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Article 1
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These Criteria are adopted pursuant to provisions of Paragraph 1 of Article 22 of the Securities Exchange Law (the "Law").
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Article 2
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Except when laws and regulation provide otherwise, the offering and issuance of overseas securities by issuers shall be governed by these Criteria.
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Article 3
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A public company whose shares are listed on the stock exchange or traded on the over-the-counter market in accordance with Article 3 of the Guidelines for Examination of Securities Traded on the Over-the-Counter Market of the Republic of China Over-the-Counter Securities Exchange (hereinafter referred to as a "listed company" or an "OTC company meeting Article 3 of the Examination Guidelines for Trading on OTC Market", as the case may be) may apply for offering and issuance of overseas corporate bonds, overseas stocks, or sponsoring issuance of overseas depositary receipts and apply for trading of its issued stocks on offshore stock exchanges.
A public company who has entered into a listing contract with the Taiwan Stock Exchange Co. or who has applied and entered into a OTC trading contract with the Taiwan OTC Exchange in accordance with Article 3 of the Guidelines for Examination of Securities Traded on the Over-the-Counter Market of the Republic of China Over-the-Counter Securities Exchange may apply for offering and issuance of overseas stocks or sponsoring issuance of overseas depositary receipts concurrent with its domestic underwriting.
A company which is neither a listed company nor meets Article 3 of the Examination Guidelines for Trading on the OTC Market may apply for offering and issuance of overseas common corporate bonds and exchangeable bonds with the right to exchange into the stocks of a listed company or an OTC company meeting Article 3 of the Examination Guidelines for Trading on OTC Market held by it.
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Article 4
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The term "sponsor in issuance" as used in these Criteria refers to the sponsoring by the issuer to assist in implementing the offering plan for overseas depository receipts and to provide financial information to a depository institution pursuant to a deposit agreement.
The term "depository institution" as used in these Criteria refers to a financial institution located outside the territory of the Republic of China and issues overseas depository receipts pursuant to the securities regulations of its home country.
The term "custodian institution" as used in these Criteria refers to a bank located within the territory of the Republic of China and has been approved by the Ministry of Finance to engage in custodian business.
The term "overseas depository receipts" as used in these Criteria refers to receipts issued by a depository institution outside the Republic of China pursuant to the securities regulations of its home country to evidence the securities held in the custody of a custodial institution.
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Article 5
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An issuer may not apply for offering and issuance of overseas securities upon the existence of any of the following events:
1. Where there is a violation of Paragraph 2 of Article 247 of the Company Law or Article 249 of the Company Law, an issuer may not issue unsecured overseas corporate bonds; provided, however, that issuers who are in conformance with Article 28-4 of the Law shall not be subject to the restriction of Article 247 of the Company Law.
2. Where there is any violation of Paragraph 1 of Article 247 of the Company Law or Article 250 of the Company Law, an issuer may not issue overseas corporate bonds; provided, however, that issuers who are in conformance with Article 28-4 of the Law shall not be subject to the restriction of Article 247 of the Company Law.
3. Where there is any violation of Article 269, Article 270, or Paragraph 2 of Article 278 of the Company Law, an issuer may not issue new shares for overseas depositary receipts or overseas stocks; provided, however, that conversion by overseas corporate bonds holders into overseas depositary receipts or stocks is permitted.
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Article 6
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When an issuer applies for the issuance and offering of overseas securities, it shall apply for an approval from the Securities and Futures Commission (this "Commission") and obtain a consent letter from the competent authority in charge of foreign exchange.
If an application is incomplete or the items required to be specified are insufficient and have not been corrected within a time frame prescribed by this Commission, the Commission may return the application documents.
An amendment application shall be filed promptly with this Commission if there is any change in the particulars applied for and documents submitted.
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Article 7
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The SFC may disapprove the offering and issuance of overseas securities upon the existence of any of the following events:
1. Where there exists any of the events referred to in Paragraph 1 of Article 156 of the Law;
2. Where the plan for the current offering and issuance of overseas securities is unfeasible, unnecessary, and unreasonable.
