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Title：

Operating Rules of the Taiwan Stock Exchange Corporation  CH

Amended Date： 2024.11.15 (Articles 50-1 amended,English version coming soon)
Current English version amended on 2023.12.05 
Categories： Basic Laws and Regulations
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Attachment Legislative History Chinese

Title： Operating Rules of the Taiwan Stock Exchange Corporation(2022.01.04)
Date： 
   Chapter I General Principles
1    These Operating Rules are prescribed in accordance with Article 138 of the Securities and Exchange Act and Article 36 of the Articles of Incorporation of the Taiwan Stock Exchange Corporation (TWSE).
2    Except as otherwise provided for in the relevant laws and regulations and the Articles of Incorporation of the TWSE, the operation of the TWSE shall be in accordance with these Operating Rules.
    Under Article 98 of the Securities and Exchange Act, the TWSE, with the approval of the Competent Authority, may operate other business in addition to providing a centralized securities exchange market.
    The "other business" referred to in the preceding paragraph, unless provided for by these Operating Rules, shall be regulated by specific provisions separately adopted by the TWSE for such business.
2-1    Normal notices, public announcements, and other documents and information sent by the TWSE to securities firms, listed companies, and informational companies and other institutions that have executed agreement with the TWSE may be transmitted through the Internet, dedicated data lines, electronic mail, and other electronic mass media. As applied to securities firms, the TWSE may effect substitute delivery by delivering such notices in the mailbox established by the TWSE on their behalf.
    Emergency notices or demand notices to be given by the TWSE to the institutions referred to in the preceding paragraph may be given orally, via telephone, or via other means.
 
   Chapter II Exchange Market
3    The trading hours of the centralized securities exchange market established by the TWSE ("Exchange"), unless otherwise provided, shall be from 9:00 a.m. to 1:30 p.m. Where in the opinion of the TWSE it is needed, or upon the recommendation of the securities dealers association, request may be made to the Competent Authority for its amendment.
4    The off-days of the Exchange shall be identical with those of banks, provided that where in the opinion of the TWSE it is needed, or upon the recommendation of the securities dealers association, request may be made to the Competent Authority for its amendment.
5    Participation in the Exchange to transact in securities shall be limited to securities brokers and securities dealers (collectively "securities firms") that has executed a contract for the usage of the centralized securities exchange market ("market usage contract").
    Securities firms with the permission of the Competent Authority to concurrently engage in other securities businesses or related businesses, or securities underwriters which have engaged the TWSE to process business matters shall execute their business in accordance with the relevant rules and regulations (Amended on October 30, 1997).
6    No one may enter the Exchange except the following persons and those with the permission of the TWSE who shall wear entrance passes or visitor passes:
  1. Supervisory personnel assigned by the Competent Authority to the TWSE.
  2. Associated persons of securities firms that have been registered and approved by the TWSE.
  3. Floor implementing staff and floor working staff of the TWSE.
7    (deleted)
8    (deleted)
9    (deleted)
9-1    In order to maintain trading order in the Exchange, the TWSE shall, in accordance with the Regulation Governing the Administration of Securities Exchange prescribe the Measures for Implementation of a System for the Surveillance of Stock Market and related regulations.
9-2    (deleted)
9-3    For purposes of enhancing the quality of credit inquiries and extensions of credit by securities firms and preserving the security of the TWSE exchange market, the TWSE shall promulgate Regulations Governing the Joint Credit Rating System for Securities Firms.
10    Enterprises applying for usage of the trading information of the TWSE shall enter into with the TWSE either the "Contract for the Provisioning of Trading Information" or the "Contract for Usage of Trading Information" and comply with the obligations set forth in the "Guidelines for the Usage of Trading Information" prescribed by the TWSE.
    The content of the contract and the guidelines referred to in the preceding paragraph shall be separately prescribed.
    Enterprises applying to utilize the trading information provided by the TWSE shall utilize the trading information and facilities provided by the TWSE in accordance with the regulations of the TWSE. If for reasons attributable to the responsibility of securities firms the TWSE suffers any damages, such firms shall be liable for compensation.
    Where the trading information and facilities provided by the TWSE suffers loss of connection or malfunctions such that normal operation is not possible, the TWSE shall not be responsible for compensation.
11    Subsequent to each market closing, the names or the code numbers of securities traded, the volume, the price, and the code of the selling and purchasing securities firms shall be produced into a computer file by the TWSE for public review via the Internet and via terminals that shall be provided.
    Subsequent to each market closing, the names or the code numbers of securities traded, the volume, the opening price, the highest price, the lowest price, the closing price, the change in closing price compared with the previous trading day, and the stock index shall be tabulated and publicly announced by the TWSE in a daily securities market report.
    In the event orders are placed, but there are no executed trades, the daily securities market report shall state the highest buy price offer or the lowest sell offer.
12    During market trading, if abnormal events occur, the TWSE may announce the halting of trading. Trades executed prior to the announcement shall remain valid.
    When the cause of the event referred to in the preceding paragraph ceases to exist, the TWSE may announce the resumption of trading.
 
   Chapter III Securities Firms
13    In order to establish distinctions, a securities firm participating in the Exchange shall clearly designate its role as a securities broker or securities dealer when using the name of "securities firms" in external business.
14    Securities firms participating in the Exchange shall complete and submit three copies each of the application, executed market usage contract, and the following documents to the TWSE:
  1. Photocopy of securities firm permit.
  2. Photocopy of documentary proof following company registration (or amendment registration) (if the applicant is not organized as a company and is operated on a concurrent basis by a financial institution, submit documentary proof of the approval for its establishment).
  3. Articles of incorporation, business plan, business bylaws, and shareholders list and their respective shareholdings.
  4. List of directors, supervisors, and managers, registration forms of same, photocopy of National Identity Card or household registration certificate, and declaration that declaring that the person does not fall within any of the categories under Article 53 of the Securities and Exchange Act.
  5. List of various levels of associated persons, registration form of same, photocopy of National Identity Card or household registration certificate, and declaration that declaring that the person does not fall within any of the categories under Article 54 of the Securities and Exchange Act.
  6. Financial reports audited and attested by a certified public accountant (CPA).
    The format of the registration forms referred to in subparagraphs 4 and 5 of the preceding paragraph shall be prescribed by the Competent Authority.
15    A securities firm shall wait until the TWSE signs and returns the market usage contract, and paid the settlement and clearing fund before it may trade in the Exchange.
16    In the event the paid-in capital, articles of incorporation, business address, or chairman of the board of any securities firms is changed, within 5 days of such change, the firm shall submit three copies of the application for amendment, relevant certifying documents, and registration fees for amendment to the TWSE for issuance of its opinion letter, and then transferred by the TWSE to the Competent Authority for its approval and registration.
    Where the director, supervisor, general manager, and associated persons of various levels is changed, such changes shall be reported in accordance with the procedures of the Rules Governing Responsible Persons and Associated Persons of Securities Firms.
17    Various levels of associated persons of securities firms shall possess the qualifications specified by the Competent Authority in the "Rules Governing Responsible Persons and Associated Persons of Securities Firms."
18    A securities firm shall be responsible for the acts of its employees, whether they are traveling outside to conduct businesses, or within the Exchange.
    The persons referred to in the preceding paragraph shall comply with and not plead ignorance to these Operating Rules, public announcements made by the Exchange, and other regulations.
19    The registration of the personnel of securities firms shall lose its effectiveness if the securities firm discharges or changes his position.
    Where the Competent Authority orders the discharge of registered personnel of securities firms, or the responsible person or associated person of securities firms falls within any of the categories under Article 12, paragraph 3 of the Rules Governing Responsible Persons and Associated Persons of Securities Firms, the TWSE shall cancel their registration.
    When any amendment is made to the registered personnel of a securities firm, the securities firm shall not be relieved of liability for such personnel's behavior until registration of the amendment is completed.
    When a securities firm receives permission for termination of the Market Usage Contract it has entered into, all of its personnel registered with the TWSE shall ipso facto lose their registered status.
20    A securities firm shall establish its business premises at the registered office, and may not share its business premises with other securities firms. In case of a major event of force majeure such that it may not normally operate at its business premises, a securities firm may search for a temporary business premises and apply to the TWSE for continued operation. The use of such premises shall not exceed 3 months, and before the expiration of this time period, a permanent business premises shall be located. Such replacement location shall conform with the TWSE Standards Governing the Places of Business and Facilities of Securities Firms and Securities Introducing Brokers, and the changes shall be reported in accordance with the regulations before it may commence business.
    The standards for business premises and facilities shall be drafted by the TWSE and approved by the Competent Authority.
    The bidding equipment used for linkage between the securities firms and the TWSE shall be installed as follows:
  1. Securities brokers shall install such equipment at the business counters of the business premises of their head offices and branches.
  2. Securities dealers shall install such equipment at their business premises.
    In the event that a major event of force majeure occurs to the trading transmission system of a securities firm such that its bidding equipment develops malfunction, the securities firm may do one of the following at its choice:
  1. Borrow the bidding equipment of its head office or branch and report in writing to the TWSE on the following business day for recordation.
  2. Borrow TWSE market backup bidding equipment, limited to two sets. The securities firm shall contact the TWSE by telephone in advance and submit an application bearing its corporate seal and the seal of its responsible person to the TWSE. Any location at which TWSE market cloud-based backup bidding equipment is used must comply with the TWSE Standards Governing the Places of Business and Facilities of Securities Firms and Securities Introducing Brokers.
     A securities firm may, pursuant to subpargraph 2 of the preceding paragraph, borrow TWSE bidding equipment for lending auction, reverse auction, and auction transactions.
21    Securities firms which have been approved by the Competent Authority to establish domestic branch offices and have been issued such permit certificates shall submit in duplicate the following documents to the TWSE for recordation before commencing business:
  1. Photocopy of permit certificate for establishment of branch office.
  2. List of directors, supervisors, and managers, registration forms of same, photocopy of National Identity Card or household registration certificate, and declaration that declaring that the person does not fall within any of the categories under Article 53 of the Securities and Exchange Act.
  3. List of various levels of associated persons, registration form of same, photocopy of National Identity Card or household registration certificate, and declaration that the person does not fall within any of the categories under Article 54 of the Securities and Exchange Act.
    Where there are changes in the business location of a domestic branch office or its manager, within 5 days of such changes, three copies of the application for amendment registration, along with the relevant documentary evidence and registration fees for amendment, shall be sent to the TWSE for issuance of its opinion letter, and then transferred by the TWSE to the Competent Authority for its approval and registration.
     Article 20, paragraph 2 of these Operating Rules shall apply to the business locations and facilities of the domestic branch office of a securities firm.
21-1    Securities firms which have been approved by the Competent Authority to establish foreign branch offices or representative offices shall submit in duplicate the following documents to the TWSE for recordation before commencing business:
  1. Photocopy of the permit for establishment issued by the domestic Competent Authority and of the documents of approval of establishment issued by the foreign competent authority.
  2. List of managers and associated persons or representatives of the branch office or representative office.
  3. Date of establishment and detailed address of the branch office or representative office.
    Where there are changes in the business location or the manager or representative of a foreign branch office or representative office, within 10 days of such changes, three copies of the application for amendment registration, along with the relevant documentary evidence, shall be sent to the TWSE, which will transfer them to the Competent Authority.
22    Upon receiving permission for establishment of a branch office, a securities firm shall receive the permit certificate and in accordance with Article 118 of these Operating Rules pay additional settlement and clearing fund before it may commence business.
23    A securities firm and its branch offices shall display their permit certificates at a prominent location in its business premises.
24    A securities firm shall maintain complete accounts, and make accurate book entries. Its accounting and financial reports shall be processed in accordance with the Standards for Preparation of Financial Reports of Securities Firms.
25    A securities firm shall maintain all accounts and related trading certificates, vouchers, books and statements, and contracts at its business location. However, if a brokerage contract between a securities broker and a principal is stored on electronic media that cannot be edited or erased and the original of which can be provided anytime, the place to keep the hard copy of the contract will not be restriced to the business location.
    The TWSE may send personnel to examine and review the trading certificates, vouchers, books and statement, and contracts referred to in the preceding paragraph, and securities firms shall not avoid or refuse such examinations; the securities firm shall consent that the TWSE may query the Joint Credit Information Center for information concerning the securities firm's credit with financial institutions.
    The TWSE Determination Standards and Handling Procedures for the Avoidance or Refusal of Examinations by Securities Firms shall be separately prescribed by the TWSE.
    Except as otherwise provided in the Business Accounting Act, the number of years that the books and accounts and relevant trading certificates, vouchers, books and statements, and contracts under paragraph 1 shall be kept shall be in accordance with the Required Periods for Preservation of Accounting Statements and Vouchers by Securities Firms prescribed by the TWSE.
    For brokerage contract not maintained at the business location as provided in the first paragraph, a securities broker should pay attention to the safety of the locatation, environment and facilities of the storage, enhance the security measures of access and maintance, and establish relevant internal control system.
    When deemed necessary, the TWSE may request securities firms to provide their financial and business information, and disclose them to the public.
    Government bonds which are in bearer form that are obtained by securities firms by utilizing their assets pursuant to Article 18 of the Regulations Governing Securities Firms shall be deposited with a custodian institution.
26    The financial reports produced by a securities firm in accordance with the regulations prescribed by the Competent Authority shall be audited and attested by a CPA, approved by the board of directors, recognized by the supervisor, and then publicly announced in a newspaper.
    Where they are semi-annual in nature, two copies of the financial report referred to in the preceding paragraph (including assets and liabilities statement, statement of comprehensive income, statement of change in equity, cash flow statement and its notes or attachments), minutes of board of directors meeting, supervisor's review report, and public announcements shall be sent to the TWSE within 2 months of the end of each semi-annual fiscal year, with one copy sent to the Competent Authority by the TWSE. Where they are annual in nature, two copies of the above shall be sent to the TWSE within 3 months of the end of each fiscal year, with one copy sent to the Competent Authority by the TWSE. In addition, TWSE (or Taipei Exchange) listed securities firms, and securities subsidiaries of a financial holding company that are public companies, also shall, within 45 days from the end of the first and third quarters of each fiscal year, submit two copies each of the CPA-audited financial report, the minutes of the board of directors meeting, and newspapers containing the public announcement to the TWSE, and the TWSE shall then submit one copy of the said documents to the Competent Authority.
    When sending financial reports within the time-limit as prescribed in the preceding paragraph, a securities firm shall report, through Internet transmission to the TWSE, basic information regarding its investments in other enterprises, numbers of TWSE listed or Taipei Exchange listed securities at the end of the reporting period respectively held by the securities firm and its invested enterprises, respective cost of shareholding, derivatives trading of TWSE listed or Taipei Exchange listed securities, and acquisition and disposal of major assets. The increase, decrease, and changes of shareholding in invested enterprises of a securities firm shall also be reported to the TWSE through Internet transmission.
    The shareholders meeting of a securities firm shall be convened within 6 months after the end of the fiscal year. Within 20 days of their recognition by the shareholders meeting, the minutes of the shareholders meeting and the business report shall be sent to the TWSE in triplicate. Where the annual financial report recognized by the shareholders meeting differs from the financial report publicly announced and sent to the TWSE, within 2 days of its occurrence, it shall be publicly announced and reported to the TWSE for its ultimate transmittal to the Competent Authority.
    Securities firms shall prepare a monthly accounting summary, income statement, itemized statements of bank deposits, and all attachments (each including the information for all branch offices), and file it with the TWSE by electronic media within 7 days from the start of the next month.
    One copy of the various financial reports and monthly accounting summaries of securities firms shall be made available for public inspection in print or electronic medium.
    Securities firms shall prepare the monthly capital sufficiency statement, and file it with the TWSE by electronic media within 10 days from the start of the next month; compilation and calculation regarding the capital sufficiency statement shall be handled in accordance with the Regulations Governing Securities Firms. The TWSE shall furthermore make quarterly disclosures thereof itemized as provided by the Competent Authority.
    Securities dealers shall prepare the monthly securities inventory report, and file it with the TWSE by electronic media within 7 days from the start of the next month.
    The various financial reports, forms, and monthly capital sufficiency statement to be reported via electronic media shall be announced by the TWSE.
    The procedures for said reporting shall be separately prescribed by the TWSE.
    Where the Competent Authority has provided otherwise than as set forth in the provisions of paragraph 1 and paragraph 2 concerning public announcement by newspaper and submission of the newspaper announcement, the provisions of the Competent Authority shall prevail.
    The TWSE may, depending on operational needs, notify securities firms to send additional copies of the various materials required to be submitted under paragraph 4. The TWSE may, depending on operational needs, notify securities firms to send paper copies of the various materials required to be filed by electronic media under paragraphs 5, 7, and 8. The securities firms shall deliver such materials to the TWSE within the time limit.
27    Securities firms shall comply with the restrictions prescribed by the Competent Authority under Article 49 of the Securities and Exchange Act requiring that the aggregate liabilities of a securities firm shall not exceed a prescribed multiple of its net capital; and the aggregate current liabilities shall not exceed a prescribed percentage of its aggregate current assets.
    Except as to securities firms concurrently operated by financial institutions acting in compliance with the provisions of the Banking Act, a securities firm shall not purchase real estate which is not used for its business purposes. The sum of its aggregate operating real estate and equipment and aggregate non-operating real estate shall not exceed 60 percent of its aggregate assets.
    Securities firms shall comply with the regulations of the Competent Authority and set aside a portion of its annual after-tax profit as special reserve.
28    A securities brokerage firm shall not deposit its funds in an institution other than one engaged in the banking business.
    Without the approval of the Competent Authority, a securities brokerage firm shall not use its own funds to invest in securities that are not listed on the TWSE; where its own funds are invested into TWSE listed securities, the amount of investment shall not exceed the limit set by the Competent Authority.
    When the regulatory capital adequacy ratio of a securities broker is less than 100 percent, it may not use its own funds to purchase TWSE listed (or Taipei Exchange listed) stocks, and may make only sell trade dispositions. The standards and measures relating to the lifting of these restrictions after corrections have been made shall be governed, mutatis mutandis, by the provisions of Article 28-1, paragraph 2.
    Unless otherwise prescribed by the TWSE, a securities brokerage firm shall not use its own funds or securities, or funds or securities borrowed from others to process securities trading settlement for its principals.
28-1    Where the total of brokerage or dealer trading orders placed by a securities firm in a single day exceeds twenty times its net funds available for use, the TWSE may suspend the placing of additional trading orders.
    Where the net worth of a securities firm is less than its paid-in capital but more than 50 percent thereof, the multiple referred to in the preceding paragraph may be adjusted to ten times. Where the net worth is less than 50 percent of the paid-in capital, the multiple may be adjusted to five times. Where the net worth is less than 50 percent of the paid-in capital for 3 consecutive months, the multiple may be adjusted to two times. If a securities firm uses a capital reduction to raise the ratio of its net worth to its paid-in capital, it must meet and maintain for 3 months the required conditions for the multiple that it wishes reinstated for its brokerage trading before that multiple may be adjusted pursuant to the preceding provisions.
    If the regulatory capital adequacy ratio of a securities firm meets the requirements of Article 65 of the Regulations Governing Securities Firms, the multiple referred to in the preceding paragraph may be adjusted to 15 times. If the regulatory capital adequacy ratio of the securities firm falls into the circumstances specified in Article 66 of the Regulations Governing Securities Firms, further downward adjustment may be made. The adjustment standards shall be separately prescribed by the TWSE.
    If the monthly statements filed by a securities firm show that the cause for an adjustment under paragraph 2 or paragraph 3 to some degree ceases to exist, successive adjustments to the multiple may be made according to the degree to which the cause ceases to exist.
    The method of calculation of the net funds available for use referred to in paragraph 1 shall be prescribed by the TWSE.
    If for 3 consecutive months, the financial ratio as shown in the monthly accounting summaries of a securities firm fails to satisfy the requirements of Article 13 or Article 16 of the Regulations Governing Securities Firms, and the Competent Authority issues the first notice of improvement to be made within a time period, but no improvement is made, the TWSE may adjust the multiple referred to in paragraph 1 to fifteen times; upon the second notice of the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to ten times; for each additional notice by the Competent Authority to improve within a time period, but no improvement is made, the multiple may be adjusted to half the previous multiple as the total limit on trading for customers' account and its own account. After the above adjustments, the highest allowable amount shall not exceed four times the net worth. Once improvement is made, the original multiple shall be restored.
    In the event any securities firm falls within any of the categories under Article 3 of the Rules for Assistance to and Examination of Securities Firm of the TWSE, or subsequent to assistance, improvements cannot be made, the TWSE may lower the multiple referred to in paragraph 1. Where improvement has been made, the original multiple shall be restored.
28-2    In the event of abnormalities in the price or the trading situation of any listed securities sufficient to affect market trading, clearing, and settlement, the TWSE may limit the amount of brokerage or proprietary trading of all or part of securities firms, or take other measures as resolved by the Supervisory and Assistance Commission.
    The standards for determining the abnormalities and the limitations on amount of trading shall be drafted by the TWSE and approved by the Competent Authority before its implementation. The same procedure applies with amendments to the same.
29    Where a securities firm is under any of the circumstances set out in Article 4, paragraph 1 of the Regulations Governing Securities Firms, it shall, in accordance with paragraph 2 of that article, report by letter the condition to the TWSE for transmittal to the Competent Authority.
30    Securities firms shall not supply false or inaccurate information in any of their reports to the TWSE.
31    (deleted)
32    (deleted)
33    The TWSE shall assign a code number to each securities firm. All forms and vouchers related to trading and clearing shall contain the code as well as the name of the securities firm.
34    If a securities firm suspends its business, until it has wound up its securities transactions and matters undertaken by it on the Exchange, its business within the scope of those transactions and matters shall be deemed as not suspended.
35    Where any securities firm is liquidated, its permit is suspended, the market usage contract is terminated, or due to other reasons it loses its right to operate, the TWSE shall offset the outstanding rights and obligations of the said firm to the TWSE, and if there are amounts remaining, they shall be returned to the said firm, and if the amount is insufficient, compensation shall be sought from the said firm.
36    Where any securities firm receives permission to terminate its market usage contract, the original executed contract shall be returned to the TWSE for cancellation.
37    Securities firms shall not have any investment, loan, or guaranty relations with any personnel of the TWSE, nor shall they concurrently hire or give honorary title to any personnel of the TWSE in any manner.
38    Where any informant points out violations of the laws or regulations or the rules of the TWSE by securities firms or their employees, the informant shall supply his true name and address. Informant statements which use aliases or are anonymous will not be accepted.
    In order to investigate the informant statement referred to in the preceding paragraph, the TWSE may notify the person being informed against to supply detailed written responses. Where necessary, the TWSE may also request the securities dealers association to investigate the matter.
    The TWSE shall treat a pending investigation as a confidential matter. Upon completing the investigation, if there is clear evidence of violations of laws and regulations or the bylaws or rules of the TWSE, the TWSE shall report the matter to the Competent Authority for its processing, or alternatively handle the matter in accordance with the rules of the TWSE.
39    Upon the permission of the TWSE, government bond brokers may participate in the market to trade government bonds, and shall comply with relevant regulations prescribed by the TWSE. The same shall apply to securities finance enterprises with respect to engaging in competitive bid borrowing of securities required in connection with stock loans and short sales.
40    Where any securities firm broadcasts to the public information related to securities, two copies of such broadcast shall be sent to the TWSE for its recordation.
 
   Chapter IV Listing Of Securities
41    The notice of listing for sale, suspension of sale, or delisting of bonds issued by the government ("Government Bonds") shall be given by the Competent Authority to the TWSE for its public announcement. Where the listed Government Bond has been redeemed at maturity, the TWSE may directly publicly announce its delisting.
    The listing for sale, suspension of sale, or delisting of securities publicly issued by a company limited by shares ("Issuing Company"), beneficial certificates of a closed-end securities investment trust fund ("closed-end fund"), an exchange-traded securities investment trust fund, or an exchange-traded futures trust fund (collectively, "exchange traded funds", "ETFs") duly issued by a securities investment trust enterprise ("SITE") or a futures trust enterprise (FTE), beneficial securities duly issued by a trustee institution, asset-backed securities duly issued by a special purposes company, real estate investment trust (REIT) beneficial securities or real estate asset trust (REAT) beneficial securities duly offered and issued by a securitization trustee institution, offshore ETF beneficial certificates, fund shares, or investment units (hereinafter, "beneficial certificates") duly offered and sold by an offshore fund management institution or an institution appointed by it (hereinafter, "offshore fund institution"), stocks duly issued by a foreign issuer, Taiwan Depositary Receipts issued by a foreign issuer and its depositary institution, and call (put) warrants and exchange-traded notes (ETNs) issued by an issuer pursuant to the law, shall be processed and publicly announced in accordance with the various types of securities listing contracts ("Agreement for Listing") executed between the TWSE and the Issuing Company, SITE, FTE, trustee institution, special purpose company, securitization trustee institution, offshore fund institution, depositary receipt issuer, call (put) warrant issuer, or ETN issuer.
    The Agreement for Listing referred to in the preceding paragraph shall be executed in accordance with the Rules Governing the Agreement for Listing reported by the TWSE to and approved by the Competent Authority. Upon the effectiveness of the Agreement for Listing, where the Rules Governing the Agreement for Listing is amended such that discrepancy in the internal content occurs, the amended rules shall be applicable.
    After the financial report of financial bonds issued by financial institutions, if certified in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies, has been audited and attested by a CPA or approved and publicly announced by an auditing institution, reference may be made to paragraph 2 of this Article for listing processing.
42    An Issuing Company applying for listing of its securities shall complete the application for listing of securities and enclose the signed Agreement for Listing and other required documents to the TWSE.
    The format and the required documents for application of securities listing shall be determined by the TWSE in accordance with the type and the nature of the securities being listed.
    The securities being applied for listing by an Issuing Company shall be certified in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies. However, securities for which no physical ("scrip") security is printed to represent the rights thereof are exempt from the requirement of certification.
    In reviewing the application for securities listing by an Issuing Company, in addition to the documents supplied, the TWSE may consult other credit reports and process the application in accordance with the Rules Governing Review of Securities Listings, and the "Industry Categorization and Adjustment Guidelines for Listed Companies".
    The Rules Governing Review of Securities Listings and the Industry Categorization and Adjustment Guidelines for Listed Companies shall be drafted by the TWSE and sent to the Competent Authority for its approval and public announcement.
    Issuing Companies applying for initial listing shall, in accordance with the regulations of the Competent Authority, reserve a set ratio of the listed stocks for public sale by securities underwriters or wholesale by securities brokers. The TWSE may use the information to be obtained from the results of the sale as reference for share dispersal review of listed securities.
    The provisions of paragraphs 1 to 5 shall apply mutatis mutandis when a SITE or an FTE applies for listing of any beneficial certificates that it offers and issues; when a trustee institution applies for listing of any beneficial securities that it offers and issues; when a special purpose company applies for listing of any asset-backed securities that it offers and issues; when a securitization trustee institution applies for listing of any REIT and REAT beneficial securities that it offers and issues; and when an issuer applies for listing of any ETNs that it offers and issues.
    The provisions of paragraphs 1, 2, 4 and 5 shall apply mutatis mutandis when a foreign issuer applies for listing of any stocks issued by it, when a foreign issuer and its depositary institution apply for listing of any Taiwan Depositary Receipts they issue, and when any issuer applies for listing of any call (put) warrants duly issued by it.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis when an offshore fund institution, through the master agent it has appointed, applies for listing of beneficial certificates of an offshore ETF sold and offered by it.
42-1    Where the Competent Authority has imposed restrictions on the listing for trading of certain securities and the restrictions have not yet been lifted, such securities that have been privately placed shall still not be for trading upon the lapse of the period of restriction of transfer of privately placed securities. If the event that was the grounds for the restriction on listing for trading occurs before the resolution of a shareholders meeting to conduct the private placement of securities, the restriction shall be thoroughly explained at the shareholders meeting. If the event that was the grounds for the restriction on listing for trading occurs after the resolution of a shareholders meeting to conduct the private placement of securities, it shall be thoroughly and explicitly disclosed in the private placement procedures.
43    After the TWSE has approved the listing of securities by an Issuing Company, and the Agreement for Listing has been signed and taken effect, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing, upon receipt of the notice of the TWSE, such Issuing Company shall upload an electronic file of the prospectus onto the Internet information reporting system designated by the TWSE. Further, 1 day prior to the listing of such securities, the Listing Company shall report information related to the listing to the Internet information reporting system designated by the TWSE, and shall send the downloaded information to the TWSE.
    The public announcement referred to in the preceding paragraph shall include the name of the company, type of listed securities, volume, rights, obligations, date of listing, date, and document reference number of the issuance approval letter issued by the Competent Authority, name of the agency handling share transfer matters, name of the underwriter, underwriting period, price, volume, and other matters to be publicly announced.
    In a case of an Issuing Company applying for initial listing, after the Agreement for Listing takes effect, if the company fails to have its stock listed for trading within 3 months from the date of the written notice by the TWSE, its listing case shall be voided, and the matter shall be reported to the Competent Authority for recordation. However, with valid reasons, and upon the approval of the TWSE, the period may be extended for a single term of 3 additional months, which shall be reported to the Competent Authority for recordation. The suspension period referred to in paragraph 4 shall not be counted.
    With respect to the Issuing Company as referred to in the preceding paragraph or a foreign issuer and its depositary institution, if prior to the commencement of listed trading of its stocks or Taiwan Depositary Receipts, specific evidence is discovered showing a likelihood of the existence, whether before or after its Agreement for Listing becomes effective, of a circumstance under any subparagraph of the TWSE Rules Governing Review of Securities Listings that renders listing inappropriate, then the TWSE may proceed to provisionally postpone the listing and trading of its stocks or Taiwan Depositary Receipts, and conduct an audit and simultaneously report to the Competent Authority for recordation. If the Issuing Company or the foreign issuer and its depositary institution refuse to undergo audit by the TWSE or to supply the necessary information, or the investigation confirms the existence of any circumstance that renders listing inappropriate, the TWSE may void its Agreement for Listing or delist it, and report to the Competent Authority for recordation. If investigation confirms that no circumstance that renders listing inappropriate exists, the TWSE may notify the Issuing Company, or the foreign issuer and its depositary institution, to resume conducting matters relating to listing and trading, and report to the Competent Authority for recordation, provided that if any uncertainty remains concerning any matter that would render listing inappropriate, the TWSE may continue to postpone the listing and trading of its stock or Taiwan depositary receipts.
    The listed securities shall be assigned by the TWSE a code number, and an abbreviated name for uniform usage.
    The provisions of paragraphs 1, 2, and 5 of this Article shall apply mutatis mutandis to applications by a SITE or an FTE for listing of beneficial certificates, application by an issurer for listing of ETNs, applications by foreign issuers and their depositary institutions for listing of Taiwan Depositary Receipts, applications by offshore fund institutions, through the master agents appointed by them, for listing of beneficial certificates of offshore ETFs, and applications by foreign issuers for secondary listings of stocks or listings of bonds.
    If a foreign issuer applies to list stocks on a primary listing basis and its application is reviewed and approved by the TWSE, then after its Agreement for Listing has been signed and taken effect, that company is deemed a primary listed company, and unless otherwise provided, shall be subject mutatis mutandis to the provisions of this Chapter regarding a TWSE listed company.
    If a public company or a foreign issuer applies to list its stocks on the Taiwan Innovation Board (TIB) in accordance with Chapter IV of the TWSE Rules Governing Review of Securities Listings and its application is reviewed and approved by the TWSE, then after its Agreement for Listing has been signed and taken effect, that company is deemed a TIB listed company or a TIB primary listed company, and unless otherwise provided, shall be subject mutatis mutandis to the provisions of this Chapter regarding a TWSE listed company.
43-1    Where any issuer sells its own call (put) warrants, public announcement shall be made on the date of the sale. The public announcement shall include the issuance terms of the call (put) warrant, numbers issued, issuing price, location of sale, period of sale, projected listing date, date of premium payment, issuance date of call (put) warrant, credit rating information of the issuer, the required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants, and other particulars required to be disclosed to protect the public and the investor.
    After the TWSE has approved an application for listing of call (put) warrants by an Issuing Company, and the Agreement for Listing has been signed and taken effect, such company shall be a listed company. In addition to the payment of listing fees in accordance with the Agreement for Listing, upon receipt of the notice of the TWSE, 2 days prior to the date it has set with the TWSE for commencement of listing of such securities, the Listing Company shall enter information related to the listing into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE. In the case of an application for a follow-on issue, the information entry shall be completed on the business day before the scheduled date for commencement of listed trading.
    The public announcement referred to in the preceding paragraph shall include the following particulars:
  1. (deleted)
  2. Date of issuance and period of validity.
  3. Detailed information on the underlying or basket of underlyings.
  4. Type of call (put) warrants, volume, and total issuance price. In the case of an issue of extendable callable bull contracts or extendable callable bear contracts, the word "extendable" shall be specified in the type of the call (put) warrants. In the case of a follow-on issue of call (put) warrants, the total number of units already issued shall additionally be specified.
  5. Terms of issuance (including issuance price, strike price or point, exercise period; issuance of capped call or put warrants or callable bear or bull contracts shall be explained using prominent lettering).
  6. A description of the calculation of the issue price, including the price or point of the underlying, strike price or point, term, interest rate, volatility and other reference factors used in the calculation, and a table of comparison with the warrants with the same underlying in the past year shall be provided. In the case of issuance of callable bull contracts or callable bear contracts, the issuance price shall be calculated in compliance with Article 11, subparagraph 8, item E of the TWSE Rules Governing Review of Call (Put) Warrant Listings. However, this shall not apply to a follow-on issue of call (put) warrants.
  7. (deleted)
  8. The required particulars as specified in Article 8 of the TWSE Operation Guidelines Governing Liquidity Providers for Call (Put) Warrants
  9. Procedures for exercising the option, and procedures for canceling exercised call (put) warrants.
  10. Planned strategy on offsetting risks.
  11. Stipulations regarding the adjustment of the call (put) warrant strike price and related matters when the Issuing Company of the underlying securities distributes dividends or bonuses, increases or decreases capital, or undergoes a stock split, merger or consolidation, or conducts other related matters; when a SITE or FTE distributes dividends on an underlying ETF or conducts other related matters; or when an offshore fund institution distributes dividends on an underlying offshore ETF or conducts other related matters. If an issuer does not adopt the TWSE reference adjustment formula, it shall explain the matter in the public offering prospectus using prominent lettering. If the underlying is a foreign security, the issuer shall itself determine the formula for adjustment.
  12. Methods for handling the matter in the event of any merger or consolidation, placement of stock under an altered trading method, halting of trading, suspension of trading, or delisting of the stock of the Issuing Company of the underlying securities; the delisting of an underlying ETF due to the dissolution, bankruptcy, or voidance of approval of the SITE or FTE; or the beneficial certificates of an underlying offshore ETF are delisted by announcement of the TWSE; or the index provider announces suspension of the compilation of the index; or halting of trading, suspension of trading, or delisting of the underlying futures by announcement of the futures exchange.
  13. The procedures for listing of the call (put) warrants, and for handling when the stock exchange delists, suspends trading of, or halts trading of, the warrants.
  14. Definition of exercise value upon the expiration of the period of validity:
    1. For call (put) warrants with domestic securities, a domestic index or domestic futures as the underlying, there is exercise value if the simple arithmetic mean trade price of the underlying securities during the 60 minutes before market close, the settlement index of the underlying index, or the settlement price of the underlying futures, is higher (or lower) than the strike price or point of the call (put) warrant; if there is no trade price for the underlying securities during the 60 minutes before market close, then the calculation shall be based on the most recent trade price. If the circumstance under Article 58-3, paragraph 5 exists, the calculation shall also incorporate the trade price or index from during the postponement period. The foregoing settlement index of the underlying index and settlement price of the underlying futures shall be calculated in accordance with Article 11, subparagraphs 6 and 7 of the TWSE Rules Governing Review of Call (Put) Warrant Listings.
    2. For call (put) warrants with foreign securities or a foreign index as the underlying, there is exercise value if the most recent closing price of the underlying securities or the most recent closing value of the underlying index is higher (or lower) than the strike price or point of the call (put) warrant.
    3. If the terms of exercise require cash settlement, then it shall be deemed that the call (put) warrant has been exercised and has given notice to that effect.
  15. Provisions specifying that the issuer may not independently exchange the contracted call (put) warrant with another call (put) warrant or securities which has a longer period of validity.
  16. Procedures for delivery when the holder exercises the option.
  17. Provisions specifying that where the exercise of the option referred to in the preceding subparagraph is required to be done in cash, the cash settlement amount shall be calculated on the basis of the closing price of the underlying securities on the exercise date. If the exercise date is the expiration date of the warrants, the cash settlement amount shall be calculated on the basis of the simple arithmetic mean price trade price of the underlying securities during the 60 minutes prior to market close, the settlement index of the underlying index, or the settlement price of the underlying futures; if there is no trade price for underlying securities during the 60 minutes prior to market close, then the calculation shall be based on the most recent trade price. If the circumstance under Article 58-3, paragraph 5 exists, the calculation shall also incorporate the trade price or index from during the postponement period. The foregoing settlement index of the underlying index and the settlement price of the underlyng futures shall be calculated in accordance with Article 11, subparagraphs 6 and 7 of the TWSE Rules Governing Review of Call (Put) Warrant Listings. However, when the underlying is a foreign security or foreign index, the exercise shall be handled in accordance with the TWSE Guidelines for the Exercise of Call (Put) Warrants.
  18. Provisions specifying that where the issuer has failed to satisfy its obligation by tendering the underlying securities or the cash differential, the procedures for handling the securities kept in a central securities depository as guaranty for performance.
  19. Date of public announcement.
  20. Address at which the public may review the prospectus.
  21. Printing the following disclaimer (standard format): "The Taiwan Stock Exchange Corporation shall not be responsible for the contents of this public announcement, and expresses no opinion on its accuracy or completeness, and it is expressly stated that it shall not assume any liabilities arising out of all or a part of the contents of this public announcement or be liable for damages resulting from reliance on such contents."
  22. Date of listing for call (put) warrant.
  23. Other items required by the TWSE.
    The letter of approval for listing shall be revoked in case the issuer of the call (put) warrant fails to determine the date of listing with the TWSE within 10 business days from the date of issuance of the warrants.
