or a resolution by the board of directors for a demerger or distribution of dividends, causing the holders of its issued Taiwan Depositary Receipts to acquire shares of another company for free.
15. Listed foreign stocks, Taiwan Depositary Receipts, or foreign bonds are reported lost, subject to a judgment of exclusion, or subject to attachment or provisional attachment by order of a court, or their holder is declared bankrupt by a court ruling, where sufficient to affect the market price of the securities listed for trading.
16. A change in the credit rating assigned to a foreign issuer or its issued securities by a credit rating agency.
17. A change in, or a change in the plan for, a private placement of securities by the foreign issuer.
18. A report in the domestic or foreign mass media or any information provided by any investor sufficient to affect the price of a listed foreign stock, Taiwan Depositary Receipt, foreign bond straight bonds, foreign convertible corporate bonds, or foreign corporate bonds with warrants.
19. Change in chairperson, general manager, juristic-person director or supervisor, independent director, principal financial or accounting officer, internal audit officer, CPA, or agent for litigious and non-litigious matters, of the foreign issuer.
20. Termination on the CPA's own initiative or otherwise failure by the CPA of the foreign issuer to carry out the audit and attest work on the company's financial reports.
21. Any amendment to the depositary agreement signed between the foreign issuer and the depository institution that has a material effect on shareholder equity.
22. A resolution by the foreign issuer to repurchase Taiwan depositary receipts, the expiration of the repurchase period or completion of the repurchase, or the repurchased Taiwan Depositary Receipts cumulatively reaching 2 percent of the total number of the already issued Taiwan depositary receipts, or the number of outstanding units of the Taiwan depositary receipts being less than 12 million units.
23. The date for and the relevant financial and business information with respect to convening by the foreign issuer of a press conference, investor conference, or other public disclosure of financial and business information that has not been entered into the Market Observation Post System.
24. Inability by the foreign issuer to punctually pay for foreign straight bonds, foreign convertible corporate bonds, or foreign corporate bonds with warrants that have matured or that creditors have requested it to redeem.
24. Publication of information by a foreign issuer on its own initiative that has a material effect on shareholder equity or the price of securities.
Documents or materials submitted by a secondary listed company to the securities exchange or supervisory authorities of its original listing shall simultaneously be submitted to the TWSE.
If a secondary listed company has a circumstance under paragraph 1, subparagraph 24, it shall, by the tenth day of each month, input the monetary amount and quantity unredeemed and the status of negotiations with creditors as of the end of the preceding month, the cash budget statement for the current month, and the status of execution of the cash budget statement for the preceding month, until redemption has been completed in full.
Article 3 A listed company or primary listed company to which any circumstance set forth in any subparagraph of Paragraph 1, Article 2 of these Procedures applies, or that discovers mass media reportage of any circumstance set forth in any subparagraph of paragraph 1, Article 2, or any reportage that diverges from facts shall handle those of such cases conforming to the circumstances set forth in Paragraph 1 of Article 2 of the TWSE Procedures for Press Conferences Concerning Material Information of Listed Companies in compliance with Article 5 of said Procedures, and shall handle all other such cases by inputting the content or explanations of the information into the Internet information reporting system designated by the TWSE before the commencement of trading hours of the trading day next following the date of occurrence of the event (date of agreement, date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of resolution of the board of directors or a committee established thereby, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; however, for any investment requiring the approval of the Competent Authority, the earliest of the above dates or the date of receipt of approval by the Competent Authority shall apply) or date of the media reportage; provided, where a press release is issued prior thereto, it shall be input at the time of issuance of the press release. However, where foreign laws or regulations impose time constraints concerning material information that a listed company or primary listed company is required to report on behalf of a foreign enterprise under these Procedures, it may accommodate the time constraints on the foreign enterprise and make the disclosure simultaneously therewith.
The filing time limits in the subparagraphs of Paragraph 1 of the preceding Article shall be based on Taiwan time, and the filings shall be made in Chinese, provided that filings may also be simultaneously disclosed in English.
If a listed company that issues securities outside of Taiwan, during the duration of those securities, experiences any event in the subparagraphs of paragraph 1 of the preceding article, it shall simultaneously input the content or explanations of the information in English into the Internet information reporting system designated bythe TWSE; or, if it experiences any material event that requires immediate reporting under the laws or regulations or securities exchange rules of the country of listing, or the country where the company is registered, it shall simultaneously input such information into the Internet information reporting system designated by the TWSE, and if it receives any written enquiry from the securities regulatory agency or securities exchange of the country of listing, or the country where the company is registered with respect to any matter that has a material effect on shareholder equity or the price of securities, it shall immediately forward a copy of the content of the written enquiry and any response thereto to the TWSE.