3. Where the implementation of any previous plan for capital increase by cash or issuance of corporate bonds has any of the following conditions and no improvement has been made:
(1) The implementation is seriously behind schedule without justifiable reason and has not been completed.
(2) The plan was materially changed without justifiable reason . However, this provision shall not apply where the time between the actual completion of the plan and the filing of the application exceeds three years.
(3) The plan was materially changed without being submitted to and approved by a shareholders' meeting.
(4) The issuer has not complied with Article 9 herein and Item 4 through Item 8 of Paragraph 1 of Article 9 of the Guidelines for Handling Offering and Issuance of Securities by Issuers in the most recent one year.
(5) Reasonable efficiency has not been produced without justifiable reason; provided, however, that this provision shall not apply if the period between the actual completion date of the plan and the application date is more than three years.
4. Where the important contents of the plan for this offering and issuance of overseas securities (such as offering plan, source of funds, project item, estimated schedule, and possible efficiency expected to be produced) have not been proposed and submitted to a board meeting or shareholders meeting for discussion and resolution/approval in accordance with the Company Law and Articles of Incorporation.
5. Where the company lends large amounts of capital to others in excess of financing needs resulting from the company's inter-company or inter-firm transactions or enters into material irregular transactions and has not rectified the situation at the time of filing the application.
6. Where the company holds a large volume of short-term investments or idle assets or real property and has no disposal or development plan; provided, however, that this provision shall not apply when the funds raised are used to purchase fixed assets and there is a concrete plan for fund raising evidencing the necessity to raise the funds.
7. Where the company provides its assets to secure a loan for another party; provided, however, that this provision shall not apply if the asset is provided to secure a loan for a subsidiary based on business needs.
8. Where the ultimate source of funds of this offering and issuance of overseas securities is from a related party of the issuer. The term "related party" shall be determined according to Paragraph 2 of the Statements of Financial Accounting Standards No. 6.
9. Where this offering and issuance of overseas securities has one of the following conditions:
(1) The amount of capital to be directly or indirectly invested in the mainland area as set forth in the plan to use the funds is greater than 20% of the capital raised from the offering. However, this provision shall not apply where the offering and issuance of overseas securities consists of securities with shareholder rights such as stocks, depository receipts, and convertible corporate bonds, where the amount of direct or indirect investment in mainland China under the capital utilization plan does not exceed 40 percent of the total amount in the current issuance, and where the issuance method or conversion method provide that the bearer may not request redemption, conversion, or reimbursement within one year of the issuance of the overseas securities.
(2);The total amount of direct or indirect investment in mainland China exceeds the upper limit set by the Investment Commission, Ministry of Economic Affairs. However, this provision shall not apply where the capital is used to purchase domestic fixed assets and a commitment is made not to increase investment in the mainland area.
10. Where the company's financial statements in the most recent two years have not been prepared in accordance with relevant laws and generally accepted accounting principles and such violations are significant.
11. Where the particulars applied for are in violation of other laws and regulations, or where the Commission deems necessary for protection of the public interest or national reputation.
The foregoing Items 4-9 are not applicable to applications for sponsoring in issuance of depositary receipts evidencing issued stocks or for trading of issued stocks on offshore stock exchanges.
The term "large volume" referred to in Item 6 of Paragraph 1 means that the total amount of short-term investment, idle assets and real property held reaches one of the following percentages:
(1) 40% of shareholder equity in the most recent financial report audited or reviewed by a CPA; or
(2) 60% of the total amount of the overseas securities offering to be issued under the application.
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Article 8
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After an issuer's application for offering and issuance of overseas securities has been approved, the Commission may revoke the approval if the Commission discovers any of the following situations:
1. Where the overseas securities have not been fully subscribed to and the proceeds thereof have not been fully collected within three months from the date on which the approval letter of this Commission has been received; provided, however, that this Commission may grant an extension of three months upon application therefore with proper reasons and provided further that only one extension shall be allowed.
2. Where the issuance of overseas depository receipts is not sponsored or the overseas stock is not offered and issued in accordance with the particulars of application and the method of underwriting stated in the accompanying documents, and no application for change has been filed with this Commission before the date of execution of a deposit agreement or the date of fixing the price for the issuance; provided, however, that this provision shall not apply if the issuer applies for sponsoring in issuance of overseas depository receipts with issued shares or for trading issued stocks in foreign securities exchanges.
