| Title： |
Operational Procedures for the Review of Foreign Securities for Listing by the Taiwan Stock Exchange Corporation(2008.10.23) |
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These Operational Procedures are promulgated pursuant to Article 2, Paragraph 3 of the Taiwan Stock Exchange Corporation’s (“this Corporation”) Criteria for Review of Securities Listings.
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This Corporation’s review of applications for the listing of securities issued by foreign issuers shall be conducted in accordance with these Operational Procedures except where otherwise provided by law, regulation, or guideline. Where content of these Operational Procedures has been amended, such review shall be conducted in accordance with the amended provisions.
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A foreign issuer and its agent institution or depositary institution in the Republic of China applying to list stocks, Taiwan depositary receipts, or bonds it has issued shall, in accordance with the rules of this Corporation, fill out in full an Application for Market Listing of Taiwan Depositary Receipts, Application for Primary Listing of Foreign Stocks, Application for Secondary Listing of Foreign Stocks, or Application for Market Listing of Foreign Bonds (Appendices 1 – 3), and submit them along with proper documentation to the appropriate office of this Corporation for certification of receipt, whereupon, following registration and assignation of a case number, they shall be distributed to the Administration Department for processing. The Administration Department shall appoint specific employees or a task force of two or more persons who will be responsible for handling each application in sequence after approval by the manager of the Administration Department. Following distribution, the undertaking employee shall immediately acknowledge receipt of the application by signing the Administration Department’s registration ledger, take appropriate custody of the application and supporting documents and notify the Competent Authority in writing.
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Except for cases of a foreign issuer applying for a primary stock listing, undertaking employees of This Corporation shall, following the acceptance for processing of applications for the listing of securities issued by foreign issuers, proceed with a written review of the application and supporting documents; the guidelines, sequence and time limit for which shall be as follows:
1. Foreign issuers and their depositary institutions applying to list Taiwan depositary receipts
1. 1 Written application and documents
(1) Inspect and examine application documents submitted for completeness and complete a “Taiwan Depositary Receipt Listing Application Inspection Form” (attached Chart 1), examining and re-examining each item level by level. Where the submitted documents are found to be incomplete, a time limit shall be set for the applicants to supplement the documents; where the time limit elapses without supplementation, it shall be noted and the application shall be rejected, with copies submitted to the Competent Authority.
(2) Examine the depositary receipt issuance plan for full disclosure in compliance with the provisions of the Criteria for the Offering and Issuance of Securities by Foreign Issuers (“the Criteria”) promulgated by the Competent Authority and complete a “Taiwan Depositary Receipt Issuance Plan Examination Chart” (attached Chart 2).
(3) Examine the depositary contract between the foreign issuer and the depositary institution for full disclosure in compliance with the provisions of the Criteria and complete a “Depositary Contract Examination Chart” (attached Chart 3).
(4) Examine the custodian contract or other documentation between the depositary institution and the custodian institution for full disclosure in compliance with the provisions of the Criteria and, along with the attached opinion of an R.O.C.-registered attorney at law, complete a “Custodial Contract or Other Documents Examination Chart” (attached Chart 4).
(5) Examine the public prospectus for full disclosure in compliance with the provisions of the Criteria and, along with the attached opinion of an R.O.C.-registered attorney at law, complete a “Prospectus Examination Chart” (attached Chart 5).
(6) Examine the underwriter’s assessment report for full disclosure in compliance with the provisions of the Taiwan Securities Association Guidelines for Information to be Published in Assessments of Securities Underwriters for Offering and Issuance of Securities by Foreign Issuers, as well as for thoroughness, and complete a “Securities Underwriter’s Assessment Report Examination Chart” (attached Chart 6).
(7) Examine the example copy of the depositary receipt certificate for full disclosure in compliance with the Criteria and, upon signing by the depositary institution and certification by the certifying institution, complete a “Taiwan Depositary Receipt Certificate Example Copy Examination Chart” (attached Chart 7).