Where a listed company or a primary listed company convenes on its own initiative, or is invited to attend an investor conference or press conference, it shall do so pursuant to the following procedures:
1. where the need arises for the overseas investor conference or press conference to be held during the trading hours of the centralized stock exchange, such case shall be reported to the TWSE in advance for approval.
2. The date and venue of the conference shall be announced, at the latest, one day prior to the convening of the conference.
3. The complete press releases and financial and business information shall be input on the Internet information reporting system designated by the TWSE on the day of conference at the latest, provided that if the conference is convened during trading hours, it shall be input before the conference during non-trading hours.
4. The financial and business information disclosed in the investor conference or press conference may not go beyond the content of the aforesaid information already disclosed.
Article 3-1 If a circumstance set forth in Article 2-2 applies to a secondary listed company, it shall file a report within the time limit set forth in the preceding Article, provided that if such circumstance falls within the purview of the laws or regulations of the company's home country or country of listing, the company shall, within the time limit prescribed by such laws or regulations, simultaneously use the Chinese language to input information into the information reporting website designated by the TWSE indicating the reason for the occurrence of the given circumstance, its impact on the company's finances and operations, the estimated monetary amount of such impact, and measures adopted in response.
If a matter with respect to a foreign issuer is subject to an arranged inquiry by the securities regulator or securities exchange of its home country or country of listing, and such matter has a material affect on shareholder equity or the price of securities, the foreign issuer shall simultaneously forward the substance of the inquiry, and its response, to the TWSE.
When a secondary listed company convenes on its own initiative or is invited to attend an investor conference or press conference, it shall do so in accordance with paragraph 4 of the preceding article.
A secondary listed company may engage its agent in the ROC to file the reports of the abovementioned material information to the TWSE via the Internet.
Article 4 When the TWSE discovers that, or an investor inquires of the TWSE by facsimile (Attachment 1) with attached supporting materials, as to whether any unpublished material information as set forth in Article 2 or Article 2-2 applies to a listed company, primary listed company, or secondary listed company, and the TWSE deems necessary, it may complete a "Public Statement Concerning Material Information - Form (1)" (Attachment 2) specifying the source and content of the information, and make inquiries by facsimile, telephone, or e-mail of the spokesperson or acting spokesperson of the abovementioned company, litigious or non-litigious agent of the primary-listed company, or the agent located in the ROC of a secondary listed company, who shall provide item-by-item explanations of the content of the inquiries, and shall input the explanations into the Internet information reporting system designated by the TWSE within the time limit prescribed by the TWSE.
The "time limit prescribed by the TWSE " in the preceding paragraph means that if any abovementioned company receives a facsimile, telephone, or e-mail inquiry from the TWSE before 12:30 p.m. on a given trading day, it shall input the explanations into the Internet information reporting system designated by the TWSE before the close of trading; or if it receives a facsimile, telephone, or e-mail inquiry from the TWSE after 12:30 p.m. on a given trading day, it shall input the explanations into the Internet information reporting system designated by the TWSE before 5 p.m. on the same trading day; provided that if any special circumstance applies to a primary-listed or secondary-listed company that makes the company unable to input the explanations within the time limit, the company may, following approval by the TWSE, extend the time limit.
An investor making a written inquiry referred to in Paragraph 1 shall fill out his or her true name, personal identification number or uniform invoice number, address, and contact telephone number. The TWSE may use the original inquiry or an abstract thereof to make inquiries of the listed company during regular business hours.
Article 5 When the TWSE discovers any irregularity in securities trading pursuant to the Rules Governing Implementation of the Stock Market Monitoring System, it may complete a "Public Statement Concerning Material Information - Form (2)" (Attachment 3), and make inquiries by facsimile, telephone, or e-mail of the spokesperson or acting spokesperson of the company, or the litigious or non-litigious agent of the primary-listed company, or the agent located in the ROC of a secondary listed company. The company shall comply with the procedures set forth in Paragraph 1 of the preceding article with respect to the content of the inquiry.
Article 6 To ensure the accuracy of and general access to the information, a listed company, primary listed company, or secondary listed company shall not disclose any information to the public before publishing any material information.
Material information published by a listed company, primary listed company, or secondary listed company shall describe in detail the facts of the event, the cause, the estimated effect on company finances and business, monetary amount of the effect, and countermeasures. The material information may not contain exaggerated descriptions or descriptions resembling advertising or promotional language. The concrete content required to be published shall be separately prescribed by the TWSE.