3. Where overseas convertible bonds or bonds with warrants are not issued in accordance with application particulars, the method of underwriting and other terms and conditions for conversion or exercise, and where no application for change has been filed with this Commission before the date of fixing the price of the issue.
4. Where any provision of these Criteria or any restriction or prohibition specified in this Commission's notice of approval for application is violated. Overseas securities shall not be listed and traded overseas in New Taiwan Dollars.
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Article 9
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After the application for offering and issuance of overseas securities has been approved, the issuer shall comply with the following:
1. Before the completion of the plan for use of the funds, it shall disclose the implementation progress of the plan in the annual report.
2. In the case of a listed company or a public company whose stocks are traded over-the-counter , the issuer shall, within ten days after the end of each quarter, enter the plan for the use of the funds and the quarterly report form on the status of its use of the funds into the stock market monitoring system or internet information system.
3. If the funds are raised by a listed company or a public company whose stocks are traded over-the-counter, and if this Commission requires that the funds raised by it be used for a specific purpose, the issuer shall request the original underwriter to prepare an evaluation opinion in connection with the implementation progress of the funds and the reasonableness of the purpose of the unused funds on a quarterly basis. Within ten days after the end of each quarter, the issuer shall enter such opinion together with the information referred to in the preceding Item into the stock market monitoring system or internet information system.
4. In the event that a change to an item or a dollar amount in an individual item in the plan for use of funds results in a total decrease or total increase of the capital needed for the original item which is greater than 20% of the total amount of capital raised, after the issuer reports the change to the authority in charge of foreign exchange for approval as required and the plan is changed, the issuer shall make a public announcement within two day after the board of directors approves a resolution. The issuer must also submit the change to this Commission for recordation and to a shareholders meeting for acknowledgement. In the case of a listed company ora public company whose stocks are traded over-the-counter, the issuer shall, upon such change and within ten days after the end of each subsequent quarter, also request the original underwriter to issue an evaluation opinion in connection with the implementation progress of the funds and the reasonableness of the purpose of the unused funds and enter such opinion together with the information referred to in Item 2 above into the stock market monitoring system or internet information system.
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Article 10
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An issuer applying for sponsoring issuance of overseas depositary receipts by a depositary institution with new shares issued with cash for capital increase or with issued and outstanding shares shall file an Application for Sponsoring Issuance of Overseas Depositary Receipts (Attachments 1 and 2) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the approval by this Commission.
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Article 10-1
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An issuer may apply for sponsoring in the issuance of overseas depository receipts through cash capital increase by issuance of new shares at below par value.
An issuer applying for sponsoring in the issuance of overseas depository receipts through cash capital increase by issuance of new shares at below par value shall state its reasons for not using other capital raising methods and the reasonableness thereof, its method for setting the issue price of shares, and any effects on shareholders' rights and interests. It shall also apply for approval by resolution of a shareholders meeting or directors meeting in accordance with the Company Law or relevant provisions of securities laws and regulations.
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Article 11
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After the issuance of overseas depositary receipts, additional depositary receipts may not be issued except under the following conditions and when the Commission has granted its approval:
1. Where depositary receipts have been redeemed and sold, depositary receipts may be re-issued by the depositary institution through purchase by the investor itself or by the depositary institution on behalf of the investor of stock within the amount of the original facility from domestic market and deposit them with the custodian 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 agreement and custodian agreement.
2. Where new shares are issued as a result of capital increase by cash, recapitalization of earnings or capital surplus, additional depositary receipts corresponding to the amount of the newly issued shares may be issued.
For additional depositary receipts corresponding to the amount of the newly issued shares pursuant to the preceding Paragraph, if the proceeds raised offshore are to be converted into New Taiwan Dollars and used onshore, the issuer shall obtain a consent letter from the government authority in charge of foreign exchange before reporting (applying for) capital increase through cash injection to this Commission.
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Article 12
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The following particulars shall be specified in the offering plan for overseas 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 overseas depositary receipts and method for determining the issue price.