     If it is discovered that any of the circumstances enumerated in Article 7 of the Regulations Governing the Issuance of Call (Put) Warrants by Issuers as promulgated by the competent authority or in any of the subparagraphs of Article 12 of the TWSE Rules Governing Review of Call (Put) Warrant Listings has occurred to an issuer in the preceding paragraph before the commencement of listing of its call (put) warrants, the TWSE may suspend the listing of the call (put) warrants, and conduct an investigation, and report to the Competent Authority. In the event the issuer refuses the investigation of the TWSE or refuses to supply the necessary information, or it is confirmed that it is inappropriate for listing, the TWSE may revoke its Agreement for Listing or delist the warrants, and report to the Competent Authority for recordation. In the event it is shown that there are no inappropriate circumstances for listing, the TWSE may notify the company to resume the listing process, and report to the Competent Authority for recordation.
    Except in the case of an application for extension, the issuer, within 20 days prior to the expiration of the call (put) warrant, shall enter the following particulars into the Internet information reporting system designated by the TWSE, and deliver the downloaded material to the TWSE; however, in the case of issuance of capped call or put warrants or callable bull or bear contracts issued under the conditions of Article 11, subparagraph 8 of the TWSE Rules Governing Review of Call (Put) Warrant Listings, public announcement of the following matters shall be made on the business day following the date that is deemed the last day of trading under the aforesaid Rules, and the above-stated restriction need not apply.
  1. Date of expiration of call (put) warrant, last day of trading, and date of delisting.
  2. Strike price or point and exercise ratio.
  3. Method of settlement when the holder exercises the right.
  4. Process for requesting fulfillment of contract.
  5. Other information required by the TWSE.
    Listed call (put) warrants shall be assigned by the TWSE a code number, and an abbreviated name for uniform usage.
43-2    After the TWSE has approved an application by a trustee institution for listing of beneficial securities issued by it or an application by a special purpose company for listing of asset-backed securities issued by it, and the Agreement for Listing has been signed and taken effect, listing fees shall be paid in accordance with the Agreement for Listing, and, upon receiving notice from the TWSE, the issuer shall upload an electronic file of the prospectus onto the Internet information reporting system designated by the TWSE. Further, 1 day prior to the date it has set with the TWSE for commencement of listing for trading, the trustee institution or special purpose company shall report information related to the listing onto the Internet information reporting system designated by the TWSE, and shall send the downloaded information to the TWSE.
    The information related to listing referred to in the preceding paragraph shall include the following particulars:
  1. Date and reference number of the Competent Authority's approval of issuance.
  2. Date of commencement of listing for trading.
  3. Names, addresses, telephones, and Internet addresses of the trustee institution and the trust supervisor or the special purpose company and the supervisory institution.
  4. Name, address, telephone, and Internet address of the originator.
  5. Date of issue and period of validity.
  6. Total monetary amount and total number of units to be issued.
  7. Summary data of the beneficial securities or asset-backed securities.
  8. Asset pool contents.
  9. Name, address, and telephone of the service institution and backup service institution.
  10. Name, address, and telephone, of the securities underwriter; underwriting period, price, and volume.
  11. Any other particulars required to be publicly announced.
    In cases of applications by trustee institutions for listing of beneficial securities issued thereby or by special purpose companies for asset-backed securities issued thereby, after the Agreement for Listing has taken effect, if the securities are not listed for trading in accordance with provisions within 3 months from the date of the written notice by the TWSE, the listing shall be cancelled, and the matter shall be reported to the Competent Authority for recordation. With legitimate reasons, and upon approval by the TWSE, the period may be extended for a single term of 3 additional months, which shall be reported to the Competent Authority for recordation. However, a suspension period referred to in paragraph 4 shall not be counted therein.
    Before the commencement of listing for trading of beneficial securities or asset-backed securities under the preceding paragraph, if concrete evidence is discovered of the likelihood of existence, before or subsequent to the effectiveness of the Agreement for Listing, of any circumstance under which listing would be inappropriate, or if the Competent Authority voids or revokes the effective registration or approval for the public offering, the TWSE may suspend the listing of the beneficial securities or asset-backed securities, conduct an investigation, and file a report with the Competent Authority for recordation. In the event the trustee institution or special purpose company refuses to submit to investigation by the TWSE or to supply necessary information, or the circumstances inappropriate to listing are verified through investigation, the TWSE may void its Agreement for Listing or delist the securities, and report to the Competent Authority for recordation. In the event it is shown upon investigation that there are no inappropriate circumstances for listing, the TWSE may notify the institution or company to resume the listing process, and report to the Competent Authority for recordation. However, where there remains any uncertainty about appropriateness for listing, the TWSE may continue to suspend the listing of the beneficial securities or asset-backed securities for trading.
    Listed beneficial securities and asset-backed securities shall be assigned by the TWSE a code number and an abbreviated name for uniform usage.
43-3    After the TWSE has approved an application by a real estate securitization trustee institution for listing of REIT beneficial securities or REAT beneficial securities offered and issued by it, and the Agreement for Listing has been signed and taken effect, listing fees shall be paid in accordance with the Agreement for Listing, and, upon receiving notice from the TWSE, the issuer shall upload an electronic file of the prospectus onto the Internet information reporting system designated by the TWSE.
    Further, by the business day prior to the date it has set with the TWSE for commencement of listing for trading, the real estate securitization trustee institution shall report information related to the listing onto the Internet information reporting system designated by the TWSE, and shall send the downloaded information to the TWSE.
    The information related to listing referred to in the preceding paragraph shall include the following particulars:
  1. Date and reference number of the Competent Authority's approval of issuance.
  2. Date of commencement of listing for trading.
  3. Names, addresses, and telephones of the trustee institution and the originator institution that entrusted the real estate management.
  4. Date of issue and period of validity.
  5. Total monetary amount and total number of units to be issued.
  6. Basic policies, scope, and investment strategy for utilization of the fund, or method of management and disposition of the trust property.
  7. Method of calculation and public announcement of net asset value per beneficial unit.
  8. Kinds, times, and payment methods of distributions of yield on REIT fund investment or method of distribution of trust property capital or any benefits, interest, or other income derived therefrom.
  9. Name, address, and telephone, of the securities underwriter; underwriting period, price, and volume.
  10. Any other particulars required to be publicly announced.
    In cases of applications by real estate securitization trustee institutions for listing of REIT beneficial securities or REAT beneficial securities offered and issued thereby, after the Agreement for Listing has taken effect, if the securities are not listed for trading in accordance with provisions within 3 months from the date of the written notice by the TWSE, the listing shall be cancelled, and the matter shall be reported to the Competent Authority for recordation. With legitimate reasons, and upon approval by the TWSE and approval for recordation by the Competent Authority, the period may be extended for a single term of 3 additional months, which shall be reported to the Competent Authority for recordation. However, a suspension period referred to in paragraph 4 of this article shall not be counted therein.
    Before the commencement of listing for trading of REIT beneficial securities or REAT beneficial securities under the preceding paragraph, if concrete evidence is discovered of the likelihood of existence, before or subsequent to the effectiveness of the Agreement for Listing, of any circumstance under which listing would be inappropriate, or if the Competent Authority voids or revokes the approval for offering and issuance, the TWSE may suspend the listing of the beneficial securities, conduct an investigation, and file a report with the Competent Authority for recordation. In the event the securitization trustee institution refuses to submit to investigation by the TWSE or does not cooperating in supplying necessary information, or the circumstances inappropriate to listing are verified through investigation, the TWSE may void its Agreement for Listing or delist the securities, and report to the Competent Authority for recordation. In the event it is shown upon investigation that there are no inappropriate circumstances for listing, the TWSE may notify the institution to resume the listing process, and report to the Competent Authority for recordation. However, where there remains any uncertainty about appropriateness for listing, the TWSE may continue to suspend the listing of the beneficial securities for trading.
    Listed REIT beneficial securities and REAT beneficial securities shall be assigned by the TWSE a code number and an abbreviated name for uniform usage.
44    Listed companies shall establish a professional agent for stock affairs or stock affairs unit in the area where the TWSE is located, and within 3 days after their decision of which, report to the TWSE and publicly disclose it. The same process shall apply in case of any changes thereto. However, if a listed company changes its agent for stock affairs, it shall report to the TWSE and make a public disclosure within 3 days from the date it obtains the letter of recordation from the Taiwan Depository and Clearing Corporation.
    The title transfer or the splitting of stocks handled by listed companies shall be completed within 3 days after the application therefor is received.
    The professional agent for stock affairs or stock affairs unit referred to in paragraph 1 shall have stock affairs handling personnel and equipment that comply with the provisions of the Regulations Governing Handling of Stock Affairs by Public Companies promulgated by the Competent Authority, and it shall conduct stock affairs in compliance with the above Regulations Governing Handling of Stock Affairs.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis to a SITE or an FTE processing the transfer of title to beneficial certificates; to trustee institutions processing the transfer of title to beneficial securities; to special purpose companies processing the transfer of title to asset-backed securities; to real estate securitization trustee institutions processing the transfer of title to REIT or REAT beneficial securities; to issuers processing the transfer of title to ETNs; to offshore fund institutions, through the master agents appointed by them, or through a qualified agent for stock affairs separately appointed by the master agent, processing the transfer of title to beneficial certificates of offshore ETFs, to the transfer of title to secondary listed company stocks, and to foreign issuers and their depositary institutions processing the transfer of title to Taiwan Depositary Receipts.
45    Where the name, type of securities, price per unit, outstanding shares, or other contents are changed, the changes shall be processed in accordance with the laws, and further the "Application for Amending the Listed Securities Registers," and the "Plan for Exchange of Securities Certificates" shall be sent to the TWSE to apply for change of content of the listed securities. The listed company shall send the required documents to the TWSE and file a report on the Internet information reporting system designated by the TWSE during the time period specified by the TWSE, and before the last day the shareholders list may be changed. In the case of change of the company name, within 3 years from the approval date of such change, all the issued securities and other information to be published as required shall be disclosed in the new name as well as the old name. For 3 consecutive months after the company name change, the said information shall be publicly announced on the Internet information reporting system designated by the TWSE. In the case of capital reduction registration, the procedural provisions for delivering the new replacement securities by scripless book-entry transfer shall be carried out within 3 months from the date on which the exchange plan in the "Plan for Exchange of Securities Certificates" submitted to the Competent Authority is approved. Thereafter, the said exchange plan shall be actually implemented. If the issuance of new replacement shares resulting from capital decrease is likely to fall behind schedule or there might be any abnormal situation, the TWSE shall be notified in writing in advance; provided, however, that issuance of new replacement shares may be waived in the case of buy back of treasury stocks and cancellation of shares under Article 28-2 of the Securities and Exchange Act.
    The Plan for Exchange of Share Certificates referred to in the preceding paragraph shall be adopted in accordance with the Procedures for Replacement of Securities Certificates by Listed Companies prescribed by the TWSE.
    In the event of slip or reverse split of ETF beneficial certificates managed by a SITE or an FTE according to the securities investment trust contract or futures trust contract, upon approval of the Competent Authority, the enterprise shall file an application to the TWSE according to the TWSE Operating Procedures Governing the Split and Reverse Split of Listed Exchange-Traded Fund Beneficial Certificates.
    Where the volume of the total newly replaced stocks has reached 30 percent of its total listed shares, the listed company may designate the listing date of the new shares (identical with the last day of trading of old shares), and submit an application to the TWSE, for public announcement and implementation after review and approval by the TWSE.
    Where the volume of the total newly replaced stocks has not reached 30 percent of total listed shares of the listed company, if the listed company makes a written undertaking that starting from the date the new shares are traded, the replacement procedures will be commenced and any old shares received will be replaced with new shares on the same date, the procedures enumerated in the preceding paragraph shall apply. If it does not issue the written undertaking, the designation of the listing date of the new shares (identical with the last day of trading of old shares) shall not at the latest be later than 30 days after the first date on which the old shares are replaced with new shares. Further, commencing from the above date, it shall continue with the replacement procedures and issue new replacement shares on the same date on which it receives the old shares.
    The provisions of this article shall apply mutatis mutandis to any change in connection with stocks issued by a secondary listed company or securities of a foreign company represented by Taiwan Depositary Receipts issued by a foreign issuer and its depositary institution.
45-1    Where a listed company issues new shares, the new shares shall be traded on the day such shares are delivered to the shareholders. In the event the company has any conditions enumerated in Article 156, paragraph 1 of the Securities and Exchange Act and the Competent Authority has restricted its trading, the shares shall be prohibited from being traded.
    The company issuing the new shares referred to in the preceding paragraph shall, before the share certificates representing the new shares are delivered and within the time period specified by the TWSE, make a report and upload the relevant documents onto the Internet information reporting system designated by the TWSE.
    Once verified by the TWSE, the reported information referred to in the preceding paragraph shall form an integral part of the original Agreement for Listing.
46    Where a TWSE listed company or a TIB listed company closes the books on changes to the shareholders register in accordance with Article 165 of the Company Act, it shall, before the last date the shareholders register may be changed and within the time period required by the TWSE, publicly announce on the website reporting system designated by the TWSE the reason for the suspension, date of suspension, amount of dividends and bonuses to be distributed, and allocation of rights. However, in special circumstances, where the reasons are stated, the company may simply publicly announce in advance the reasons for convening a shareholders meeting and the date of the meeting. In such cases, it shall follow up, at least 40 days prior to the date of the shareholders meeting, with a public announcement on the above-mentioned website designated by the TWSE of the amount of dividends and bonuses to be distributed or rights to be allocated.
    If there is subsequently any change in information publicly announced by a TWSE listed company or a TIB listed company under the preceding paragraph, or the public announcement is not made by the listed company within the time period specified by the TWSE, then the listed company shall bear full liability for any resultant trade dispute or damage suffered by a party to a trade.
    The provisions of paragraph 2 of this Article shall apply mutatis mutandis to a SITE or an FTE setting a time period for changes to the beneficiaries list or date of distribution of profits when handling matters set forth in Article 64, Article 68, and Article 77 of the Regulations Governing Securities Investment Trust Funds or Article 60, Article 63, or Article 78 of the Regulations Governing Futures Trust Funds.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis for the book closure period during which the shareholders list, beneficiaries list, and foreign bond holders list may not be changed due to the distribution of stock dividends, bond interest, bonus, or other interests in accordance with the laws of its country of registration, in respect of bonds issued by a foreign issuer or its agent institution, stocks issued by a TWSE primary listed, TIB primary listed or secondary listed company or its agent institution, or foreign securities represented by Taiwan Depositary Receipts issued by a foreign issuer or its depositary institution. All shareholders of a TWSE primary listed company or a TIB primary listed company shall be notified by 30 days before the convening of a regular shareholders meeting. If a company, however, under the laws and regulations of the country of its registration, is unable to deliver the notice of the convening of the shareholders meeting by 30 days before the meeting, it shall deliver notice to all shareholders, at the latest, by 21 days before the regular shareholders meeting, and shall make a supplementary public disclosure by 10 days before the date of delivery of the shareholders meeting notice.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis when a trustee institution sets a record date for book closure of the register of beneficiaries or for distribution of income because of the convening of a beneficiaries meeting or of distribution of profit on a special purpose trust, or when a special purpose company sets a record date for book closure for entries in the register of holders of asset-backed securities or a record date for distributions because of the convening of a meeting of holders of asset-backed securities or distribution or repayment of principal, profit, interest, or other income rights in accordance with an asset securitization plan.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis when a securitization trustee institution sets a record date for book closure of the register of beneficiaries or for distribution of income because of the convening of a beneficiaries meeting or distribution of income.
    The provisions of paragraphs 1 and 2 shall apply mutatis mutandis when an issuer of ETNs sets a record date for book closure of the register of holders of ETNs or for distribution of income because of distribution of income.
    When an offshore fund institution, for purposes of holding a beneficial owners meeting or shareholders meeting of an offshore ETF, or for distribution of income or dividends, sets the record date for book closure period of the register of beneficial owners or register of shareholders or for a distribution of income or dividends, the provisions of paragraph 1 shall apply mutatis mutandis to the master agent appointed by the offshore fund institution.
    When an offshore fund institution entrusts its master agent to make any public announcement of a matter under the preceding paragraph, if, due to any subsequent change or to a failure to make the public announcement by the deadline under TWSE regulations, any trade dispute occurs and a party to the trade suffers any loss, the offshore fund institution and the master agent shall without exception be held fully liable.
    When a TWSE listed company, TIB listed company, TWSE primary listed company, or TIB primary listed company has not issued a cash dividend within 3 months after the ex-dividend record date, the TWSE may impose a penalty of NT$100,000 and send the company a written notice to correct the situation within 1 month after its receipt of the notice. If the company again fails to issue the dividend within the deadline, the TWSE may impose a penalty of not less than NT$200,000 and not more than NT$1 million, and may impose a new deadline for correction according to the circumstances of the individual case. If the company still fails to comply, the TWSE may impose a penalty of not less than NT$200,000 and not more than NT$1 million for each successive failure to comply.
46-1    On the date when the issuing company of the underlying securities represented by a call (put) warrant commences to distribute dividends or bonuses, increase capitalization, or where the strike price or point has to be adjusted as it meets the criteria for resetting, or upon distribution of dividends on an underlying ETF or handling of other related matters by a SITE or FTE, or upon distribution of dividends on an underlying offshore ETF or handling of other related matters by an offshore fund institution, such issuer or enterprise shall, by the deadline prescribed by the TWSE, enter the information listed below into the Internet information reporting system designated by the TWSE; if the issuing company of the underlying securities commences to duly carry out a capital reduction, stock split, or reverse stock split, the warrant issuer shall, by the deadline prescribed by the TWSE, shall enter the information listed below into the Internet information reporting system designated by the TWSE, and shall additionally deliver the downloaded material to the TWSE:
  1. Name of the call (put) warrant.
  2. Date of maturity for call (put) warrant.
  3. Adjustments and changes to the strike price or point, exercise ratio, and other related matters in the call (put) warrant.
  4. Effective date.
  5. Other relevant information required by the TWSE.
47    A TWSE listed company, TIB listed company, TWSE primary listed company or TIB primary listed company shall provide the following information within the prescribed time period:
  1. With the exception of announcements of book closure of the shareholders' register because of the convening of a regular shareholders meeting, special shareholders meeting, or target date fixed by the company for distribution of dividends, bonus, or other benefits under Article 165 of the Company Act or the laws of the jurisdiction of incorporation, for which it is not necessary to send the downloaded information to the TWSE, for all other announcements related to the rights and obligations of shareholders, the relevant particulars shall be entered into the Internet information reporting system designated by the TWSE, and the downloaded information shall be sent to the TWSE. Where particulars that should be publicly announced were not announced, or where the announced items were not sufficiently explanatory, the TWSE may inform the company to make the announcement or to supplement or amend the announcement.
  2. Before convening a shareholders meeting, the board meeting minutes along with the public announcement of book closure of the shareholders' register shall be entered into the Internet information reporting system designated by the TWSE in accordance with the preceding article.
  3. Within 20 days of the general shareholders meeting, one copy of the annual report to the shareholders meeting shall be submitted.
  4. Where approval is granted for the issuance of securities, four copies of the prospectus shall be submitted.
  5. One copy of each of the financial reports, documents, reports or forms required to be provided to the TWSE pursuant to Article 36 of the Securities and Exchange Act, and when the annual financial reports are submitted, one copy of the consolidated financial statements of the affiliates shall be provided.
  6. Information required to be submitted according to the competent authority’s List of Information about Offering and Issuance of Securities by Foreign Issuers to be Published and Submitted to the the Commission.
  7. Other information as required by the Competent Authority and the TWSE.
    Where a TWSE listed company, TIB listed company, TWSE primary listed company or TIB primary listed company issuing overseas securities on an overseas stock exchange is required by the laws and regulations of the jurisdiction in which the listing is to take place to provide or disclose certain information, a copy of such information shall be provided to the TWSE within 2 days after such information has been so provided.
    The TWSE may, according to a TWSE listed company's, TIB listed company’s, TWSE primary listed company’s or TIB primary listed company’s scale, nature of business, and other necessary circumstances, require the company to prepare a sustainability report, and to file it through the internet information reporting system designated by the TWSE. The operation rules governing such reports will be separately prescribed.
47-1    SITEs, FTEs, and the master agents of offshore fund institutions shall provide the following information within the prescribed time period:
  1. Where an announcement is related to the rights of beneficiaries, the relevant particulars shall be entered into the Internet information reporting system designated by the TWSE. Where particulars that should be publicly announced but were not announced, or where the announced items were not sufficiently explanatory, the TWSE may inform the company to make the announcement or supplement or amend the announcement.
  2. Upon receiving notification from the TWSE of approval for offering and issuance of beneficial certificates, a SITE shall upload the electronic file [of the prospectus] onto the Internet information reporting system designated by the TWSE and provide four [physical] copies of the prospectus.
  3. At the same time that they are filed with the Competent Authority, two copies of the annual report and monthly balance sheet report shall be submitted, provided that the requirement of submission of a monthly balance sheet shall not apply if the offshore ETF is not required to prepare a monthly balance sheet under the rules of the competent authority of its place of registration.
    The TWSE may provide original or abstract copies of the information provided to it pursuant to the preceding paragraphs for review by the public.
47-2    Any secondary listed company and its agent institution, or any foreign issuer and its depositary institution that issue Taiwan Depositary Receipts, shall provide the following information within the prescribed time period:
  1. Foreign issuers designating specific time periods or record dates for confirmation of its shareholders for purposes of distribution of dividends, warrants, and other rights shall on the commencement date or 12 business days before the record date report the particulars and other concrete contents regarding such events on the Internet information reporting system designated by the TWSE.
  2. (deleted)
  3. In accordance with regulations, four copies of the prospectus must be provided to the TWSE for review by the public when the stock or Taiwan Depositary Receipt begins trading on the Exchange.
  4. The form "Items that Shall be Publicly Announced and Reported to this Commission when A Foreign Issuer Offers and Issues Securities" produced in accordance with the regulation of the Competent Authority shall be provided.
    The preceding documents or public announcement, if in English, shall have Chinese translations, or shall be made in Chinese.
47-3    (deleted)
47-4    The trustee institution or special purpose company shall provide the following information within the prescribed time period:
  1. When rights or interests of beneficiaries or holders are publicly announced, the relevant particulars shall be entered into the Internet information reporting system designated by the TWSE. Where particulars that should have been publicly announced were not announced, or where the announced items were not sufficiently explanatory, the TWSE may give notice via letter to make the announcement or to supplement or amend the announcement.
  2. When trading of beneficial securities or asset-backed securities on the TWSE market commences, four copies of the prospectus shall be submitted.
  3. Two copies of each shall be submitted at the time that the balance sheet, profit and loss statement, and trust property management and application report prepared by the trustee institution with respect to the trust property of the special purpose trust are reported to the trust supervisor and notice is given to the beneficiaries; and at the time that the report prepared by the special purpose company with respect to the management and disposition of the assigned assets, profit/loss and distribution amounts, book balance, withdrawn capital or other interests, overdue receivables and bad debts, and other material information, is reported to the supervisory institution and notice is given to all holders.
  4. When the special purpose company performs reporting and public announcement in accordance with Article 36 of the Securities and Exchange Act, two copies of all such information shall be submitted.
    The TWSE may provide the originals or abstracts of any information provided to it pursuant to the preceding paragraphs for review by the public.
47-5    The real estate securitization trustee institution shall provide the following information within the prescribed time period:
  1. When rights or interests of beneficiaries are publicly announced, the relevant particulars shall be entered into the Internet information reporting system designated by the TWSE. Where particulars that should have been publicly announced were not announced, or where the announced items were not sufficiently explanatory, the TWSE may give notice via letter to make the announcement or to supplement or amend the announcement.
  2. When trading of REIT beneficial securities or REAT beneficial securities on the TWSE market commences, four copies of the prospectus shall be submitted.
  3. Two copies shall be submitted of the trust property assessment report publicly announced every 3 months by the real estate securitization trustee institution.
  4. Two copies of each shall be submitted at the time that the balance sheet, profit and loss statement, and trust property management and application report prepared by the real estate securitization trustee institution are reported to the trust supervisor and notice is given to the beneficiaries.
  5. Two copies of the beneficiaries meeting minutes shall be submitted within 20 days after the beneficiaries meeting.
  6. Other information as required by the Competent Authority and the TWSE.
    The TWSE may provide the originals or abstracts of any information provided to it pursuant to the preceding paragraphs for review by the public.
47-6    An issuer of ETNs shall submit the following information according to the required schedule:
  1. When publishing information about rights and interests of holders of ETNS, an issuer shall enter the information to the online information reporting system at the website designated by the TWSE. If it fails to publish information required to be published or the information it has published is inadequate, the TWSE may send a written notice asking it to publish the information or provide supplementary or corrected information.
  2. Four copies of the prospectus the ETNs shall be submitted prior to beginning of trading at the TWSE market.
  3. Other information to be submitted as required by the competent authorities and the TWSE.
    The TWSE may grant public access to the information submitted in accordance with the preceding paragraph in its original or in abstract copy.
48    Within 2 days of the occurrence or of the effectiveness of the following events, a TWSE listed company or TIB listed company shall report to the TWSE:
  1. Where any of the conditions specified in Articles 49, 49-2 and 50, or Articles 49-4 and 50-9, of these Operating Rules occurs to a TWSE listed company or a TIB listed company, as applicable.
  2. Amendment of its articles of incorporation, or increase/decrease of capitalization.
  3. Issuance of preferred classes of shares, or the issuance, maturity or redemption of corporate bonds, or the conversion of convertible bonds into shares in accordance with its terms.
  4. Addition or reduction or substitution in value of the security for the bond.
  5. The reaching of a resolution referred to in Article 185 of the Company Act, the purchase of shares referred to in Article 186 of the Company Act, or the negotiation and determination of the purchase price of shares referred to in Article 187 of the Company Act.
  6. Any action of the promoters or directors that under the Company Act carries liability for damages.
  7. Any resolutions of the regular or special meeting of shareholders which have been revoked by a court in accordance with the law.
  8. Where reports are made to the Competent Authority pursuant to Article 25, and Article 36, paragraph 2 of the Securities and Exchange Act.
  9. Any judicial decision on the reported loss of, and deprivation of rights for listed securities, or the attachment or provisional attachment thereof, or its holder is adjudicated to be bankrupt.
    A TWSE primary listed company or a TIB primary listed company in the following circumtsances shall notify the TWSE within 2 days of occurrence of the event or the day when the event takes legal effect:
  1. Where any of the conditions specified in Articles 49-1, 49-3 and paragraph 1, subparagraph 2 of Article 50-3, or Articles 49-4 and 50-9, of these Operating Rules occurs to a TWSE primary listed company or a TIB primary listed company, as applicable.
  2. Amendment of its articles of incorporation, or increase/decrease of capitalization.
  3. Issuance of preferred classes of shares, or the issuance, maturity or redemption of corporate bonds, or the conversion of convertible bonds into shares in accordance with its terms.
  4. Addition or reduction or substitution in value of the security for the bond.
  5. Where a resolution consistent with the requirements under Article 185 of the ROC Company Act is made at a shareholders meeting convened according to the articles of incorporation, or dissenting shareholders at the above shareholders meeting request the company to purchase shares, or the company negotiates share price with dissenting shareholders.
  6. Any action of the promoters or directors that under the Company Act carries liability for damages.
  7. Any resolutions of the regular or special meeting of shareholders which have been revoked by a court in accordance with the law.
  8. Where reports are made to the Competent Authority pursuant to Article 25, and Article 36, paragraph 2 of the Securities and Exchange Act.
  9. Any judicial decision on the reported loss of, and deprivation of rights for listed securities, or the attachment or provisional attachment thereof, or its holder is adjudicated to be bankrupt.
    A SITE or an FTE to which any of the following conditions applies shall report to the TWSE:
  1. Any changes in the specimen certificate of a beneficial certificate.
  2. Any events specified in Article 63 or Article 78 of the Regulations Governing Securities Investment Trust Funds, or Article 73 or Article 82 of the Regulations Governing Futures Trust Funds.
  3. Any events specified in Article 3, Article 4, Article 5, or Article 24 of the Rules Governing Securities Investment Trust Enterprises or Article 8, Article 9, Article 10, or Article 38 of the Regulations Governing Futures Trust Enterprises.
    Upon receiving any notice made pursuant to the preceding three paragraphs, or where it learns such information from other sources, in order to provide reference material to the public, the TWSE shall, in addition to processing the matter in accordance with regulations or reporting to the Competent Authority for its disposal, publicly announce the matter or notify the TWSE listed company, TIB listed company, TWSE primary listed company or TIB primary listed company in writing to report it on the Internet information reporting system designated by the TWSE.
48-1    A secondary listed company shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information of Listed Companies prescribed by the TWSE.
    Upon receiving approval from the Competent Authority to issue call (put) warrants, a call (put) warrant issuer shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Listed Warrants/Stocks prescribed by the TWSE.
    A trustee institution or special purpose company shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Trustee Institutions and Special Purpose Companies prescribed by the TWSE.
    A real estate securitization trustee institution shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Real Estate Securitization Trustee Institutions prescribed by the TWSE.
    An issuer of ETNs shall make reporting in a timely manner in accordance with the Procedures for Verification and Disclosure of Material Information of Listed Exchange-Traded Notes, established by the TWSE.
48-2    If a listed company is reducing the percentage of its direct or indirect shareholding in (or contribution to) its key subsidiary by 10 percent or more, on an accumulative basis, in three years or has lost its control over the subsidiary, it shall appoint an independent expert to issue an opinion on the fairness of the price in the various reductions and the impact on the shareholders' equity of the listed company.
    The listed company shall submit the written opinion in the preceding paragraph, how percentage of shareholding in (or contribution to) the key subsidiary will be reduced, the parties to whom equities (or contributions) are to be assigned or the specified persons being contacted, and whether continued listing of shares of the listed company on the TWSE will be affected to its audit committee for review and then submit the results of the review to its board of directors for discussion. Where the company has not established an audit committee, the approval of two-thirds of all members of the board of directors shall be required.
    The three years as referred to in the first paragraph shall be the three-year period prior to the day of occurrence of the relevant event. Those changes occurring during this period that have been dealt with in accordance with this Article, however, shall be excluded.
    For purpose of the preceding paragraph, the day of occurrence of the relevant event shall mean the agreement date, contract signing date, payment date, closing date of consigned trading, transfer of title date, date of resolution of a board of directors or a committee established by the BOD, or any other day when the counterparty to a transaction or the trading value can be confirmed, whichever is earlier. In case of an investment requiring the approval by the competent authorities, however, the day shall be one of the above dates or the date when the approval by the competent authorities is received, whichever is earlier.
    A listed domestic company that is an investment holding company or financial holding company and is a subsidiary that has met the standards under Article 7, paragraph 3 of the TWSE Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities will be deemed a key subsidiary for purposes of this Article.
    In the event of a listed company's violation of this Article, the TWSE may notify it for improvement, change how its securities are trading, or suspend trading of its securities depending on degree of severity.
48-3    If a subsidiary of a listed company applies for listing of securities in an overseas securities market for trading, it shall establish a special committee to review and consider the following matters and submit the results of the reviews to the board of directors for discussion before the listing shall be approved by resolution at a shareholders meeting of the listed company:
  1. The purpose of the subsidiary's application for listing of securities in the overseas securities market for trading.
  2. Impact on the finance and business of the listed company, and impact of the proposed changes in the organizational structure and business on the listed company.
  3. Method of shareholding dispersal, proposed reduction of shareholding, basis of price determination, to whom equities are to be assigned or specified persons being contacted with regard to the subsidiary.
  4. Whether continued listing of shares of the listed company on the TWSE will be affected.
    When a subsidiary of a listed company applies for listing at an overseas securities market, making the listed company meets the criteria in the first paragraph of the preceding article due to a reduced direct or indirect shareholding in or capital contribution to its subsidiary, the listed company shall take the required actions in accordance with the applicable provisions in that article.
    Where listing shall be approved by resolution at a shareholders meeting in accordance with the first paragraph, the information listed in that paragraph shall be included and explained in the reason for convening the shareholders meeting and shall not be submitted as an extempore motion.
    If, as a result of a subsidiary of a listed company listing securities in an overseas securities market for trading, the listed company or subsidiary is required to issue an undertaking to the competent authority or security exchange of such market, the listed company shall establish a special committee to review and consider the impact of the undertaking on the finance, business or shareholder equity of the listed company and the subisidary, and shall submit the results of the review to the board of directors for resolution.
    The contents of the undertaking and board of directors resolution mentioned in the preceding paragraph shall be fully reported in the next shareholders meeting.
    Where a listed company that has established an audit committee, the audit committee shall act as the special committee referred to in the first to four paragraphs. The audit committee shall follow the regulations on matters to be resolved by audit committee under the Securities and Exchange Act in proceeding with the reviews and considerations under this article.
    Where a special committee is established in accordance with this article, the applicable regulations under the Regulations Governing the Establishment and Related Matters of Special Committees of Public Companies for Merger/Consolidation and Acquisition shall apply mutatis mutandis to the makeup, qualification, review method and other matters relating to the committee.
    In the event of a listed company's violation of this Article, the TWSE may notify it for improvement, change how its securities are trading, or suspend trading of its securities depending on degree of severity.
49    If any of the following circumstances applies to a listed company, the TWSE may place its listed securities under an altered trading method:
  1. The latest individual financial report, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report.
  2. A shareholders meeting has not been held within 6 months after the end of the fiscal year.
  3. The attesting CPA for the most recent financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act issues an audit report or review report indicating substantial uncertainty about the ability to continue as a going concern, or the attesting CPA issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply if it is otherwise permitted by the laws and regulations of the competent authority, or in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA has fully disclosed in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned non-major subsidiary is a subsidiary of a financial holding company, its interim financial report shall also be audited or reviewed by a CPA in accordance with applicable laws and regulations.
  4. Violation of relevant bylaws or rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
  5. Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
  6. A petition for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
  7. Half or more of the directors have changed, such that any of the following circumstances exists, and it fails to make improvement within a specified time period ordered by the TWSE:
    1. The shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing.
    2. The newly appointed directors, supervisors, or president meet any of the conditions under Article 9, paragraph 1, subparagraph 8 of the TWSE Rules Governing Review of Securities Listings.
  8. The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
  9. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
  10. After a demerger, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, paragraph 1, subparagraph 2 or Article 5, subparagraph 1, respectively, of the Rules Governing Review of Securities Listings.
  11. The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as a result of share conversion, sale and assignment, transfer of business, demerger, or change of company name, this shall not apply within 1 year from the date of listing for trading.
  12. Failure to abide by an undertaking to purchase the shares held by other shareholders of a TWSE listed (or Taipei Exchange listed) subsidiary in which it has shareholding of more than 70 percent.
  13. Any of the following circumstances occurs in the handling of stock affairs:
    1. The company has not engaged an agent of stock affairs, and has not obtained the Taiwan Depository and Clearing Corporation's review and agreement to handle stock affairs.
    2. The Taiwan Depository and Clearing Corporation has audited and discovered a material irregularity in stock affairs, and the company has failed to correct the irregularity within the deadline set by the TWSE for corrections.
  14. Where explanations given in a press conference concerning material information fail to clarify points in question, and the TWSE deems it necessary to protect the rights and interests of investors.
  15. The number of TWSE listed common shares does not reach 25 percent of the total number of the company's issued common shares, and any of the circumstances in the following items exists:
    1. The share capital of TWSE listed common shares does not reach NT$600 million.
    2. The number of TWSE listed common shares does not reach 30 million shares.
  16. The requirements of Article 50, paragraph 2, subparagraph 13 cannot be met within 6 months after trading is suspended pursuant to Article 50, paragraph 1, subparagraph 14.
  17. A venture capital company fails to rectify within the prescribed time limit when its current financial reports show any of the following:
    1. The number of shares it invests and holds in any public company exceeds 30 percent of the total issued voting shares of said company.
    2. The total investment it holds in any invested company exceeds 20 percent of the total assets shown in the venture capital company's most updated financial reports.
    3. Its total investment fails to reach 60 percent of its total assets.
    4. It engages in any business other than those stipulated in the Rules Governing Guidance to Venture Capital Enterprises.
  18. The board of directors resolves to refer a dissolution proposal to a shareholders meeting for resolution.
  19. Upon other necessary reasons as determined by the TWSE.
    If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may resume trading of the company's securities by the normal trading method:
  1. Where the change of trading method was imposed pursuant to subparagraph 1 of the preceding paragraph, the financial reports for the most recent two periods registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report; in the event of a capital reduction, the operations for exchange of securities upon capital reduction are additionally completed.
  2. Where the change of trading method was imposed pursuant to subparagraph 2 of the preceding paragraph, and the shareholders meeting has been held.
  3. Where the change of trading method was imposed pursuant to subparagraph 3 of the preceding paragraph, and due to supplementation or correction, the circumstances specified in that subparagraph no longer exist.
  4. Where the change of trading method was imposed pursuant to subparagraph 4 of the preceding paragraph, and disclosure proceeding is commenced in compliance with the notice.
  5. After the trading method was changed pursuant to subparagraph 5 of the preceding paragraph, the preliminary injunction order was canceled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
  6. After the trading method was changed pursuant to subparagraph 6 of the preceding paragraph, the petition for re-organization was withdrawn or was conclusively dismissed by court pursuant to Article 283-1, subparagraph 1 or Article 285-1, paragraph 3, subparagraph 1; provided that the execution period of the altered trading method shall not be less than 3 months where the petition for re-organization was withdrawn.
  7. After the trading method was changed pursuant to subparagraph 7 of the preceding paragraph, supplementation or correction was made.
  8. After the trading method was changed pursuant to subparagraph 8 of the preceding paragraph, the company has repaid the debt or reached a settlement agreement with the creditors.
  9. Within 3 months of the trading day next following the date the trading method was changed pursuant to subparagraph 9 of the preceding paragraph, the listed company has completed any of the remedial procedures enumerated herein below, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by the TWSE. The form shall be signed and certified by a CPA and a lawyer and submitted to the TWSE along with the other relevant documents and materials for approval and recordation:
    1. Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
    2. Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
    3. Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
  10. Where correction or improvement has been made by the listed company within 3 months of the trading day next following the date the trading method of the securities was changed pursuant to subparagraph 10 of the preceding paragraph.
  11. Where correction or improvement has been made within 3 months after the change of trading method of the securities pursuant to subparagraph 11 or subparagraph 12 of the preceding paragraph.
  12. Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 13 of the preceding paragraph.