(8) After completing the examination charts for the reviews of preceding items (2) through (7), the undertaking employee shall examine each item and pass them on to higher levels for further examination; where there are omissions or incomplete details, a time limit shall be set for the applicant to supplement [the documents]. Where the time limit is surpassed, it shall be noted and the application rejected, with copies submitted to the Competent Authority.
1.2 Listing conditions prescribed in this Corporation’s Criteria for Review of Securities Listings
(1) The listing application and attachments submitted shall be reviewed to determine whether they meet each of the listing conditions provided in Article 26 of the Taiwan Stock Exchange Corporation Criteria for Review of Securities Listings; and a Listing Conditions Review Chart shall be completed with each item examined and submitted to higher levels for further examination.
(2) Where there has been a written review of the application and other documents for completeness, compliance with the listing conditions, and submission to higher levels for further examination uncovers no errors, this Corporation shall issue a listing approval letter. The approval letter shall clearly state: “Contingent upon the Competent Authority’s approval of the application to issue Taiwan Depositary Receipts and, based on the condition that shareholders’ dispersal data upon completion of the issue indicates that the application remains in compliance with two of the listing conditions, this Corporation agrees to list the Taiwan Depositary Receipts issued by the applicant. Where no application for public issuance is made to the Competent Authority within 30 days of the issuance of this letter, this approval letter shall be void;” and shall be provided for submission with the application to the Competent Authority for public issuance of Taiwan Depositary Receipts.
(3) This Corporation’s undertaking departments shall compile and submit monthly reports to the board of directors on the status of approval letters that have been issued for Taiwan Depositary Receipt listing applications handled.
1.3 Review period
Undertaking personnel of this Corporation handling the processing of listing applications for Taiwan Depositary Receipts shall complete review and be submitted to higher levels for further review of Charts 1 through 8 referred to in the preceding paragraph within 10 business days of receipt of the application. Under extraordinary circumstances, however, the review period may be extended following reporting for approval.
2. Applications for secondary listings of stocks by foreign issuers
2.1 Application documents
(1) Examine whether documents submitted are complete and complete a “Foreign Stock Application Document Inspection Chart” (attached Chart 10), examining each document and submitting to higher levels for further examination. Where the documents submitted are found to be incomplete, a deadline shall be set for the applicant to supplement [the documents]. Where the deadline expires and the supplementation has not been fulfilled, it shall be noted and the application shall be rejected, with copies submitted to the Competent Authority.
(2) Examine the stock issue plan for full disclosure in accordance with the Criteria and complete a “Stock Issue Plan Inspection Chart” (attached Chart 11).
(3) Examine the agent contract executed between the foreign issuer and its agent institution within the Republic of China for whether full disclosure is made in accordance with the Criteria and, with an attached opinion provided by an R.O.C.-registered attorney at law, and complete an “Agent Contract Inspection Chart” (attached Chart 12).
(4) Examine the custodial contract or other documents executed between the foreign issuer and the custodial institution for whether full disclosure is made in accordance with the Criteria and, with an attached opinion provided by an R.O.C.-registered attorney at law, complete a “Custodial Contract or Other Documents Inspection Chart” (attached Chart 13).
(5) Examine the public prospectus for whether full disclosure is made in accordance with the Criteria and, with an attached opinion provided by an R.O.C-registered attorney at law, complete a “Public Prospectus Inspection Chart” (attached Chart 14).
(6) Examine whether the underwriter’s assessment is in compliance with the Taiwan Securities Association Guidelines for Information to be Published in Assessments of Securities Underwriters for Offering and Issuance of Securities by Foreign Issuers, as well as for full disclosure, and complete a “Securities Underwriter’s Assessment Inspection Chart” (attached Chart 15).