3. Rights and obligations of the holders of overseas depositary receipts.
4. Source of the underlying securities represented by overseas depositary receipts; if the securities evidenced by the depositary receipts are new shares issued for cash injection, and if a shareholders meeting authorizes the board of directors to adjust the issuance amount within the scope of the limit depending on the market status and issue the depositary receipts in one issue, such shall be stated in the offering plan.
5. Method of underwriting. It shall be expressly stated as to whether all the depositary receipts shall be publicly issued or whether a portion thereof shall be subscribed to by specific person(s) through special agreement. If it is agreed that a portion thereof shall be subscribed to by specific person(s), the purpose of subscription by specific person(s), the total number of units subscribed to by the specific person(s), total dollar amount, and the relation between the specific person(s) and the issuer shall be specified in the offering plan.
6. Place of issuance and transaction.
7. In case overseas depositary receipts evidence new shares issued for cash injection, the use of proceeds and the projected benefits to be derived therefrom.
8. Allocation of relevant fees incurred during the offering period and the period when the facility remains outstanding.
9. Other matters required to be specified by this Commission.
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Article 13
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An issuer applying for offering and issuance of overseas depositary receipts shall retain a securities underwriter to prepare an evaluation report on the following matters:
1. Feasibility of the offering plan of the overseas depositary receipts.
2. The allocation of expenses incurred for overseas depositary receipts and impact on shareholders equity.
3. In the event that the underwriting method provides that a portion of the depositary receipts shall be subscribed to by specific person(s), the reasonableness and legality of the offering plan and the impact on shareholders equity shall be evaluated.
4. Feasibility and necessity of the offering and issuance plan, reasonableness of use of proceeds, projected progress and the effect expected to be generated, where the securities evidenced by the depositary receipts are new shares issued for cash injection.
5. In the case of an application for sponsoring in the issuance of overseas depository receipts through cash capital increase by issuance of new shares at below par value, necessity and reasonableness of discounting the price of the newly issued shares, and its reasons for not using other capital raising methods, and any effects on shareholders' rights and interests.
6. Reasonableness of the pricing formula for the overseas depositary receipts.
7. Legality of the provisions in the deposit agreement and custodian agreement.
8. Whether there exists any event referred to in Article 5 and Article 7 of these Criteria and the basis for evaluation thereof shall be explained.
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Article 14
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When a holder of overseas depositary receipt requests redemption, it may request the depositary institution to transfer the title of 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 holder of depositary receipts may not request redemption within three months after the issuance of the overseas depositary receipts if the underlying securities for such depositary receipts are new shares issued for cash injection.
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Article 15
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After overseas depositary receipts have been issued, the cash dividends distributed, the sales proceeds received for sale of underlying securities from redemption, and the remittance of funds required by the investor itself or through depositary institution to acquire stocks in domestic market for re-issue of depositary receipts pursuant to Article 11, Paragraph 1 Item 1 of these Criteria shall be handled in accordance with the relevant provisions of the Statute for Regulation of Foreign Exchange.
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Article 16
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The depositary institution shall appoint a local agent to handle the opening of a domestic securities trading account, exercise of shareholder's rights, applications for foreign exchange, and payment of taxes.
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Article 17
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An issuer approved by this Commission to sponsor the issuance of overseas depositary receipts shall, within two days after signing a deposit agreement, make a public announcement and report to this Commission on the following matters:
1. Total issue dollar amount, issue price and total number of units of overseas depositary receipts, however, if the overseas depositary receipts are for conversion of overseas corporate bonds, the public announcement may only show the estimated number of units to be issued;
2. The number of shares of the underlying securities and their unit price, however, if the overseas depositary receipts are for conversion of overseas corporate bonds, the public announcement may only show the estimated number of shares.
3. Place of issuance and transaction.
4. If the underwriting method provides that a portion of the depositary receipts shall be subscribed to by specific person(s), then the purpose for subscription by the specific person(s) through negotiation, the total number of units subscribed to by the specific person(s), total dollar amount, and the relation between the specific person(s) and the issuer shall be publicly announced.
5. Use of proceeds plan and estimated effect if the securities underlying the overseas depositary receipts are new shares issued for cash injection;
6. Major impact on shareholder equity (such as the allocation of expenses incurred from sponsoring the overseas depositary receipts or impact on the shareholding structure).