Article 7 If a listed company, primary listed company, or secondary listed company or its agent located in the ROC is for any other reason unable to input material information into the Internet information reporting system designated by the TWSE, and publishes the material information through the "Public Statement Concerning Material Information - Form (3)" (Attachment 4), the TWSE may publicly announce the information pursuant to regulations, or disclose it generally through the TWSE's information transmission system, or take other measures pursuant to the TWSE Rules Governing Implementation of the Stock Market Monitoring System, and may forward photocopies to all securities brokers to publicly post at their places of business, and display them in the TWSE'sInvestor Library for reference by the investor public.
Article 8 The TWSE may from time to time select listed companies and primary listed companies according to the standards for sampling checks set forth below and require them to submit financial and business related materials or photocopies thereof for purposes of verifying material information disclosures and the timeliness, accuracy, and completeness thereof. When necessary, it may also carry out an on-site audit.
1. Standards for sampling checks:
(1) Among securities for which information for attention in trading has been publicly announced, those securities with relatively many cumulative instances thereof in the current month.
(2) Companies that have published very little material information in the current month, or that have published material information of an unusual nature.
(3) Companies that are objects of complaints for failing to publish material information, delaying its publication, or publishing untrue material information.
(4) Obvious severe irregularities in operating conditions.
(5) Any circumstances the TWSE deems to require investigation and verification.
2. Financial and business materials to be submitted:
(1) Minutes of board of directors meetings
(2) Trading certificates, vouchers, books and statements, and related materials.
(3) Relevant materials supporting the content of the material information.
(4) Other materials the TWSE deems need to be provided.
Rules governing the sampling check operations referred to in the preceding paragraph shall be separately prescribed by the TWSE.
Article 8-1 When the TWSE deems necessary, pursuant to the listing contract, the TWSE Operating Rules, or these Procedures, it may make inquiries to a secondary listed company or its agent located in the ROC, or request that such company or agent provide the relevant information.
Article 9 If any of the following circumstances applies to a listed company, a primary listed company, or a secondary listed company, the TWSE may impose on a case-by-case basis a penalty of NT$30,000.However, if the cumulative number of penalties imposed within the most recent one year reaches two or more (inclusive of the current penalty), or if the circumstances in an individual case are due to intent or material negligence, or have a material impact on shareholder equity or securities prices, the TWSE may impose a penalty of NT$50,000 to NT$5 million. Where a company that is required to make up a disclosure and is notified to do so within two business days from delivery of the notice, still fails to comply by the deadline, a penalty of NT$10,000 per day may be imposed until the date of compliance and the information may be generally disclosed through the TWSE's information transmission system.
1. The company violates any provision of these Procedures.
2. The company arbitrarily publishes unconfirmed news or discloses information that diverges from fact.
3. The company fails to submit relevant sampling check materials within the time limit set by the TWSE.
If any circumstance set forth in any subparagraph of the preceding paragraph applies to a listed company, a primary listed company, or a secondary listed company, and the TWSE has imposed a per day penalty and the company still fails to comply by the deadline and the circumstances of the particular case are severe, the TWSE may alter the original trading method of the company's listed securities, suspend trading of the securities, or delist the securities pursuant to Article 49, Article 50, Article 50-1, or Article 50-3 of the TWSE Operating Rules.
A listed company, primary listed company, or secondary listed company on which a penalty is imposed shall pay the penalty to the TWSE Finance Department within five days from receiving notice from the TWSE.
If any circumstance under Subparagraph 2 of Paragraph 1 is found on the part of a listed company, primary listed company, or secondary listed company, the TWSE shall compile the relevant information and submit it to the competent authority as a basis for it to take further measures.
If an event under Article 2-2, paragraph 1, subparagraph 2 is found on the part of a secondary listed company, and the company fails to simultaneously report the event on the Internet information reporting system designated by the TWSE, or fails to simultaneously submit required documents and materials to the TWSE pursuant to Article 2-2, paragraph 2, then the TWSE may, at its sole discretion, impose a penalty of no less than NT$1 million to no more than NT$5 million. However, if the cumulative number of penalties within the most recent 1 year reaches two or more (inclusive of the current penalty), the current penalty may be increased to NT$5 million.
Article 10 Imposition of a penalty on a listed company, primary listed company, or secondary listed company due to a violation of these Procedures shall be disclosed in the “Section Designated for Violations by TWSE Listed Companies of Rules Governing Information Reporting, Material Information, and Press Conferences” on the Market Observation Post System.
Article 11 These Procedures shall be in force after approval and recordation by the competent authority; the same shall apply to any amendments hereto.