(7) In reviewing the items in preceding subparagraphs 1 through 6, the undertaking personnel, after completing the relevant charts, shall examine each item and submit them to higher levels for further examination. Where there are items omitted or incomplete disclosure, a deadline shall be set for the applicant to supplement [the documents]. Where the deadline has been surpassed, it shall be noted and the application shall be rejected, with copies submitted to the Competent Authority.
2.2 Listing conditions prescribed in this Corporation’s Criteria for the Review of Securities Listings:
(1) Review whether the application and supporting documents meet the listing conditions prescribed in Article 27 of the Taiwan Stock Exchange Corporation Criteria for the Review of Securities Listings and complete a “Listing Conditions Review Chart” (attached Chart 16), reviewing each item and submitting them to higher levels for further examination.
(2) Where there has been a written review of the application and other documents for completeness, compliance with the listing conditions, and further examination conducted by higher levels has found no errors, this Corporation shall issue a listing approval letter. The approval letter shall clearly state: “Contingent upon the Competent Authority’s approval of the application to issue stocks and, based on the condition that shareholdings’ dispersal data upon completion of the issue indicates that the application remains in compliance with two of the listing conditions, this Corporation agrees to list the stocks issued by the applicant. Where no application for public issue is made to the Competent Authority within 30 days of the issue of this letter, this approval letter shall be void;” and shall be provided for submission with the application to the Competent Authority for public issue of stocks.
(3) This Corporation’s undertaking departments shall compile and submit monthly reports to the board of directors on the status of approval letters that have been issued stock listing applications handled.
2.3 Review period
Undertaking personnel of this Corporation handling the processing of listing applications for stocks issued by foreign issuers shall complete review and submit them to higher levels for further examination of Charts 10 through 16 referred to in the preceding paragraph within 10 business days of receipt of the application. Under extraordinary circumstances, however, the review period may be extended following reporting for approval.
3. Applications for the listing of bonds by foreign issuers
3.1 Public announcement of the listing of bonds issued by foreign governments or international organizations may be made following notification by the Competent Authority.
3.2 Listing applications for bonds issued by foreign issuers:
(1) Application documents
Examine whether the written application and supporting documents are complete; complete a “Foreign Bond Listing Application Inspection Chart” (attached Chart 18) and review each document and submit them to higher levels for further examination. Where the documents submitted are found to be incomplete, a deadline shall be set for the applicant to supplement [the documents]. If the deadline is surpassed, it shall be noted and the application shall be rejected, with copies sent to the Competent Authority.
Examine whether the bond issue plan provides full disclosure is in compliance with the Criteria and complete a “Bond Issue Plan Inspection Chart” (attached Chart 19).
Examine the agent contract executed between the foreign issuer and its agent institution in the R.O.C. for full disclosure in accordance with the Criteria and, with an attached opinion provided by an R.O.C.-registered attorney at law, complete an “Agent Contract Inspection Chart” (attached Chart 20).
Examine the public prospectus for full disclosure in accordance with the Criteria and, with an attached opinion provided by an R.O.C.-registered attorney at law, complete a “Public Prospectus Inspection Chart” (attached Chart 21).
In reviewing items 18 through 21 in the preceding subparagraphs, the undertaking personnel, after completing the relevant charts, shall examine each item and submit them to higher levels for further examination. Where there are items omitted or incomplete disclosure, a deadline shall be set for the applicant to supplement [the documents]. Where the deadline has been surpassed, it shall be noted and application shall be rejected, with copies submitted to the Competent Authority.
(2) Listing conditions prescribed in this Corporation’s Criteria for the Review of Securities Listings:
The listing application and attachments submitted shall be reviewed to determine whether they meet each of the listing conditions provided in Article 25 of the Taiwan Stock Exchange Corporation Criteria for Review of Securities Listings; and a Listing Conditions Review Chart (attached Chart 22) shall be completed with each item to be further examined by higher levels.