Should there be any change after the announcement or reporting of items referred to in the preceding Paragraph, a public announcement of such change shall be made and a report shall be filed with this Commission within two days after the closing of the offering.
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Article 18
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An issuer approved by this Commission to sponsor an issuance of overseas depositary receipts shall submit one set of the following documents to this Commission for record within ten days after issuance of the overseas depositary receipts:
1. Prospectus prepared in accordance with the securities laws of the country where the offering took place, however, this requirement does not apply to the issuance of overseas depositary receipts for conversion of overseas corporate bonds;
2. Copy of the deposit agreement;
3. Copy of the custodian agreement;
4. Specimen of the overseas depositary receipt;
5. An opinion letter in Chinese issued by a ROC attorney-at-law confirming that there is no material discrepancy between the actual offering terms and the contents approved by this Commission; and
6. Other documents required by this Commission.
If an issuer is required to provide to a depositary institution any information pursuant to a deposit agreement, such information shall be shall be provided to this Commission within three days after such provision.
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Article 19
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After the issuance of overseas depositary receipts, the sponsor shall, within ten days after the end of each month, submit to the competent authority in charge of foreign exchange a monthly report hereto on the total units outstanding and total number of the underlying securities evidenced thereby (Attachment 10). In addition, the names, nationalities, and number of shares redeemed shall be entered monthly into the stock market monitoring system or internet information system for requests for redemption of shares by related persons and when the accumulated requests for redemption by shareholders reaches 10% of the underlying securities represented by that issuance of overseas depository receipts.
In the event that the sponsor issues new shares for cash injection or recapitalization of earning or capital reserve and the depositary institution issues additional depositary receipts pursuant to Article 10, Paragraph 1, Item 2, the sponsor shall, within two days after issuance of the overseas depositary receipts, report to the competent authority in charge of foreign exchange the total dollar amount of the overseas depositary receipts, total units and the number of the underlying securities, and enter the relevant information into the stock market monitoring system or internet information system..
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Article 20
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An issuer intending to issue and offer overseas corporate bonds shall file an Application for Offering and Issuance of Overseas Corporate Bonds (Attachments 3-5) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the approval by this Commission.
An issuer who has issued and offered overseas corporate bonds and wishes to amend the terms and conditions for conversion into overseas depositary receipts shall file an Application for Offering and Issuance of Overseas Depositary Receipts (Attachments 6 and 7) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the approval by this Commission.
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Article 21
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When offering and issuing overseas convertible bonds, an issuer shall specify in the offering plan the following particulars:
1. Conversion procedure.
2. Method for determining the terms and conditions of the conversion (including conversion price and conversion period).
3. Conversion price and its adjustment.
4. Entitlement to interest and dividend in the converting year.
5. Method for handling funds that are not sufficient to convert into one unit of the securities upon conversion.
6. In case of conversion into overseas depositary receipts, the type of underlying securities evidenced by overseas depositary receipts, the number of securities of each unit of overseas depositary receipts, the names of depositary institutions and custodian institutions, the projected plan for the issuance of overseas depository receipts, and other agreed-upon terms and conditions.
7. Method of underwriting. The method of underwriting shall state whether all the depositary receipts shall be publicly issued or a portion thereof shall be subscribed to by specific person(s) through negotiation. If a portion thereof shall be subscribed to by specific person(s), then the purpose of subscription by specific person(s) through negotiation, number of depositary receipts, total dollar amount, and the relation between the specific person(s), and the issuer shall be specified.
8. Whether the obligation to convert the shares will be fulfilled by either issuing new shares or delivery of outstanding shares.
9. Other important matters agreed upon by the contracting parties.
When overseas corporate bonds are converted to shares, such conversion shall not be subject to Article 140 of the Company Law providing that the issue price may not be below par value.
In the absence of applicable precedent in international practice, Section 2 of Chapter III of "Criteria for Issuance and Offering of Securities by Issuers" shall apply mutatis mutandis to matters relating to conversion of overseas corporate bonds.