  13. Where the points in question have been clarified after the trading method was changed pursuant to subparagraph 14 of the preceding paragraph, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least 3 months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
  14. Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 15 of the preceding paragraph, and the single-quarter net profit before tax attributable to owners of the parent for each of the most recent consecutive two quarters is positive.
  15. Within two years after the securities have been placed under the altered trading method due to the circumstances in subparagraph 16 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 3 percent or more of the share capital stated in the financial reports for the most recent period, and the requirements of Article 50, paragraph 2, subparagraph 13, items B to F are met.
  16. After the trading method was changed pursuant to subparagraph 17 of the preceding paragraph, correction or improvement is made.
  17. After the trading method was changed pursuant to subparagraph 18 of the preceding paragraph, the dissolution proposal is revoked by the board of directors, or the shareholders meeting fails to pass a resolution for the proposal.
  18. After the trading method was changed pursuant to subparagraph 19 of the preceding paragraph, correction or improvement is made upon the request of the TWSE.
    Where the TWSE changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where the TWSE restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within 1 month of such action, the TWSE shall report such action to the Competent Authority for recordation.
    The net worth referred to in Chapter IV and IV-1 means the equity attributable to owners of the parent as stated in the balance sheet prepared in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry.
49-1    If any of the circumstances listed below apply to a primary listed company, the TWSE may classify that company's listed securities as securities placed under an altered trading method:
  1. Net worth, as indicated in its duly announced and filed financial report for the most recent period, of less than one-half of its share capital stated in the financial report.
  2. Failure to convene and bring to completion a regular shareholders meeting within 6 months after the conclusion of the fiscal year.
  3. The attesting CPA for the most recent financial report publicly announced and registered as required issues an audit report or a review report indicating substantial uncertainty about the ability to continue as a going concern, or the attesting CPA issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA fully discloses in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present.
  4. It violated any bylaw, rule, or regulation relating to listed foreign securities such as those regarding the disclosure of material information, was notified to conduct supplementary disclosure procedures, failed to do so before the deadline, and the circumstances of the case were serious.
  5. Any petition for its reorganization has been submitted to the court in the country where it is registered.
  6. If the situation in Article 28-8, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings applies to the incumbent director, supervisor, or general manager of the primary listed company or any company it controls, and corrective action is not taken within the period prescribed by the TWSE.
  7. Inability to redeem ordinary corporate bonds or convertible corporate bonds upon maturity or upon creditor request.
  8. A negotiable instrument has been dishonored by a financial institution due to insufficient funds and the TWSE is aware of the situation.
  9. Explanations in a press conference concerning material information fail to clarify the points in question and the TWSE deems it necessary to protect the rights and interests of investors.
  10. The number of TWSE listed common shares does not reach 25 percent of the total number of the company's issued common shares, and does not reach 60 million shares.
  11. The requirements of Article 50-3, paragraph 2, subparagraph 11 cannot be met within 6 months after trading is suspended pursuant to Article 50-3, paragraph 1, subparagraph 11.
  12. The board of directors resolves to refer a dissolution proposal to a shareholders meeting for resolution.
  13. It fails to purchase the shares held by the other shareholders of its TWSE/TPEx listed subsidiary in which it holds more than 70 percent of shares, as it has undertaken to do.
  14. Its directors with registered household in the Republic of China take less than a majority seats in the board, or fewer than two independent directors have a registered household in the Republic of China, and no special shareholders meeting has been held for a re-election within 60 days of occurrence of the fact.
  15. The TWSE deems it necessary to do so for any other reason.
    When a primary listed company's securities have been classified as securities placed under an altered trading method due to any circumstance in a subparagraph of the preceding paragraph, if the company meets the respective requirements listed below and is free of any other circumstances in the subparagraphs of the preceding paragraph, the TWSE may restore the regular trading method for the company's listed securities:
  1. After placement under an altered trading method pursuant to subparagraph 1 of the preceding paragraph, the net worth in its consolidated financial reports as duly filed and announced for each of the most recent two periods exceeds NT$300 million and is one-half or more of its share capital as stated therein; in the event of a capital reduction, the operations for exchange of securities upon capital reduction have been additionally completed.
  2. After placement under an altered trading method pursuant to subparagraph 2 of the preceding paragraph, it convenes and brings to completion the regular shareholders meeting.
  3. After placement under an altered trading method pursuant to subparagraph 3 of the preceding paragraph, the circumstance under that subparagraph ceases to exist after supplementary or corrective action.
  4. After placement under an altered trading method pursuant to subparagraph 4 of the preceding paragraph, it conducts supplementary disclosure procedures as per notification.
  5. After placement under an altered trading method pursuant to subparagraph 5 of the preceding paragraph, the petition for its reorganization is withdrawn, or is conclusively dismissed by court on the grounds that the petition procedure fails to conform to requirements or the statement of petition contains false or untrue entries; provided that the altered trading method implementation period may not be less than 3 months where the petition for its reorganization is withdrawn.
  6. After placement under an altered trading method pursuant to subparagraph 6 of the preceding paragraph, supplementation or corrective action is taken.
  7. After placement under an altered trading method pursuant to subparagraph 7 of the preceding paragraph, the company settles its obligation or reaches a conciliation agreement with the creditor.
  8. Within 3 months from the next business day after placement under an altered trading method pursuant to subparagraph 8 of the preceding paragraph, it extinguishes the debt under the negotiable instrument by actual settlement of the amount of the negotiable instrument or completes payment negotiation procedures with its financial institution, and has the negotiation documents signed and certified by a CPA and lawyer and submits them together with other relevant documentation to the TWSE for review and recordation.
  9. After placement under an altered trading method pursuant to subparagraph 9 of the preceding paragraph, it clarifies the points in question.
  10. Where supplementation or correction has been made after the trading method was changed pursuant to subparagraph 10 of the preceding paragraph, and the single-quarter net profit before tax attributable to owners of the parent for each of the most recent consecutive two quarters is positive.
  11. Within two years after the securities have been placed under the altered trading method due to the circumstances in subparagraph 11 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches NT$60 million, and the requirements of Article 50-3, paragraph 2, subparagraph 11, items B to F are met.
  12. After the trading method was changed pursuant to subparagraph 12 of the preceding paragraph, the dissolution proposal is revoked by the board of directors, or the shareholders meeting fails to pass a resolution for the proposal.
  13. After placement under an altered trading method under subparagraph 13 or 14 of the preceding paragraph, corrections and improvements have been made.
  14. After placement under an altered trading method under subparagraph 15 of the preceding paragraph, it provides supplementation or takes corrective action as required by the TWSE.
    Within 1 month after it places the listed shares of a primary listed company under an altered trading method pursuant to the circumstances of paragraph 1, or restores that company's listed shares to the regular trading method under paragraph 2, the TWSE shall file with the Competent Authority for recordation.
    After a primary listed company, under Article 28-7 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings, adds in its articles of incorporation, organizational documents, or important financial or business documents any important matters as designated by the TWSE in connection with the protection of shareholders equity, it shall submit the draft amendment with a legal opinion by a lawyer regarding important matters in connection with the protection of shareholders equity of its articles of incorporation, organizational documents, or important financial or business documents to the TWSE 15 days before the notice or announcement of the shareholders meeting. If the TWSE deems that the draft amendment is likely to impair shareholders equity, it may issue an opposing opinion to the draft amendment. If the primary listed company, without the prior approval of the TWSE, fails to submit the draft amendment by the above-stated deadline, the TWSE may impose a penalty of NT$30,000.
    If the TWSE deems that any content of a primary listed company's articles of incorporation, organizational documents, or important financial or business documents is likely to impair shareholders equity, it may require the primary listed company to amend its articles of incorporation, organizational documents, or important financial or business documents by a deadline. If the primary listed company fails to amend its articles of incorporation, organizational documents, or important financial or business documents by the deadline, the TWSE may impose a penalty of NT$30,000, and further impose a deadline for amendment of the articles of incorporation, organizational documents, or important financial or business documents. If the primary listed company still fails to amend the articles of incorporation, organizational documents, or important financial or business documents by the deadline, the TWSE may designate its listed stock as securities placed under an altered trading method. However, if in an individual case the circumstances of the impairment to shareholder equity are serious, the TWSE may proceed directly to designate the listed stock as securities placed under an altered trading method, without first imposing the penalty.
    When listed stock of a primary listed company is designated as securities placed under an altered trading method because of circumstances in paragraph 5, then once the articles of incorporation, organizational documents, or important financial or business documents have been amended so that there is no longer any likelihood of impairment to shareholder equity, nor is there any other of the circumstances set out in the subparagraphs of paragraph 1, the TWSE may resume normal trading of the company's listed stock.
    When the TWSE designates the listed stock of any primary listed company as securities placed under an altered trading method pursuant to paragraph 5, or resumes normal trading of its listed stock pursuant to paragraph 6, it shall report to the competent authority for recordation within 1 month after executing the measure.
    If a secondary listed company, or a foreign issuer that issues Taiwan Depositary Receipts or the depositary institution thereof, breaches an undertaking executed at the time of its application for listing, the TWSE may depending on the case impose a breach penalty of NT$30,000 and order it to make supplementation or corrections within a certain period of time.
    If any of the circumstances listed below exists with respect to a TWSE secondary listed company, the TWSE may place its listed securities under an altered trading method:
  1. The company fails to publicly announce and file its consolidated financial report by the prescribed deadline.
  2. Its net worth indicated in its duly announced and filed consolidated financial report for the most recent period is less than one-half of its share capital stated in the consolidated financial report.
  3. The attesting CPA for the most recent consolidated financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act issues an audit report or review report indicating substantial uncertainty about the ability to continue as a going concern, or the attesting CPA issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA fully discloses in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present.
  4. For the duly announced and filed consolidated financial report for the most recent period, the CPA issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse conclusion or disclaimer of conclusion in the review report.
  5. The company is unable to punctually repay straight corporate bonds or convertible corporate bonds upon maturity or upon the demand of creditors.
  6. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
  7. Any document or information that has been submitted is suspected to be untrue, and upon the request of the TWSE to explain the matter, no explanation is provided within the prescribed time period.
  8. The company has violated relevant bylaws or rules concerning the material information of the listed foreign securities, and failed to rectify the situation within the specified time after having been notified to proceed with the disclosure process, and such violation is serious.
  9. The company has breached an undertaking it gave when applying for TWSE listing, and failed to make supplementation or corrections within a prescribed time limit after having had a penalty imposed under the preceding paragraph.
  10. The company has violated Article 6 of the TWSE Procedures for Review of Financial Reports of TWSE Secondary Listed Companies, and failed to make supplementation or corrections within a prescribe time limit after having been notified by the TWSE to do so.
  11. Other causes for which the Taipei Exchange deems it necessary.
    If the listed securities of a TWSE secondary listed company have been placed under an altered trading method due to a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may restore the original trading method for the company's securities:
  1. Where the change of trading method was imposed pursuant to subparagraph 1 of the preceding paragraph, a supplementary consolidated financial report is duly announced and filed.
  2. Where the change of trading method was imposed pursuant to subparagraph 2 of the preceding paragraph, the duly announced and filed consolidated financial reports for the most two recent periods show net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report.
  3. Where the change of trading method was imposed pursuant to subparagraph 3 of the preceding paragraph, the circumstance under that subparagraph ceases to exist after supplementary or corrective action.
  4. Where the change of trading method was imposed pursuant to subparagraph 4 of the preceding paragraph, the CPA has re-audited the financial report, and issued an audit report free of the original disclaimer of opinion or adverse opinion, or a review report free of the original adverse conclusion or disclaimer of conclusion, and there is no qualified opinion in the audit report or qualified review report as specified in paragraph 9, subparagraph 3.
  5. Where the change of trading method was imposed pursuant to subparagraph 5 of the preceding paragraph, and the company has repaid the debt or reached a settlement agreement with the creditors.
  6. Within three months from the following business day after the change of trading method was imposed pursuant to subparagraph 6 of the preceding paragraph, the company extinguishes the debt under the negotiable instrument by actual settlement of the amount of the instrument, or completes debt settlement negotiations with the financial institutions, and the documents have been duly signed and certified by the CPA and lawyer, and then submitted to the TWSE along with other relevant documents and data for approval and recordation.
  7. Where the change of trading method was imposed pursuant to subparagraph 7 of the preceding paragraph, the situation has been duly corrected or explanations have been made as required by the TWSE, and substantial evidence can be provided.
  8. Where the change of trading method was imposed pursuant to subparagraph 8 of the preceding paragraph, the company has proceeded with the disclosure process as required by the notification.
  9. Where the change of trading method was imposed pursuant to subparagraph 9 of the preceding paragraph, the company has duly made supplementation or correction, and fulfilled the undertaking that it gave.
  10. Where the change of trading method was imposed pursuant to subparagraph 10 of the preceding paragraph, the company has duly made supplementation or correction.
  11. Where the change of trading method was imposed pursuant to subparagraph 11 of the preceding paragraph, the company has made correction or improvement as required by the Taipei Exchange.
     With respect to the imposition by the TWSE of an altered trading method on the listed securities of a TWSE secondary listed company pursuant to paragraph 9, or the restoration of the trading method of the listed securities pursuant to the preceding paragraph, the company shall file a report with the competent authority for recordation within one month after the implementation thereof.
    If a primary listed company or secondary listed company fails to publicly announce a new litigious and non-litigious representative within 15 days counting inclusively from the date of dismissal of its litigious and non-litigious representative, the TWSE may impose a penalty of NT$30,000 and set a deadline of 15 days for the company to correct the failure. If the company fails to correct the failure by the deadline, the TWSE may impose consecutive penalties of NT$10,000 per day until the company has corrected the failure.
49-2    If any of the following circumstances applies to a listed company, the TWSE may impose the periodic call auction trading method for its listed securities pursuant to the Rules Governing Trading of Securities Placed Under Altered Trading Methods:
  1. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 6.
  2. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 8.
  3. Its listed securities have been placed under an altered trading method pursuant to Article 49, paragraph 1, subparagraph 9.
  4. Its latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates that its net worth is lower than three-tenths of its share capital stated on the financial report.
  5. The trading method of its listed securities has been altered pursuant to Article 49, paragraph 1, subparagraph 18.
  6. The TWSE deems it necessary to do so for any other reason.
    Where the periodic call auction trading method has been imposed for listed securities of a listed company because of a circumstance specified in a subparagraph of the preceding paragraph, and no circumstance specified in any other subparagraph of the preceding paragraph exists, the TWSE may lift the requirement of the periodic call auction trading method if the respective requirement listed among the following subparagraphs is satisfied:
  1. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 1 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 6.
  2. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 2 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 8.
  3. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 3 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 9.
  4. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 4 of the preceding paragraph: satisfy the requirement that the net worth stated on the listed company's latest-period financial report attested by a CPA and publicly announced and registered under Article 36 of the Securities and Exchange Act be not less than three-tenths of the share capital stated on the financial report; in the event of a capital reduction, the operations for exchange of securities upon capital reduction have been additionally completed.
  5. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 5 of the preceding paragraph: satisfy the requirements in Article 49, paragraph 2, subparagraph 17.
  6. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 6 of the preceding paragraph: have made supplementation or correction as demanded by the TWSE.
    If the TWSE imposes the periodic call auction trading method for a listed company's securities under paragraph 1, or lifts the requirement of the periodic call auction trading method for a listed company's securities under paragraph 2, it shall report the measure to the Competent Authority for recordation within 1 month after execution.
49-3    If any of the following circumstances applies to a TWSE primary listed company, the TWSE may impose the periodic call auction trading method for its listed securities pursuant to the Rules Governing Trading of Securities Placed Under Altered Trading Methods:
  1. Its listed securities have been placed under an altered trading method pursuant to Article 49-1, paragraph 1, subparagraph 5.
  2. Its listed securities have been placed under an altered trading method pursuant to Article 49-1, paragraph 1, subparagraph 7.
  3. Its listed securities have been placed under an altered trading method pursuant to Article 49-1, paragraph 1, subparagraph 8.
  4. Its net worth as stated on its consolidated financial report duly announced and registered for the latest period is lower than three-tenths of its share capital stated on the consolidated financial report.
  5. The trading method of its listed securities has been altered pursuant to Article 49-1, paragraph 1, subparagraph 12.
  6. The TWSE deems it necessary to do so for any other reason.
    Where the periodic call auction trading method has been imposed for listed securities of a TWSE primary listed company because of a circumstance specified in a subparagraph of the preceding paragraph, and no circumstance specified in any other subparagraph of the preceding paragraph exists, the TWSE may lift the requirement of the periodic call auction trading method if the respective requirement listed among the following subparagraphs is satisfied:
  1. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 1 of the preceding paragraph: satisfy the requirements of Article 49-1, paragraph 2, subparagraph 5.
  2. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 2 of the preceding paragraph: satisfy the requirements of Article 49-1, paragraph 2, subparagraph 7.
  3. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 3 of the preceding paragraph: satisfy the requirements of Article 49-1, paragraph 2, subparagraph 8.
  4. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 4 of the preceding paragraph: satisfy the requirement that the net worth stated on the TWSE primary listed company's latest-period financial report audited and attested by a CPA and duly publicly announced and registered be not less than three-tenths of the share capital stated on the financial report; in the event of a capital reduction, the operations for exchange of securities upon capital reduction have been additionally completed.
  5. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 5 of the preceding paragraph: satisfy the requirements in Article 49-1, paragraph 2, subparagraph 12.
  6. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 6 of the preceding paragraph: have made supplementation or correction as demanded by the TWSE.
    If the TWSE imposes the periodic call auction trading method for a TWSE primary listed company's securities under paragraph 1, or lifts the requirement of the periodic call auction trading method for a listed company's securities under paragraph 2, it shall report the measure to the Competent Authority for recordation within 1 month after execution.
49-4    If any of the following circumstances applies to a TIB listed company or a TIB primary listed company, the TWSE may place its listed stocks under the altered trading method:
  1. The latest financial report, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-third of its share capital stated on the financial report.
  2. A regular shareholders meeting has not been held within 6 months after the end of the fiscal year.
  3. The attesting CPA for the most recent financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act issues a qualified audit report or a review report with a qualified conclusion. However, this shall not apply if it is otherwise permitted by the laws and regulations of the competent authority, or in the case of an interim financial report if the reason is that the calculation of investment in a non-major subsidiary, or investment accounted for using the equity method, and the amount of profit or loss thereupon, is based on a financial report that has not been audited or reviewed by a CPA, and the attesting CPA has fully disclosed in the audit or review report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present.
  4. Violation of relevant bylaws or rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
  5. Two-thirds or more of the directors have been provisionally ordered to be suspended of the performance of their authorities and duties.
  6. A petition for re-organization has been filed to the court in accordance with Article 282 of the Company Act or to the court of the jurisdiction of incorporation.
  7. Half or more of the directors have changed, such that any of the following circumstances exists, and it fails to make improvement within a specified time period ordered by the TWSE:
    1. The shareholding is too concentrated to meet the shareholding dispersion criteria under Article 29, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings.
    2. The newly appointed directors or president meet any of the conditions under Article 31, paragraph 1, subparagraph 7 of the TWSE Rules Governing Review of Securities Listings.
  8. The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
  9. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where the TWSE is aware of such dishonor.
  10. Failure to abide by an undertaking to purchase the shares held by other shareholders of a TWSE listed (or TPEx listed) subsidiary in which it has shareholding of more than 70 percent.
  11. Any of the following circumstances occurs in the handling of stock affairs:
    1. The company has not engaged an agent of stock affairs, and has not obtained the Taiwan Depository and Clearing Corporation's review and agreement to handle stock affairs.
    2. The Taiwan Depository and Clearing Corporation has audited and discovered a material irregularity in stock affairs, and the company has failed to correct the irregularity within the deadline set by the TWSE for corrections.
  12. Where explanations given in a press conference concerning material information fail to clarify points in question, and the TWSE deems it necessary to protect the rights and interests of investors.
  13. The number of listed common shares does not reach 25 percent of the total number of the company's issued common shares, and any of the circumstances in the following items exists:
    1. The share capital of listed common shares does not reach NT$100 million.
    2. The number of listed common shares does not reach 5 million shares.
  14. It fails to meet the requirements under Article 50-9, paragraph 2, subparagraph 12 within 6 months after trading is suspended according to paragraph 1, subparagraph 12 of the same article.
  15. The board of directors resolves to refer a dissolution proposal to a shareholders meeting for resolution.
  16. Directors of a TIB primary listed company with registered household in the Republic of China take less than a majority seats in the board, or fewer than two independent directors have a registered household in the Republic of China, and no special shareholders meeting has been held for a re-election within 60 days of occurrence of the fact.
  17. The TWSE deems it necessary to do so for any other reason.
    Where the listed stocks of a TIB listed company or a TIB primary listed company are placed under an altered trading method due to a circumstances provided in the subparagraphs of the preceding paragraph, if the following subparagraphs are met and none of the circumstances under the subparagraphs of the preceding paragraph exists, the TWSE may resume the original trading method of its stocks:
  1. After its stocks have been placed under an altered trading method pursuant to subparagraph 1 of the preceding paragraph, the latest two financial reports, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, both show that its net worth is more than than one-third of its share capital stated on the financial report. However, in the case of decrease of capitalization, the procedure to replace securities for capital reduction should be completed.
  2. After its stocks have been placed under an altered trading method pursuant to subparagraph 2 of the preceding paragraph,
  3. After its stocks have been placed under an altered trading method pursuant to subparagraph 3 of the preceding paragraph, it has made corrections or improvements and the circumstances under that subparagraph no longer exist.
  4. After its stocks have been placed under an altered trading method pursuant to subparagraph 4 of the preceding paragraph, it has rectified the situation after having been notified to proceed with disclosure process.
  5. After its stocks have been placed under an altered trading method pursuant to subparagraph 5 of the preceding paragraph, the court has vacated the provisional order and then more than one-third of the company’s directors are able to perform their authorities and duties.
  6. After its stocks have been placed under an altered trading method pursuant to subparagraph 6 of the preceding paragraph, the petition for re-organization was withdrawn or was conclusively dismissed by court pursuant to Article 283-1, subparagraph 1 or Article 285-1, paragraph 3, subparagraph 1, or was conclusively dismissed by court of the jurisdiction of incorporation pursuant to law; provided that the execution period of the altered trading method shall not be less than 3 months where the petition for re-organization was withdrawn
  7. After its stocks have been placed under an altered trading method pursuant to subparagraph 7 of the preceding paragraph, corrections or improvements were made.
  8. After its stocks have been placed under an altered trading method pursuant to subparagraph 8 of the preceding paragraph, the company has repaid the debt or reached a settlement agreement with the creditors.
  9. Within 3 months of the trading day next following the date its stocks have been placed under an altered trading method pursuant to subparagraph 9 of the preceding paragraph, the company has completed any of the remedial procedures enumerated herein below, and the company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption. However, if the company adopts the remedial procedure of “extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument” or “complete negotiation of settlement with correspondence financial institution”, it shall additionally submit a rechecking form prescribed by the TWSE. The form shall be signed and certified by a CPA and a lawyer and submitted to the TWSE along with the other relevant documents and materials for approval and recordation:
    1. Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
    2. Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
    3. Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
  10. Where correction or improvement has been made within 3 motnhs after its stocks have been placed under an altered trading method pursuant to subparagraph 10 of the preceding paragraph.
  11. Where correction or improvement has been made within 3 motnhs after its stocks have been placed under an altered trading method pursuant to subparagraph 11 or 13 of the preceding paragraph,
  12. Where the points in question have been clarified after its stocks have been placed under an altered trading method pursuant to subparagraph 12 of the preceding paragraph, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least 3 months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
  13. Within two years after the securities have been placed under the altered trading method due to the circumstances in subparagraph 14 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 3 percent or more of the share capital stated in the financial reports for the most recent period, and the requirements of Article 50-9, paragraph 2, subparagraph 12, items B to F are met.
  14. After its stocks have been placed under an altered trading method pursuant to subparagraph 15 of the preceding paragraph, the dissolution proposal is further revoked by the board od directors or is not approved with a resolution at the shareholders meeting.
  15. After its stocks have been placed under an altered trading method pursuant to subparagraph 16 of the preceding paragraph, a special shareholders meeting has been held and re-election is completed.
  16. After its stocks have been placed under an altered trading method pursuant to subparagraph 17 of the preceding paragraph, correction or improvement has been made upon requpest of the TWSE.
    Where the TWSE has placed the listed securities of a TIB listed company or a TIB primary listed company under an altered trading method, or has resumed the original trading method of its listed securities pursuant to the preceding paragraphs, the competent authority shall be informed of the change within one month after the implementation for recordation.
    Article 49-1, subparagraphs 4 to 7 shall apply mutatis mutandis to TIB primary listed companies.
49-5    The ratio of net worth to share capital stated in the financial reports as referred to in Articles 49 to 49-4 shall be calculated as set forth below:
  1. If the cost of shares bought back by a TWSE listed company under Article 28-2 of the Securities and Exchange Act or by a TWSE primary listed company under Article 28-2 applied mutatis mutandis under Article 165 of the Securities and Exchange Act or of shares held in the listed company by its subsidiaries are classified as a deduction from the equity attributable to owners of the parent, then the par value of the treasury stock of the listed company held by the listed company and its subsidiaries shall be deducted from the share capital stated in the financial reports in the calculation of the above-stated ratio.
  2. If share capital collected in advance or share capital awaiting retirement are classified as an addition to or deduction from the equity attributable to owners of the parent, the par value of the relevant shares shall be added to or deducted from the share capital in the calculation of the above-stated ratio.
  3. If a circumstance in the two preceding subparagraphs applies to a listed company whose shares have no par value or a par value other than NT$10, the total amount of treasury stock of the listed company held by the listed company and its subsidiaries, the total amount of share capital collected in advance, and the total amount of share capital awaiting retirement, shall be added to or deducted from the sum of the share capital plus capital surpluses minus the original issue premium.
    The term "share capital" in Chapter IV, for a TWSE listed company whose stock has no par value or a par value per share other than NT$10, means the sum of the share capital plus capital surpluses minus the original issue premium.
50    If any of the following circumstances applies to a listed company, the TWSE shall, in accordance with Article 147 of the Securities and Exchange Act, suspend the trading of such securities and report to the Competent Authority for recordation, or the listed company may apply for delisting pursuant to Article 50-1, paragraph 5:
  1. Failure to produce and file and publicly announce financial reports or financial forecasts by the deadlines provided in laws and regulations.
  2. Where any condition specified in Article 282 of the Company Act exists, and a court has prohibited the transfer of its shares pursuant to Article 287, paragraph 1, subparagraph 5 of the Company Act.
  3. Any document or information that has been submitted is suspected to be untrue, and upon the request of the TWSE to explain the matter, no explanation is provided within the prescribed time period.
  4. The securities transfer institution established at the location of the TWSE is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of the TWSE to correct the situation within a time period, no correction is made.
  5. The financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act was not produced pursuant to relevant laws and regulations and generally accepted accounting principles, such violations were serious and corrections or rewrites were not made within the specified time period; or the CPA attesting the publicly announced and registered financial report issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse conclusion or disclaimer of conclusion in the review report. Where, in a publicly announced and registered financial forecast of the listed company reviewed by a CPA, the attesting CPA issues an adverse opinion or disclaimer of opinion in the review report.
  6. Violation of relevant bylaws or rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
  7. Where a listed company has breached an undertaking it gave when applying for listing.
  8. Where a listed company, going public in accordance with Article 6-1 of Rules Governing Review of Securities Listings, critically delays its construction schedule or materially violates provisions prescribed in the concession contract.
  9. Violation of Article 49, paragraph 1, subparagraph 8, and failure to satisfy paragraph 2, subparagraph 8 of the same Article within 3 months.
  10. Violation of Article 49, paragraph 1, subparagraph 9, and failure to carry out, within 3 months of the trading day next following the date the trading method was changed, remedial procedures as provided in paragraph 2, subparagraph 9 of the same Article and to submit relevant documentary proof.
  11. Loss of controlling interest, as defined in Article 4, subparagraph 1 of the Financial Holding Company Act, in a subsidiary, where a competent authority has ordered it to make corrections within a certain period.
  12. Violation of Article 49, paragraph 1, subparagraph 10, 11, 12, or 13 and inability to achieve compliance with paragraph 2, subparagraph 10, 11, or 12 of the same article within 3 months from the business day next following the date of change of trading method.
  13. Violation of Article 49, paragraph 1, subparagraph 15, and inability to achieve compliance with paragraph 2, subparagraph 14 of the same article within 3 years from the business day next following the date of change of trading method.
  14. Change in managerial control, and a material change in the scope of business within a certain period of time before or after the change in managerial control, except in the event of a merger, private placement or public tender offer of a TWSE listed company and a TWSE (or Taipei Exchange) listed company or a TWSE (or Taipei Exchange) primary listed company according to the Business Mergers and Acquisitions Act or other laws and regulations.
  15. Where the requirements of Article 49, paragraph 2, subparagraph 15 cannot be met within two years after the securities have been placed under the altered trading method due to the circumstances in Article 49, paragraph 1, subparagraph 16.
  16. The TWSE has placed the listed securities of the listed company under an altered trading method in view of an audit report or review report issued by a CPA indicating substantial uncertainty about the ability to continue as a going concern as mentioned in Article 49, paragraph 1, subparagraph 3, and the listed company fails to conform to paragraph 2, subparagraph 3 of the same article within three years from the business day following said alteration.
  17. The TWSE has imposed the periodic call auction trading method for the listed securities of the listed company pursuant to Article 49-2, paragraph 1, subparagraph 4, and the listed company fails to conform to paragraph 2, subparagraph 4 of the same article within three years from the business day following said imposition.
  18. Other events deemed necessary to suspend the trading in securities.
    Where trading of the listed securities of a listed company has been suspended because of a circumstance in a subparagraph of the preceding paragraph, upon satisfying the below conditions, and being free of any other of the above circumstances, the TWSE may in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
  1. Where the suspension of trading was ordered pursuant to subparagraph 1 of the preceding paragraph, and a supplementary financial report or financial forecast is duly announced and filed, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49, paragraph 1, subparagraph 3. If the financial forecast has not yet been duly announced on a make-up basis in the current fiscal year, the already announced and filed financial report for the same fiscal year may be used as a substitute.
  2. Where the suspension of trading was ordered pursuant to subparagraph 2 of the preceding paragraph, and the judicial order prohibiting transfer has expired, and reorganization has not been ordered by the court, or a dismissal of application for reorganization has not been rendered pursuant to Article 285-1, paragraph 3, subparagraph 2 of the Company Act.
  3. Where the suspension of trading was ordered pursuant to subparagraph 3 of the preceding paragraph, and corrections have been made in accordance with regulations or explanations have in fact been provided upon the request of the TWSE.
  4. Where the suspension of trading was ordered pursuant to subparagraph 4 of the preceding paragraph, and substantive improvements have in fact been made in accordance with regulations.
  5. Where the suspension of trading was ordered pursuant to subparagraph 5 of the preceding paragraph, and due to supplementation or correction the circumstance specified by that subparagraph no longer exists, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49, paragraph 1, subparagraph 3.
  6. Where the suspension of trading was ordered pursuant to subparagraph 6 of the preceding paragraph, and corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
  7. Where the suspension of trading was ordered pursuant to subparagraph 7 of the preceding paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
  8. Where the suspension of trading was ordered pursuant to subparagraph 8 of the preceding paragraph, and substantive corrections or improvements have in fact been made pursuant to relevant laws and regulations.
  9. Where the suspension of trading was ordered pursuant to subparagraph 9 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant regulations.
  10. Where the suspension of trading was ordered pursuant to subparagraph 10 of the preceding paragraph, and remedial procedures as set forth in subparagraph 9 of paragraph 2 of the preceding article have been carried out within 6 months of the trading day next following the date of suspension of trading, and the listed company has produced relevant documentary proof that it has carried out the remediation.
  11. Where the suspension of trading was ordered pursuant to subparagraph 11 of the preceding paragraph, and corrections have been made by the deadline set by the competent authority for the target industry.
  12. Where the suspension of trading was ordered pursuant to subparagraph 12 or 13 of the preceding paragraph, and corrections or improvements have been made within 6 months of the trading day next following the date of suspension of trading.
  13. Where within 6 months after trading is suspended pursuant to subparagraph 14 of the preceding paragraph, the underwriter's evaluation report has been provided and the following circumstance are met:
    1. The sum of the net pofit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 2 percent or more of the share capital stated in the financial report for the most recent period.
    2. The share capital of TWSE listed common shares is NT$300 million or more, and the number of TWSE listed common shares is 30 million shares or more.
    3. The CPA's project audit report for the internal control system is provided, with an unqualified opinion.
    4. The company is free of the conditions set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 12 of the Rules Governing Review of Securities Listings.
    5. The requirements of Article 4, paragraph 1, subparagraphs 4 and 5 of the Rules Governing Review of Securities Listings are met.
    6. The company's directors, supervisors, and greater than 10 percent shareholders have placed all of their common shares in the company into centralized custody (in the case of shares obained through public offering and issuance) or have provided written undertakings that they will not transfer shares (in the case of shares obtained through private placement) and that during the period of the undertaking not to transfer shares, they shall place in centralized custody any of those shares that are approved for retrospective public issuance. They may withdraw or transfer the shares only after the requirements of this subparagraph have been met and one year has passed from the day that the normal trading method has reinstated by the TWSE for the company's securities.
  14. Within 6 months after trading is suspended pursuant to subparagraph 15 of the preceding paragraph, the sum of the net pofit before tax attributable to owners of the parent in the publicly announced and filed financial reports for the most recent four periods accounts reaches 3 percent or more of the share capital stated in the financial report for the most recent period, and the requirements of items B to F of the preceding subparagraph are met.
  15. Where suspension of trading was ordered pursuant to subparagraph 16 or 17 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant provisions.
  16. Where suspension of trading was ordered pursuant to subparagraph 18 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant bylaws, rules, and regulations.
50-1    If any of the following circumstances applies to any TWSE listed company, the TWSE shall, in accordance with Article 144 of the Securities and Exchange Act, delist its securities, and report to the Competent Authority for Recordation:
  1. Any of the circumstances in Article 315, paragraph 1, subparagraphs 1 to 4 of the Company Act occurs, and registration of dissolution is completed; or any of the conditions specified in Article 9, Article 10, Article 11, Article 17, paragraph 2, Article 315, paragraph 1, subparagraph 8, or Article 397 of the Company Act, or Article 21 or Article 54 of the Financial Holding Company Act, occurs, and a relevant competent authority has revoked or voided its company registration, ordered its dissolution, or voided its approval, or the court has ruled on dissolution.
  2. Any conditions specified in Article 251 or Article 271 of the Company Act or the relevant authority has revoked its approval for other reasons.
  3. Confirmation of bankruptcy by any court.
  4. Confirmation of reorganization by any court, or denial of reorganization motion issued in accordance with Article 285-1, paragraph 3, subparagraph 2 of the Company Act.
  5. (deleted)
  6. The total amount of its listed preferred shares is less than NT$200 million, or the number of shares issued is less than 20 million.
  7. Where any of the following circumstances applies to the company's securities:
    1. Trading of the securities has been suspended pursuant to the provisions of the preceding article, and after 6 consecutive months trading of its securities is not resumed, provided that this rule does not apply to trading suspended pursuant to paragraph 1, subparagraph 14 of the preceding article.
    2. Trading of the securities is resumed after having been suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article for less than 6 months, and, within 6 months from the resumption of trading, trading is again suspended pursuant to subparagraph 2 of paragraph 1 of the preceding article, and the aggregate period of suspension of trading exceeds 6 months.
  8. Record of refusal of financial institutions to transact with the company or of the circumstances referred to in paragraph 1, subparagraph 9 of the preceding Article where the company has failed to carry out remedial procedures as set forth in Article 49, paragraph 2, subparagraph 9 and submit relevant documentary proof within 6 months of the trading day next following the date of suspension of trading. However, if the negotiable instrument is retrieved by means of a settlement within 3 months of the trading day next following the date of suspension of trading, an application may be filed with the TWSE for re-calculation of the duration of the period of suspension of trading as from a date approved by the TWSE. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials. Only one such extension may be granted.
  9. Where the most recent financial report as publicly announced and registered in accordance with Article 36 of the Securities and Exchange Act shows a negative net worth. Likewise, where a subsequently publicly announced and registered financial report of a non-holding company or consolidated financial report of a holding company shows a negative net worth.
  10. The business of the company has completely stopped for 6 months and cannot commence quickly, or the publicly announced business revenue has been zero or negative for 6 consecutive months; provided such provisions shall not be applicable to a company, listed in accordance with Article 6-1 of Rules Governing Review of Securities Listings, which has no business income during the period of construction under the concession contract.
  11. Any conditions specified in Article 156 of the Securities and Exchange Act exists and the Competent Authority has ordered the suspension of trading of all of its securities for at least 3 months.
  12. A demerger from, or a general assignment to, or a merger with another company, where the resulting entity does not satisfy, respectively, the requirements for continued listing under Article 53-19, Article 53-10, or Article 53-2; or the company has changed its name to investment holding company but does not meet the requirements of Article 20, paragraph 1, subparagraphs 1, 2, 4, 5, 7, 8, or 9 of the TWSE Rules Governing Review of Securities Listings.
  13. Material breach of the Agreement for Listing.
  14. Final confirmation by a judicial authority that any of the following circumstances applies to the listed company:
    1. The financial reports, accounting books, etc. provided by the company during the application for listing contain false and concealed items, and upon discounting for such false and concealed items, its profitability does not conform to the listing requirements; provided, the above shall not be applicable if 5 years have passed between the listing date and the date of confirmation by a judicial authority.
    2. Satisfies the proviso of the preceding sub-item, and the false and concealed accounting items still exists at the time of the final confirmation of judgment, and upon discounting for such false and concealed items, its current revenue generating ability does not conform to the listing requirements.
  15. Over 70 percent of its total issued shares or paid-in capital is held by another TWSE listed (or Taipei Exchange listed) company. However, if the other TWSE listed (or Taipei Exchange listed) company has acquired the shares of the TWSE listed company and conducted a merger or share conversion, the provisions of Chapter IV-1 regarding delisting procedures shall apply.
  16. Circumstances set forth in paragraph 1, subparagraph 12 of the preceding article and inability to achieve compliance with paragraph 2, subparagraph 12 of the same article within 6 months from the trading day next following the suspension of trading.
  17. The competent authority for the target industry duly appoints a receiver to take receivership of the financial institution.