Following a written review of the application and other documents for completeness, compliance with the listing conditions, and further examination by higher levels has uncovered no errors; applications for the listing of New Taiwan dollar-denominated bond issues, the listing contract executed with the issuer and related documents shall be directly reported to the Competent Authority for approval, followed by public announcement of the listing and a report to the board of directors. For applications for the listing of foreign currency-denominated bond issues, this Corporation shall issue a listing approval letter. The approval letter shall clearly state: “Contingent upon the Competent Authority’s approval of the application to issue bonds, this Corporation agrees to list the bonds issued by the applicant. Where no application for public issue is made to the Competent Authority within 30 days of the issue of this letter, this approval letter shall be void;” and shall be provided for submission with the
application to the Competent Authority for public issue of Taiwan Depositary Receipts.
Undertaking departments of this Corporation shall compile monthly status reports of those applications by foreign issuers to list bonds that have been handled and received approval letters, for submission to the board of directors.
3. Review period
Undertaking Personnel of this Corporation handling the processing of listing applications for bonds issued by foreign issuers shall complete review and submit them to higher levels for further examination of Charts 18 through 22 referred to in the preceding subparagraphs within 10 business days of receipt of the application. Under extraordinary circumstances, however, the review period may be extended following reporting for approval.
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After receiving an application by a foreign issuer for a primary stock listing, the undertaking personnel of this Corporation shall begin a document review of the application, its attachments, and other materials submitted by the foreign issuer, the underwriter, or the CPA:
1. Review guidelines:
1.1 The foreign issuer's consolidated financial reports for the most recent two years, audited and attested by a certified public accountant, shall be reviewed, and if there are irregular changes in any accounting titles, then the financial report for the preceding year shall be reviewed with particular attention to the given accounting title. If the review period extends beyond the fourth, seventh, or tenth month of the fiscal year adopted by the foreign issuer, then the foreign issuer shall be requested to additionally submit a consolidated financial report for the first quarter, the half-year, or the third quarter; the half-year financial report shall have been reviewed by a CPA. When the review period extends beyond the end of the fiscal year adopted by the foreign issuer, then within two months after the conclusion of that fiscal year, the foreign issuer shall additionally submit a CPA audited and attested financial report for that year as a basis for the review. At the time of submission of documents by the foreign issuer, its financial forecast information for the following quarter shall also be obtained for reference, and the foreign issuer shall be contacted during each subsequent quarter and requested to submit, prior to the end of the second month of the given quarter, financial forecast information for the following quarter until such time as the application is submitted to the Committee for Review of Stock Exchange Securities Listings. If the issuer is unable to provide the documents by the aforementioned deadlines, its application shall be returned.
1.2 The CPA audit or review report:
(1) The certifying CPAs for the most recent three years shall be two practicing Taiwan CPAs at a joint accounting firm approved by the competent authority for attestation of the financial reports of public companies.
(2) Another CPA shall be engaged to perform auditing and attestation when disciplinary action has been taken against the original CPA by the competent authority in the preceding three years, or a disposition against the CPA has been issued under Article 37, paragraph 3 of the Securities and Exchange Act, provided that this will not apply when the disciplinary action or disposition was a warning or a reprimand, and the cause of the warning or reprimand occurred five or more years prior to the date of application; another CPA shall also be engaged when the CPA has accumulated two or more demerits within the preceding year in accordance with this Company's Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for Market Listing and the GreTai Securities Market’s Regulations for Handling Deficiencies in Certified Public Accountants' Reviews of OTC Stock Listing Applications.
(3) The section on the scope of the audit or review report shall explain the accounting principles adopted by the foreign issuer and the differences between those principles and the generally accepted accounting principles used in the ROC, and include an index to the notes; it shall also contain respective statements that the report has been reviewed in accordance with Taiwan's Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards, or has been reviewed in accordance with Taiwan's Statement of Auditing Standards No. 36, "Review of Financial Statements."