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Article 21-1
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When offering and issuing overseas convertible bonds or bonds with warrants, an issuer shall specify in the offering plan the following particulars:
1. [For issues bonds with] separable warrants, the total number of warrant units to be issued and the method for calculating the price of each unit.
2. The methods of exercising warrant rights (including exercise price, warrant period, type of shares covered by the warrant, exercise ratio, and the number of shares that each warrant unit provides the right to purchase).
3. Adjustment of exercise price.
4. Procedures for exercising warrant rights and method of payment for shares.
5. In the case of sponsoring overseas depository receipts to fulfill warrant obligations, the type of underlying securities evidenced by the overseas depositary receipts, their source, the number of underlying securities which each unit of overseas depositary receipts represents, the names of depositary institutions and custodian institutions, the projected plan for the issuance of overseas depository receipts, and other agreed-upon terms and conditions.
6. Method of underwriting. The method of underwriting shall state whether all the depositary receipts shall be publicly issued or a portion thereof shall be subscribed to by specific person(s) through negotiation. If a portion thereof shall be subscribed to by specific person(s), then the purpose of subscription by specific person(s) through negotiation, number of depositary receipts, total dollar amount, and the relation between the specific person(s), and the issuer shall be specified.
7. Whether the obligation to fulfill warrant rights will be made by either issuing new shares or delivery of outstanding shares.
8. Other important matters agreed upon by the contracting parties.
When warrant obligations are fulfilled by the issuer, such fulfillment shall not be subject to Article 140 of the Company Law providing that the issue price may not be below par value.
In the absence of applicable precedent in international practice, Section 2 of Chapter III of "Criteria for Issuance and Offering of Securities by Issuers" shall apply mutatis mutandis to matters relating to the exercise of overseas corporate bonds with warrants.
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Article 22
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An issuer applying for offering and issuance of overseas corporate bonds shall retain a securities underwriter to prepare an evaluation report on the following matters:
1. Feasibility of the offering plan of the overseas corporate bonds.
2. Impact of the offering of overseas corporate bonds on shareholder interests.
3. If the underwriting method provides that a portion of the corporate bonds shall be subscribed to by specific person(s), the reasonableness and legality of the offering plan and its impact on shareholder equity shall be evaluated.
4. Feasibility and necessity of the offering and issuance plan, and reasonableness of the use of proceeds, projected progress and the effect expected to be produced.
5. Whether there exists any event referred to in Article 5 and Article 7 of these Criteria and the basis for evaluation thereof shall be explained.
6. Other evaluation matters required by this Commission.
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Article 23
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Where the overseas depositary receipts are obtained from the conversion of overseas corporate bonds or the exercise of warrant rights, Paragraph 1 of Article 14 of these Criteria shall apply mutatis mutandis when the holder of such overseas depositary receipts requests the depositary institution to redeem the overseas depositary receipts.
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Article 24
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After the Commission approves the offering plan of overseas corporate bonds, the issuer shall, within two days after signing the agreement, make a public announcement and report to the Commission on the following matters:
1. Total dollar amount of the offered overseas corporate bonds, the face value of each bond certificate, and the issue price.
2. Interest rate(s) for the overseas corporate bonds.
3. Repayment method and term of the overseas corporate bonds;
4. Type of security, where the bonds are secured.
5. Conversion terms and other important terms, where the offering plan provides for conversion.
6. Place of issuance and transaction.
7. If the offering method provides that a portion shall be subscribed to by specific person(s), then the purpose for subscription by the specific person(s) through negotiation, the total number of certificates subscribed to by the specific person(s), total dollar amount, and the relationship between the specific person(s) and the issuer shall be publicly announced.
8. Plan for the use of the proceeds and the estimated effect.
9. The principal impact on shareholders equity.
Should there be any change in the items after their report or application referred to in the preceding Paragraph, a public announcement of such change shall be made and a report shall be filed with this Commission within two days after the closing of the offering.
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Article 25
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After the Commission approves an issuance of overseas corporate bonds, the issuer shall submit one set of the following documents to the Commission within ten days of the issuance of the overseas corporate bonds:
1. Prospectus prepared in accordance with the securities laws of the country in which the bonds are offered.
2. Copy of the issuance agreement.
3. Copy of the deposit agreement and custodian agreement, if there are conditions to covert or purchase overseas depositary receipts.