  18. Other events requiring delisting.
    If a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, or if the circumstance in subparagraph 8 of the preceding paragraph existed, and the TWSE has announced but not yet implemented the delisting of its securities, if the listed company satisfies the requirements of the respective subparagraphs below, is free from any other circumstance in the subparagraphs of the preceding paragraph, and submits an application to the TWSE together with relevant materials and evidence at least 8 business days prior to the delisting implementation date, the TWSE may publicly announce an exemption from implementation of the delisting, and report to the Competent Authority for recordation:
  1. Where a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 1 or 5, of the preceding Article for a full 6 months without correction, and it meets the supplementation requirements of paragraph 2, subparagraph 1 or 5 of the preceding Article.
  2. Where, after public announcement of delisting for reasons in subparagraph 8 above, the record of refusal of transaction by a financial institution or the dishonor of a negotiable instrument because of insufficient funds on deposit has been resolved by carrying out remedial procedures as set forth in Article 49, paragraph 2, subparagraph 9 and submitting relevant documentary proof.
    A listed company that makes full supplementations or corrections before the implementation date after its listed securities have been publicly announced for delisting shall be eligible for an exemption from implementation of delisting only if such listed company has never previously been granted an exemption from delisting based on the same reasons.
    Where delisting is occasioned by the circumstances set out in paragraph 1, subparagraph 17 after receiving the notice of receivership from the Competent Authority, the TWSE shall immediately announce that beginning from the next day the trading of the company's listed securities shall be suspended for a period of 10 days, and before the expiration of the period of suspended trading shall announce that beginning from the next day following expiration of the suspension, the securities shall be traded for 20 days under the altered trading method in periodic call auction trading, after which the listed securities shall be delisted.
    Except in the case of a merger conducted under Chapter IV-1, a listed company applying for delisting of its securities in accordance with Article 145 of the Securities and Exchange Act shall process the application in accordance with "Procedures for Handling Applications for Delisting by Listed Companies."
    Where a listed company delists in accordance with paragraph 1, subparagraph 15 herein, the listed parent company shall undertake to unconditionally purchase the remaining outstanding shares of the company.
50-2    The TWSE may publicly announce the delisting of beneficial certificates when the period of validity of a securities investment trust fund has expired, or when the securities investment trust contract has terminated. Where any of the following circumstances exists with respect to a closed-end fund managed by any SITE, the TWSE may delist its beneficial certificates, and report to the Competent Authority for recordation:
  1. Any circumstance specified in Article 79, paragraph 2 or 3 of the Regulations Governing Securities Investment Trust Funds.
  2. Change to an open-ended investment fund upon the resolution of the meeting of the beneficiaries, and reported to and approved by the Competent Authority, or in accordance with the terms of the securities investment trust contract.
  3. The total issued value of the securities investment trust fund falls below NT$800 million due to opening of redemption.
  4. Any material information on the net asset value per unit of beneficial interest on the most recent business day of the closed-end fund managed by the SITE as posted on the Market Observation Post System, being zero or negative.
  5. Where for any other reason the TWSE deems it necessary to delist the beneficial certificates.
    Where any of the following circumstances exists with respect to an ETF managed by any SITE or FTE, the TWSE may delist its beneficial certificates and report to the Competent Authority for recordation:
  1. Any circumstance specified in Article 79, paragraph 2 or 3 of the Regulations Governing Securities Investment trust Funds or Article 83, paragraph 2 or 3 of the Regulations Governing Futures Trust Funds.
  2. Any circumstance stipulated in the securities investment trust contract or the futures trust contract of the listed beneficial certificate as grounds for termination of the contract, where the SITE or FTE has applied to the TWSE for delisting.
  3. Where the offshore ETF to which an ETF is linked as referred to in Article 37, paragraph 4 of the Regulations Governing Securities Investment Trust Funds has its approval voided by the competent authority of its place of registration or is delisted from the exchange where it was initially listed for trading, or the offshore ETF to which an ETF is linked has its permission terminated.
  4. Any material information on the net asset value per unit of beneficial interest of the ETF managed by the SITE or FTE as posted on the Market Observation Post System, being zero or negative.
  5. Where for any other reason the TWSE deems it necessary to delist the beneficial certificates.
    Where any of the following circumstances exists with respect to an offshore ETF offered and sold by an offshore fund institution or the master agent entrusted by an institution appointed by such institution, the TWSE may delist its beneficial certificates, and report to the Competent Authority for recordation:
  1. The competent authority of the place of registration or Taiwan's Competent Authority has canceled the approval for the offshore ETF.
  2. Taiwan's Competent Authority has granted approval for termination of the offering and sale of the fund within Taiwan.
  3. The offshore ETF is delisted from the exchange on which it was first listed.
  4. Any material information on the net asset value per unit of beneficial interest of the offshore ETF handled by the aforementioned offshore fund institution or entrusted master agent as posted on the Market Observation Post System, being zero or negative.
  5. There occurs any other cause of termination of the fund as specified in the fund's trust contract, the articles of association, or the prospectus, or if for legal or factual reasons, the offshore fund manager deems it necessary to terminate the listing and trading of the beneficial certificates, and the offshore fund institution, itself or through the master agent, has applied to the TWSE for delisting of its beneficial certificates.
  6. Any other circumstance in which the TWSE deems delisting necessary for purposes of protecting the public interest or the rights and interests of investors.
    The TWSE may delist the additional beneficial certificates in other foreign currency managed by a SITE and report to the Competent Authority for recordation if any of the following circumstances applies:
  1. Any circumstance stipulated in the securities investment trust contract of the listed beneficial certificate as grounds for termination, where the SITE has applied to the TWSE for delisting.
  2. The TWSE has delisted the beneficial certificates of the additional exchange-traded securities investment trust funds.
  3. Where for any other reason the TWSE deems it necessary to delist the beneficial certificates.
    Where a closed-end fund, ETF or offshore ETF shall be delisted in accordance with paragraph 2, subparagraph 4; paragraph 3, subpargraph 4; or paragraph 4, subparagraph 4, the TWSE will immediatley announce publicly the suspension of trading of its listed beneficial certificates until the delisting date. The same applies to foreign-currency beneficial certificates of an ETF if the circumstance for delisting in paragraph 3, subparagraph 4 applies to the underlying ETF.
50-3    If any of the circumstances listed below applies to a primary listed company, the TWSE shall suspend the trading of its listed securities pursuant to Article 147, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act, and report to the Competent Authority for recordation:
  1. Failure to publicly announce and file its financial report by the prescribed deadline.
  2. Any suspected misrepresentation is discovered in a document or information submitted by it, and it fails to provide an explanation by a specified deadline as requested by the TWSE.
  3. Failing to appoint a professional agent for stock affairs in the Republic of China to handle stock affairs, and then failing to take corrective action by the specified deadline, as confirmed by the TWSE.
  4. Failure to prepare its duly announced and filed financial report according to the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the generally accepted accounting principles of the United States, or the International Financial Reporting Standards, as the case may be, and the circumstances are serious, and the company is notified to correct or make a restatement of the financial report but fails to do so by the specified deadline; or its attesting CPA has issued an audit report containing a disclaimer of opinion or adverse opinion, or issued a review report with an adverse conclusion or disclaimer of conclusion, in connection with the financial report that it announced and filed.
  5. Violation of any bylaw, rule, or regulation regarding the disclosure of material information on a listed foreign company, in which the circumstances of the case are serious and necessitate the suspension of the trading of its securities.
  6. Breach of an undertaking issued at the time it applied for listing; provided that this subparagraph does not apply to any amendment to the articles of incorporation, organizational documents, or important financial or business documents involving any important matter in connection with the protection of shareholders equity.
  7. Violation of Article 49-1, paragraph 1, subparagraph 7, 13 or 14 and inability to meet the requirements of paragraph 2, subparagraph 7 or 13 of that same Article within 3 months.
  8. Violation of Article 49-1, paragraph 1, subparagraph 8, and inability to complete the supplementation procedures specified in paragraph 2, subparagraph 8 of that same Article within 3 months from the next business day after its shares are placed under an altered trading method.
  9. Violation of Article 49-1, paragraph 5, and failure to amend the articles of incorporation, organizational documents, or important financial or business documents within 3 months from the next business day following placement of the stock under an altered trading method.
  10. Violation of Article 49-1, paragraph 1, subparagraph 10, and inability to achieve compliance with paragraph 2, subparagraph 10 of the same article within 3 years from the business day next following the date of change of trading method.
  11. Change in managerial control, and a material change in the scope of business within a certain period of time before or after the change in managerial control, except in the event of a merger, private placement or public tender offer of a TWSE primary listed company and a TWSE (or Taipei Exchange) listed company or a TWSE (or Taipei Exchange) primary listed company according to the laws and regulations of the place or country of registration or the securities laws and regulation of the Republic of China.
  12. Where the requirements of Article 49-1, paragraph 2, subparagraph 11 cannot be met within two years after the securities have been placed under the altered trading method due to the circumstances in Article 49-1, paragraph 1, subparagraph 11.
  13. The TWSE has placed the listed securities of the listed company under an altered trading method in view of an audit report or review report issued by a CPA indicating substantial uncertainty about the ability to continue as a going concern as mentioned in Article 49, paragraph 1, subparagraph 3, and the listed company fails to conform to paragraph 2, subparagraph 3 of the same article within three years from the business day following said alteration.
  14. The TWSE has imposed the periodic call auction trading method for the listed securities of the listed company pursuant to Article 49-3, paragraph 1, subparagraph 4, and the listed company fails to conform to paragraph 2, subparagraph 4 of the same article within three years from the business day following said imposition.
  15. Any other circumstance requiring that the trading of listed securities be suspended.
    When trading of the listed securities of a primary listed company is suspended due to any circumstance in a subparagraph of the preceding paragraph, if the company meets the respective requirements listed below and is free of any other circumstances in the subparagraphs of the preceding paragraph, then pursuant to Article 147, applied mutatis mutandis under Article 165-1, of the of the Securities and Exchange Act, the TWSE may publicly announce resumption of the trading of its listed securities, and report to the Competent Authority for recordation:
  1. After suspension of trading pursuant to subparagraph 1 of the preceding paragraph, has duly made a supplementary announcement and filing of its financial report.
  2. After suspension of trading pursuant to subparagraph 2 of the preceding paragraph, has duly made corrections, or provided explanations as requested by the TWSE, with solid evidence.
  3. After suspension of trading pursuant to subparagraph 3 of the preceding paragraph, has duly taken corrective action with solid evidence.
  4. After suspension of trading pursuant to subparagraph 4 of the preceding paragraph, has made corrections to or a restatement of its financial report as required by the TWSE; or its CPA conducts a re-audit and issues an audit report free of the original disclaimer of opinion or adverse opinion, or a review report free of the original adverse conclusion or disclaimer of conclusion; and there is no audit report containing a qualified opinion or review report containing a qualified conclusion in connection with Article 49-1, paragraph 1, subparagraph 3.
  5. After suspension of trading pursuant to subparagraph 5 of the preceding paragraph, has made supplementation or taken corrective action pursuant to rules or regulations regarding disclosure of material information on listed foreign companies.
  6. After suspension of trading pursuant to subparagraph 6 of the preceding paragraph, has made supplementation or taken corrective action pursuant to regulations and is in compliance with the undertaking it issued.
  7. After suspension of trading pursuant to subparagraph 7 of the preceding paragraph, it makes supplementation or takes corrective action pursuant to regulations.
  8. After suspension of trading pursuant to subparagraph 8 or 10 of the preceding paragraph, completed the supplementation procedures under Article 49-1, paragraph 2, subparagraph 8 or 10 within 6 months after the next business day after trading was suspended and presented the relevant evidentiary document to verify that it has done so.
  9. After suspension of trading pursuant to subparagraph 9 of the preceding paragraph, has amended the articles of incorporation, organizational documents, or important financial or business documents, and there is no longer any likelihood of impairment to shareholders equity.
  10. After suspension of trading pursuant to subparagraph 10 of the preceding paragraph, corrections or improvements have been made within 6 months of the business day next following the date of suspension of trading.
  11. Where within 6 months after suspension of trading pursuant to subparagraph 11 of the preceding paragraph, the underwriter's evaluation report has been provided and the following circumstance are met:
    1. The sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches NT$40 million or more.
    2. The share capital of listed common shares or the net worth reaches NT$300 million or more.
    3. The CPA's project audit report for the internal control system is provided, with an unqualified opinion.
    4. The company complies with Article 28-4, applied mutatis mutandis, of the Rules Governing Review of Securities Listing, and is free of the conditions set out in Article 28-8, subparagraphs 1, 3, 4, 6, and 7 of those Rules.
    5. The requirements of Article 28-1, paragraph 1, subparagraphs 5 and 6 of the Rules Governing Review of Securities Listings are met.
    6. The company's directors, supervisors, and greater than 10 percent shareholders have placed all of their common shares in the company into centralized custody (in the case of shares obtained through public offering and issuance) or have provided written undertakings that they will not transfer shares (in the case of shares obtained through private placement ) and that during the period of the undertaking not to transfer shares, they shall place in centralized custody any of those shares that are approved for retrospective public issuance. They may withdraw or transfer the shares only after the requirements of this subparagraph have been met and one year has passed from the day that the normal trading method has reinstated by the TWSE for the company's securities.
  12. Within 6 months after trading is suspended pursuant to subparagraph 12 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent in the publicly announced and filed financial reports for the most recent four periods accounts reaches NT$60 million or more, and the requirements of items B to F of the preceding subparagraph are met.
  13. Where suspension of trading was ordered pursuant to subparagraph 13 or 14 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant provisions.
  14. After suspension of trading pursuant to subparagraph 15 of the preceding paragraph, it makes supplementation or takes corrective action pursuant to the relevant bylaws, rules, and regulations.
    If any of the circumstances listed below applies to a primary listed company, the TWSE shall delist the company's listed securities pursuant to Article 144, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act, and report to the Competent Authority for Recordation:
  1. Dissolution upon cancellation or voidance of its organizational registration, an order of dissolution, court ruling on dissolution, or shareholder meeting's resolution for dissolution, in the country where it is registered, and registration of dissolution is completed.
  2. Declaration of bankruptcy by a final and unappealable court ruling in the country where it is registered.
  3. A ruling of the court in the country where it is registered approving reorganization, or dismissing a petition for reorganization due to the impossibility of rehabilitation, becomes final and unappealable.
  4. (deleted)
  5. The total amount of its listed preferred shares is less than NT$200 million, or the number of shares issued is less than 20 million.
  6. Six months after trading of its listed shares is suspended pursuant to paragraph 1, any circumstance in any subparagraph of paragraph 1 still exists. However, this shall not apply in the case of suspension of trading under paragraph 1, subparagraph 11.
  7. The most recent duly announced and filed consolidated financial report, or a consolidated financial report announced and filed on a supplementary basis, shows a negative net worth.
  8. The Competent Authority has ordered suspension of the trading of all of its securities due to a circumstance under Article 156 of the Securities and Exchange Act and the suspension has for been effective for 3 months or longer.
  9. Serious breach of the Agreement for Listing.
  10. The shareholding in it by another TWSE listed (or Taipei Exchange listed) company (including another TWSE primary listed or Taipei Exchange primary listed company) accounts for 70 percent or more of its total issued shares or paid-in capital. However, if the other TWSE listed (or Taipei Exchange listed) company has acquired the shares of the TWSE listed company and conducted a merger or share conversion, the provisions of Chapter IV-1 regarding delisting procedures shall apply.
  11. Any other circumstance that necessitates the delisting of the securities.
    When trading of the listed shares of a primary listed company has been suspended by the TWSE due to any circumstance in paragraph 1, subparagraph 1, 4, or 8 and the suspension has lasted for a full 6 months during which the company has not taken corrective action, and the TWSE has announced but not yet implemented the delisting of the company's listed shares, if the company then meets the respective requirements listed below, is free of any other circumstance in any subparagraph of the preceding paragraph, and submits relevant substantiating evidence to apply to the TWSE at least 8 working days before the implementation date, the TWSE may announce an exemption from implementation of the company's delisting, and report to the Competent Authority for recordation:
  1. If trading of its listed shares was suspended by the TWSE, due to a circumstance in subparagraph 1 or 4 of the preceding paragraph, for a full 6 months during which it failed to take corrective action, and it submits the regularly scheduled consolidated financial report that it previously failed to submit before the original deadline, or it duly makes corrections or restates the relevant consolidated financial report.
  2. After announcement of its delisting due to a circumstance in paragraph 1, subparagraph 8, it completes the supplementary procedures listed under Article 49-1, paragraph 2, subparagraph 8, and submits the relevant documents as evidence.
    After the announcement of the delisting of a primary listed company's listed shares, if that company completes supplementation before the delisting implementation date, it shall be eligible for exemption on those grounds from the implementation of delisting only if the company has not previously been given an exemption of implementation of delisting of its listed shares for the same reason.
    Except in the case of a merger conducted under Chapter IV-1, the Procedures for Handling Applications by Listed Companies for the Delisting of Securities shall apply mutatis mutandis to a primary listed company that applies to delist its listed shares.
    If any of the following conditions applies to any security that is listed with the TWSE by a TWSE secondary listed company, the TWSE may suspend its trading pursuant to Article 147, applied mutatis mutandis under Article 165-2, of the Securities and Exchange Act, and report to the Competent Authority for recordation:
  1. The listed shares, or foreign securities represented by Taiwan Depositary Receipts, of a secondary listed company have already been suspended from trading by the securities exchange on which they are listed.
  2. There has been a ruling by a court of the country where the issuer is registered or listed that duly prohibits transfer of the listed shares, or the foreign securities represented by Taiwan Depositary Receipts, of a TWSE secondary listed company.
  3. Any other circumstance requiring the suspension of trading of TWSE listed securities.
    When the TWSE trading of securities of a TWSE secondary listed company is suspended due to any of the circumstances listed in the subparagraphs in the preceding paragraph, the secondary listed company may, after the cause for such suspension of trading ceases to exist, or supplementation or corrective action is completed, and none of the other circumstances in the preceding paragraph exists, apply with the TWSE by submitting relevant documentary proof. The TWSE may then announce the resumption of such TWSE trading pursuant to Article 147, applied mutatis mutandis under Article of the Securities and Exchange Act, and report the matter to the competent authority for recordation.
    If any of the circumstances listed below exists with respect to a TWSE secondary listed company, the TWSE may delist its securities pursuant to Article 144, applied mutatis mutandis under Article 165-2, of the Securities and Exchange Act, and report the matter to the competent authority for recordation:
  1. The listed shares, or foreign securities represented by Taiwan Depositary Receipts, of a TWSE secondary listed company have already been suspended from trading by the securities exchange on which they are listed or transferred to another sub-board for listing and trading.
  2. Its net worth, as indicated in its duly announced and filed consolidated financial report for the most recent period, is less than one-third of its share capital stated in the consolidated financial report.
  3. The company's organization and registration have been voided by the country of registration, or the company has been dissolved.
  4. The company has filed for reorganization with a court of the country of registration or country of listing.
  5. The company has filed for bankruptcy with a court of the country of registration or country of listing.
  6. (deleted)
  7. A demerger, general assignment, or transfer of equity in a subsidiary company, does not satisfy the standard for continued TWSE listing in Article 53-30 hereof.
  8. In any of the events in Article 156, applied mutatis mutandis under Article 165-2, of the Securities and Exchange Act, the company has been ordered by the competent authority to suspend the trading of all securities for a period of three months or more.
  9. The company's TWSE listed securities have been suspended from trading pursuant to the subparagraphs of paragraph 7, and any of the circumstances under the subparagraphs of paragraph 7 still exists after six full months have elapsed.
  10. The TWSE secondary listed company's stocks or Taiwan Depositary Receipts listed on the TWSE exceed 50 percent of the total number of its issued shares.
  11. The TWSE secondary listed company or its depositary institution violates government laws or regulations, TWSE bylaws or public announcements, and the circumstances are serious, or fails to perform obligations required under the Agreement for Listing, and the circumstances are serious.
  12. Violation of Article 49-1, paragraph 9, subparagraph 1, 4, 5, 6, or 10 and inability to meet the requirements of paragraph 10, subparagraph 1, 4, 5, 6, or 10 of that same Article within 6 months from the business day following the change of trading method.
  13. The company has violated Article 6 of the TWSE Procedures for Review of Financial Reports of TWSE Secondary Listed Companies, and failed to make supplementation or corrections within a prescribe time limit after having been notified by the TWSE to do so, and the circumstances are serious.
  14. Other events requiring delisting of the securities.
    If because any circumstance in any subparagraph of the preceding paragraph exists with respect to a TWSE secondary listed company, and the TWSE has announced the delisting of its securities, but the delisting has not yet been implemented, if the cause for delisting ceases to exist, or supplementation or corrective action is completed, and none of the other circumstances in any subparagraph of the preceding paragraph exists, the company may submit relevant substantiating evidence to apply to the TWSE at least 8 working days before the date of delisting, and, the TWSE may announce an exemption from delisting and report the matter to the competent authority for recordation. However, this shall apply only insofar as no exemption from delisting has previously been granted for the same reason.
    If due to the expiration of the issuing period, or if in accordance with the provisions of Article 145, applied mutatis mutandis under Article 165-2, of the Securities and Exchange Act the foreign issuer and its depositary institution apply for the delisting of the securities of a TWSE secondary listed company, the TWSE may announce the delisting, and report to the competent authority for recordation.
    In cases of delisting under paragraphs 9 and 11, at least the foreign issuer and all of its directors with the exception of independent directors shall undertake to unconditionally purchase the remaining outstanding shares or Taiwan Depositary Receipts of the company, and the Application Procedures for Terminating the Listing of Securities by Listed Companies shall apply mutatis mutandis.
    When a special cause exists for a secondary listed company, such as stock price sensitive information pending announcement or the occurrence of a material event, upon a voluntary application by the secondary listed company, or upon an announcement, by the securities exchange or securities market on which are listed the foreign stock or the securities represented by Taiwan Depositary Receipts, of the halting of trading thereof, the TWSE may announce halting of trading of the company's TWSE-listed foreign stock or Taiwan Depositary Receipts. Upon a voluntary application by the secondary listed company, or upon an announcement, by the securities exchange or securities market on which are listed the foreign securities or the securities represented by the Taiwan Depositary Receipts, of the resumption of trading thereof, the TWSE may announce the resumption of trading of the company's TWSE listed foreign stock or Taiwan Depositary Receipts, provided that the specific instance of halting of trading did not result in any material violation of TWSE rules in connection with material information, necessitating suspension of trading of the TWSE listed foreign stock or Taiwan Depositary Receipts.
    When the TWSE announces halting or resumption of trading of the listed foreign stock or Taiwan Depositary Receipts of a secondary listed company under the preceding paragraph, it may first proceed to make the announcement, and then file a report with the Competent Authority for recordation.
50-4    When the underlying domestic securities represented by listed call (put) warrants, or securities represented by company warrants, are placed under an altered trading method, are suspended from trading, are halted from trading, or are delisted, the TWSE, pursuant to the handling procedures listed in Articles 49, 49-1, 49-2, 50, 50-3, and 50-1, may alter the trading method of the call (put) warrants or company warrants, or suspend their trading, and file a report with the Competent Authority for recordation within 1 month, or may publicly announce the suspension of trading or the delisting of the warrants, and report to the Competent Authority for recordation.
    When the securities represented by call (put) warrants or company warrants referred to in the preceding paragraph are restored to their original trading method, or their trading is resumed after the suspension or halt, or they are exempted from delisting, the TWSE may restore the original trading method, or resume halted trading, and file a report with the Competent Authority for recordation within 1 month, or publicly announce the resumption of suspended trading or exemption from delisting, and report to the Competent Authority for recordation.
    If any of the circumstances of Article 50 or Article 50-1 applies to an issuer of call (put) warrants, the TWSE shall file a report with and obtain the approval of the Competent Authority for the suspension of trading or for the delisting of the warrants, or first make a public announcement of the suspension of trading of the warrants and subsequently file a report with the Competent Authority for recordation.
50-5    Once the rights to exercise the warrants attached to a listed company's listed corporate bonds with warrants or preferred shares with warrants, or company warrants, have expired or have been completely exercised, the TWSE may publicly announce the delisting of such bonds or preferred shares for which the warrants have become void. An issuer that wishes to continue the trading on the centralized securities exchange market of such corporate bonds or preferred shares for which the warrants have become void shall reapply for listing. However, if the rights and obligations of the remaining preferred shares for which the warrant rights have become void are the same as those of other preferred shares of the issuer already listed and traded on the exchange, such remaining preferred shares may be listed together with such other preferred shares with no need to reapply for listing.
    When the balance of company warrants referred to in the preceding paragraph that remains outstanding is lower than 10 percent of the originally issued total amount, the listed company may apply to the TWSE for the delisting of those stock warrants, without being subject to the TWSE Application Procedures for Terminating the Listing of Securities by Listed Companies.
50-6    The TWSE may publicly announce the delisting of listed beneficial securities or asset-backed securities upon the maturity thereof.
    Where any of the following events occurs with respect to the trustee institution or special purpose company, the TWSE may suspend trading of its beneficial securities or asset-backed securities, and report to the Competent Authority for recordation:
  1. Failure to produce, and report and publicly announce, relevant forms, statements, or account books in accordance with Articles 36, 91, and 92 of the Financial Assets Securitization Act.
  2. An event of resignation or dismissal of the trustee institution as set forth in Article 47 of the Financial Assets Securitization Act.
  3. Any other cause that in the opinion of the TWSE necessitates the suspension of trading.
    If trading of beneficial securities or asset-backed securities is suspended due to any event enumerated in the preceding paragraph, [the trustee institution or special purpose company] may, if the cause ceases to exist, and in the absence of any other cause under the preceding paragraph, submit relevant supporting documents to apply for resumption of trading. The TWSE may publicly announce the reinstatement of trading under Article 147 of the Securities and Exchange Act, and report to the Competent Authority for recordation.
    Where any of the following events occurs with respect to the trustee institution or special purpose company, the TWSE may delist its beneficial securities or asset based securities, and report to the Competent Authority for recordation:
  1. The special purpose trust deed is terminated or the date of expiry of the special purpose company is reached.
  2. The trustee institution or special purpose company is sanctioned by the competent authority for the target industry under Article 106 of the Financial Assets Securitization Act.
  3. The special purpose company shall be dissolved because of any of the events set forth in Article 96 of the Financial Assets Securitization Act.
  4. Trading is suspended under paragraph 2 of this Article, and corrections have not been made after 6 months.
  5. Any other cause that in the opinion of the TWSE necessitates delisting.
50-7    The TWSE may publicly announce the delisting of listed REIT beneficial securities or REAT beneficial securities upon the maturity date thereof.
    Where any of the following events occurs with respect to the real estate securitization trustee institution, the TWSE may suspend trading of its REIT beneficial securities or REAT beneficial securities, and report to the Competent Authority for recordation:
  1. Failure to produce, and report and publicly announce, relevant forms, statements, or account books in accordance with Articles 26, 27, and 36 of the Real Estate Securitization Act.
  2. A change in the REIT plain or REAT plan, where there is a likelihood of material impact on beneficial rights or interests.
  3. An event under Article 6, paragraph 1, subparagraphs 1 to 3 of the Regulations Governing the Offering or Private Placement of Real Estate Investment Trust or Real Estate Asset Trust Beneficial Securities by Trustee Institutions, where corrections are not made by the deadline under subparagraph 4 of the same article and paragraph.
  4. Any other cause that in the opinion of the TWSE necessitates the suspension of trading of the securities.
    If trading of a real estate securitization trustee institution's REIT beneficial securities or REAT beneficial securities is suspended due to any event enumerated in the preceding paragraph, [the trustee institution] may, if the cause ceases to exist, and in the absence of any other cause under the preceding paragraph, submit relevant supporting documents to apply for reinstatement of trading. The TWSE may publicly announce the reinstatement of trading under Article 147 of the Securities and Exchange Act, and report to the Competent Authority for recordation.
    Where any of the following events occurs with respect to the real estate securitization trustee institution, the TWSE may delist its REIT beneficial securities or REAT beneficial securities, and report to the Competent Authority for recordation:
  1. The duration expires; or the fund is turned into an open-end fund by a resolution of the beneficiaries meeting and approval of the Competent Authority, or under the REIT contract.
  2. The REIT contract or REAT contract is terminated.
  3. The competent authority for the target industry orders it to transfer the trust property to a new trustee institution under Article 55 of the Real Estate Securitization Act.
  4. Trading is suspended under paragraph 2 of this Article, and corrections have not been made after 6 months.
  5. Any other cause that in the opinion of the TWSE necessitates delisting of its REIT beneficial securities or REAT beneficial securities.
50-8    Upon expiry of the valid term of the listed ETNs, the TWSE may directly issue a public notice stating delisting of the ETNs.
    In any of the following circumstances involving ETNs, the TWSE may terminate trading in the ETNs and report the termination to the competent authorities:
  1. A circumstance specified in Article 11, paragraph 1 of the Regulations Governing the Issuance of Exchange Traded Notes by Securities Firms, as a result of which the competent authorities have voided or revoked their effective registration.
  2. The institution calculating the underlying index has stopped its calculation, or terminated its index licensing contract.
  3. Total issue value is less than TWD 100 million and the number of issued units is less than 5 million.
  4. The issuer has delisted the ETNs or early redeemed the units held by investors in accordance with its issue plan.
  5. The issuer is in a circumstance described in Article 50-1, paragraph 1, subparagraphs 1 to 4, 9 to 11, and 17.
  6. The issuer was blacklisted by financial institution.
  7. The issuer is unable to redeem the ETNs upon maturity or those sold back by investors.
  8. Where the TWSE deems it necessary to delist and terminate trading of its ETNs for any other reasons.
50-9    If any of the circumstances listed below applies to a TIB listed company or a TIB primary listed company, the TWSE shall suspend the trading of its listed securities pursuant to Article 147, or Article 165-1 under which Article 147 shall apply mutatis mutandis, of the Securities and Exchange Act, and report to the Competent Authority for recordation; or the TIB listed company or TIB primary listed company may apply for delisting pursuant to Article 50-10, paragraph 4:
  1. The financial report it has publicly announced and filed for the most recent period as required indicates the net worth is lower than one-tenth of the share capital shown in the financial report.
  2. Failure to produce and file and publicly announce financial reports or financial forecasts by the deadlines provided in laws and regulations.
  3. Where any condition specified in Article 282 of the Company Act exists, and a court has issued a ruling to prohibit the transfer of its shares pursuant to Article 287, paragraph 1, subparagraph 5 of the Company Act, or a court of the jurisdiction of incorporation has issued a ruling to prohibit the transfer of its shares.
  4. Any document or information that has been submitted is suspected to be untrue, and upon the request of the TWSE to explain the matter, no explanation is provided within the prescribed time period.
  5. The securities transfer institution established at the location of the TWSE is withdrawn, or a dummy transfer institution is established such that no transfers are processed, or no professional agent for stock affairs is appointed to handle stock affairs in the Republic of China, and upon the order of the TWSE to correct the situation within a time period, no correction is made.
  6. The CPA attesting the publicly announced and registered financial report issues a disclaimer of opinion or an adverse opinion in the review report, or any of the following circumstances applies to the financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act:
    1. Failure to prepare its financial report according to the applicable laws and the generally accepted accounting principles, or the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the generally accepted accounting principles of the United States, or the International Financial Reporting Standards, as the case may be, and the circumstances are serious, and the company is notified to correct or make a restatement of the financial report but fails to do so by the specified deadline.
    2. Its attesting CPA has issued an audit report containing a disclaimer of opinion or adverse opinion, or issued a review report with an adverse conclusion or disclaimer of conclusion.
  7. Violation of relevant bylaws or rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
  8. Breach of an undertaking it gave when when applying for listing; provided this subparagraph shall not apply when a TIB primary listed company amends important matters pertaining to protection of shareholders’ equipty in its articles of incorporation, organic documents or important financial and business documents.
  9. Violation of Article 49-4, paragraph 1, subparagraph 8, and failure to satisfy paragraph 2, subparagraph 8 of the same article within 3 months.
  10. Violation of Article 49-4, paragraph 1, subparagraph 9, and failure to carry out, within 3 months of the trading day next following the date the trading method was altered, remedial procedures as provided in paragraph 2, subparagraph 9 of the same article and to submit relevant documentary proof.
  11. Violation of Article 49-4, paragraph 1, subparagraph 10, 11 or 16, and failure to satisfy, within 3 months of the trading day next following the date the trading method was altered, paragraph 2, subparagraph 10, 11, or 15 of the same article.
  12. Change in managerial control, and a material change in the scope of business within a certain period of time before or after the change in managerial control, except in the event of a merger, private placement or public tender offer of a TWSE/TPEx listed company a TWSE/TPEx primary listed company according to the Business Mergers and Acquisitions Act or other laws and regulations.
  13. Violation of Article 49-4, paragraph 1, subparagraph 13, and failure to satisfy, within 3 years of the trading day next following the date the trading method was altered; paragraph 2, subparagraph 11 of the same article.
  14. Failure to, within 2 years after its stocks were placed under an altered trading method pursuant to Article 49-4, paragraph 1, subparagraph 14, satisfy paragraph 2, subparagraph 13 of the same article.
  15. Failure to continue to appoint a securities underwriter as indicated in an undertaking it issued upon listing to assist in compliance during the listing in the market.
  16. Other events deemed necessary to suspend the trading in securities.
    Where trading of the listed securities of a TIB listed company or a TIB primary listed company has been suspended because of a circumstance in a subparagraph of the preceding paragraph, upon satisfying the following conditions, and being free of any other of the above circumstances, the TWSE may in accordance with Article 147 or Article 165-1, under which Article 147 applies mutatis mutandis, of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
  1. Where the suspension of trading was ordered pursuant to subparagraph 1 of the preceding paragraph, and the latest two financial reports, as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, both show that its net worth is more than than one-tenth of its share capital stated on the financial report. However, in the case of decrease of capitalization, the procedure to replace securities for capital reduction should be completed.
  2. Where the suspension of trading was ordered pursuant to subparagraph 2 of the preceding paragraph, and a supplementary financial report or financial forecast is duly announced and filed, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49-4, paragraph 1, subparagraph 3. If the financial forecast has not yet been duly announced on a make-up basis in the current fiscal year, the already announced and filed financial report for the same fiscal year may be used as a substitute.
  3. Where the suspension of trading was ordered pursuant to subparagraph 3 of the preceding paragraph, and the ban on transfer ordered by court, or court of the jurisdiction of incorporation, has expired or the order has been revoked or reversed by that court, and reorganization has not been ordered by that court, or a dismissal of application for reorganization has not been rendered pursuant to Article 285-1, paragraph 3, subparagraph 2 of the Company Act or by the court of the jurisdiction of incorporation.
  4. Where the suspension of trading was ordered pursuant to subparagraph 4 of the preceding paragraph, and substantive corrections have in fact been made in accordance with regulations or upon the TWSE’s request for explanation.
  5. Where the suspension of trading was ordered pursuant to subparagraph 5 of the preceding paragraph, and substantive improvements have in fact been made in accordance with regulations.
  6. Where the suspension of trading was ordered pursuant to subparagraph 6 of the preceding paragraph, and due to corrections or improvements the circumstance specified by that subparagraph no longer exists, and there is no audit report containing a qualified opinion or review report with a qualified conclusion as specified in Article 49-4, paragraph 1, subparagraph 3.
  7. Where the suspension of trading was ordered pursuant to subparagraph 7 of the preceding paragraph, corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
  8. Where the suspension of trading was ordered pursuant to subparagraph 8 of the preceding paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
  9. Where the suspension of trading was ordered pursuant to subparagraph 9 of the preceding paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations.
  10. Where the suspension of trading was ordered pursuant to subparagraph 10 of the preceding paragraph, and remedial procedures as set forth in Article 49-4, paragraph 2, subparagraph 9 have been carried out within 6 months of the trading day next following the date of suspension of trading, and the listed company has produced relevant documentary proof that it has carried out the remediation.
  11. Where the suspension of trading was ordered pursuant to subparagraph 11 or 13 of the preceding paragraph, and corrections and improvements have been made within 6 months of the trading day next following the date of suspension of trading.
  12. Where within 6 months after trading is suspended pursuant to subparagraph 12 of the preceding paragraph, the underwriter's evaluation report has been provided and the following circumstance are met:
    1. The sum of the net profit before tax attributable to owners of the parent stated in the publicly announced and filed financial reports for the most recent four periods reaches 2 percent or more of the share capital stated in the financial report for the most recent period.
    2. The share capital of listed common shares is NT$100 million or more.
    3. The CPA's project audit report for the internal control system is provided, with an unqualified opinion.
    4. The company is free of the conditions set out in Article 31, paragraph 1, subparagraphs 1, 3, 4, 5, 7, 8, and 11 of the Rules Governing Review of Securities Listings.
    5. The requirements of Article 29, paragraph 1, subparagraphs 4 and 5 of the Rules Governing Review of Securities Listings are met.
    6. The company's directors and shareholders holding more than 10 percent of the total issued shares have placed all of their common shares in the company into centralized custody (in the case of shares obtained through public offering and issuance) or have provided written undertakings that they will not transfer shares (in the case of shares obtained through private placement) and that during the period of the undertaking not to transfer shares, they shall place in centralized custody any of those shares that are approved for retrospective public issuance. They may withdraw or transfer the shares only after the requirements of this subparagraph have been met and one year has passed from the day that the regular trading method has reinstated by the TWSE for the company's securities.
  13. Within 6 months after trading is suspended pursuant to subparagraph 14 of the preceding paragraph, the sum of the net profit before tax attributable to owners of the parent in the publicly announced and filed financial reports for the most recent four periods accounts reaches 3 percent or more of the share capital stated in the financial report for the most recent period, and the requirements of items B to F of the preceding subparagraph are met.
  14. Where suspension of trading was ordered pursuant to subparagraph 15 of the preceding paragraph, and substantive corrections or improvements have in fact been made within 1 month of the trading day next following the date of suspension of trading.
  15. Where suspension of trading was ordered pursuant to subparagraph 16 of the preceding paragraph, and corrections or improvements have been made in accordance with relevant bylaws, rules, and regulations.
50-10    If any of the following circumstances applies to any TIB listed company or TIB primary listed company, the TWSE shall, in accordance with Article 144 or Article 165-1, under which Article 144 shall apply mutantis mutandis, of the Securities and Exchange Act, delist its securities, and report to the Competent Authority for Recordation:
  1. After a full two years from the day of listing in the market, its stocks are listed at TPEx or registered as emerging stocks on Over-the-Counter market.