(4) The CPA shall produce an audit report that states an unqualified opinion without reference to the audit work of other CPAs.
(5) If the consolidated half-year financial reported reviewed by the CPA includes information on an important subsidiary, the financial report and related materials on that subsidiary shall also be reviewed by the CPA.
1.3 Content of the consolidated financial reports:
(1) The consolidated financial reports shall be produced using the New Taiwan Dollar as monetary unit, and shall be in Chinese, but may also add English.
(2) The consolidated financial reports shall be produced using period-on-period comparison, and shall include consolidated balance sheets, consolidated income statements, consolidated cash flow statements, consolidated statements of changes in shareholders' equity, and related notes. Statements of changes in shareholders' equity, however, need not be included in quarterly consolidated financial reports.
(3) The notes to consolidated financial reports shall state which accounting principles are employed; if they are not prepared according to Taiwan accounting standards, then the differences in those standards and the Taiwan standards as applied in their balance sheet and income statement titles shall be disclosed, including material discrepancies and their dollar amounts. The provisions of Article 15 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall not apply to those consolidated financial reports prepared in accordance with Taiwan accounting standards.
1.4 When the advisory period for market listing is less than six months, the issuer shall also attach the "Evaluation of Appropriateness of the Market Listing Advisory Schedule" for reference during the review.
1.5 Reviewers shall apprise themselves of whether the foreign issuer is in compliance with Articles 28-4, 28-5, and 28-6 of this Company's Rules Governing Review of Securities Listings, and whether any circumstance under any subparagraph of Article 28-8, paragraph 1 of the same Rules that would make market listing inappropriate apply to the foreign issuer or any company subject to its control.
2. Review procedures:
2.1 This Company may initiate the following review procedures as it deems necessary for a review:
(1) Requesting that the foreign issuer, the underwriter, or the CPA attach additional information and an explanation of the information.
(2) Requesting that the foreign issuer engage a CPA, attorney, or other institution designated by this Company to undertake an audit of the foreign issuer within a scope designated by this Company, and to submit the results of the audit to this Company.
2.2 The recommendations for the internal control system issued by a CPA for the most recent three years shall be examined for indications of material irregularities, and as needed, the foreign issuer shall be requested to engage a CPA to issue a special audit report on the internal control system.
2.3 The provisions of this Company's Regulations Governing the Reporting of Basic Information on Advisory Client Companies by Securities Underwriters and the Assessment and Auditing Procedures for Securities Underwriters Handling Initial Applications for Market Listing apply mutatis mutandis to foreign issuers applying for a primary listing.
2.4 The securities underwriter and CPA handling an application for a primary listing by a foreign issuer shall apply this Company's Regulations for Handling Deficiencies in the Evaluation Report or Other Relevant Information Submitted by a Securities Underwriter and Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for Market Listing.
2.5 The undertaking personnel shall provide the key points of the audit results, requesting relevant expert opinion and consulting relevant information as needed to produce written proposals for the purpose of reference during the review process.
2.6 Applications for a primary listing by a foreign issuer shall be submitted for deliberation by the Securities Review Committee within six months after receipt of the application documents. Under exceptional circumstances, however, the Administration Department, ten days prior to the Review Committee meeting, may extend the deadline for submission to the Review Committee based upon review requirements or at the request of the applicant company, subject to the signed approval of the president of the GTSM. Extensions granted at the request of the applicant company are be limited to a maximum period of one month and may not extend into the following fiscal year.
3. The provisions of Article 4, paragraphs 2 and 3 of this Company's Procedures for Review of Securities Listings in regard to retaining an outside reviewer to give a consulting opinion, and the provisions regarding review by the Committee for Review of Stock Exchange Securities Listings apply mutatis mutandis to applications for primary listing by a foreign issuer, provided that when any circumstance of the subparagraphs of Article 28-8, paragraph 1 apply or in the case of re-reviews, the approval of two-thirds or more of the Review Committee members present is required, and the Review Committee must submit the concrete reasons for their overall consideration that approval of the listing be granted.