4. Copy of paying agency agreement.
5. Copy of purchase agreement.
6. Copy of trust deed.
7. A Chinese opinion letter issued by a ROC lawyer confirming that there is no material discrepancy between the offering terms and conditions of the overseas corporate bonds and the contents approved by this Commission.
8. Other items as specified by the Commission.
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Article 26
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After the issuance of overseas corporate bonds, an issuer shall, within ten days after the end of each month, submit to the competent authority in charge of foreign exchange a Report on the Outstanding Bonds for the preceding month (Attachment 11) and the names, nationalities, and number of shares redeemed shall be entered monthly into the stock market monitoring system or internet information system for requests to covert bonds or exercise warrants by related persons and when the accumulated requests to convert bonds or exercise warrants by shareholders reaches 10% of the estimated number of shares which can be converted or purchased by warrants pursuant to that issuance of overseas corporate bonds. After conversion of the overseas corporate bonds or exercise of the warrants is accepted by the issuer, the issuer shall, within ten days after completion of an issue of new shares for cash injection, report to this Commission and Investment Commission of the Ministry of Economic Affairs on the share subscription by overseas investors.
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Article 27
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An issuer applying for offering and issuance of overseas stocks, or listing its outstanding shares on a foreign securities exchange shall file an Application for Issuance of Overseas Stocks (Attachments 8 and 9) specifying therein the required particulars together with the required supporting documents and may proceed to the issuance only after the approval by this Commission.
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Article 27-1
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An issuer may apply for offering and issuance of overseas stocks at below par value through cash capital increase.
An issuer applying for issuance of overseas stocks at below par value shall state its reasons for not using other capital raising methods and the reasonableness thereof, its method for setting the issue price of shares, and any effects on shareholders' rights and interests. It shall also apply for approval by resolution of a shareholders meeting or directors meeting in accordance with the Company Law or relevant provisions of securities laws and regulations.
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Article 28
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After the issuance of overseas stocks, no additional stocks shall be issued, except for the following events and unless this Commission has granted its approval:
1. Where overseas stocks have been sold, investors may purchase stocks on the domestic market within the amount of the stocks previously sold and trade them on the offshore market.
2. Where new shares are issued as a result of capital increase by cash, recapitalization of earnings or capital reserve.
For additional overseas stocks corresponding to the amount of the newly issued shares pursuant to a rights issue for cash injection as referred to in the preceding Paragraph, if the proceeds raised offshore are to be converted into New Taiwan Dollars and used onshore, the issuer shall obtain the consent letter from the government authority in charge of foreign exchange before reporting (applying for) capital increase through cash injection to this Commission.
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Article 29
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An issuer applying for issuance of overseas stocks shall submit an issuance plan that specifies the following particulars:
1. Purpose of the offer.
2. Estimated date of issuance, total number of stocks to be issued, method for determining the issue price per share and total dollar amount.
3. Place of issuance and transaction.
4. Method of underwriting. The method of underwriting shall state whether all the stocks shall be publicly issued or a portion thereof shall be subscribed to by specific person(s) through negotiation. If a portion thereof shall be subscribed to by specific person(s), then the purpose of subscription by specific person(s) through negotiation, number of shares, total dollar amount, and the relation between the specific person(s) and the issuer shall be specified.
5. Manner for handling and custody of the stock certificates.
6. In case of new share issuance for cash injection, the use of proceeds and the projected benefits to be derived therefrom.
7. Allocation of expenses incurred from issuance and during the period when the stocks are outstanding.
8. Other important agreed-upon matters.
9. Other matters required to be specified by this Commission.
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Article 30
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An issuer applying for issuance of overseas stocks shall retain a securities underwriter to prepare an evaluation report on the following matters:
1. Feasibility of the issuance plan.
2. Method of issuance expense allocation and impact on shareholder interests.
3. If the issuance method provides that a portion shall be subscribed to by specific person(s), the reasonableness and legality of the issuance plan, and its impact on shareholder equity shall be evaluated.