  2. Any of the circumstances in Article 315, paragraph 1, subparagraphs 1 to 4 of the Company Act occurs, and registration of dissolution is completed; or any of the conditions specified in Article 9, Article 10, Article 11, Article 17, paragraph 2, Article 315, paragraph 1, subparagraph 8, or Article 397 of the Company Act occurs, and a relevant competent authority has revoked or voided its company registration, ordered its dissolution, or voided its approval, or the court has ruled on dissolution. The authority of the jurisdiction of incorporation has revoked or voided its incorporation registration, ordered its dissoloution, or its shareholders meeting has passed a dissolution resolution, and the dissolution registration is completed.
  3. Any conditions specified in Article 251 or 271 of the Company Act or the relevant authority has revoked its approval for other reasons.
  4. Confirmation of bankruptcy by any court.
  5. Confirmation of reorganization by any court, or dismissal of reorganization motion due to impossibility of restructuring or rehabilitation.
  6. Failure to resume trading of its securities within one year after the trading day next following the date of suspension of trading pursuant to parapragraph 1, subparagraph 1 of the preceding article.
  7. Where any of the following circumstances applies to the company's securities:
    1. Trading of the securities has been suspended pursuant to the provisions of the preceding article, and after 6 consecutive months trading of its securities is not resumed, provided that this rule does not apply to trading suspended pursuant to paragraph 1, subparagraph 1, 12 or 15 of the preceding article.
    2. Trading of the securities is resumed after having been suspended pursuant to paragraph 1, subparagraph 3 of the preceding article for less than 6 months, and, within 6 months from the resumption of trading, trading is again suspended pursuant to paragraph 1, subparagraph 3 of the preceding article, and the aggregate period of suspension of trading exceeds 6 months.
  8. Record of refusal of financial institutions to transact with the company or of the circumstances referred to in paragraph 1, subparagraph 10 of the preceding article where the company has failed to carry out remedial procedures as set forth in Article 49-4, paragraph 2, subparagraph 9 and submit relevant documentary proof within 6 months of the trading day next following the date of suspension of trading. However, if the negotiable instrument is retrieved by means of a settlement within 3 months of the trading day next following the date of suspension of trading, an application may be filed with the TWSE for re-calculation of the duration of the period of suspension of trading as from a date approved by the TWSE. Such application shall be accompanied by the settlement document, a photocopy of the negotiable instrument, and other relevant materials. Only one such extension may be granted.
  9. Where the most recent financial report as publicly announced and registered in accordance with Article 36 of the Securities and Exchange Act shows a negative net worth. Likewise, where a subsequently publicly announced and registered financial report shows a negative net worth.
  10. Any conditions specified in Article 156 of the Securities and Exchange Act exists and the Competent Authority has ordered the suspension of trading of all of its securities for at least 3 months.
  11. A demerger from, or a general assignment to, or a merger with another company, where the resulting entity does not satisfy, respectively, the requirements for continued listing under Article 53-19, 53-10, or 53-2.
  12. Material breach of the Agreement for Listing.
  13. Where another TWSE/TPEx listed company holds 70 percent or more of its total issued shares or paid-in capital, provided the regulations for procedures of delisting under Chapter IV-1 shall apply if that another TWSE/TPEx listed company has acquired shares in that company for reverse stock split or share exchange.
  14. Average closing price for 30 consecutive business days is lower than NT$3 or averge securities market value is lower than NT$100 million.
  15. Value of its total issued preferred shares listed for trading is less than NT$20 million or number of issued shares is less than 2 million.
  16. Trading of the securities has been suspended pursuant to paragraph 1, subparagraph 15 of the preceding article, and after a full one month trading of its securities is not resumed.
  17. Other events requiring delisting of securities.
    If a listed company's securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 2 or 6, of the preceding Article for a full 6 months without correction, or if the circumstance in subparagraph 8 or 16 of the preceding paragraph existed, and the TWSE has announced but not yet implemented the delisting of its securities, if the listed company satisfies the requirements of the respective subparagraphs below, is free from any other circumstance in the subparagraphs of the preceding paragraph, and submits an application to the TWSE together with relevant materials and evidence at least 8 business days prior to the delisting implementation date, the TWSE may publicly announce an exemption from implementation of the delisting, and report to the Competent Authority for recordation:
  1. Where its securities have been suspended from trading by the TWSE because of a circumstance in paragraph 1, subparagraph 2 or 6, of the preceding Article for a full 6 months without correction, and it meets the supplementation requirements of paragraph 2, subparagraph 2 or 6 of the preceding Article.
  2. Where, after public announcement of delisting for reasons in subparagraph 8 of the preceding paragraph, the record of refusal of transaction by a financial institution or the dishonor of a negotiable instrument because of insufficient funds on deposit has been resolved by carrying out remedial procedures as set forth in Article 49-4, paragraph 2, subparagraph 9 and submitting relevant documentary proof.
  3. Where, after public announcement of delisting for reasons in subparagraph 16 of the preceding paragraph, it has appointed a new securities underwriter to assist in compliance with substantive proof of evidence.
    A TIB listed company or a TIB primary listed company that makes full supplementations or corrections before the implementation date after its listed securities have been publicly announced for delisting shall be eligible for an exemption from implementation of delisting only if such listed company has never previously been granted an exemption from delisting based on the same reasons.
    Except in the case of a merger conducted under Chapter IV-1, a TIB listed company or a TIB primary listed company applying for delisting of its securities in accordance with Article 145 or Article 165-1, under which Article 144 shall apply mutantis mutandis, of the Securities and Exchange Act shall process the application in accordance with "Procedures for Handling Applications for Delisting by Listed Companies."
    Where a listed company delists in accordance with paragraph 1, subparagraph 13 herein, the listed parent company shall undertake to unconditionally purchase the remaining outstanding shares of the company.
51    (deleted)
51-1    (deleted)
51-2    (deleted)
51-3    (deleted)
51-4    (deleted)
52    Unless otherwise provided, 40 days prior to the delisting of securities by the TWSE, the TWSE shall publicly announce the delisting and inform the Taipei Exchange and the listed company that the securities may be applied for as managed stocks. However, the TWSE may shorten the time period for public announcement for delisting of the securities of a TWSE secondary listed company in special circumstances.
    The TWSE shall announce the delisting of securities in accordance with Article 50-2, Article 50-6, Article 50-7, Article 50-8, paragraph 1, subparagraph 1 of Article 50-10 or Chapter IV-1, 5 days prior to such event.
    After a listed company, SITE, or FTE is notified by the TWSE of the delisting of its securities, it shall make a public announcement of the matter within 2 days from the date on which it receives such notification, provided that it may be exempted from the aforesaid requirement concerning public announcement date, where for reason of maturity of the bond issue period or other exceptional circumstance, and subject to approval of the Competent Authority.
    The preceding paragraph shall apply mutatis mutandis when a trustee institution is notified by the TWSE of the delisting of its beneficial securities; when a special purpose company is notified by the TWSE of the delisting of its asset-backed securities; when a real estate securitization trustee institution is notified by the TWSE of the delisting of its REIT or REAT beneficial securities; when an issuer of ETNs is notified by the TWSE of the delisting of its ETNs; when the master agent of an offshore fund institution is notified by the TWSE of the delisting of its offshore ETF beneficial certificates; when a foreign issuer and its depository institution are notified by the TWSE of the delisting of their Taiwan Depositary Receipts; when a secondary listed company is notified by the TWSE of the delisting of its shares; and when an issuer is notified by the TWSE of the delisting of its call (put) warrants.
52-1    When the TWSE suspends the trading of listed securities, the listed company may not apply for the return of securities listing fee that it has already paid. When the TWSE delists securities, a pro rata share of the listing fee shall be returned based on the months that it has been listed (partial months counted as whole months).
    The preceding paragraph shall apply mutatis mutandis when a trustee institution is notified by the TWSE of delisting of its beneficial securities; when a special purpose company is notified by the TWSE of delisting of its asset-backed securities; when a real estate securitization trustee institution is notified by the TWSE of delisting of its REIT or REAT beneficial securities; when a foreign issuer and its designated depositary institution are notified by the TWSE of delisting of their Taiwan Depositary Receipts; when a secondary listed company is notified by the TWSE of delisting of its shares; and when an issuer is notified by the TWSE of delisting of its call (put) warrants or ETNs.
53    In accordance with regulations or upon valid reasons, the TWSE may inform a listed company to provide information related to the listed securities within a limited time.
    Any financial or business reports or information filed by a listed company may be publicly announced or displayed, in original or abstract form, by the TWSE for viewing by the public.
    The listed company shall be responsible for any false or untrue statements made in the preceding reports or information.
 
   Chapter IV-1 Listed Company Mergers And Acquisitions
53-1    Upon a merger between a TWSE listed or TWSE primary listed company and a TWSE (or Taipei Exchange) listed company or TWSE (or Taipei Exchange) primary listed company or TWSE (or Taipei Exchange) secondary listed company, if the surviving company after the merger remains a TWSE listed or TWSE primary listed company, the securities of the non-surviving company shall be delisted. If by reason of the merger, the surviving company issues new shares or certificates of entitlement to new shares of the same class of stocks that are already listed, the TWSE listing of the shares may commence from the record date of the merger; provided, trading of the securities of the non-surviving company shall be suspended 8 trading days before the record date of the merger (and non-inclusive of that date), and a delisting application shall be completed and filed with the TWSE, annexing the relevant documents, at least 30 trading days before the record date of the merger (and non-inclusive of that date).
53-2    Where a TWSE listed company merges with a company that is neither listed on the TWSE nor on the Taipei Exchange, by using as consideration a follow-on issue (whether by public offering and issuance or private placement) of shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger remains a TWSE listed company, except in the case of a securities, financial, or insurance company with special approval from the authority in charge of the industry concerned or where the TWSE listed company merges with a subsidiary of which it holds 90 percent or more of the outstanding shares, all the following conditions shall be met by the company that is neither listed on the TWSE nor on the Taipei Exchange:
  1. The financial data of the merged company that is neither listed on the TWSE nor the Taipei Exchange and the consolidated financial data of the merging and merged companies satisfy the profitability requirements of TWSE listed companies enumerated in Article 4 of the TWSE Rules Governing Review of Securities Listings; provided, the above shall not apply under either of the following circumstances:
    1. The net worth per share of the surviving company, both in the most recent financial year and on the most recent pro forma financial report, is higher than the net worth per share of the original TWSE listed company. Where the above proviso is satisfied, if the TWSE listed company or the merged company that is neither TWSE listed nor Taipei Exchange listed, from the date next following the date of the balance sheet in the most recent financial report to the date the application is filed with the TWSE, undergoes any material change in capital affecting the net worth per share, such as a capital increase or reduction or distribution of dividends, the net worth per share of the surviving company shall be higher than the net worth per share of the original TWSE listed company, and the attesting CPA shall submit a review opinion following the imputed adjustment.
    2. An express opinion of the Industrial Development Bureau, Ministry of Economic Affairs is obtained concluding that the merger will improve synergy effectively.
  2. The merged company that is neither listed on the TWSE nor the Taipei Exchange is free of the circumstances specified in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 7, 8, and 12 of the TWSE Rules Governing Review of Securities Listings.
  3. The most recent annual financial reports of the merged company that is neither listed on the TWSE nor the Taipei Exchange have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and the auditor issues an unqualified opinion.
    Where a TWSE listed company merges with a foreign company meeting the conditions set forth in the Business Mergers and Acquisitions Act, the foreign company, unless it is a TWSE (or Taipei Exchange) primary listed company or TWSE (or Taipei Exchange) secondary listed company, or its stock is listed and traded on the main board of an overseas securities market approved by the Competent Authority, or it is a subsidairy of which the TWSE listed company holds 90 percent or more of the outstanding shares, shall comply with the provisions of Article 53-3, paragraph 1, subparagraph 2, and the TWSE listed company additionally shall submit the following documents:
  1. Documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
  2. An opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
  3. A written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the TWSE listed company and the foreign company, issued by a CPA other than the original attesting CPA who is approved by the Competent Authority to perform auditing and attestation of financial reports of public companies.
    For the purposes of this chapter, an overseas securities market approved by the competent authority is as defined in Article 23 of the Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings.
53-3    Where a TWSE primary listed company, under the laws and regulations of the country in which it is registered, merges with any other company by using as consideration a follow-on issue of new shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger is to remain a TWSE primary listed company, the TWSE primary listed company shall submit the documents prescribed in Article 53-2, paragraph 2, subparagraphs 2 and 3, and the other company shall meet all of the requirements listed below:
  1. If the other company is a domestic company that is neither listed on the TWSE nor the Taipei Exchange, it shall comply with the conditions set out in all of the subparagraphs of Article 53-2, paragraph 1.
  2. If the other company is a foreign company that is neither a TWSE (or Taipei Exchange) primary listed company nor a TWSE (or Taipei Exchange) secondary listed company, or whose stock is not listed and traded on the main board of an overseas securities market approved by the Competent Authority, it shall comply with all the conditions set out in each following item;
    1. The financial data of the merged company and the consolidated financial data of the merging and merged companies each satisfy the requirements of Article 28-1, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings, unless the proviso of Article 53-2, paragraph 1, subparagraph 1 is conformed to.
    2. The company is free of the circumstances under which TWSE listing is inappropriate as specified in Article 28-8, subparagraphs 1, 3, 4, and 5 of the TWSE Rules Governing Review of Securities Listings; and is also free of any circumstance under which there has been a material deficiency in the execution of the company's internal control system.
    3. The company's financial reports of the most recent fiscal year have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and the auditor issues an unqualified opinion.
    Subparagraphs 1 and 2 of the preceding paragraph do not apply if the other company with which the TWSE primary listed company merges is a subsidiary of which said company holds at least 90% of the issued shares.
53-4    When a TWSE listed company or primary listed company issues new shares due to a merger, if those shares are of a different class from the TWSE listed securities, then those shares shall conform respectively to Article 14, paragraphs 2 and 3, and Article 28-12, paragraphs 2 and 3, of the Rules Governing Review of Securities Listings before listing, unless otherwise stipulated by laws and regulations.
53-5    When a TWSE listed or TWSE primary listed company is to conduct a merger pursuant to Articles 53-1 to 53-3, the surviving TWSE listed or TWSE primary listed company shall submit an application form attaching the relevant documents (attachments). After the TWSE has examined and approved the application, it shall send the company a written opinion approving the merger. The written opinion shall state "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of merger. If the registration filing fails to become effective, this approval letter shall become void."
    The termination of the Agreement for Listing of the securities of a TWSE listed or TWSE primary listed company under the preceding paragraph shall be reported by the TWSE to the Competent Authority for recordation.
53-6    Where a TWSE listed or TWSE primary listed company is to conduct a merger pursuant to Article 53-2 or 53-3, and the additional common shares or overseas depositary receipts issued (whether by public offering or private placement) due to the said merger will account for 10 percent or more of the aggregate shares already issued and anticipated to be issued by the TWSE listed or TWSE primary listed company, any directors, supervisors, and shareholders holding more than 10 percent of the issued shares of the non-surviving company shall place in centralized custody in compliance with all of the below-listed provisions any additional common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued due to the merger that they hold. However, this requirement shall not apply where a TWSE listed company merges with a subsidiary of which it holds 90 percent or more of the outstanding shares.
  1. Such persons obtaining common shares publicly offered and issued due to the merger shall place into centralized custody with the central securities depository approved for establishment by the competent authority all of the common shares publicly offered and issued due to the merger that they hold, and in aggregate not less than the number of shares calculated under Article 10, paragraph 2 of the TWSE Rules Governing Review of Securities Listings for the total amount of common shares offered and issued as a result of the merger. In case of shortage, negotiation shall be made with other shareholders holding common shares publicly offered and issued due to the merger to make up the shortfall. Of the shares placed in central custody, one-half may be withdrawn after a full 6 months has elapsed from the date that listed trading thereof commences. The remaining portion of shares may be withdrawn in full only after one full year has elapsed from the date that listed trading commences.
  2. Such persons obtaining privately placed common shares due to the merger shall issue a written undertaking not to transfer the shares within a certain period. The written undertaking shall furthermore state: "The Taiwan Stock Exchange Corporation may from time to time send personnel to carry out spot checks to ascertain whether I have faithfully abided by my undertaking not to transfer the common shares I have obtained through private placement due to the merger. After expiration of the period in which I have undertaken restricted transfer, for those shares I obtained due to the merger that are still classified as privately placed common shares, I shall continue to abide by the restrictions on transfer under Article 43-8 of the Securities and Exchange Act." The total ratio of privately placed common shares subject to the undertaking regarding restriction of transfer referred to above and the period of the restriction of transfer shall accord with the provisions of the preceding subparagraph.
  3. Such persons obtaining overseas depositary receipts issued for capital increase due to merger shall provide a written undertaking that for a certain period of time they shall not redeem or transfer the overseas depositary receipts held by them, and the surviving company after the merger shall incorporate provisions restricting redemption into the contract signed and entered into with the custodian institution. The total ratio of overseas depositary receipts subject to restriction of redemption or transfer and the period of the restriction shall accord with the provisions of subparagraph 1.
    The provisions regarding the total ratio of shares subject to centralized custody, as referred in the preceding paragraph, need not apply where a TWSE listed company or TWSE primary listed company merges with a subsidiary company of which it holds 50 percent or more of the outstanding shares.
53-7    Where a TWSE listed company or TWSE primary listed company will become a non-surviving company upon a merger with another company that is not listed on the TWSE (nor listed on the Taipei Exchange), the TWSE listed company or TWSE primary listed company shall submit an application, with relevant documentation, to the TWSE no later than 30 business days before the record date of the merger. After the TWSE has reviewed the application for compliance with regulations, trading of the company's securities shall be suspended beginning 2 business days prior to (and non-inclusive of) the book closure date, and its securities shall be delisted from the record date of the merger.
    Upon a merger of a TWSE listed company or TWSE primary listed company with another company in accordance with the Business Mergers And Acquisitions Act or laws and regulations of the country of registration with new shares issued or cash paid by the parent company of such other company as consideration for the assignment of shares by the TWSE listed company or TWSE primary listed company, if the TWSE listed company or TWSE primary listed company becomes a wholly owned subsidiary of the parent company of the other company as a result, the listed company shall submit an application, with relevant documentation, to the TWSE no later than 30 business days before the record date of the merger. After the TWSE has reviewed the application for compliance with regulations, trading of the company's securities shall be suspended beginning 2 business days prior to (and non-inclusive of) the book closure date, and its securities shall be delisted from the record date of the merger.
53-8    When a TWSE listed company merges with an unlisted company and the TWSE listed company is a non-surviving company, the surviving or newly-incorporated unlisted company, within 1 year after the merger record date, may apply to the TWSE for listing if it meets the requirements set out in all the following subparagraphs:
  1. At the time of the application for merger, at least 80 percent of its operating revenue and identifiable assets as stated on its latest-period financial report audited or reviewed by a CPA is derived from business items or assets originally from the merged listed company, and its liabilities may not exceed two-thirds of its total assets.
  2. Capitalization: complies with the provisions of Article 4, paragraph 1, subparagraph 2 of the TWSE Rules Governing Review of Securities Listings.
  3. Profitability: after imputation based on the surviving unlisted company's latest-period financial data, complies with the provisions of Article 4, paragraph 1, subparagraph 3 of the TWSE Rules Governing Review of Securities Listings. However, this requirement does not apply if the post-merger surviving company's net worth per share on the latest-period financial report audited or reviewed by a CPA is greater than the non-surviving listed company's net worth per share on its financial report audited or reviewed by a CPA for the latest period before the merger record date. When the above proviso is satisfied, if the TWSE listed company, and the surviving or newly-incorporated unlisted company have different par values per share, the comparison of net worth per share shall be based on an imputation adjustment to the same par value, and the attesting CPA shall submit a review opinion following the imputation adjustment.
  4. Shareholding dispersion: complies with Article 4, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings.
  5. The non-surviving listed company was free of any and all circumstances set out in Articles 49, 50, and 50-1 before the merger record date, and its net worth per share was stated at not less than the par value per share on the financial reports audited or reviewed by a CPA for both the most recent period and most recent fiscal year before the merger record date.
  6. Financial reports: a CPA shall have audited or reviewed the latest-period financial report, and issued a signed audit report or a review report containing an unqualified conclusion; or, if an audit report containing other than an unqualified opinion is issued, it does not affect the fair presentation of the financial report.
  7. Complies with Article 4, paragraph 1, subparagraph 5, and Articles 18 and 19 of the TWSE Rules Governing Review of Securities Listings and is free of any of the circumstances set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 12 of those Rules.
    Before its securities are listed, the surviving unlisted company under the preceding paragraph shall deposit stock in central custody and conduct a pre-listing public offering in accordance with Articles 10 and 11 of the TWSE Rules Governing Review of Securities Listings.
53-9    Where a TWSE listed company, pursuant to Article 27 of the Business Merger and Acquisition Act, conducts a general purchase and assumption of, or pursuant to Article 185, paragraph 1, subparagraph 3 of the Company Act or other laws or regulations, receives transfer of shares, business, or assets from, another company that is neither TWSE listed nor Taipei Exchange listed, and uses as consideration shares, or securities that may be converted into or may be used to subscribe shares, if such transaction reaches any of the following standards, that company that is neither TWSE listed nor Taipei Exchange listed shall additionally comply with the conditions set out in each subparagraph of Article 53-2, paragraph 1, and that company that is neither TWSE listed nor Taipei Exchange listed and any director, supervisor, or shareholder holding 10 percent or more of the shares thereof who has holdings of the new common shares or overseas depositary receipts issued (whether by public offering or private placement) by the TWSE listed company for such capital increase additionally shall, in accordance with the provisions of Article 53-6, deposit the share certificates into central custody, or issue a written undertaking not to redeem or transfer them within a certain period of time:
  1. If the book entry amount of the shares, or securities that may be converted into or may be used to subscribe shares, that are obtained by the unlisted company as a result of being acquired reaches 70 percent or more of the book net asset value thereof, or the shares, or securities that may be converted into or may be used to subscribe shares, that are paid by the listed company for the acquisition reach 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed company.
  2. If the total number of shares acquired from shareholders of the unlisted company reaches 70 percent or more of its issued shares.
  3. If the operating revenue or operating income or book net asset value of a division being demerged from the unlisted company to the listed company reaches 70 percent or more of its entire operating revenue or operating income or book net asset value, or reaches 10 percent or more of the entire operating revenue or operating profit or book net asset value on the listed company's pro forma financial statements.
    If the acquired company referred to in the preceding paragraph is a foreign company, Article 53-2, paragraph 2 shall apply mutatis mutandis.
    When a TWSE primary listed company, under the laws and regulations of the country in which it is registered, receives transfer of shares, business, or assets of any other company, and uses shares, or securities that may be converted into or may be used to subscribe shares, as consideration, if such transaction reaches any of the standards set out in paragraph 1, that other company shall also meet the requirements set out in each subparagraph of Article 53-3.
    When a TWSE listed company or TWSE primary listed company is to conduct an acquisition under this article, it shall complete an application form and attach the relevant documents (attachments). After the TWSE has examined and approved the application, it shall send a written opinion approving the acquisition to the company. The written opinion shall state "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of acquisition. If the registration filing fails to become effective, this approval letter shall become void."
53-10    Where a TWSE listed company, pursuant to Article 27 of the Business Merger and Acquisition Act, undergoes a general assignment, or pursuant to Article 185, paragraph 1, subparagraph 2 of the Company Act or other laws or regulations, assigns business or assets, it shall, at least 30 business days prior to the assignment record date, file the application with the TWSE, and may remain listed if all required documents have been submitted to the TWSE, and, after review by the administering department, none of the following conditions is found:
  1. The pro forma operating revenue or operating income as stated in the pro forma financial statements audited by a CPA, excluding the business or assets under assignment, for each of the most recent 2 accounting years, has declined by 50 percent or more, compared with the operating revenue (including discontinued operations) or operating income (including discontinued operations) as stated in the financial statements of the same period.
  2. The pro forma operating loss as stated in the pro forma financial statements audited by a CPA, excluding the business or assets under assignment, for each of the most recent 2 accounting years is greater than the operating loss (including discontinued operations) as stated on the financial statements of the same period.
    Where pursuant to the preceding paragraph a TWSE listed company establishes an investment holding company, and the said investment holding company complies with Article 20, paragraph 1, subparagraphs 1, 2, 4, 5, 7, 8, 9 and 11 of the TWSE Rules Governing Review of Securities Listings and holds 100 percent of the transferee company's shares, the listing may be continued and the provisions of paragraphs 1 and 2 of the preceding paragraph shall not apply, and an application shall be filed with the TWSE for amendment to the content of listed securities pursuant to Article 45.
     The financial reports referred to in the subparagraphs of paragraph 1 mean parent company only financial reports, or if the company does not have any subsidiary, mean individual financial reports.
53-11    Where a single TWSE listed company, pursuant to Article 34 of the Business Mergers and Acquisitions Act, converts its shares to another newly established or already TWSE listed or TWSE primary listed existing company, and becomes a 100 percent held subsidiary of such newly established or already TWSE listed or TWSE primary listed existing company, the securities of the newly established or already TWSE listed or TWSE primary listed existing company shall be listed after completion of procedures for listing shares or new shares, and the securities of the original listed company shall be delisted on the record date of the share conversion.
53-12    The provisions of the preceding article shall also apply in cases where a single or multiple companies limited by shares or a foreign company converts shares into a newly established or existing TWSE listed or TWSE primary listed company; provided that if a company that is neither TWSE listed nor Taipei Exchange listed converts shares together therewith, the said unlisted company, unless a subsidiary of which the TWSE listed or TWSE primary listed company holds at least 90% of the shares, shall conform to the provisions of all the following subparagraphs:
  1. Profitability shall comply with subparagraph 3 of paragraph 1 of Article 4 of the TWSE Rules Governing Review of Securities Listings, unless the proviso of Article 53-2, paragraph 1, subparagraph 1 is conformed to.
  2. There shall not exist any circumstance specified in subparagraphs 1, 3, 4, 6, 7, 8, or 12 of paragraph 1 of Article 9 of the TWSE Rules Governing Review of Securities Listing.
  3. The financial report for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies and issued an unqualified opinion from such CPA.
    If any company participating in the share conversion is a foreign company, Article 53-2, paragraph 2 shall apply mutatis mutandis.
53-13    Where a TWSE listed company establishes an investment holding company by means of share conversion pursuant to Article 53-11 or Article 53-12, such investment holding company shall comply with the provisions of subparagraphs 1, 2, 4, 5, 7, 8, and 9 of paragraph 1 of Article 20 of the TWSE Rules Governing Review of Securities Listings before it may be listed.
53-14    When a company limited by shares or a foreign company converts its shares to another newly established company under Article 53-11 to 53-13, the TWSE listed company or TWSE primary listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the newly established company shall carry out with the TWSE the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and after the TWSE has reviewed the application for compliance with regulations, the trading of such company's(ies') originally listed securities shall be suspended 2 trading days prior to (and non-inclusive of) the book closure date, and the securities shall be delisted from the record date of the share conversion; provided, if shares of a single or multiple TWSE listed or Taipei Exchange listed companies are converted into a newly established company to form an investment holding company, the securities of the investment holding company may be listed and traded from the record date of the share conversion, but trading of the originally listed securities shall be suspended beginning 8 days before the record date of the share conversion (counting non-inclusively of that date):
  1. An Application for Listing of Shares of a Newly Established Company (TWSE Listed Company) Receiving Assignment of Shares shall be completed and filed, along with all specified attachments, with the TWSE no later than 30 trading days prior to (and non-inclusive of) the record date of the share conversion.
  2. An Application for Share Transfer Book Closure shall be completed and the TWSE shall directly make an announcement to the market of book closure of the shareholder registers of the TWSE listed companies participating in the share conversion.
    When a company(ies) limited by shares or a foreign company(ies) converts shares into another company that is an already TWSE listed existing company pursuant to Articles 53-11 to 53-13, and that already TWSE listed existing company uses as consideration shares, or securities that may be converted into or may be used to subscribe for shares, said company limited by shares or foreign company shall complete the application form in subparagraph 1 of the preceding paragraph and submit the application to the TWSE. And if the companies that are converting shares into the already TWSE listed existing company are themselves TWSE listed or TWSE primary listed companies, those companies shall do as specified in subparagraph 2 of the preceding paragraph.
    The Agreement for Listing of the securities of a newly established company, and the termination of the Agreement for Listing of the securities of the original listed company, under the preceding two paragraphs, shall be reported by the TWSE to the Competent Authority for recordation.
53-15    When a company carries out a case pursuant to Article 53-11 through Article 53-13, after the TWSE has examined and approved the application, a written opinion approving the share conversion shall be sent to the company, stating "This approval letter is provided only for purposes of the applicant company filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of share conversion. If the registration fails to become effective, this approval letter shall become void." Provided, where shares of a single or multiple listed or Taipei Exchange companies are converted into a newly established company to form an investment holding company, the case shall be submitted directly to the Competent Authority after examination and approval by the TWSE.
53-16    Under the circumstances set forth in Article 53-11 through Article 53-13, where before the conversion the company is a TWSE (or Taipei Exchange) listed company, those shares already duly placed in centralized custody by directors, supervisors, and major shareholders thereof at the time of initial listing on the TWSE (or Taipei Exchange) shall remain in centralized custody after the conversion until the expiration of the custody period; if before the conversion the company was neither TWSE listed nor Taipei Exchange listed, and the total number of shares anticipated to be converted will account for 10 percent or more of the shares already issued and anticipated to be issued by the company that is the transferee of the shares, the centralized custody of shares held by the directors, supervisors, and major shareholders of unlisted company in the company that is the transferee of the shares shall be handled in accordance with Article 53-6.
53-17    Where a TWSE listed company, TWSE primary listed company, or such company and another company(ies), converts its shares into shares of a company that is not TWSE listed pursuant to Article 34 of the Business Mergers and Acquisitions Act and become that existing company's wholly-owned subsidiary, the TWSE listed company shall file an application with relevant documentation to the TWSE no later than 30 business days before the share conversion record date; after the TWSE has reviewed the application for compliance with applicable regulations, trading of its securities shall be suspended beginning 2 business days before (but non-inclusive of) the book closure date, and shall be delisted beginning from the record date of the share conversion. The termination of the Agreement for Listing of the securities of the original listed company shall be reported by the TWSE to the Competent Authority for recordation.
53-18    When a TWSE listed company, or a TWSE listed company and another company, convert(s) its (their) shares into shares of another existing company that is not TWSE listed, if the pro forma post-share-conversion financial statement for the most recent year of the existing company that is not TWSE listed shows that more than 50 percent of its total operating revenue or operating income is derived from the TWSE listed company that participated in the share conversion, and the unlisted existing company meets all of the requirements in each subparagraph of Article 53-2, paragraph 1, a listing application with relevant documentation may be filed with the TWSE within 1 year after the record date of the share conversion. Before its securities are TWSE listed, the surviving unlisted company shall deposit its stock in central custody in accordance with Article 10 of the TWSE Rules Governing Review of Securities Listings.
    If shares of any company that is neither TWSE listed nor Taipei Exchange listed are being converted together with a share conversion under the preceding paragraph, that unlisted company shall also comply with all of the requirements in each subparagraph of Article 53-2, paragraph 1.
53-19    If a TWSE listed company that has carried out a demerger of one or more departments capable of operating independently pursuant to applicable law wishes to continue listed trading of its TWSE listed securities, or if the existing company or newly incorporated company that acquired the business of the aforesaid department(s) after the demerger (the "transferee company of the demerger") wishes to list its securities for trading, the company shall without exception comply with the provisions of this Article, and shall carry out applicable procedures for a company demerger and for TWSE listing.
    The provisions of the preceding paragraph shall also apply where a single TWSE listed company demerges simultaneously into multiple transferee companies of the demerger, or multiple TWSE listed companies carry out demergers simultaneously to a single transferee company of the demergers.
    A TWSE listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies shall apply to the TWSE at least 30 business days before the record date of the demerger. Where the TWSE has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them to be free of all of the [negative] criteria set out in the subparagraphs below, the company may continue to be listed:
  1. The pro forma operating revenue (including discontinued operations) or pro forma operating income (including discontinued operations) as shown on the pro forma financial statements for each of the most recent 2 accounting years excluding the financial data for the demerged department(s) and audited by a CPA, is down by 50 percent or more from the operating revenue or the operating income shown on the financial statements for the same period.
  2. The pro forma operating loss (including discontinued operations) as shown on the pro forma financial statements for each of the most recent 2 accounting years excluding financial data for the demerged department(s) and audited by a CPA, is greater than the operating loss shown on the financial statements for the same period.
    When a TWSE listed company to which any circumstance set forth in paragraph 1 or paragraph 2 applies files an application for continuation of listing, it shall submit an opinion of an independent expert on the share exchange ratio for the demerger, the reasonableness of the acquisition price, and the effect on the shareholders' equity of the TWSE listed company.
    Except under any of the circumstances listed below, a TWSE listed company to which any circumstance set forth in paragraph 1 or 2 applies shall file to carry out the procedures for the demerger and the capital reduction and issuance of new securities certificates as a consolidated case. The trading of its listed securities shall be suspended two trading days prior to the book closure date and such suspension shall continue until the expiration of the book closure period, during which period the company shall have completed the procedures for issuing the new securities certificates in accordance with Article 45 and points 1, 2, and 3 of the Procedures for the Exchange of Securities Certificates by Listed Companies:
  1. Where a TWSE listed company demerges but does not carry out a capital reduction, and issue of replacement shares is unnecessary.
  2. Where the demerger of the TWSE listed company does not involve subsequent confirmation of the shareholder register, or there is no difference in shareholder equity before and after the record date of the share transfer book closure, and suspension of margin purchase and short sale or compulsory covering of short sale positions are unnecessary.
     The financial reports referred to in the subparagraphs of paragraph 3 mean parent company only financial reports, or if the company does not have any subsidiary, mean individual financial reports.
53-20    Where a TWSE listed company establishes an investment holding company for reasons of carrying out a demerger under Article 53-19, paragraph 1 or 2, the TWSE listed company that undergoes the demerger may continue to be listed if it complies with Article 20, paragraph 1, subparagraphs 1, 2, 4, 5, 7, 8, 9 and 11 of the TWSE Rules Governing Review of Securities Listings; the provisions of paragraph 3 of the preceding article shall not apply.
53-21    Where a TWSE listed company carries out capital reduction due to a demerger referred to in Article 53-19, paragraph 1 or 2, and the newly incorporated company that acquires its business issues new shares for which the acquired business is the consideration, and issues them in full to the original shareholders of the demerged company on a pro-rata basis, approval may be given for TWSE listing and trading of the securities of the newly incorporated transferee company if it complies with all of the conditions listed below; provided, simultaneous application may not be made of related conditions such as those concerning lesser capital amount or profitability in Article 5, Article 6, or Article 6-1 of the TWSE Rules Governing Review of Securities Listings:
  1. Capitalization: the share capital on the pro forma financial statement for the most recent period at the time of application complies with the provisions of Article 4, paragraph 1, subparagraph 2 of the TWSE Rules Governing Review of Securities Listings.
  2. Profitability: complies with the provisions of Article 4, paragraph 1, subparagraph 3 of the TWSE Rules Governing Review of Securities Listings, according to the pro forma financial statement.
  3. Article 4, paragraph 1, subparagraph 5 of the TWSE Rules Governing Review of Securities Listings are conformed to, and no circumstance in Article 9, paragraph 1, subparagraph 1, 3, 4, 6, 8, 9, 11, or 12 of said rules applies.
  4. The pro forma financial statements for the most recent fiscal year shall be audited and attested by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports for public companies, and an audit report containing an unqualified opinion issued.
  5. Centralized custody of shares and pre-listing public sale shall be carried out pursuant to Article 10 or Article 10-1, and Article 11, of the TWSE Rules Governing Review of Securities Listings.
    When a demerged listed company undergoes a demerger, if the period of listing, or the combined period of listing and Taipei Exchange-listing, of its securities is no less than 3 years, the newly formed transferee company of the demerger may, within 1 year from the day of completion of amendment registration of the demerger, submit an application for TWSE listing accompanied by relevant documents to the TWSE in accordance with prescribed procedures.
53-22    If a TWSE listed company conducting a demerger under Article 53-19, paragraph 1 or 2 does not carry out a capital reduction or carries out only a partial reduction, the newly formed transferee company of the demerger, when applying to the TWSE for listing, shall comply with all of the below-listed conditions:
  1. Incorporation period: the time of incorporation of the demerged department, as shown in the financial data of the demerged company, shall comply with Article 4, paragraph 1, subparagraph 1 of the TWSE Rules Governing Review of Securities Listings.
  2. Capitalization: the share capital on the pro forma financial statement for the most recent period at the time of application complies with the provisions of Article 4, paragraph 1, subparagraph 2 of the TWSE Rules Governing Review of Securities Listings.
  3. Profitability: complies with the provisions of Article 4, paragraph 1, subparagraph 3 of the TWSE Rules Governing Review of Securities Listings, according to the pro forma financial statement.
  4. Shareholding dispersion: shall comply with Article 4, paragraph 1, subparagraph 4 of the TWSE Rules Governing Review of Securities Listings.
  5. Article 4, paragraph 1, subparagraph 5 of the TWSE Rules Governing Review of Securities Listings are conformed to, and none of the circumstances set forth in Article 9, paragraph 1, subparagraph 1, 3, 4, 6, 8, 9, 11, or 12 of said rules exists, nor is there any of the circumstances set forth in Article 18 or 19 of the same Rules under which listing is inappropriate.
  6. The pro forma financial statements for the most recent fiscal year shall be audited and attested by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports for public companies, and an audit report containing an unqualified opinion issued.
  7. Centralized custody of shares and pre-listing public sale shall be carried out pursuant to Article 10 or Article 10-1, and Article 11, of the TWSE Rules Governing Review of Securities Listings.
    If more than one TWSE listed company carry out demergers and makes transfers to a single transferee on the same record date, the calculation of the incorporation period provided in subparagraph 1 of the preceding paragraph shall be based upon the TWSE listed company that transferred the business of which the operating revenue or operating income accounts for 50 percent or more of the total operating revenue or operating income of the transferee company and accounts for 10 percent or more of the overall operating revenue or discernible assets of such listed company. If more than one independently operating department was demerged, that with the longer period of incorporation may be selected as the basis for calculation.