4. The provisions of this Company's Procedures for Review of Securities Listings in regard to consideration by the board of directors, return of applications and re-reviews, forwarding to the competent authority, and listing and trading of stocks shall apply mutatis mutandis to applications for primary listing by a foreign issuer.
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Except for cases of a foreign issuer applying for a primary listing, a foreign issuer, its agent institution or depositary institution shall submit relevant information to this Corporation according to the following time limits:
1. Within three days of the Competent Authority’s approval to issue, submit a copy of the issuance approval letter. This Corporation will then compile the issuance approval letter, the application and supporting documentation, the previous review materials and the listing contract and submit them with a written report to the Competent Authority for examination and approval. At the same time, each securities firm and other relevant agency shall be notified to conduct pre-listing preparations.
2. Within three days of completion of underwriting, an equity distribution chart (attached Chart 9, attached Chart 17) shall be completed and a listing date set, a date which shall be not less than two business days from the date of submission of the equity distribution chart. Where this Corporation’s undertaking employee checks that the review materials are in compliance with market listing requirements, the listing announcement may be made and a written report filed with the Competent Authority for filing. Where the review materials are not in compliance with market listing requirements, all relevant written materials and documentation shall be submitted to the Competent Authority for handling.
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Listings shall be handled as follows, with the exception of a foreign issuer applying for a primary stock listing that applies or files for a cash capital increase, issuance of bonus shares, or a listing of common stock not issued within the territory of the ROC in accordance with Article 28-12 of this Company's Rules Governing Review of Securities Listings:
1. Where a foreign issuer and its agent or depositary institution apply for the listing of additional stock or Taiwan depositary receipts as a result of capital increase by cash and the rights and obligations of the holders of stock or Taiwan depositary receipts to be newly issued are identical with those of the stock or depositary receipts already listed, or where a foreign issuer participated with already-issued stock in the issuance of Taiwan depositary receipts to be market listed, this Corporation may, after examination of the Application (Report) for Additional Issuance of Foreign Stocks/Market Listing and Trading of Taiwan Depositary Receipts (Attached Charts 23 and 24), issue an approval document for listing, and after approval by the competent authority and completion of issuance, announce the listing thereof.
2. Where a foreign issuer and its agent or depositary institution apply for the listing of additional stock or Taiwan depositary receipts as a result of a cash capital increase through a new share issue to existing shareholders with priority subscription rights or the issuance of bonus shares and the rights and obligations of the newly issued stock or Taiwan depositary receipts are identical with those of the stock or depositary receipts already listed, this Corporation will, after having examined the Application (Report) for Additional Issuance of Foreign Stocks/Market Listing and Trading of Taiwan Depositary Receipts (Attached Charts 23 and 24), publicly announce the listing thereof.
3. Where a foreign issuer and its depositary institution apply for the reissuance and listing within the amount of the original issuance of those Taiwan depositary receipts which are reported on a monthly basis to have been previously redeemed and which carry the same rights and obligations as those of the Taiwan depositary receipts already listed, the undertaking employee shall, upon receipt of the submitted “Monthly Chart of the Distribution and Redemption of Taiwan Depositary Receipts” (Attached Chart 25) publicly announce the listing in accordance with the provisions of Article 28, paragraph 2 of this Corporation’s “Criteria for the Review of Securities Listings.
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Except in cases of a foreign issuer applying for a primary stock listing, this Corporation’s Administration Department shall compile monthly trading reports for listed Taiwan depositary receipts and foreign issued stocks and bonds for presentation to the board of directors and written reports to be submitted to the Competent Authority within 10 days following the board of directors meeting for recordation.
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These Operational Procedures shall be in force upon the approval of the Competent Authority; the same shall apply to any amendments hereto.
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