4. Where the stocks are newly issued pursuant to a rights issue for cash injection, the feasibility and necessity of the offering and issuance plan, and reasonableness of the use of proceeds, projected progress and the effect expected to be produced.
5. In the case of an issuer applying for issuance of overseas shares at below par value through cash capital increase, necessity and reasonableness of discounting the price of the newly issued shares, and its reasons for not using other capital raising methods, and any effects on shareholders' rights and interests.
6. Reasonableness of the pricing method.
7. Legality of the offshore stock service agency agreement and custodian agreement.
8. Whether there exists any event referred to in Article 5 and Article 7 and the basis for evaluation thereof shall be explained.
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Article 31
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The holder of overseas stocks may sell the stocks in the domestic market; provided, however, that in the event the stocks are new shares issued for cash injection, the holder thereof shall not effect the sale within three months after the issuance of the overseas stocks.
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Article 32
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Where an issuer has issued overseas stocks pursuant to the Commission's approval, a report shall be made to the Commission and a public announcements shall be made within the time limit specified below:
1. Where the offering is to raise funds, a public announcement of the following particulars shall be made within two days after the issue pricing:
(1) Number of shares issued, issue price per share, and total issue size.
(2) Place of issuance and transaction.
(3) If the issuance method provides that a portion of the depositary receipts shall be subscribed to by specific person(s), then the purpose for subscription by the specific person(s) through negotiation, the total number of shares subscribed to by the specific person(s), the total dollar amount, and the relation between the specific person(s) and the issuer shall be publicly announced
(4)Use of proceeds plan and estimated effect, where the stocks are newly issued shares for cash injection.
(5) Major impact on shareholders equity (such as allocation of expenses incurred from issuance of overseas stocks or impact on shareholding structure).
2. Where the offering is not to raise funds, a public announcement on the following particulars shall be made within two days after listing:
(1) Number of shares listed, listed price per share, and total size of listing.
(2) Place of listing.
(3) Major impact on shareholders interests (such as allocation of expenses incurred from issuance or impact on shareholding structure)
Should there be any change after the announcement or reporting of items referred to in Item 1 of the preceding Paragraph, a public announcement of such change shall be made and a report shall be filed with the Commission within two days after the closing of the offering.
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Article 33
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After the approval by the Commission for issuance of overseas stocks, the issuer shall submit one set of the following documents to the Commission for record within ten days after issuance or listing:
1. Prospectus prepared in accordance with the securities laws of the country where the stocks are issued (not required for cases where no funds are raised).
2. Copy of overseas stock service agency agreement.
3. Copy of the custodian agreement.
4. An opinion letter in Chinese issued by a ROC lawyer confirming that there is no material discrepancy between the terms and conditions of the overseas stock issuance and the contents approved by the Commission.
5. Other documents required by this Commission.
When the issuer provides or discloses any information pursuant to the laws and regulations of the country where the stocks are issued, a report thereof shall be filed with the Commission within three days after such provision.
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Article 34
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After the issuance of overseas stocks, the issuer shall, within ten days after the end of each month, submit to the competent authority in charge of foreign exchange a Monthly Report on the [Overseas] Liquidity and Redemption of Overseas Stocks (Attachment 12) for the preceding month. In the event that the issuer issues new shares for cash injection, or recapitalization of earnings or capital reserve and additional new stocks are issued pursuant to Article 28, Paragraph 1, Item 2, the issuer shall, within two days after issuance thereof, report to the competent authority in charge of foreign exchange the number of stocks issued and the total dollar amount and enter the relevant information into the stock market monitoring system or the internet information system.
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Article 35
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All the application documents shall be prepared according to the forms set forth in these Criteria and bundled.
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Article 36
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When issuers make public announcements and filing pursuant to Articles 17, 24, and 32, copies shall be sent to the competent government authority in charge of foreign exchange.
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Article 37
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When issuers make public announcements and filings pursuant to Article 17, 18, 24, 25, 32, and 33, copies shall be sent to the Taiwan Stock Exchange Corp., the ROC Over-the-Counter Securities Exchange, the Chinese Securities Association, and the Securities and Futures Institute.
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Article 38
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These Criteria shall come into force on the date of their promulgation.
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