    When a demerged listed company undergoes a demerger, if the period of TWSE listing, or the combined period of TWSE listing and Taipei Exchange listing, of its securities is no less than 3 years, the transferee company of the demerger may, within 1 year of the day of completion of amendment registration of the demerger, submit an application for TWSE listing accompanied by relevant documents to the TWSE in accordance with prescribed procedures; procedures for reviewing such listing application case shall be governed by the TWSE Procedures for Review of Securities Listings.
53-23    When a TWSE listed company conducts a demerger under Article 53-19, paragraph 1 or 2, if the transferee company of the demerger is an existing company and the operating revenue or operating income of a single TWSE listed company of which it is the transferee accounts for 50 percent or more of the total operating revenue or operating income on its pro forma financial statements, and accounts for 10 percent or more of the operating revenue or discernible assets of the demerged company, the said existing company, when applying to the TWSE for listing, shall comply with all the requirements of each paragraph of the preceding article.
    The pro forma financial statements of the existing company as referred to in the preceding paragraph shall be prepared as consolidated statements with those of the single or multiple independently operating departments of the TWSE listed company of which it is the transferee.
    Paragraphs 2 and 3 of the preceding article shall apply mutatis mutandis to the calculation of the incorporation period and procedures for the TWSE listing application of the transferee company of a demerger.
53-24    In event that a transferee company of a demerger is unable to apply to the TWSE for listing in accordance with any of the preceding three articles, the TWSE listing of its stock may be approved if it meets all of the requirements of the following subparagraphs:
  1. At the time of the submission of the TWSE listing application, 3 years have not elapsed since the day of completion of amendment registration of the demerger.
  2. The TWSE listed company undergoing the demerger, one business day prior to the demerger, had market capitalization of not less than NT$20 billion or its shareholders equity was stated at not less than NT$10 billion on the financial statement audited (or reviewed) by a CPA for the most recent period.
  3. The equity of the transferee company of the demerger is stated at not less than NT$5 billion on the financial statement audited (or reviewed) by a CPA for the most recent period.
  4. The transferee company of the demerger complies with all the requirements of each subparagraph of Article 53-22, paragraph 1.
    The transferee company of the demerger referred in the preceding paragraph is exempted from the requirement under Article 2-1, paragraph 1 of the TWSE Rules Governing Review of Securities Listings to first have applied and had its stock registered and traded as emerging stock on the Taipei Exchange for not less than 6 months.
    The transferee company of the demerger shall follow procedures for placement of shares in custody and for pre-listing public sale in accordance with Article 10 or 10-1, and Article 11, of the TWSE Rules Governing Review of Securities Listings, provided that underwriting may be carried out for stock already publicly offered and issued by the company.
53-25    If a TWSE listed company conducting a demerger under Article 53-22 or Article 53-23 acquires new shares issued by the transferee company of the demerger, and within 1 year from the date on which the amendment registration in connection with the demerger is completed, the cumulative total of equity interest from cash capital increase that is sold or waived by the TWSE listed company reaches 20 percent or more of the equity interest acquired as a result of the demerger, such sale or waiver shall be approved by a shareholders meeting resolution.
    The resolution referred in the preceding paragraph shall be reported to the Internet information reporting website designated by the TWSE within the time period prescribed by the TWSE. The report content shall disclose the counterparty and transaction price of the sales, or relevant information such as an explanation regarding the method for deciding on, and reasonableness of, the cash capital increase issue price and of any waiver of cash capital increase.
53-26    (deleted)
53-27    If a transferee company of a demerger fails to apply to the TWSE for listing in accordance with prescribed procedures, annexing relevant documents, within the time periods set out in Article 53-21 through Article 53-24, it may separately do so in compliance with the relevant provisions of the TWSE Rules Governing Review of Securities Listings, but provisions of Article 53-22, paragraph 1, subparagraph 1 or Article 53-22, paragraph 2 may respectively apply mutatis mutandis to the calculation of the incorporation period thereof.
53-28    Within 2 years from the commencement date of TWSE (or Taipei Exchange) listed trading of securities of a transferee company of a demerger of a TWSE listed company pursuant to any of Articles 53-21, 53-22 and 53-23 herein, or to any of Articles 15-22, 15-23 and 15-24 of the GreTai Securities Market Rules Governing Securities Trading on the Taipei Exchange, any transferee company of any further demerger of the TWSE listed company may not apply for listing of its securities pursuant to Article 53-21 through Article 53-23.
    Where a Taipei Exchange listed company carries out a demerger and the transferee company of the demerger applies for TWSE listing, the applicable provisions of the TWSE Regulations for the Review of Securities Listings and Procedures for the Review of Securities Listings shall be complied with.
53-29    If a TWSE listed company, after carrying out a demerger, wishes to apply for delisting of its securities, or the company is extinguished due to the demerger of its entire operations or assets, the TWSE will delist the securities pursuant to Article 144 of the Securities and Exchange Act, and report to the Competent Authority for recordation.
53-30    Where a TWSE primary listed or TWSE secondary listed company, pursuant to the laws and regulations of the country in which it is registered, transfers equity interest in a subsidiary company and the transfer of equity results in a decline by 25 percent or more in the operating revenue or operating income as stated in the consolidated financial statements for the most recent accounting year, or undergoes a demerger or general assignment, it shall, at least 30 trading days prior to the effective date of transfer of equity interests, the demerger record date, or the assignment record date, file the application with the TWSE, and may remain listed if all required documents have been submitted to the TWSE, and, after review by the administering department, none of the following conditions is found:
  1. The pro forma operating revenue or operating income as stated in the pro forma consolidated financial statements audited by a CPA, excluding the already transferred assets (operating departments or equity investments), for each of the most recent 2 accounting years, has declined by 50 percent or more, compared with the operating revenue or operating income as stated in the financial statements of the same period.
  2. The pro forma operating loss as stated in the pro forma consolidated financial statements audited by a CPA, excluding the excluding the already transferred assets (operating departments or equity investments), for each of the most recent 2 accounting years is greater than the operating loss as stated on the financial statements of the same period.
53-31    Where a single TWSE listed company is converted into a financial holding company pursuant to Article 29 of the Financial Holding Company Act, the securities of the financial holding company shall be listed for trading on the TWSE from the record date of the share conversion, and the securities of the original TWSE listed company shall be delisted on the same date.
    The provisions of the preceding paragraph shall also apply in cases where multiple TWSE listed or Taipei Exchange listed companies, at least one of which is a TWSE listed company, are converted into a single financial holding company. However, if any company that is neither TWSE listed nor Taipei Exchange listed is converted together with other TWSE listed or Taipei Exchange listed companies, such unlisted company shall conform to the following conditions:
  1. It shall be free of any of the circumstances specified in subparagraphs 1, 3, 4, 6, 8, or 12 of paragraph 1 of Article 9 of the TWSE's Rules Governing Review of Securities Listings.
  2. Its financial reports for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to perform auditing and attestation of financial reports of public companies, and have received an unqualified opinion from such CPA.
53-32    Where shares of a single or multiple company(ies) limited by shares are converted into shares of a TWSE listed financial holding company pursuant to Article 29 of the Financial Holding Company Act, the financial holding company shall complete the relevant documentation and submit an application to the TWSE according to the procedures prescribed in Article 53-33 hereof. The listed securities shall be delisted on the record date of the share conversion and the shares of the financial holding company into which they are converted shall be listed on the same day; provided, any company limited by shares that is neither TWSE listed nor Taipei Exchange listed that participates in the share conversion shall conform to the requirements set forth in paragraph 2 of Article 53-31.
53-33    If any circumstance in Article 53-31 applies to a TWSE listed company(ies), the TWSE listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the financial holding company shall carry out with the TWSE the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, after the TWSE has reviewed the case for compliance with regulations, the trading of such company's(ies') original TWSE listed securities shall be suspended 8 trading days prior to (and non-inclusive of) the record date of the share conversion:
  1. An Application for Listing of Shares of a TWSE Listed Company Converted into a Financial Holding Company shall be completed and filed, along with all specified attachments, with the TWSE at least 30 trading days prior to (and non-inclusive of) the record date of the share conversion.
  2. A Declaration of Book Closure of Share Transfer Registrations shall be completed, and the TWSE shall make an announcement to the market of book closure of the shareholder registers of the TWSE listed companies participating in the conversion into a financial holding company.
    When a TWSE listed financial holding company receives assignment of shares of another company(ies) limited by shares pursuant to Article 53-32, the financial holding company shall complete an Application for Listing of Stock of a Financial Holding Company Converted from Shares of a Company(ies) Limited by Shares, and file it, along with all specified attachments, with the TWSE at least 30 trading days prior to (and non-inclusive of) the record date of the share conversion. And if the companies limited by shares that are converting shares into the already TWSE listed financial holding company are themselves TWSE listed companies, those TWSE listed companies shall do as specified in subparagraph 2 of the preceding paragraph.
    The Agreement for Listing of the securities of a financial holding company, and the termination of the Agreement for Listing of the securities of the original listed company, under the preceding two paragraphs, shall be reported by the TWSE to the Competent Authority for recordation.
53-34    Where any circumstance set forth in Article 53-31 or Article 53-32 applies to a company limited by shares participating in the share conversion and the company was a TWSE listed or Taipei Exchange listed company before the conversion, then the shares of the directors, supervisors, and major shareholders of the company shall be placed in centralized custody pursuant to Article 53-16. However, this restriction shall not apply where the circumstances set forth in paragraph 2 of Article 31 of the Financial Holding Company Act exist as a result of the share conversion.
53-35    A financial holding company established after conversion and meeting the requirements of Article 13 of the TWSE's Criteria Governing Information to be Published in Prospectuses for Use in Initial Applications for Securities Listing may deliver simplified prospectuses to the subscribers.
53-36    Where a financial holding company is established by means of transfer of operations by a TWSE listed company pursuant to Article 24 of the Financial Holding Company Act and the financial holding company holds 100 percent of the shares of the transferred company, an application for amendments to TWSE listed securities, accompanied by relevant documentation, shall be filed with the TWSE pursuant to Article 45.
53-37    Where a TIB listed company undergoes a merger, general assumption, general assignment, share transfer or stock split pursuant to the Business Mergers and Acquisitions Act or the Company Act, Articles 53-1, 53-2, 53-4 to 53-7, subparagraphs 1, 2 and 4 of Article 53-9, Articles 53-10 to 53-17, 53-19, 53-20 and 53-29 shall apply mutantis mutandis.
    Where a TIB primay listed company undergoes a merger, assumption of another company’s shares, business or assets, assignment of equity in a subordinate company, division or general assignment pursuant to the company law of the jurisdiction of incorporation, Articles 53-3 to 53-7, subparagraphs 3 and 4 of Article 53-9, Articles 53-12, 53-14 to 53-17 and 53-30 shall apply mutantis mutandis.
 
   Chapter V Trading On The Exchange
54    The trading of securities on the Exchange, unless specified by other laws and regulations, shall be made on a cash to physical delivery settlement basis.
55    The trading of securities on the Exchange shall be conducted by automated computer trading. Where it is deemed necessary by the TWSE, other trading method may be employed.
    The regulations governing the trading of bonds, beneficial certificates, depositary receipts, call (put) warrants, convertible bonds, certificates carrying rights to convert bonds into shares, corporate bonds, securities with warrants, foreign stocks, and ETNs shall be separately prescribed by the TWSE.
    If beneficial securities or asset-backed securities issued under the Financial Asset Securitization Act, or REAT beneficial securities issued under the Real Estate Securitization Act, are debt-type securities, the method of trading of such securities listed on the TWSE's market shall be subject, mutatis mutandis, to the regulations governing trading of corporate bonds under the preceding paragraph.
56    Unless otherwise permitted by the proviso of Article 150 of the Securities and Exchange Act, securities publicly announced for listing or trading by the TWSE shall be traded on the Exchange.
57    The trading of securities over the Exchange shall be divided into the following three categories:
  1. Normal settlement.
  2. Trade date settlement.
  3. Designated date settlement.
    The settlement of normal settlement trades shall take place 2 business days after the trade date.
    The settlement of trade date settlement trades shall be effected by written agreement of both parties, and settlement shall take place on the trade date.
    The rules regarding the settlement of designated date settlement trades shall be prescribed by the TWSE and reported to and approved by the Competent Authority before implementation.
57-1    The performance of obligations relating to call (put) warrants shall be handled through securities firms that have executed a market usage contract with the TWSE; provided that where the holder or the issuer has entered into the market usage contract with the TWSE, they may process matters on their own.
    Upon receiving a commission referred to in the preceding paragraph, or when requesting performance of obligation on its own behalf, a securities firm shall confirm the related details of the performance of obligation on the next business day, and complete the transfer of the money/certificate before 10 a.m. of the second next business day.
    The processing of the performance of obligations relating to call (put) warrants, confirmation of related details of the performance of obligation, and the process of transfer of money/certificate shall be performed by the TWSE and the central securities depository.
58    The validity of trading orders relating to the automated computer trading system shall be limited to the day on which the order is placed.
    Unless otherwise provided, trading orders for the automated computer trading system may be keyed-in 30 minutes prior to the opening of the market trading by the participating securities brokers or dealers. Such orders shall include the code of the securities firm, serial number of the brokerage order ticket (or serial number of the proprietary trading order), type of order ticket (margin purchase, short sale, securities lending, central depositary, self-custody), account number of the principal (or of the dealer), code of the securities, type of trade (normal, block, odd-lot), price (limit order or market order), volume, sale/purchase, and period of validity (valid on the current day, canceled if not immediately satisfied, or canceled if not all order is immediately satisfied). Upon acceptance by the computer of the TWSE, a trade confirmation slip shall be printed. When a matching trade is made, an execution report will be printed on the printer of the participating securities firms. The items printed on the trading order confirmation slip or the execution report may be adjusted by the TWSE depending on actual need.
    The serial number of the brokerage order ticket to be keyed-in by the participating securities brokers as referred to in the preceding paragraph shall be sequentially assigned in the order that the orders were received. The serial number of proprietary trading orders by securities dealers shall be sequentially numbered in the order that the orders were placed.
    The price of the trading orders shall be within the daily price fluctuation limit placed in accordance with paragraphs 1 and 2 of Article 63.
    Thirty minutes before market opening (i.e. the commencement of trading hours) and a certain period of time before market closing (i.e. the close of trading hours), the TWSE shall disclose on a real-time basis the computed execution prices and volumes, and the computed prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. In addition, the TWSE shall disclose, on a real-time basis during trading hours, the executed trade prices and volumes, and the prices and volumes of the five highest unexecuted buy orders and five lowest unexecuted sell orders. As to the prices and volumes of other trading orders, however, the TWSE may make appropriate disclosures based on market needs.
    Application of securities firms for changes to the trading orders that are valid on the current day, except in the following circumstances, shall be accomplished by first canceling the original trading order, and then placing new trading orders.
  1. Reduction of the volume in the order; or
  2. Change of the price of a limit order, in which case the time of the order shall be the time of entry of the updated order, unless otherwise provided by the TWSE.
58-1    (deleted)
58-2    In principle, the priority for satisfying trading orders are based on price priority and time priority, and the priority for satisfying trading orders shall be based on the following principles:
  1. Price priority principle: higher-priced buy orders shall have priority over lower-priced buy orders. Lower-priced sell orders shall have priority over higher-priced sell orders. Where orders are placed at the same price, priority shall be based on time priority principle.
  2. Time priority principle: For orders placed prior to the opening of the market, priority shall be determined randomly based on computer arrangement. For orders placed after the opening of the market, priority shall be made on the order in which the orders were placed.
58-3    The competitive auction for trading orders shall be divided into call auction and continuous trading. The first matching in the current session shall be done by call auction, and subsequent matching shall be done by continuous trading until a period of time before market closing, during which all the trading quotes shall be accumulated and matched by call auction.
    Trade prices of call auction shall be determined based on the following principles:
  1. Satisfying the maximum trade volume such that buy orders with prices higher than the determined price and sell orders with prices lower than the determined price shall be all satisfied.
  2. Where there are buy and sell orders with prices equal to the determined price, at least one side shall be all satisfied.
  3. Where two or more prices conform to the principles set forth in the preceding two subparagraphs, the price closest to the most recent traded price in the current session shall be used. If there is not yet any traded price in the current session, the price closest to the auction reference price at market opening of the current session.
    Trade prices of continuous trading shall be determined by each buy order or sell order that is entered based on the following principles:
  1. When the price of a buy order entered is higher than or equal to the minimum price of a sell order previously entered, orders shall be satisfied from the lowest to the highest price of sell order, in that order, until orders are all satisfied or until the price of the buy order currently entered is lower than the price of the unsatisfied sell order.
  2. When the price of a sell order entered is lower than or equal to the maximum price of a buy order previously entered, orders shall be satisfied from the highest to the lowest price of buy order, in that order, until orders are all satisfied or until the price of the sell order currently entered is higher than the price of the unsatisfied buy order.
    The aforesaid auction reference price at market opening of the current trading session shall be determined by the following principles:
  1. Use the closing price for the preceding day.
  2. Where there is no closing price for the preceding day, the auction reference price shall be determined by the following principles:
    1. If, on the preceding day, the highest buy order price at the close of market was higher than the auction reference price at the opening of market, use the highest buy order price.
    2. If, on the preceding day, the lowest sell order price at the close of market was lower than the auction reference price at the opening of market, use the lowest sell order price.
    3. When neither of the above circumstances applies, use the auction reference price at the opening of market of the preceding business day.
  3. In the case of an initial listing, price adjustment due to ex-rights or ex-dividend trading, or resumption of suspended trading, use the price arrived at by processing, pursuant to Article 62 herein, the reference price as set in accordance with Article 59, 59-1, 67, 67-1, or 67-2, or other rules.
    The opening price of a security is the price of the first matched trade for the current session. Trading orders entered prior to market opening that are unexecuted shall continue to be matched in the order as originally randomly assigned by the computer. The closing price shall be the price of trades matched upon accumulation of all trading orders over a period of time prior to market closing. Where unexecuted, the closing price shall be the last traded price during the current session.
    Except securities that are newly listed common stocks during the period when no price fluctuation limit is imposed, or securities for which extended matching intervals have been implemented under the bylaws or rules of the TWSE, or securities for which the opening auction reference price is lower than a certain price, during the period from the first matched trade of a security during the current session until the period of time prior to market closing, if any execution price as test-calculated prior to each matching fluctuates beyond 3.5% of the reference price:
  1. If a trading order entered is a limit order and is valid for the current day, except that an order whose execution price as test-calculated is within the price range and shall be satisfied immediately, the TWSE shall at the same time postpone the matching of the security for two minutes, and continue to accept entries, cancellations, and changes of trading orders for that security. Matching will then proceed by call auction at the conclusion of the postponement period.
  2. If a trading order entered is a limit order which will be canceled if not immediately satisfied in one trade, is a market order and is valid for the current day which will be canceled if not immediately satisfied in one trade, except that an order whose execution price as test-calculated is within the price range and shall be satisfied immediately, the remaining unsatisfied volume of the trading order entered is canceled.
  3. If a trading order entered is a limit order which will be canceled if not all order is immediately satisfied, or is a market order which will be canceled if not all order is immediately satisfied, the trading order entered is all canceled.
    The reference price in the preceding subparagraph shall be determined by the following principles:
  1. Within five minutes after the first matching for the current session, the reference price is the price of the first matched trade. In the absence of a trade price in the first matching, the opening auction price shall be the reference price.
  2. After the first five minutes of the first matching for the current session, prior to each matching, a weighted average price is calculated based on the price and volume of all trades for the five-minute period immediately before the entry time of the order. In the absence of a trade price in the five minutes, the most recent trade price shall be used. In the absence of a most recent trade price, however, the opening auction price shall be the reference price.
  3. After the first matching for the current session, in the event of a postponement of matching of a security in the first subparagraph, within the five minutes after the conclusion of the postponement period, the trade price of the call auction during the session is the reference price. In the absence of a trade price during the session, however, the reference price shall be calculated in accordance with the preceding subparagraph.
    If, during the 1 minute prior to market opening or market close for a security, any given computed execution price fluctuates beyond 3.5 percent from the previous computed execution price (if there is no previous computed execution price available 30 minutes before market opening, the fluctuation shall be based on the auction reference price at market opening; if there is no previous calculated execution price available a period of time before market closing, the fluctuation shall be based on the most recent trade price; if there is no most recent trade price available, the fluctuation shall be based on the auction reference price at market opening), the first matched trade for the current session, or the matching at market close, for that security is postponed. For a security for which the first matched trade for the current session is postponed, matching and execution for the security will proceed sequentially after 2 minutes of postponement. For a security for which the matching at market close is postponed, entries, cancellations, and changes of trading orders for that security will continue to be accepted from 1:31 p.m. to 1:33 p.m., and matching and execution will then proceed sequentially at 1:33 p.m. However, this restriction shall not apply to securities for which extended matching intervals have been implemented under the bylaws or rules of the TWSE, securities for which the opening auction reference price is lower than NT$1, call (put) warrants, or company warrants.
58-4    The TWSE shall stop accepting orders and trades one business day prior to the expiration of the call (put) warrant.
58-5    After the cause of halting of trading of listed securities ceases to exist, trading may be resumed for ordinary trading and for other trading such as odd-lot, after-market fixed-price, block, auction, and ordinary reverse auction trades. But if the cause of the halting of trading ceases to exist during a certain period of time prior to, or after the close of, market trading hours, trading will not in any event be resumed on that day.
58-6    The time of commencement of a halt of trading or resumption of trading of listed securities shall be determined by the time of execution by the TWSE computer.
    During a period of halted trading of listed securities, the TWSE will cease accepting trading orders. However, for any trading order that is unexecuted prior to the halt of trading, the securities firm may apply to cancel or reduce the quantity of the order.
    When the trading of listed securities is resumed during the period from 30 minutes prior to the commencement of market trading hours to a certain period of time prior to the close of market trading hours, the first matching of the securities will be done by call auction a period of time after the resumption of acceptance of trading orders.
58-7    The "period of time" in Article 58-3 and the preceding two articles shall be prescribed by the TWSE and publicly announced for implementation after approval and recordation by the Competent Authority.
58-8    A trading order can either be a limit order or market order:
  1. A limit order is an order for which a principal has set a certain price where the order is satisfied at or below the price in the case of a buy order, or at or above the price in the case of a sell order.
  2. When giving a market order, a principal does not set a certain price and this order may be satisfied within the permitted price range of the security on the day. However, newly listed common stocks during the period when no price fluctuation limit is imposed, securities subject to no fluctuation limit, securities for which extended matching intervals have been implemented under the bylaws or rules of the TWSE, or those otherwise identified by the TWSE shall not be traded as market order.
    Prior to matching a trade, a market order shall have its reference price converted based on the following principles, with the converted price as its order price:
  1. For a buy order, the converted reference price shall be the most recent trade price of the security (or opening auction reference price in the absence of a most recent trade price), maximum limit buy order, or maximum limit sell order, whichever is higher. If the converted reference price is the same as the maximum limit buy order, it shall be matched before a limit order where price priority under Article 58-2 applies.
  2. For a sell order, the converted reference price shall be the most recent trade price of the security (or opening auction reference price in the absence of a most recent trade price), minimum limit buy order, or minimum limit sell order, whichever is lower. If the converted reference price is the same as the minimum limit sell order, it shall be matched before a limit order where price priority under Article 58-2 applies.
    In terms of period of validity of a trading order, the order is either valid on the current day, canceled if not immediately satisfied in one trade, or canceled if not all trade is immediately satisfied in one trade:
  1. "Valid on the current day" describes an order that is valid during the current session if not all order is satisfied in one trade and the remaining unsatisfied volume is not withdrawn.
  2. "Canceled if not immediately satisfied in one trade" describes that when a trading order is entered, if not all order is satisfied in one trade, the remaining unsatisfied volume will be canceled.
  3. "Canceled if not all order is immediately satisfied in one trade" describes that when a trading order is entered, if not all order is satisfied in one trade, all the order shall be canceled.
    A trading order that is a market order, or with period of validity that is canceled if not immediately satisfied in one trade or canceled if not all order is immediately satisfied in one trade may only be entered during the period allowed for continuous trading under Article 58-3. During the period for call auction, the TWSE withdraws trading orders previously entered as market orders that are valid on the current day.
59    When determining the daily price fluctuation limits for competitive auction trading of an initial listing of securities, unless otherwise provided by law, reference price shall be made to the public offering price before the listing date. Where the securities in the initial listing are already traded on the Taipei Exchange, reference shall be made to the closing price on the last trading day before the cessation of its Taipei Exchange trading. Competitive auction trading of the common stocks of a TIB listed company or a TIB primary listed company that is relisted as TWSE listed company or TWSE primary listed company, as applicable, shall refer to the price of public sale prior to relisting as the basis of price fluctuation limits.
    When a company limited by shares or a foreign company converts its shares to another newly established company or another already TWSE listed or TWSE primary listed existing company under Chapter IV-1, the daily price fluctuation limits for an initial listing of common shares of such newly established company shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the common shares of the TWSE or Taipei Exchange listed company or TWSE or Taipei Exchange primary listed company whose converted common shares are anticipated to account for the greatest proportion of the anticipated issued common shares of the newly established company) by (the number of shares required for exchange of one new share); the daily price fluctuation limits for securities other than common shares of the newly established company or the already TWSE listed or TWSE primary listed existing company shall be calculated on the basis of the following reference price: the price arrived at by multiplying (the closing price on the last trading day of the TWSE listed security or Taipei Exchange listed security anticipated to account for the highest proportion of those converted into the security) by (the number of shares [or trading units] required for exchange of one share [or one trading unit] of the new security).
    Where there is no closing price for the last trading day of any TWSE listed security used for the calculation of a reference price under the preceding paragraph, the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein shall be used. Where there is no closing price for the last trading day of the Taipei Exchange listed security used for the calculation of reference price referred to in paragraph 1 or 2, the basis price for the opening of trading on the next day, determined in accordance with the provisions of the GreTai Securities Market Rules Governing Securities Trading on the Taipei Exchange, shall be used.
    The daily price fluctuation limits on initial listings of new capital stock, certificates evidencing right to subscribe to new shares, and certificate evidencing payment shall be determined with reference to the closing price of the old shares on the previous business day minus the value difference on rights; provided where the difference on rights cannot be determined, the price fluctuation limit shall be determined with reference to the closing price of the old shares on the previous business day. Where there is no closing price for the old shares on the previous business day, the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein shall be used.
59-1    Where trading of the TWSE listed securities of a TWSE listed company has been suspended or halted, unless otherwise provided, the price fluctuation limit of such securities on the first day of resumption of the suspended or halted trading shall be calculated based on the closing price of the last trading day. If there is no closing price for the last trading day, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein.
60    The trading orders shall be given in a single trading unit or multiples thereof. The trading unit of stocks shall be 1,000 shares. The trading unit of government bonds and corporate bonds shall be bonds with par value of 100,000 dollars.
    Where a portion of the principal of government bonds and corporate bonds has been paid, the trading unit shall be calculated based on its remaining principal.
61    The price of trading orders for stocks shall be based on one share of stock. The price of trading orders for government bonds and corporate bonds shall be based on bonds with a par value of 100 dollars.
    The trading of bonds shall be interest-free trades, except where the trading order specifies interest or the regulations specifies otherwise.
    The calculation of the interest specified in the preceding paragraph shall be based on the actual number of days between the interest-bearing commencement date and the trade date.
62    The fluctuation unit (tick) of the prices of trading orders shall be determined as follows:
  1. Where the market price of a stock is less than 10 dollars per share, the tick shall be 1 cent, or 5 cents if the price is from 10 dollars to less than 50 dollars, or 10 cents if the price is from 50 dollars to less than 100 dollars, or 50 cents if the price is from 100 dollars to less than 500 dollars, or 1 dollar if the price is from 500 dollars to less than 100 dollars, or 5 dollars if the price is 1,000 dollars or more.
  2. The tick for government bonds and corporate bonds shall be five cents. The tick for convertible bonds shall be 5 cents if the price is less than 150 dollars, or 1 dollar if the price is from 150 dollars to less than 1,000 dollars, or 5 dollars if the price is 1,000 dollars or more.
63    The daily price fluctuation limits of securities, unless otherwise approved by the Competent Authority, shall be 10 percent above and below the auction reference price at market opening of the current trading session for stocks, and 5 percent above and below the auction reference price at market opening of the current trading session for bonds; provided, however, that if the price fluctuation limit is less than the minimum tick size, the minimum tick size shall be the price fluctuation limit, and the price may not fall lower than the minimum tick size.
    For newly TWSE listed common stocks other than those converted from Taipei Exchange listed stocks to TWSE listed stocks, there will be no price fluctuation limit imposed for the 5 trading days beginning from the listing date, and the minimum price shall be one cent.
    Paragraph 1 shall apply mutatis mutandis to price fluctuation limits for trading of the common stocks of a TIB listed company or a TIB primary listed company; provided in the case where its stocks are relisted as TWSE stocks, there are no price fluctuation limits for the first 5 trading days from the first listing day, during which period the lowest price shall be 1 cent.
64    (deleted)
65    (deleted)
66     (Deleted)
67    In the trading of stocks, where a listed company has set a date for suspension of changes to the shareholders register (i.e. a book closure date) based on the record date for distributing dividends, bonuses or other interests pursuant to paragraph 2 of Article 165 of the Company Act, all settlements conducted after the book closure date shall be ex-dividend and ex-rights; provided that the provisions of this Article shall not apply to a capital increase out of employee compensation.
    The daily price fluctuation limit after the distribution of dividends shall be based on the closing price of the previous day minus the amount of dividends and bonuses that have been distributed.
    The daily price fluctuation limit for the ex-rights date shall be calculated based on the following:
  1. Where a listed company uses retained earnings or capital surplus to increase capitalization, the calculation of daily price fluctuation limit for the ex-rights date shall be based on the closing price of the previous day minus the value of the distributed stock dividends.
  2. Where a listed company uses cash capital to issue new stocks, the calculation of daily price fluctuation limit for the ex-rights date shall be handled by one of the following methods:
    1. In case under cash capitalization the issue price of the newly issued stock is lower than the closing price on the day immediately preceding the ex-rights date, the daily price fluctuation limit for the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
    2. In case under cash capitalization the issue price of the newly issued stock is higher than the closing price on the day preceding the ex-rights date, the daily price fluctuation limit on the ex-rights date shall be the closing price on the day immediately preceding the ex-rights date minus the value of the newly issued cash capitalization stock for the purpose of determining the maximum high, and the closing price on the day immediately preceding the ex-rights date for the purpose of calculating the maximum low.
  3. Where a listed company simultaneously uses retained earnings or capital surplus to increase capitalization, and also uses cash capital to issue new stocks, the daily price fluctuation limit shall be calculated as follows:
    1. In case under cash capitalization the issue price of the newly issued stock is lower than the closing price of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital surplus, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus and value of the newly issued cash capitalization stock for the purpose of calculating the maximum low.
    2. In case under cash capitalization the issue price of the newly issued stock is higher than the closing value of the day prior to the ex-rights date minus the value of the capitalized retained earnings or capital surplus, the daily price fluctuation limit for the ex-rights date shall be the value of the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus and the value of the newly issued cash capitalization stock for the purpose of calculating the maximum high, and the closing price on the day immediately preceding the ex-rights date minus the value of the capitalized retained earnings or capital surplus for the purpose of calculating the maximum low.
  4. In case any of the procedures in the above subparagraphs cannot be suitably used, the daily price fluctuation limit for the ex-rights date shall be determined by the TWSE in view of the current circumstances.
    The value of the rights referred to in the preceding paragraph shall be determined by the TWSE.
    Where there is no preceding day's closing price on the commencement date of ex-dividend or ex-rights trading, the closing price used as the basis for the calculations referred to in paragraphs 2 and 3 shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein.
    The matters relating to ex-dividend and ex-rights in connection with securities eligible for margin purchase and short sale shall be handled in accordance with the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales of Securities or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales.
67-1    Where a listed company carries out procedures for capital reduction and issuance of new replacement shares, the daily price limits on its stock for the date on which the stock begins to list after the capital reduction shall be calculated based on the following methods according to the circumstances of the capital reduction:
  1. For a capital reduction for purposes of making up losses, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares divided by the ratio of the post-reduction number of issued shares to the original number of issued shares.
  2. For a capital reduction by cash refund of capital stock, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares minus the cash amount refunded per share, and then divided by the ratio of the post-reduction number of issued shares to the original number of issued shares.
  3. For a demerger accompanied by capital reduction:
    1. If the stock of the transferee company of the demerger, on the date that its listed trading begins after the capital reduction, is stock of a TWSE listed or Taipei Exchange listed company, the price limits shall be calculated on the basis of the closing price on the last trading day before the issuance of the new replacement shares minus the value calculated by the auction reference price at market opening on the date of commencement of listed trading of the TWSE listed shares of the transferee company of the demerger obtained per share after the capital reduction, or the value calculated by the basis price for the opening of trading of the Taipei Exchange listed shares, and then divided by the ratio of the post-reduction number of issued shares to the original number of issued shares.
    2. If the stock of the transferee company of the demerger is stock of a company that is neither TWSE listed nor Taipei Exchange listed, the calculation shall be done by the method below, and the higher figure shall be the basis for calculation of the upper price limit and the lower figure shall be the basis for calculation of the lower price limit, and the price arrived at by processing, pursuant to Article 62 herein, the average of the two figures shall be taken as the auction reference price at market opening:
      1. The reference price calculated by first calculating the market capitalization by multiplying the closing price of the last trading day prior to the issuance of the new replacement shares by the original number of issued shares, then calculating the market capitalization after the capital reduction by the ratio of the company's net worth after the capital reduction to the company's original net worth, and then further dividing it by the number of issued shares after the capital reduction.
      2. The reference price calculated by the closing price of the last trading day prior to the issuance of the new replacement shares minus the net worth of the shares of the transferee company of the demerger obtained in replacement per share, and then divided by the ratio of the post-reduction capital amount to the original capital amount.
    Where there is no closing price for the last trading day prior to the issuance of new replacement shares referred to in the preceding paragraph, it shall be replaced by the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2 herein.
67-2     For a TWSE listed company carrying out procedures for the issuance of new replacement shares due to a change of par value, the price fluctuation limits of the stock on the commencement date of trading on the TWSE after the change of par value shall be calculated based on the closing price on the last trading day before the issuance of the new replacement shares divided by the ratio of the number of issued shares after the change of par value to the original number of issued shares.
    In the event there was no closing price on the last trading day before the issuance of the new replacement shares, the calculation shall be based on the price determined by the principles set out in Article 58-3, paragraph 4, subparagraph 2.
68    Upon matching a trading order, the associated person of a securities broker shall in reference to the information contained in the execution report inform the principal of this fact and prepare the relevant vouchers.
    The principal may solicit information from a securities broker in regard to the securities for which it has placed brokerage trading orders. The securities broker shall provide the information.
69    Securities firms shall observe good faith commercial practices and institute fair trades. Where it learns of any illegal trading or fraudulent trades by other securities firm, it shall have the responsibility of informing on these acts.
    In handling the above informed matter, the TWSE may act in accordance with the provisions of Article 38.
70    A trade shall be considered to be an odd-lot trade if the volume of stocks traded is less than one trading unit. The methods for trading in such stocks shall be separately drafted by the TWSE and reported to and approved by the Competent Authority before its implementation.
    The TWSE may appoint designated securities dealers to concurrently operate the business of trading in odd-lot shares, and publicly announce such decision. The same procedure shall be applicable with amendments to the same.
    A securities dealer may not refuse the appointment referred to in the preceding paragraph.
71    A trade shall be a treated as a block trade if any of the below-listed circumstances is present in a single buy order or sell order:
  1. Block trade of a single security: refers to a single buy order or sell order for at least 500 trading units of a single listed security.
  2. Block trade of a basket of stocks: refers to a single buy order or sell order for at least five listed stocks with a total value of at least NT$15 million.
    If the conditions specified in subparagraph 1 of the preceding paragraph are not met but the total value of the single buy or sell order is at least NT$15 million, the trade may be treated as a block trade of a single security.
    Regulations regarding block trades shall be separately adopted by the TWSE and implemented after being filed with the Competent Authority for final approval.
72    (deleted)
73    The provisions of related regulations on listed shares shall apply mutatis mutandis to trades in certificates carrying right to subscribe to new stocks or certificates evidencing payment of stocks.
74    Where listed securities meet any of the following conditions, the trading method for such securities may be exempted from the provisions of this Chapter, and the securities may be traded via negotiation, auction, reverse auction, or other methods:
  1. Initial offering of bonds and their wholesale trade.
  2. Wholesale trade of stocks before their listing.
  3. Special circumstances in the trading of securities not warranting the application of usual regulations.
  4. Securities trades to which are attached the condition of meeting specified trading volumes, that have been reported to and approved by the TWSE may be conducted after registration.
    The method of trading in the above transactions shall be reported to and approved by the Competent Authority before its implementation.
74-1    The hours of the centralized securities exchange market established by the TWSE for trading at fixed price after closing of the market shall be from 2:00 p.m. to 2:30 p.m. All trades shall be matched at the closing price of the same day. The trading rules shall be prescribed by the TWSE and reported to the Competent Authority for approval before the implementation.
 
   Chapter VI Brokerage Trading By Securities Brokers
75    Securities brokers conducting brokerage trading of securities shall comply with the following provisions:
  1. When accepting an account opening for processing, a securities broker shall first enter into a brokerage contract with the principal, recognizing these Operating Rules, the TWSE Regulations Governing Brokerage Contracts of Securities Brokers (hereinafter, the "Regulations Governing Brokerage Contracts"), public announcements, circular letters, and the regulations of the Taiwan Securities Association as integral parts of the contract, and specify the date of account opening and the following matters:
    1. For a principal that is a natural person: name, gender, age, occupation, address, telephone number, and National Identity Card number; if there is an agent, the agent's name and National Identity Card number.
    2. For a principal that is a juristic person: the juristic person's name, address, government uniform invoice number, phone number, representative, and authorized person.
  2. For a principal that is a person of no legal capacity or limited legal capacity, or who has been declared by a court to be placed under assistance, his/her statutory agent, guardian, or assistant shall sign/seal the brokerage contract and indicate the kinship relationship. All business vouchers for brokerage trading of securities, subscription of securities, and settlement matters shall be signed/sealed by the statutory agent, guardian, or assistant.
  3. For a principal that is a juristic person, such juristic person and its representative shall sign/seal the brokerage contract, and a power of attorney shall be provided. All business vouchers for brokerage trading of securities and settlement matters shall be signed/sealed by the authorized person.
  4. A director, supervisor, or employee of a securities firm may not open an account, engage in the brokerage trading of securities, purchase securities, or handle settlement-related matters on behalf of any other person, unless he/she is the statutory agent or guardian of the principal.
  5. When the principal or his/her/its statutory agent or authorized person signs the brokerage contract, a seal specimen card or signature card of the principal or the principal's statutory agent or authorized person shall be kept, and that same seal or signature shall be used for any orders placed in person for brokerage trading or subscription of securities and for the procedures for carrying out settlement, provided when the principal cancels an authorization, he/she/it may do so by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent; where the Taiwan agent and custodial institution of an offshore overseas Chinese or foreign national are the same person, the agent account-opening and settlement seal of the custodian institution may be taken as the specimen seal.
  6. When a principal or his/her/its statutory agent authorizes an agent to engage in brokerage trading, purchase securities or process settlement-related matters, a power of attorney shall be issued, and the seal specimen or signature card of such agent shall be kept for handling, provided when the principal cancels his/her/its authorization, he/she/it may do so according to the proviso in the preceding subparagraph .
  7. Where settlement of the principal's payment and securities is to be made by the book entry method, and where a letter of consent is signed, signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, information relevant to the brokerage trade shall be given to the principal and a confirmation record shall be kept on file. Where, pursuant to law or regulation, the principal may effect receipt or payment of the purchase price by account transfer (or remittance), signature/seal of the settlement slips (order tickets for non face-to-face orders, trade reports, etc.) may be waived. However, before settlement, the securities firm shall give notice of information relevant to the brokerage trade to the principal and the custodian institution to be the agent for trade settlement, and shall keep a confirmation record on file.
  8. A securities broker may not use computer-set groups in handling securities trading orders. The order ticket and trading order record shall record information pursuant to Articles 4 and 12 of the Regulations Governing Information to be Published in Order Tickets, Trade Reports, and Reconciliation Statements Prepared by Securities Brokers Upon Receiving Orders to Buy or Sell Securities of the Competent Authority, and be prepared in accordance with the following provisions:
    1. Trading through non-electronic media:
      1. For trading orders placed in person: the principal or its agent or authorized person that places trading orders for securities in person shall fill out an order ticket and affix their signature/seal thereto.
      2. For trading orders placed via telephone, in writing, by telegraph, or by another method approved by the TWSE: if the principal, or its agent or authorized person places an order for trading of securities by one of the above methods, the associated person handling the order at the securities broker that accepts the order shall fill out the order ticket by hand or electronic means; with the exception of orders placed by telephone, the letter, telegram, or relevant documents shall be attached to the back of the order ticket.
        3. Where the securities broker fills out the order ticket by electronic means, if delegation of responsibility for the execution of the trading order can be implemented and the employee handling that trading order confirmed, order tickets need not be printed out individually, provided that they shall be stored using a non-revisable, non-erasable electronic medium.
    2. Trading through electronic media:
      3. Means that a principal uses voice mail, the Internet, dedicated line, closed private network, or other electronic means approved by the TWSE to place a trading order, which the securities broker shall handle in accordance with the following provisions:
      1. Where a trading order is placed through an electronic medium, the securities broker need not prepare or fill out an order ticket on the client's behalf.
      2. If a trading order is placed via the Internet, the internet protocol (IP) address and electronic signature thereof shall be recorded. If a trading order is placed via voice mail, through coordination with the telecommunications institution the caller-end number display function shall be enabled, and the number of the incoming call recorded.
    3. When a securities broker accepts a trading order through non-electronic media, and uses electronic media to fill out the order ticket, or accepts a trading order through electronic media, it shall print trading order records in chronological order, and after close of market, have them signed/sealed by the brokerage personnel handling the order. However, if the storage operations of the trading order record meet the following requirements, the trading order record need not be printed out and signed:
      1. A non-revisable, non-erasable electronic storage medium is used, and preparation of trading order records is completed on the day the trade is executed.
      2. Comprehensive indexing and management procedures are set up.
      3. Management responsibility is assigned to designated personnel, and electronic data files can be converted into print format at any time.
  9. The brokerage trading of securities, order confirmation, and execution report between a securities broker and a principal shall be conducted in accordance with the following provisions:
    1. Trading through non-electronic media:
      2. The execution report may be given by electronic mail, telephone, facsimile, text message, voice message, or the Internet.
    2. Trading through electronic media:
      3. The transmission of the brokerage order for purchase/sale of securities, order confirmation, execution report, and other electronic documents between a securities broker and the principal who uses an electronic trading method other than voice mail shall carry the electronic signature issued by the institution providing vouchers for identification and confirmation; however, this restriction shall not apply in the following circumstances:
      1. Order confirmation and execution report are conducted by telephone, facsimile, text message, voice menu system, or the Internet.
      2. The conditions for exemption are met under the Operational Guidelines for the Implementation of Direct Market Access by Futures Brokers.
  10. The order ticket referred to in subparagraph 8 shall be numbered in the order it is received. Its format and particulars to be recorded shall be as prescribed by the Competent Authority. When there is any dispute in connection with a trade, the order ticket shall be kept until the dispute is resolved. When there is no dispute, order tickets shall be kept in accordance with the following provisions:
    1. For unexecuted trades: destroy after one week; however, if an order ticket is filled out by hand, it shall be stamped "Unexecuted".
    2. For executed trades: if there is no dispute, keep for 5 years together with other business vouchers.
  11. If, after an order from a principal to trade within 30 minutes prior to the commencement of market trading hours or within a certain period of time prior to the close of market trading hours as accepted by a securities broker is reported to the TWSE, there occurs a massive revocation or amendment to the report, the TWSE may request the securities broker to collect in advance from its principal, upon accepting the trading order, the funds or securities, margin for margin purchases, or margin for short sales.
75-1    A securities broker opening an account for a principal shall comply with the following:
  1. Except the following situation, if the principal is a natural person, he/she shall open the account against the original identity card and put signature/affix seal personally:
    1. where the principal is of no legal capacity or limited legal capacity, or has been declared by a court to be placed under assistance, his statutory agent, guardian, or assistant shall open the account against the original identity cards of the statutory agent, guardian, or assistant and that of the principal and put the signature/affix seal personally. If the principal has not received an identity card yet, a household registration certificate may be supplied instead. The guardian or assistant shall also provide documentary evidence that he or she is the guardian or assistant.
    2. where the principal is a person dispatched by a juristic person to work overseas, he may entrust an agent to open the account against the original identity cards of the agent and the principal as well as the power of attorney and certificate of employment overseas issued by the said juristic person, both legalized by an ROC representative office or an institution entrusted by such office. (3) where the principal specifies NT$1 million as the maximum daily trading volume and has not opened a margin trading account, the securities broker may open an account for him/her/it by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent, and the principal may determine at his/her/its sole discretion the manner in which credit check is to be performed, provided a new credit check must be carried out according to the relevant requirements if the maximum daily trading volume is to be adjusted.
    3. Where the principal handles account opening by written correspondence or electronic means, the TWSE Standards Governing Principal Identification and Management of Credit Line Categorization in the Processing by Securities Firms of Account Opening will govern.
  2. Where the principal is a juristic person, the authorized person shall provide a copy of the registration document of the juristic person, a copy of the notice of issuance of uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting such copy of notice), the power of attorney, and photocopies of the identification cards of the responsible person of the juristic entity and that of the authorized person for processing. The securities broker shall confirm in writing that the account is opened through authorization.
  3. If the principal has engaged a custodian institution to open the account on its behalf, or submits proof that settlement is to be handled on its behalf by a custodian institution, it is not necessary to confirm in writing that the account is opened through authorization.
  4. Where the principal is a group that is not incorporated as a juristic person, it shall open the account in the individual name of its responsible person, and include the group name side-by-side therewith in the account name. To open the account, the responsible person shall submit a photocopy of certification that the group has been registered with the competent authority (or of its approval for establishment, recordation, or other evidentiary document of its registration), photocopy of the notice of issuance of a uniform number for tax withholding entities issued by the tax authorities (if exempt from income tax withholding, one copy of the Certificate of Exemption from Tax Withholding must also be submitted), and a photocopy of the National Identity Card of the responsible person.
  5. Except for certain account numbers that it may handle as an account without a number under exceptional circumstances for which reasons have been noted, the securities broker shall assign an account number sequentially to each account in the order opened; provided that numbers canceled in (calendar) years other than the current year may be used sequentially.
    A securities broker shall ensure that the items supplied on the applications are error free and complete. It shall not accept any order to trade in or subscribe to securities from the principal unless it completes the account opening process and the written confirmation procedures referred to in subparagraph 2 of the preceding paragraph and keys-in the account information and account number into the computer system of the TWSE.
    A securities broker to cancel an account for a principal may do so by correspondence or electronic means that is sufficient to identify the applicant as the principal himself/herself/itself and confirm his/her/its indication of intent.
75-2    When a securities broker processes an application for opening of an account made by a custodian institution representing a principal in discretionary investment, the name of both the principal and the authorized discretionary trader shall be specified in the account name, an Account Opening and Brokerage Contract for Discretionary Investment Trading of Securities shall be signed, the custodian institution shall be stipulated as the agent for settlement payment and delivery, information required for account opening shall be entered into the computer file of the TWSE as instructed online, and the following documents shall be submitted:
  1. Photocopy of written agreement signed by the principal, the authorized discretionary trader, and the custodian institution regarding respective rights and obligations. However, under the circumstances in which a Chinese-language legal opinion issued by a lawyer is permitted to be substituted for the tripartite agreement of discretionary investment as set out in Article 17, paragraph 7 of the Regulations Governing the Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises of the Securities Investment Trust and Consulting Association of the ROC ("Regulations Governing the Conduct of Discretionary Investment Business"), those provisions shall govern.
  2. Where the principal is a natural person, photocopy of his/her National Identity Card shall be submitted; provided that where the said principal is of no legal capacity or with limited legal capacity, or has been declared by a court to be placed under assistance, a photocopy of the National Identity Card of his/her statutory representative, guardian, or assistant shall also be submitted. Where the principal is a juristic person or other institution, photocopy of the registration document of the juristic entity, photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities (a profit-seeking enterprise may be exempt from submitting such copy of notice), and photocopy of the National Identity Card of the responsible person of the juristic entity shall be submitted.
  3. Photocopy of the corporate registration document of the authorized discretionary trader, and photocopy of the National Identity Card of the responsible person of such company.
  4. Photocopy of the National Identity Card of the investment manager (including any deputy thereof) or any other person authorized to execute trades, and the original power of attorney issued by the authorized discretionary trader to the aforesaid personnel.
  5. When a foreign professional institutional investor, under Article 17, paragraph 10 of the Regulations Governing the Conduct of Discretionary Investment Business, applies to convert an original brokerage trading account into a discretionary investment account, or to revert that discretionary investment account into a brokerage trading account for its own trading, or applies to cancel the discretionary investment account because of allocation of a portion of the assets to another mandatary, the investor's instruction letter shall be submitted.
    A securities broker may accept orders for trading of securities through a discretionary investment account referred to in the preceding paragraph only after the procedures for opening the account have been completed and the required information has been entered into the computer files of the TWSE. In case of any change, after account-opening, in the investment manager (including any deputy thereof) or any other person authorized to execute trades, orders for trading of securities may not be accepted unless and until the documents under subparagraph 1 of paragraph 4 have been replaced.
75-3    When a securities broker accepts an application to open an account on behalf of a trustee of trust property, the account name shall indicate that it is a segregated trust account, and the following documents shall be submitted:
  1. Where the trustee is a trust enterprise:
    1. Photocopy of the juristic person registration documentation of the trust enterprise and photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities.
    2. Power of attorney and photocopies of the National Identity Cards of the representative of the juristic person and the attorney in fact.
    3. Where the settlor is a natural person, a photocopy of the person's National Identity Card; where it is a juristic person, a photocopy of the documentation of its juristic person registration.
    4. Summary terms and conditions contract for the trust.
  2. Where the trustee is not a trust enterprise:
    1. Where the settlor and trustee are natural persons, photocopies of their National Identity Cards; where they are juristic persons, photocopies of their juristic person registration documentation, and the power of attorney and photocopies of the National Identity Cards of the representative of the juristic person and the attorney in fact.
    2. Photocopy of the notice of issuance of uniform number for taxable entities issued by the tax authorities.
    3. Photocopy of the trust deed.
    Where a trading account under the preceding paragraph belongs to a charitable trust, a photocopy of the approval document by the competent authority for the target industry shall also be submitted.
    A securities broker shall make a detailed check of the documents related to opening of the segregated trust account, and shall accept orders to trade securities only after completing the account opening procedures and entering the account opening information into the computer files of the TWSE.
    Paragraph 1, subparagraph 1, and paragraph 3, do not apply when a settlor engages a securities broker to trade in listed securities on a fixed-term, fixed-amount basis by way of trust.
75-4    Each headquarters and branch of a securities firm may open two omnibus trading accounts in its own name, for purposes of accepting securities trading orders from domestic and foreign (including overseas Chinese and foreign nationals) principals respectively; provided that a mainland area principal may not use an omnibus trading account.
    A principal may use an omnibus trading account only after opening a securities trading account; the omnibus trading account may be used to participate in TWSE ordinary trading (i.e., the trading time as specified under Article 3 of the TWSE Operating Rules), after-market fixed-price trading, odd-lot trading, and block trades that are settled on the second business day following the trade date. It may also, after carrying out a securities borrowing transaction through a securities firm under the TWSE Securities Lending and Borrowing Rules, [use the borrowed securities] to trade through the omnibus trading account. A principal that is allowed by regulations to engage in margin trading may engage in margin trading through the omnibus trading account.
    If a principal has authorized a trader to conduct trades and handle allocation of trade prices and volumes, it shall provide a power of attorney and specify the allocation of trade price and volume and relevant authorized matters. However, where a same authorized trader is authorized by offshore overseas Chinese or foreign nationals, domestic funds, or units of a same group, the power of attorney may be waived, and the authorized trader shall provide a statement specifying the principals' ID numbers or uniform invoice numbers, names, and other relevant information. The TWSE may, in accordance with operational needs, require securities firms to provide certifying documents relating to the aforesaid authorizations.
75-5    When a securities firm accepts orders to trade securities through an omnibus trading account, it shall make trading quotes corresponding to the orders placed by the principals or the authorized traders thereof, and shall note the name or symbol of the principal or the authorized trader on the order ticket or the trading order record.
    The securities firm shall transmit the itemized allocations of trade price and volume as instructed by the authorized trader to the TWSE by 6 p.m. on the trade date, and the itemized orders of the principals and authorized traders thereof, to the TWSE by 6 p.m. on the first business day following the trade date, provided that this restriction shall not apply if the TWSE provides otherwise.
    Operational directions related to omnibus trading accounts will be prescribed by the TWSE.
75-6     A principal that meets any of the following conditions is not subject to the restriction of opening only one trading account at the same business place of the same securities broker:
  1. Discretionary investment account.
  2. Trading account opened by an offshore foreign institutional investor.
  3. Mainland Area Invsitutional Investor under Point 6 of the Operation Directions for Applications by Overseas Chinese, Foreign Nationals, and Mainland Area Investors for Registration to Invest in Domestic Securities or Trade Domestic Future.
  4. Trading account opened by a domestic professional institutional investor as defined in Article 19-7, paragraph 2 of the Regulations Governing Securities Firms.
  5. Segregated trust accounts opened based on the different types of contract for the respective trust accounts.
     When opening two or more trading accounts for the same principal, the securities broker shall add notes after the name of the principal specifying the reasons for opening the accounts, in order to clearly segregate the authorities and duties associated with each such account.
75-7    For a securities broker to accept an application for account opening, a principal shall provide documents necessary for verification of identification as required under the Regulations Governing Anti-Money Laundering of Financial Institutions.
76    Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
  1. Persons without legal capacity or with limited legal capacity, who do not have the agency or authorization of their legal guardian.
  2. Personnel or employees of the Securities and Futures Bureau (SFB) of the Competent Authority who fail to submit a letter of consent from the SFB.
  3. Personnel of the TWSE who fail to submit a letter of consent from the TWSE.
  4. Persons declared bankrupt and whose rights have not been reinstated.
  5. Persons declared by a court to be placed under guardianship where such declaration has not been voided; provided, this restriction shall not apply when a guardian disposes of securities for purposes of the interest of the ward.
  6. Persons declared by a court to be placed under assistance where such declaration has not been voided; provided, this restriction shall not apply if the person under assistance has obtained the consent of the assistant or permission from a court.
  7. Juristic persons opening accounts that cannot supply proof that there is authorization to open the account.
  8. Securities dealers which have not been approved by the Competent Authority.
  9. A principal who has engaged a director, supervisor, or employee of a securities firm to open an account with such securities firm as an agent or representative of the principal.
  10. The principal is applying or applied to convert an account it originally opened as a discretionary investment account to a brokerage account for the principal's own trading use.
    Insiders of securities firms opening accounts for brokered securities trading shall comply with the Rules Governing Insiders of Securities Firms Opening Accounts at Their Securities Firms for Brokered Securities Trading prescribed by the TWSE.
    Upon discovering that a principal falls in any of the following categories, a securities broker shall refuse to open an account or, if an account has already been opened, refuse to accept orders for brokerage trading or subscription of securities:
  1. Any person that has breached a contract relating to securities trading, where the TWSE or the GreTai Securities Market have notified all securities brokers of this fact, where the case has not been closed and less than 5 years have elapsed. However, this provision does not apply to brokerage trades that are made for purposes of offsetting margin purchases or short sales that were already executed for the same principal on the same day, and are of the same type and same quantity of securities, nor does it apply to opposite offsetting trades made on the same day in brokerage day trading in accordance with the Operational Rules Governing Day Trades of Securities.
  2. Any person that, in connection with a violation of the Securities and Exchange Act or forging (or altering) TWSE listed or Taipei Exchange listed securities, has been indicted in a public prosecution and the case is still pending, or has been adjudicated criminally guilty by a final and unappealable court judgment within the last 5 years.
  3. Any person that has breached a futures contract where the case has not been closed and less than 5 years have elapsed, or that has violated future trading laws or regulations and has been adjudicated criminally guilty by a final and unappealable judgment of a judicial authority within the past 5 years.
    Upon conclusion of a case of breach of a brokerage contract by a principal, the securities broker shall promptly report such conclusion to the TWSE; the TWSE will in turn inform all other securities brokers.
    Where a principal repeats its breach of a brokerage contract within a year (inclusive), the securities broker shall collect from principals in advance the full funds or securities for orders placed for 10 consecutive business days from the initial trade date as entertained by the securities broker within three months of the date of announcement of the conclusion of the case.
    The operating procedures for the advance collectioon of funds or securities under the preceding paragraph are governed by the Operation Directions for the Advance Collection of Funds and Securities by Securities Brokers in Brokerage Trading mutatis mutandis.
77    When a securities broker processes account opening for overseas Chinese or foreign nationals for the purpose of brokered sale of securities, the securities broker shall obey relevant laws and regulations and comply with the following provisions:
  1. If special-case approval is granted by the Investment Commission of the Ministry of Economic Affairs, Science-Based Industrial Park Administration, or the Export Processing Zone Administration, a photocopy of the approval to sell document and power of attorney for the filing and payment of tax required by the tax collection authority must be retained, provided no such power of attorney is required if no tax agent is required. That account may only accept sell orders, and only for the type and amount of securities as originally approved in the investment plan. If, prior to the 19 November 1997 amendments to the Act Governing Investment by Foreign Nationals and the Act Governing Investment in Taiwan by Overseas Chinese, special-case approval to hold unlisted stocks has not been granted by the Investment Commission of the Ministry of Economic Affairs, the Science-Based Industrial Park Administration, or the Export Processing Zone Administration, and such stocks are subsequently approved for listing, the original investment information (such as trading vouchers, wire transfer receipts, and tax payment receipts) shall be submitted , and a special application shall be made by letter to the TWSE for its approval for account opening, before brokerage orders to sell such stocks may be accepted.
  2. In regard to securities obtained due to gift, succession, or pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235-1; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act or prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, and the resulting shares alloted, subscribed for or assigned, a copy of the identification or company registration certificate (or document of equivalent validity), the power of attorney for filing tax returns required by the tax collection authority, and the following documents shall be submitted for account opening. That account may only accept sell orders, and trading shall be limited to the sale of the aforesaid securities. No such power of attorney is required if no tax agent is required.
    1. Where the securities and the said entitlements are obtained through gift, transfer procedure shall be completed and the certificate of payment of gift tax or other certification issued by the tax collection authority shall be submitted.
    2. Where the securities and the said entitlements are obtained through succession, transfer procedure shall be completed and the certificate of payment of estate tax or other certification issued by the tax collection authority shall be submitted.
    3. Where the securities and the said entitlements are obtained pursuant to Article 167-1, paragraph 2; Article 167-2; Article 235-1; or Article 267 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act, a certificate of employment valid at the time the employee obtains the shares through allotment, subscription or assignment and documents evidencing the allotment, subscription or assignment shall be submitted.
    4. Where the securities are obtained prior to relinquishing one's original nationality or prior to the implementation of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals and Procedures for Remittance on 28 December 1990, document proving the source of the securities or other documents shall be submitted.
  3. Securities obtained in compliance with the preceding subparagraph may be sold by mutatis mutandis application of Article 82-1.
  4. Where foreign securities have been obtained before they are listed on the centralized securities exchange market of the TWSE on a primary listing basis, documentary proof of securities holdings issued by the agent for stock affairs engaged by the foreign issuer, or the documentary proof that employees have subscribed to or been allotted shares in accordance with the laws and regulations of the country of registration, the power of attorney for the filing and payment of tax required by the tax collection authority, and the documentary proof of identity of the principal or the principal's company registration certificate (or document of equivalent validity) shall be submitted to conduct account opening. That account may only accept sell orders, and trading shall be limited to the sale of the amount of holdings. No such power of attorney is required if no tax agent is required. If the holder of those securities, after opening the present account, subsequently opens an account with a securities broker for securities trading under Article 77-4, the present account shall be canceled.
  5. A principal referred to in subparagraph 1, 2, or 4 that obtains stock of another TWSE listed company, TWSE primary listed company, or emerging stock company, by duly participating in a public tender offer through an offer to sell, or by the issuer's participation in a merger or acquisition, or that obtains stock as a result of allotment, subscription or assignment, may sell the stock through those accounts.
    If the principal under the preceding paragraph is an offshore overseas Chinese or foreign natural person, he or she may mandate a Republic of China lawyer, CPA, custodian bank, or securities firm as his or her agent to open a New Taiwan Dollar account to be used solely for purposes of securities settlement, and shall submit the documents listed below:
  1. Documentary proof of identity: i.e., a certificate of nationality or photocopy of a valid passport, which shall be legalized by an overseas representative office or authorized entity of the Republic of China.
  2. Photocopy of the contract for opening of the securities account, and submit for inspection the original of the central depository account passbook.
  3. Power of attorney for the agent, which must be legalized by an overseas representative office or authorized entity of the Republic of China.
  4. Record of ID Number in the Republic of China issued by the National Immigration Agency of the Ministry of the Interior.
  5. A lawyer or CPA mandated as agent must have obtained a license to practice as a lawyer or CPA in the Republic of China, and shall submit for inspection the original of his or her documentary proof of identity and lawyer or CPA license; a custodian bank or securities firm mandated as agent shall provide the original of its business license, the original of which shall be returned after it has been inspected and a photocopy made to be retained on file.
    Foreign banks with branch offices in the Republic of China may use the name of the branch office to open the account in accordance with Article 75. Such account may only accept sales orders, and purchase orders shall not be accepted.
77-1    Securities brokers accepting account opening applications from the domestic agent of a depositary institution for an overseas depositary receipt shall ensure that the account name clearly states its relation with and the rights and obligations of the securities of such listed company, and shall further supply the following documents:
  1. Copy of the approval to issue overseas depositary receipts issued by the Competent Authority.
  2. Copy of the power of attorney executed by a depositary institution appointing a domestic agent.
  3. Photocopies of the National Identity Card, Alien Resident Certificate, or company registration (or amendment registration) certification of the domestic agent or representative of the depositary institution. Provided, if such documentation for the same domestic agent or representative has already been submitted to and placed on file by the broker, it need not be resubmitted.
    The trading account referred to in the preceding paragraph may be used only to execute sales orders unless the issuance plan of such depositary receipt, the depositary contract, and the custodian contract specifies that the depositary institution may purchase and then re-issue securities from the centralized exchange market, and such depositary institution files an application, containing copies of the above purchase and issuance documents (including abstract translations), with the TWSE; upon the filing of such application, the securities broker may accept purchase orders for the securities indicated on the depositary receipt.
    When holders of overseas depositary receipts acquire shares of a listed company as a result of a demerger and capital reduction conducted by a company that has sponsored the issuance of overseas depositary receipts, the depositary institution shall designate a domestic agent to submit the documents listed below to open a collective custody account at a securities firm on behalf of the holders of the overseas depositary receipts:
  1. Photocopy of the previous letter of approval to issue overseas depositary receipts issued by the competent authority.
  2. Photocopy of the meeting minutes of the demerged company's shareholders meeting that approved the demerger.
  3. Photocopy of the power of attorney executed by the depositary institution appointing the domestic agent.
  4. Photocopy of the national identity card, alien resident certificate, or company registration (or amendment registration) certification of the domestic agent or representative of the depositary institution. However, if such documentation for the same domestic agent or representative has already been submitted to and placed on file by the securities broker, it need not be resubmitted.
    The trading account referred to in the preceding paragraph may not be used for any securities trading except the brokered sale of the listed company's stock obtained as a result of a demerger and capital reduction.
    Domestic agents applying for account opening on behalf of overseas Chinese or foreign nationals that have invested in overseas depositary receipts and desire to redeem such depositary receipt into the underlying securities shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to redemption of the overseas depositary receipts, it need not be done anew.
77-2    A mainland area person, juristic person, organization or other institution that obtains listed securities due to gift or succession shall apply to a securities broker for account opening with the following documents submitted:
  1. Proof of payment of estate tax or gift tax issued by a tax collection authority or other evidentiary documents, and the power of attorney for filing tax returns required by the tax collection authority.
  2. In the event of a natural person, identification documents or documents evidencing approval of his entry to Taiwan.
  3. The company registration certificate of a juristic person, organization or other institution denotes a juristic person or organization qualification certificate or registration certificate issued by the local government.
    A mainland area person, juristic person, organization, other institution, or a company in which it invests in a third area, which has obtained the approval of the Investment Commission, Ministry of Economic Affairs, for investing in listed companies, shall apply to a securities broker for account opening with the following documents submitted:
  1. A photocopy of the written approval of sale, and power of attorney for filing tax returns required by the tax collection authority.
  2. In the event of a natural person, identification documents or documents evidencing approval of his entry to Taiwan.
  3. Qualification certificate of the juristic person, organization, other institution, or company in which it invests in a third area (as duly notarized, certified, legalized in accordance with the requirements of the Investment Commission, Ministry of Economic Affairs governing documents required for applications for investment in Taiwan by Mainland Area people).
    The principal shall comply with the following provisions when engaging an agent to open an account on its behalf pursuant to the preceding two paragraphs:
  1. Where the principal is a natural person, the agent shall personally present the identification documents of the principal and the agent, power of attorney (must be notarized by a notary public office of the Mainland Area and legalized by the Straits Exchange Foundation), and the related documents specified in the preceding two paragraphs.
  2. Where the principal is a juristic person, organization, other institution, or company in which it invests in a third area, the agent shall personally present the identification documents of the principal, power of attorney (as duly notarized, certified, legalized in accordance with the requirements of the Investment Commission, Ministry of Economic Affairs governing documents required for applications for investment in Taiwan by Mainland Area people), and the related documents specified in the preceding two paragraphs.
    The opening of a New Taiwan Dollar account by a mainland area person applying for account opening pursuant to subparagraph 1 of the preceding paragraph may be governed by Article 77, paragraph 2 mutatis mutandis, provided the identification documents and power of attorney must be notarized by a notary public office of the mainland area and legalized by the Straits Exchange Foundation.
    Such account as mentioned in paragraphs 1 and 2 may only accept sale orders and may not accept purchase orders.
    Listed securities acquired pursuant to paragraph 1 may be sold by the mutatis mutandis application of Article 82-1.
77-3    Where an overseas Chinese or foreigner who has made investment in overseas convertible corporate bonds and has requested exchange, conversion, or subscription of securities issued by a domestic issuing company through such foreign convertible corporate bonds appoints his local agent to open an account on his behalf, he shall carry out registration and account opening in accordance with Article 77-4; provided, if approval has been obtained and an account opened prior to exchange, conversion, or subscription for the overseas convertible corporate bonds, it need not be done anew.
77-4    To invest in domestic securities, onshore overseas Chinese and foreign nationals shall submit the relevant documents to a securities broker to carry out registration with the TWSE and obtain an identification number and submit the below-listed documents to the securities broker for purposes of opening an account for securities trading.
  1. Overseas Chinese and foreign natural persons: Alien Resident Certificate (or Overseas Compatriot Identity Certificate, or ROC passport with an Overseas Compatriot Identity Endorsement) and other identification with identifiable features (such as national health insurance card, passport, driver's license or student identity card etc.).
  2. Foreign institutional investor: Document evidencing company registration registered with the competent authority of the jurisdiction where it was incorporated, and National Identity Card (or Alien Resident Certificate or passport) of the responsible person.
    Offshore overseas Chinese and foreign nationals shall carry out registration with the TWSE through their designated domestic agent or representative and obtain an identification number and submit photocopies of the domestic agent or representative's national ID card or alien resident certificate or a photocopy of the documentary proof following company registration (or amendment registration) to the securities broker for purposes of opening an account for securities trading (provided, if such documents, for the same domestic agent or representative and having identical content, have already been submitted to and placed on file by the broker, they need not be resubmitted).
    If the domestic agent under this Article is a custodian institution approved by the Financial Supervisory Commission, and the custodian institution and the securities broker handling account opening both have network authentication mechanisms, the documents for account opening may be transmitted electronically to open the account.
    If any of the circumstances in Article 11 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals is present with respect to a registration by an overseas Chinese or foreign national, the TWSE shall not carry out registration; if registration has already been performed, the registration shall be canceled, and the securities broker that has opened the account shall be notified that it may not accept purchase orders therefrom. However, this restriction shall not apply to a purchase made to return securities borrowed in a securities borrowing and lending transaction. After the balance of the account has been liquidated, the securities broker shall cancel the account.
    The registration operations of this Article shall be handled pursuant to the Operation Directions for Registration Applications by Overseas Chinese, Foreign Nationals, and Mainland Area Investors to Invest in Domestic Securities or Engage in Domestic Futures Trading submitted by the TWSE to the Competent Authority for approval.
77-5    When the overseas controlling or subordinate company, branch or office of a TWSE listed, Taipei Exchange listed, or emerging stock company issuing securities to its overseas foreign national employees pursuant to Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act or Articles 167-1, 167-2, 235-1, or 267 of the Company Act handles the assignment, subscription and allotment of securities on behalf of its overseas foreign national employees, and carries out registration of a "Segregated Collective Investment Account for Overseas Foreign National Employees" with the TWSE, it shall, in addition to the same registration documents duly required for offshore foreign institutional investors, submit the documents in the following subparagraphs, and keep a copy of the documents on record at its domestic agent or representative:
  1. Original affidavit stating that the overseas controlling or subordinate company, branch or office of the TWSE listed, Taipei Exchange listed, or emerging stock company has actually been authorized by the overseas foreign national employees.
  2. Photocopy of the evidentiary documents that the TWSE listed, Taipei Exchange listed, or emerging stock company has obtained the effective registration from the competent authority to issue new shares or employee stock warrants or to buy back its shares.
  3. Photocopy of the minutes of the TWSE listed, Taipei Exchange listed, or emerging stock company's board of directors meeting that approved the transfer of bought-back stocks to its employees pursuant to Article 167-1 of the Company Act or Article 28-2, paragraph 1, subparagraph 1 of the Securities and Exchange Act, the issuance of employee stock warrants pursuant to Article 167-2 of the Company Act, or Article 28-3 of the Securities and Exchange Act, or the issuance of new shares pursuant to Article 235-1 and Article 267 of the Company Act.
    When the domestic agent or representative of the overseas controlling or subordinate company, branch or office of a TWSE listed, Taipei Exchange listed, or emerging stock company applies with a securities broker to open an account, it shall, in addition to the documents required for account opening as in the preceding Article, affix the documents in the subparagraphs of the preceding paragraph to apply for account opening. Securities trading through that segregated account will be restricted to the sale of the following stocks; no other securities trading may be engaged in:
  1. Stock that those employees have obtained as a result of allotment, subscription or assignment.
  2. Stock of another TWSE or Taipei Exchange listed company, TWSE or Taipei Exchange primary listed company, or emerging stock company that those employees have obtained by duly participating in a public tender offer through an offer to sell, or by the issuer's participation in a merger or acquisition, or stock obtained as a result of allotment, subscription or assignment.
    When a TWSE primary listed, Taipei Exchange primary listed, or emerging stock foreign issuer carries out registration procedures for a "Segregated Collective Investment Account for Overseas Foreign National Employees" with the TWSE for securities obtained by its overseas foreign national employees in accordance with the laws and regulations of the place of registration, it shall, in addition to the same registration documents duly required for offshore foreign institutional investors, submit the documents in the following subparagraphs, and keep a copy of the documents on record at its domestic agent or representative:
  1. Original affidavit stating that the TWSE primary listed, Taipei Exchange primary listed, or emerging stock foreign issuer has actually been authorized by the overseas foreign national employees.
  2. Photocopy of documentary proof that the TWSE primary listed, Taipei Exchange primary listed, or emerging stock foreign issuer has obtained effective registration from the competent authority to issue new shares or employee stock warrants or to buy back its shares.
    When the domestic agent or representative of the TWSE primary listed, Taipei Exchange primary listed, or emerging-stock foreign issuer applies with a securities broker to open an account, it shall, in addition to the documents required for account opening as in the preceding Article, affix the documents in the subparagraphs of the preceding paragraph to apply for account opening. Such account may not be used for any securities trading other than the sale of securities obtained by the employees in accordance with the laws and regulations of the country of registration and as approved or authorized by Taiwan, or sale of stock of another TWSE or Taipei Exchange listed company, TWSE or Taipei Exchange primary listed company, or emerging stock company that the employees have obtained by duly participating in a public tender offer through an offer to sell, or have obtained by the issuer's participation in a merger or acquisition, or of stock obtained as a result of allotment, subscription or assignment.
    Paragraphs 3, 4, and 5 of the preceding Article shall apply mutatis mutandis to the registration process under this Article.
77-6    Overseas Chinese and foreign nationals investing in stock issued overseas by a domestic public company, when entrusting their local agent to open an account with a securities broker on their behalf in accordance with paragraph 2 of Article 37 of the Regulations Governing Investment in Securities by Overseas Chinese and Foreign Nationals, shall carry out registration and account opening in accordance with paragraph 4 of Article 77, provided, if approval has been obtained and an account opened prior to the sale of the overseas stock, it need not be done anew.
77-7    A mainland area investor shall, after the investor's designated domestic agent or representative registers with the TWSE to obtain an ID number, submit to a securities broker a photocopy of the national ID card or alien resident certificate, or documentary proof of company registration (or amendment registration), of the domestic agent or representative to open an account to trade securities.
    When the domestic agent of a mainland area qualified institutional investor opens an account at a securities broker, in addition to the documents for account opening of paragraph 1, it shall also submit documentary proof of identity of the mainland area qualified institutional investor and documentation stating the overseas investment limit approved by the mainland area competent authority for foreign exchange business and the letter of approval issued by the TWSE for the inward remittance amount to open an account to trade securities.
    "Mainland area qualified institutional investor" in the preceding paragraph means an institutional investor with approval or permission under Article 3 of the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors.
    The provisions of Article 77-4, paragraph 3 shall apply mutatis mutandis to account opening that is done by means of electronically transmitting the account opening documents.
    If any of the circumstances of Article 8 of the Regulations Governing Securities Investment and Futures Trading in Taiwan by Mainland Area Investors exist at the time of registration by a mainland area investor, the TWSE will deny registration. If the investor is already registered, the TWSE will cancel the registration and notify the securities broker that opened the account that it may not accept purchase orders, and that, after liquidating the balance in that account, it shall cancel the account.
77-8    When the domestic agent or representative of a mainland nationality shareholder of a TWSE or Taipei Exchange primary listed company opens an account at a securities broker, in addition to the documents for account opening of paragraph 1 of the preceding Article, the domestic agent or representative shall also submit documentation issued by the foreign issuer's agent for stock affairs evidencing that the mainland nationality shareholder obtained the stock (or evidentiary certificate representing the stock) issued by that foreign issuer prior to its TWSE listing or Taipei Exchange listing in Taiwan, or the documentary proof that mainland nationality employees have been allotted, subscribed to or been assigned shares in accordance with the laws and regulations of the country of registration.
    For a mainland nationality shareholder of a TWSE or Taipei Exchange primary listed company or a shareholder of a TWSE or Taipei Exchange primary listed company that is a company in which a mainland area person, juristic person, organization, or other institution invests in a third area, when such shareholder’s domestic agent or representative opens an account at a securities broker, in addition to the documents for account opening of paragraph 1 of the preceding Article, documentation shall also be submitted evidencing that the stock issued by the foreign issuer was obtained due to direct investment in private placement, cash capital increase, merger, acquisition and share conversion.
    Securities trading through the accounts referred to in the preceding two paragraphs are restricted to sale of stock issued by such foreign issuer, sale of stock through duly made tender by participation in a public tender offer, and sale of stock of other TWSE or Taipei Exchange listed company or TWSE or Taipei Exchange primary listed company obtained through the issuer’s participation in a merger and acquisition, and sale of stock obtained as a result of allotment, subscription or assignment. No other securities trading may be engaged in through such accounts.
    If a company whose stock is TWSE listed or Taipei Exchange listed, pursuant to Article 28-2, paragraph 1, subparagraph 1 or Article 28-3 of the Securities and Exchange Act or Article 235-1 or Article 267 of the Company Act, awards securities to an employee or employees who are mainland nationals, the company's overseas subordinate company or branch office will conduct registration for a Collective Investment Account for Mainland Nationality Employees with the TWSE to obtain an ID number for purposes of handling the assignment, subscription or allotment of securities to such employee or employees. When the domestic agent or representative opens an account with a securities broker in such a case, in addition to the account opening documents required by paragraph 1, the documents in the following subparagraphs shall also be submitted, and a copy of the documents shall also be kept on record at the place of the domestic agent or representative for reference:
  1. An original copy of the undertaking stating that the overseas subordinate company or branch office of the company whose stocks are TWSE listed or Taipei Exchange listed is actually authorized by the employees that are mainland nationals.
  2. A photocopy of the documentation evidencing the Competent Authority's effective registration for the issuance of new shares or employee stock warrants, or the repurchasing of its own shares, by the company whose stock is TWSE listed or Taipei Exchange listed.
  3. A photocopy of the meeting minutes at which the board of directors of the company whose stock is TWSE listed or Taipei Exchange listed approved the current instance of repurchase of its own shares for a share transfer to employees pursuant to Article 28-2, paragraph 1, subparagraph 1 of the Securities and Exchange Act, or issuance of employee stock warrants pursuant to Article 28-3 of the Securities and Exchange Act, or issuance of new shares pursuant to Article 235-1 and Article 267 of the Company Act.
    When a TWSE primary listed or Taipei Exchange primary listed foreign issuer carries out registration procedures for a "Segregated Collective Investment Account for Mainland Nationality Employees" with the TWSE for securities obtained by its mainland nationality employees in accordance with the laws and regulations of the place of registration, when the domestic agent or representative opens the account with a securities broker, in addition to the account opening documents in paragraph 1 of the preceding article, the documents in the following subparagraphs shall also be submitted, and a copy of the documents shall also be kept on record at the place of the domestic agent or representative for reference:
  1. Original affidavit stating that the TWSE primary listed or Taipei Exchange primary listed foreign issuer has actually been authorized by the mainland nationality employees.
  2. Photocopy of documentary proof that the TWSE primary listed or Taipei Exchange Primary listed foreign issuer has obtained effective registration from the competent authority to issue new shares or employee stock warrants or to buy back its shares.
    The accounts of the preceding two paragraphs may be used only to sell stocks which such employees have obtained by exercising securities subscription rights or through assignment or allotment, or to sell stocks of another TWSE or Taipei Exchange listed company or TWSE or Taipei Exchange primary listed company that such shareholders have obtained by duly participating in a public tender offer through an offer to sell, or have obtained by the issuer's participation in a merger or acquisition, or stocks obtained as a result of allotment, subscription or assignment. Such accounts may not be used for any other securities trading.
    The provisions of paragraphs 4 and 5 of the preceding Article shall apply mutatis mutandis to the registration operations of this Article.
77-9    For a securities broker to accept an application for account opening, a principal who is an overseas Chinese or foreigner or mainland area investor shall provide documents necessary for verification of identification as required under the Regulations Governing Anti-Money Laundering of Financial Institutions.
78    Securities firms engaging on their own or on behalf of others in securities trading margin purchases and short sales business shall handle it in accordance with the Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, Regulations Governing Securities Finance Enterprises, the Operating Rules for Securities Firms Handling Margin Purchases and Short Sales, or the Operating Rules for Securities Finance Enterprises Handling Margin Purchases and Short Sales.
    If, after execution of a trading order through a securities firm that is engaged or acts on behalf of another to handle business under paragraph 1, or after execution of a sale of borrowed securities in accordance with the Taiwan Stock Exchange Corporation Securities Lending and Borrowing Rules, there is any change in the trading category, such change shall be handled in accordance with the provisions of the Directions for Securities Firms Handling Changes to Trading Category.
79    A securities firm may accept authorization from a juristic person, other institutions or specific natural persons to decide on its behalf the price and time of placement of an order within the range of the price limits specified by such juristic person, institution or natural person; when placing quotes for trades, the securities broker shall consider the market conditions and the supply-demand relationship, and take care not to damage the formation of fair prices in the market and the sound development of the market, and the securities broker shall retain the customer authorization record in accordance with regulations.
    "Specified natural person" in the preceding paragraph means a natural person who simultaneously meets all of the following conditions:
  1. Provides proof of financial capacity of NT$50 million or more.
  2. Possesses adequate professional knowledge or trading experience with respect to financial products.
  3. Issues a signed statement specifying that a registered qualified associated person of the securities firm has explained in detail to him/her the rights, obligations, and risks requiring attention in connection with discretionary orders, and confirming that he/she has been fully advised of and understood the same and agrees to sign as a specified natural person.
    "Possesses adequate professional knowledge or trading experience with respect to financial products" in subparagraph 2 of the preceding paragraph means that the person meets one of the following conditions:
  1. The person has in the past held a position at a securities, futures, financial, or insurance institution, or has other academic qualifications or work experience sufficient to prove possession of professional knowledge of securities.
  2. The person simultaneously meets all of the following conditions:
    1. At least six months have elapsed since the person opened the account.
    2. The person provides proof of the number of his/her trades on the securities market for the most recent year having reached 20; the same shall apply in the case where 1 year has not elapsed since the person opened the account.
    3. The person has never had any record of default in securities trading.
    Securities brokers may accept an order specifying the term of validity.
79-1    When accepting sell orders for normal settlement in brokerage trading, a securities broker shall confirm that the volume of securities in the orders do not exceed the principal's custodial book-entry account balance, provided that this rule does not apply in any of the circumstances listed below:
  1. Settlement is handled by a custodian institution on behalf of the securities broker.
  2. Brokerage orders to sell securities short.
  3. Brokerage orders to sell securities to settle a margin purchase.
  4. Brokerage orders to sell securities that had been deposited as collateral for a margin trade that has already been liquidated.
  5. Brokerage orders to sell collateral that had been provided for borrowing of funds or for settlement financing.
  6. Brokerage orders to sell collateral that is eligible to be withdrawn in securities borrowing and lending.
  7. Brokerage orders to sell securities in special accounts set up for the handling of events of default.
  8. Brokerage orders to sell securities lent on the previous business day pursuant to Chapter 3 of the TWSE Securities Borrowing and Lending Rules.
  9. Brokerage orders to sell securities lent pursuant to the TWSE Securities Borrowing and Lending Rules, where the securities borrower has been notified to return the securities by the sale settlement date.
  10. Brokerage orders to sell securities the borrowing of which has been confirmed but that have not yet been remitted in.
  11. Brokerage orders to sell securities under pledge that are being disposed by the pledge.
  12. Brokerage orders to sell securities for which applications for exercise of call warrants were made on the previous business day, and for which the issuer has confirmed that the exercise will be implemented by means of delivery of the securities.
  13. Brokerage orders to sell ETF beneficial certificates or baskets of stocks evidenced by beneficial certificates, pursuant to Article 12 of the TWSE Rules Governing Trading of Beneficial Certificates.
  14. Brokerage orders to sell securities bought on the previous business day.
  15. Brokerage orders to sell securities pursuant to the Operational Rules Governing Day Trades of Securities.
  16. Brokerage orders to sell securities that are loaned and returned prior to the settlement date of their sale pursuant to the Operational Rules Governing Day Trades of Securities.
  17. Other exempted circumstances as announced by the TWSE.
79-2    When a securities firm is consigned to purchase securities at the TIB, its principal must be a qualified investor and the purpose is limited to a company repurchasing its shares pursuant to law. For purpose of the preceding paragraph, a qualified invetor refers to a principal who meets one of the following conditions:
  1. Is a professional institutional investor, a high net worth corporate investor, or a juristic person or fund meeting certain criteria and having applied in writing to the trustee or sub-distributor for the status of a professional investor, as defined under Article 3, paragraph 3 of the Regulations Governing Offshore Structured Products.
  2. Is a venture capital enterprise established pursuant to laws.
  3. Is a natural person with two or more years of experiences of investment in trading in securities who has met one of the following conditions:
    1. Has net assets of NT$10 million or more.
    2. Has an average annual income of NT$1.5 million or more during the most recent two years.
80    Purchase or sale orders accepted by a securities broker shall be processed by registered and qualified associated persons.
    When executing orders to trade in securities, the registered and qualified associated persons referred to in the preceding paragraph shall wear the registration pass issued by the TWSE. When accepting trading orders, the associated persons shall fill out order tickets in accordance with the provisions of subparagraph 8 of Article 75, assign serial numbers to the orders, and process them in the order in which they are received.
    When a trading order has been matched, the securities broker shall produce a trade report. The format and the particulars to be specified on the report shall be in accordance with the regulations prescribed by the Competent Authority.
    For orders received by telephone, the securities broker shall synchronously record the conversation and shall keep the telephone recording in its place of business.
    The above-stated telephone recording shall be preserved for at least 1 year. Where there are disputes relating to a trading order, the recordings shall be preserved until the dispute has ended. In the event the securities broker suffers facilities breakdowns or it is remiss in its procedures, it shall within 2 days of the occurrence of the event report to the TWSE regarding the facts and causes and its remedial measures.
    The telephone recordings preserved in accordance with the preceding paragraph shall be construed as a type of trade voucher. In case the securities firm avoids or refuses inspection, it shall be punished in accordance with paragraph 2 of Article 25 and the Standards for Determining Securities Firms Avoiding or Refusing Inspections and Handling Procedures Thereof.
80-1    No one shall enter the operating counter and trading room of a securities broker except its chairman, general manager, manager of the business department, internal auditing personnel, compliance personnel, and the registered and qualified associated persons referred to in paragraph 1 of the preceding Article.
81    After accepting a brokerage trading order, a securities broker may cancel or amend particulars of the order only if notified by the principal to do so, and only if the order has not yet been executed.
82    After accepting a brokerage trading order for normal settlement, a securities broker, following execution of the trade, shall collect the price payable for the securities bought, or collect the securities sold, pursuant to Article 12 of the Regulations Governing Brokerage Contracts, or collect the price difference after offsetting purchases and sales pursuant to the Operational Rules Governing Day Trades of Securities.
    A securities broker filing a report of delayed settlement for an offshore overseas Chinese or foreign national, or for a mainland area investor, with the TWSE shall do so in compliance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals, and shall notify the principal or the custodian institution pursuant to the agreement.
    In the case of brokerage orders for margin trades, the securities broker shall collect from its principal the margin for the margin purchase or the margin for the short sale, as the case may be, pursuant to Article 12 of the Regulations Governing Brokerage Contracts.
    Where the TWSE has taken any disciplinary measure against a specific securities in accordance with the "Regulations for Implementation of Stock Market Monitoring System" and other relevant operation rules, a securities broker shall, on the date it accepts the order, collect in advance from its principals the funds or securities, or the margin for margin purchases, or the margin for short sales.
    Where a securities broker believes that there are any defect on the rights of the securities delivered by its principal for sale or there is legal dispute or other doubtful matter, it may decline to sell such securities; provided that the above shall not be applicable where its principal has provided adequate collateral as approved by the securities broker.
82-1    Where a securities broker accepts an order to sell registered securities that have never been transferred and its principal is not the owner of the securities, it shall handle the settlement in accordance with the Guidelines for Reporting by Securities Brokers of Sale of Securities Not Owned by the Principal as stipulated by the TWSE. The "owner" in the preceding sentence, unless otherwise provided, may not be an overseas Chinese or foreign national or mainland area investor.
    The provisions of the preceding paragraph shall apply mutatis mutandis where a securities broker accepts an order to sell registered securities that have been transferred and for which transfer registration procedures have been carried out with the issuing company, and that meets any of the following conditions:
  1. Securities of a defaulting investor after the case is closed and withdrawal has been effected.
  2. Securities acquired through an inheritance or gift.
  3. Securities acquired through underwriting before November 1997.
  4. Collateral in the form of spot securities that a securities finance company or securities firm operating its own margin purchase and short sale operations has required an investor to deposit to offset a decline in the securities price to below the maintenance ratio.
  5. Securities that a bank has required a customer to pledge in the form of spot securities.
  6. Securities obtained through a final and unappealable court judgment.
  7. Other conditions reported to and approved by the TWSE.
    When accepting a brokerage order to sell securities pursuant to this article, the securities broker shall confirm that the quantity of securities in the order does not exceed the quantity identified in the certifying document furnished by the principal.
82-2    Securities borrowing and lending by principals through the securities borrowing system of the TWSE shall be conducted in accordance with the provisions of Chapter 1 and Chapter 2 of the Securities Lending and Borrowing Rules of the TWSE.
82-3    A securities firm handling, or acting as an agent for, securities lending and borrowing business shall do so in compliance with the Regulations Governing Securities Lending by Securities Firms, Regulations Governing Securities Finance Enterprises, Operating Rules for Securities Lending by Securities Firms, or Operating Rules for Securities Finance Enterprises Offering Refinancing to Securities Firms.
83    A securities broker shall keep complete and true records and vouchers when receiving or delivering securities or payments in connection with brokerage trading.
    The vouchers referred to in the preceding paragraph shall include receipts for funds and securities collected in advance, vouchers on securities delivered, and trade reports. The format thereof and the particulars to be entered therein shall conform to the regulations prescribed by the Competent Authority. Where a financial institution concurrently engages in the business of a securities broker and has opened specific accounts for depositing funds which can be verified, it need not use trade reports.
    A securities broker shall handle the receipt of securities or funds from its principals or delivery of securities or funds to its principals referred to in paragraph 1 of this Article by book-entry through the central securities depository accounts opened by its principals or through the deposit accounts opened by its principals with financial institutions designated by the securities broker, except under any of the following circumstances:
  1. Where a securities investment trust fund, venture capital enterprises invested by the National Development Fund of the Executive Yuan, insurance enterprise, offshore overseas Chinese or foreign national, or an overseas Chinese or foreign national or mainland area investor who has converted overseas corporate bonds held by him into stock or has converted overseas depositary receipts held by him into the underlying securities, has a deposit account opened by the custodian institution on behalf thereof, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account.
  2. Fund collection or payment operations of centralized segregated trust asset accounts under the management of a trust enterprise that has the status of a central depository participant may be carried out by means of transfer (remittance).
  3. Where a depositary institution of overseas depositary receipts has been engaged by its principal to redeem the overseas depositary receipts and sell the stock, it may receive the proceeds thereof by way of account transfer (or remittance) through the deposit account maintained at the custodian institution.
  4. Where a principal places engages a securities investment consulting enterprise or a SITE to conduct discretionary securities trading, the principal may open and maintain a deposit account at the custodian institution, and the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such account. When processing trade settlement, it is prohibited to transfer payment funds or securities between separate discretionary investment accounts of the same principal.
  5. If a domestic bank or insurance company obtains a rating of twA- or higher from the Taiwan Ratings Corporation, or its rating by a credit rating institution approved or recognized by the Competent Authority meets or exceeds the qualification requirements of the Taiwan Ratings Corporation's twA- rating, its receipt and payment of purchase prices may be effected by account transfer (or remittance) during the period for which the aforementioned rating is valid.
  6. If government agencies conduct securities trading settlement through deposit accounts of such institutions in accordance with laws and regulations, the receipt and payment of the purchase prices may be effected by account transfer (or remittance) through such accounts.
  7. If a principal agrees to keep settlement money in dedicated accounts for settlement with a securities firm, an arrangement may be made with the securities firm to have the receipt and payment of the purchase prices be effected by account transfer (or remittance) through the principal's own deposit accounts.
84    (deleted)
85    A securities broker shall not accept any discretionary order to decide the type, volume, price or purchase or sale of securities on behalf of its principal.
    A securities broker shall not purchase or resell for its own profit any securities it has accepted an order to trade, or guarantee to share profits with its principals, or accept trading orders by installment payments.
    When recommending its principals or on website to buy or sell securities, a securities broker shall comply with the "Regulations Governing Securities Brokers' Practice on Recommending Principals to Buy and Sell Securities" as stipulated by the TWSE.
    The website provided by securities brokers shall show, in a conspicuous manner, the risk disclosure statement and the alternative to be adopted in case of inability to execute electronic transmission, and the most up-to-date information shall be transmitted. The securities brokers shall carefully select hyperlink websites, and shall be responsible for the supervision and administration of their associates' use of electronic mail, group electronic mail, bulletin board system, website, etc. in activities associated with business operations.
86    A securities broker shall keep all matters in which it is engaged by the principal in confidence and shall not disclose them to others; provided that the above shall not be applicable if the TWSE makes enquiries of the securities broker.
87    A securities broker that has made a mistake when executing a trade shall report the out-trade and/or correct the account number in accordance with the TWSE Directions for the Handling of Out-Trades and Correction of Account Numbers by Securities Brokers.
    A securities broker shall open a segregated error account in its own name, and shall assign it with an account number and fill its company profit seeking enterprise uniform invoice number therein, and said segregated error account shall be treated in the same manner as the account of its principals. All trades transacted through the said segregated error account shall be deemed as ordinary trades, for which securities transaction tax shall be paid. Gains and losses resulted from the said segregated error account shall be handled in accordance with the Principles Governing the Preparation of Financial Reports by Securities Firms.
88    Where a principal places an order to trade listed securities of a specified category whose volume is too large and it is believed that handling such trade as an ordinary trade would affect the normal market, the securities broker may in accordance with Article 74 report to the TWSE and consult with it about changing the method for execution of the order to price negotiation, auction, reverse auction, or other methods.
89    A securities broker and its branch offices shall not engage in the following activities:
  1. Offset purchase orders against sales orders for the same securities in whole or in part in private off-market trading.
  2. Engage in matched-order trading with another securities firm or firms outside the Exchange.
  3. Trade securities not listed by the TWSE, without the approval of the Competent Authority.
90    A securities broker may not violate brokerage contract when conducting brokerage trading. In the event that a securities broker breaches the brokerage contract, the principal may report the matter to the TWSE.
    Any claim by the principal against the clearing and settlement fund deposited with the TWSE by a securities broker that arises out of breach of contract by the securities broker in brokered market trades shall have the second highest priority after that of the TWSE.
    The principal may request the TWSE for payment from the clearing and settlement fund deposited with the TWSE by its contracted securities broker only if it has obtained the consent of the securities broker or a final adjudication of execution or of an arbitral award.
91    Where the principal fails to fulfill its settlement obligations on time, the principal is in default. In such an event, the securities broker shall report the default in accordance with the TWSE Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals , and shall simultaneously notify the principal.
    When the principal is an offshore overseas Chinese or foreign national, or a mainland area investor, and a report of delayed settlement has been filed in accordance with Article 82, paragraph 2, if settlement is not completed in accordance with provisions and it is not an out-trade, the principal is in default. The securities broker shall handle the matter pursuant to the provisions in the preceding paragraph.
    A securities broker which receives securities or consideration in accordance with paragraph 1 or paragraph 2 of this Article shall engage another securities broker to dispose of it on the Exchange no later than the first business day after the principal's default. Thereafter, the securities broker shall forthwith report to the TWSE and notify its principal in accordance with the Guidelines for Securities Brokers in Reporting Delayed Settlement and Default by Principals. However, those securities which belong to the same account and are of the same type and same volume may be offset against each other.
    Where the aggregate number of [shares represented by] the share certificates of securities received by a securities broker under paragraph 1 and paragraph 2 during the period of a single default reaches 5 percent or more of the number of shares of the underlying securities already issued, and furthermore reaches or exceeds the average daily volume of the underlying securities during the 20 trading days prior to reporting of the default, the securities broker may adopt either of the following measures to handle the default:
  1. If handling of the default cannot be completed through reverse transactions during the 3 consecutive business days from the day next following the date of confirmation of the default by the principal, the securities broker, by reaching a mutual agreement with the principal or by notice to the principal, may, depending on market conditions, in accordance with the content of the agreement or the notice, complete handling of the default through reverse transactions within 180 days, and report the agreement or notice to the TWSE via letter for recordation.
  2. The securities broker may reach an agreement with the principal setting a price(s) to serve as the basis for calculating profit/loss, and submit the written agreement reached between the parties to the TWSE via letter for recordation.
    Based on the report of a securities broker referred to in paragraph 1 or paragraph 2 of this Article, the TWSE will forthwith notify each securities broker, which shall act in accordance with paragraph 3 of Article 76 hereof.
    In the event that the principal suffers losses or there is any other dispute arising out of the notification sent by the TWSE to each securities broker based on the report by a securities broker, the securities broker reporting the default shall be fully responsible therefor.
    If a securities broker, for a reason not attributable to the broker, is unable in a timely manner to take measures pursuant to paragraphs 3 and 4, it shall prepare a handling record and keep it on file for inspection along with related documentary evidence.
91-1    Except under the circumstance prescribed in paragraph 2 below, if settlement is not completed on time for a discretionary investment account, the securities broker shall handle the matter in accordance with the provisions governing default by an ordinary principal.
    If settlement is not completed on time for a discretionary investment account because of non-performance by the authorized discretionary trader of obligations arising from trading exceeding the discretionary trader's authorization, such event shall be handled as follows:
  1. The securities broker shall carry out settlement on behalf of the principal and notify the principal. Not later than 6:00 p.m. of the business day next following the trade day, the securities broker shall prepare written report on relevant facts with seals of both the company and its responsible person fixed thereon, together with photocopy of the notice of unauthorized trading issued by the custodian institution, and related trade vouchers and brokerage contract (including documents submitted for account opening), and fax the aforesaid to the TWSE and notify the TWSE by telephone before forwarding original copy of the said documents to the TWSE for reporting to the Competent Authority. However, those that meet the requirements of Article 42, paragraph 5 of the Regulations Governing the Conduct of Discretionary Investment Business may substitute a notice of unauthorized trading issued by a party authorized to do so under the relevant contract or legal opinion for the notice of unauthorized trading issued by the custodian institution.
  2. In connection with the discretionary investment account, the securities broker shall immediately suspend acceptance of trading orders for securities. Other accounts in the name of the same principal shall not be affected by restrictions under paragraph 3 of Article 76.
  3. In connection with the securities or consideration received by a securities broker through settlement on behalf of the principal, the securities broker shall engage another securities broker to dispose of it on the Securities Exchange Market of the TWSE starting on the next business day after the required reporting has been made, provided that the securities in the same account, and of the same type and quantity may be offset against each other.
  4. Upon completion of the process prescribed in preceding subparagraph 3, the securities broker shall prepare written report on how the process has been handled, with the seals of both the company and its responsible person fixed thereon, together with photocopy of related trade vouchers, and forward the said documents to the TWSE for reporting to the Competent Authority.
    The TWSE shall promptly relay information reported per subparagraph 1 of paragraph 2 above to all securities brokers.
92    A securities broker accepting an order to trade securities shall immediately deliver to the principal the securities bought or the proceeds of the securities sold after it is transacted and settled and, in case it is not transacted, shall forthwith return to the principal the securities or funds received; provided that the securities broker may keep the settlement in funds in the settlement account of the securities firm subject to the consent of the customer, and shall comply with the TWSE Directions for the Creation of Customer Ledgers of Securities Firm Settlement Accounts.
    A securities broker delivering the securities or funds referred to in the preceding paragraph, unless otherwise provided, shall request the principal to sign and seal on relevant vouchers so as to complete the procedures. A power of attorney shall be required in the event that the principal appoints another person to sign and seal on its behalf.
93    Before the principal settles the debt arising out of the brokerage trade, a securities broker may retain the property received from the principal and the sum payable to the principal in connection with the brokerage trade.
    A securities broker shall prepare and send to each of its principals a monthly reconciliation statement; provided that the above shall not apply to case where there has not been any trade in that particular month and the principal does not request in writing for the statement.
    The format and particulars to be specified in the statement referred to in the preceding paragraph shall be in accordance with the regulations prescribed by the Competent Authority.
94    After a brokerage trade has been executed, the securities broker may collect a processing fee from the principal. The fee schedule shall be formulated by the TWSE and approved by the Competent Authority.
    A securities broker may at its sole discretion adopt a rate schedule, based on the customer transaction amount, for securities transactions fees that it collects, and may also adopt discounts and single-order minimum fees, and shall report such schedule, discounts, and fees to the TWSE for recordation through the One-Stop Window for Securities Firm Filings before implementation. After collecting transaction fees, a securities broker may settle accounts at regular intervals (e.g. monthly, weekly). Any amount refundable or deductible shall be transferred into the original customer's settlement account, and recorded in the customer's monthly reconciliation statement and the monthly accounting summary filed with the TWSE. If the fee adopted by a securities broker exceeds 0.1425 percent of the amount of a transaction, the securities broker shall notify the customer of this fact by an appropriate method before accepting the order, and retain a record of that notification, provided that offshore overseas Chinese and foreign nationals may be notified before settlement.
    A securities broker shall not pay, in whole or in part, any processing fee receivable by it to any introducing person related to the trading as their remuneration; provided, this restriction shall not apply to any of the following circumstances:
  1. where it is paid under a contract to a foreign financial institution that is registered and permitted by the competent authority of the local country to operate securities business.
  2. where, under a contract entered into for cross-selling, it is paid to a subsidiary of a financial holding company.
    The term "local country" in subparagraph 1 of the preceding paragraph shall be separately defined by the TWSE.
95    (deleted)
 
   Chapter VII Trading By Securities Dealers
96    A securities dealer shall not directly or indirectly accept orders from others to trade securities on the Exchange.
97    A securities dealer may subscribe stock or corporate bonds of a company. With the exception of such subscriptions, any proprietary trading of listed securities by a securities dealer shall be done on the Exchange only. Unless otherwise approved by the Competent Authority, a securities dealer shall not place orders with securities brokers to trade on its behalf.
98    (deleted)
99    A securities dealer that trades securities for purposes of meeting hedging needs in connection with call (put) warrant issuance or financial derivatives trading, or acting as a liquidity provider for call (put) warrants or ETF beneficial certificates, or subscribing to or redeeming ETF beneficial certificates, shall separately establish a segregated account for the trading quotes.
    When the TWSE has concerns that a securities dealer's trading of securities may impact normal market circumstances, the TWSE may file with the Competent Authority to limit its trading volume or price for a portion of, or all, securities.
100    (deleted)
 
   Chapter VIII Clearing And Settlement
101    The trading of securities transacted on the Exchange shall be cleared and centrally settled by the Clearing Division.
    The TWSE shall appoint the central securities depository to handle the receipt and delivery of securities in connection with the central settlement of securities trading referred to in the preceding paragraph.
    The clearing and settlement of securities transacted by the branch offices of a securities firm shall be consolidated by the head office and handled in accordance with the preceding two paragraphs.
102    A securities firm shall complete the clearing and settlement matters in accordance with the Operation Rules and relevant regulations.
    The associated persons of a securities firm in charge of the clearing and settlement shall carry the registration pass provided by the TWSE while handling centralized clearing and settlement at the Clearing Division of the TWSE or at the central securities depository.
103    The trading of securities on the Exchange that is transacted on the same business day shall be deemed as one clearing period.
    The portion of the transacted securities referred to in the immediately preceding paragraph that are to be centrally deposited and settled through book-entry shall be handled in accordance with the relevant provisions of the operation rules of the central securities depository.
    The portion of the securities referred to in the first paragraph of this Article that are transacted through margin purchases or short sales shall be handled by securities firms in accordance with the relevant provisions of the Operation Rules for Securities Firms Dealing with Margin Purchases and Short Sales of Securities and the Operation Rules for Securities Finance Enterprises Dealing with Margin Loans and Short Stocks.
    The clearing data in respect of margin purchases or short sales referred to in the immediately preceding paragraph that shall be compared with that of the securities finance enterprises shall be transmitted along with other clearing data to the computer system of the central securities depository after ascertaining that there is no error at comparison, and consolidated report shall be prepared and transmitted to the computer system of the TWSE. The deadline for completion of the transmission shall not be later than 9:00 p.m.
104    The TWSE shall handle centralized settlement of trading conducted on the Exchange in accordance with the principle of delivery versus payment.
    A securities firm shall bear the obligation to the TWSE to perform the settlement of trades that the securities firm conducts on the Exchange. The TWSE shall bear the obligation of counter-prestation settlement for trades employing multilateral net settlement.
    When handling trades employing multilateral net settlement, the TWSE shall carry out settlement with securities firms and securities finance enterprises after offsetting the amounts of securities and funds receivable and payable/deliverable.
    A securities firm or a securities finance enterprise shall perform in advance its obligation to deliver securities deliverable or funds payable. The TWSE may, until that obligation has been performed, retain the funds and securities receivable by the securities firm or securities finance enterprise.
    Securities firms and securities finance enterprises shall complete settlement procedures with the TWSE for the prices and securities payable and receivable for securities trades within the following time limits:
  1. Securities deliverable to the TWSE shall be delivered by 10 a.m. of the second business day following the trade date.
  2. Prices payable to the TWSE shall be paid by 11 a.m. of the second business day following the trade date.
  3. Securities receivable from the TWSE shall be received after 11 a.m. of the second business day following the trade date.
  4. Prices receivable from the TWSE shall be received after 11 a.m. of the second business day following the trade date.
    After completing the operations for the transfer of securities deliverable by the securities firms and securities finance enterprises, the central securities depository shall promptly notify the TWSE of the results.
105    (deleted)
106    (deleted)
107    (deleted)
108    (deleted)
109    If the balance of the securities on deposit in the custodial book-entry account of the securities firm representing the seller is insufficient for the performance of settlement obligations, the securities firm representing the seller may apply to borrow securities for settlement pursuant to the TWSE Securities Borrowing and Lending Rules, and shall by 11 a.m. pay the cash collateral required for securities borrowing. the securities firm representing the seller does not apply to borrow securities by 10 a.m. of the second business day following the trade date, and has not completed securities settlement, the TWSE shall by 11 a.m. borrow securities on its behalf.
    If the amount of securities borrowed is insufficient, the TWSE will fill out and forward a "Securities Delivery Voucher" to the central securities depository for the portion falling short for safekeeping on behalf of the securities firm representing the purchaser. The borrowing securities firm shall, by 10 a.m. of the following business day, deliver the securities in exchange for the return of the aforesaid "Securities Delivery Voucher" and the refund of the cash collateral required for securities borrowing.
    If the borrowing securities firm fails to deliver the cash collateral required for securities borrowing or to provide offsetting collateral by 11 a.m. of the borrowing date, the TWSE may tentatively retain a portion of the proceeds and/or securities equivalent in value to the settlement price payable for that settlement period.
    Lending auctions, negotiated lending, and reverse auction carried out to cover shortfalls experienced by securities finance enterprises in securities required for short sales shall be conducted in compliance with the TWSE Securities Lending and Borrowing Rules.
    The Securities Lending and Borrowing Rules will be separately adopted by the TWSE and submitted to the Competent Authority for approval and shall take effect after they are publicly announced.
110    (deleted)
111    If a securities firm or a securities finance enterprise fails to carry out settlement within the time frame specified in Article 104, paragraph 5, subparagraph 1 or 2, the TWSE shall impose a delay fine pursuant to Article 137. A securities firm that fails to pay cash collateral required for securities borrowing shall be deemed to have not completed the delivery obligation of the securities deliverable.
    If a securities firm or a securities finance enterprise fails to pay a price payable or to pay cash collateral required for securities borrowing (including any collateral shortfall the borrower is required to cover for renewal of securities borrowing) by the end of banking hours, it is a breach of settlement obligations.
112    A securities broker may not refuse to perform its obligations for settlement on grounds of the following matters:
  1. Default by the principal.
  2. Delayed settlement by the principal.
  3. Failure by the authorized discretionary trader for a discretionary investment account to perform on time obligations arising from a trade exceeding the scope of the discretionary trader's authorization.
  4. A shortfall in refinancing for a margin purchase or short sale.
113    Securities firms and securities finance enterprises may not default on their settlement obligations.
    Where any securities firm violates the preceding paragraph, in addition to the TWSE designating another securities firm to effect delivery on its behalf in accordance with Article 153 of the Securities and Exchange Act, the TWSE shall also retain the sum and securities receivable; provided that in respect of the sum and securities that have been actually paid and delivered, the defaulting securities firm may engage the designated securities firm to collect the retained sum and securities equivalent thereto before making computation of the offsetting in accordance with paragraph 3 hereof.
    The designated securities firm shall compute and offset the sum and securities that have not been paid and delivered at the respective due date by the defaulting securities firm against the retained sum and securities. The balance thereof shall, after being verified with the TWSE to be correct and beginning from the following business date, be cleared off through purchases or sales on the Exchange on behalf of the defaulting securities firm. In case it is unable to clear off through purchases or sales, the TWSE may notify the designated securities firm to clear it through auction, price negotiation, reverse auction, or other trading methods; provided, however, that, in case auction or reverse auction approach is adopted, it may be exempted from the restrictions on volume applied for, pricing, period of public announcement, and transacted volume as specified in relevant regulations.
    The base price for handling the clearing off in auction, price negotiation, reverse auction or other trading methods referred to in the preceding paragraph shall be determined by the TWSE based on the closing price for the most recent business day plus or minus 10 percent.
    The defaulting securities firm shall not raise any objection in respect of the base price determined pursuant to the preceding paragraph.
    The difference on pricing and all expenses incurred from handling the clearing off pursuant to paragraph 3 hereof shall be borne by the defaulting securities firm.
    In the event that securities finance enterprises violate their obligations for settlement, the TWSE shall report to the Competent Authority for actions on a case by case basis.
113-1    Where default by any principal causes a securities firm to default on its obligations for settlement and the securities firm has reported such to the TWSE, the TWSE may notify other securities firms to temporarily suspend delivery to the defaulting principal of securities receivable by it for settlement, and that the securities owned by the defaulting principal and placed in custody with the central securities depository shall not be withdrawn or delivered. After the money and securities of the defaulting securities firm or the defaulting principal have been balanced, the TWSE shall notify other securities firms to proceed with settlement, and remove the said restriction on securities withdrawal or delivery.
    The preceding paragraph shall apply to any principal whose connection with the defaulting principal has been verified by the TWSE on evidence from defaulting securities firm(s) and consultation with the securities firm(s) to which the TWSE has intended to notify the suspension of settlement.
    Upon receiving court order of attachment execution to suspend settlement for the defaulting principal, a securities firm shall immediately notify the TWSE.
114    In the event that there is any sum payable by a defaulting securities firm, the TWSE shall forthwith offset said sum against its clearing and settlement funds and other interests. the case of any deficit after offsetting, the TWSE shall seek indemnification from the defaulting securities firm.
115    (deleted)
116    In the event of war, natural disasters or the occurrence of other events of force majeure that causes the TWSE or the central securities depository to be unable, or with obvious difficulties, to process the clearing and central settlement, the TWSE may first decide to suspend clearing and the central settlement and then formulate the method for handling such event, which shall be submitted to the Competent Authority for its approval and to take effect after its approval.
117    (deleted)
 
   Chapter IX Clearing And Settlement Funds And Processing Fees
118    Securities firms shall deposit clearing and settlement fund with the TWSE in accordance with the regulations prescribed by the Competent Authority. The deposit into such fund shall be limited to cash only, and the method for management of such fund shall be separately prescribed.
119    A securities firm that terminate the market usage contract shall settle its trades on the Exchange of the TWSE, and shall further clear all accounts before applying with the TWSE for refund of the clearing and settlement fund.
120    The fee schedule of handling fees to be collected by the TWSE from the securities firms representing the purchaser and seller shall be formulated jointly by the TWSE and the Securities Dealers Association, and shall take effect after it is reported to and approved by the Competent Authority.
    Where the TWSE is engaged by a securities firm to handle any matters on its behalf in accordance with paragraph 2 of Article 5, the handling fee payable by such securities firm to the TWSE shall be formulated jointly by the TWSE and the Securities Dealers Association, and shall take effect after it is submitted to and approved by the Competent Authority.
121    The TWSE shall calculate the handling fees payable before the end of each month based on the trading volume engaged in by each securities firm for the then current month and the fee schedule referred to in the immediately preceding Article, and shall issue and forward an invoice to each securities firm. The securities firms shall make full payment before the 10th day of the following month.
 
   Chapter X Arbitration
122    Any dispute between a securities firm and its principal arising out of trading of securities may be settled by arbitration if the parties have so agreed. This shall apply to other disputes arising out of the brokerage contract.
    The agreement for arbitration referred to in the preceding paragraph may be specified in the brokerage contract between a securities firm and its principal, and shall be treated as an arbitration agreement referred to in the Arbitration Act.
123    A securities firm and its principal that proceed with arbitration in accordance with their agreements may apply with an arbitration institute for arbitration proceedings to be conducted by an arbitration court.
124    In the event that the parties in dispute fail to observe the provisions of this Chapter by applying for arbitration and instead directly institute legal action in court, the other party may petition the court for dismissal of the lawsuit in accordance with Article 167 of the Securities and Exchange Act.
125    (deleted)
126    (deleted)
127    (deleted)
128    (deleted)
129    (deleted)
130    (deleted)
131    (deleted)
132    (deleted)
132-1    Any dispute arising out of trading of securities between securities firms shall be settled by arbitration; provided that the TWSE may request the Securities Dealers Association to mediate the dispute before proceeding with the arbitration.
132-2    Any securities firm which is the party to the arbitration referred to in this Chapter shall notify the TWSE when arbitration is proceeding, and shall submit copies of the relevant documents to the TWSE.
132-3    The arbitration referred to in this Chapter, its procedures, the selection of arbitrators, and other proceedings shall be conducted in accordance with the Securities and Exchange Act and the Arbitration Act.
132-4    Where the parties in dispute which proceed with the arbitration require the TWSE to provide relevant information, they shall apply to an arbitration court for such materials from the TWSE.
133    Any dispute between securities firms and the TWSE arising out of the market usage contract shall be settled by arbitration, and the provisions of this Chapter shall apply mutatis mutandis.
134    (deleted)
 
   Chapter XI Penalities For Violations
135    Where any securities firm violates Article 13, Article 16, paragraph 2 of Article 21, Article 23, paragraph 1 or 6 of Article 25, paragraph 3 of Article 28-1, paragraph 1 of Article 29, Article 33, Article 40, Article 68, subparagraph 1, 2, 3, 6, 8, or 11 of Article 75, paragraph 1 of Article 75-1, paragraph 1 of Article 75-2, Article 75-7, Article 76, Article 77-9, Article 79-1, paragraph 2, or 3 of Article 80, Article 80-1, paragraph 4 of Article 82, paragraph 3 of Article 85, Article 87, paragraph 2 of Article 93 or Article 95 hereof, the TWSE may notify it to make correction or improvement within a prescribed time frame, or, in addition thereto, impose a breach penalty of not more than NT$100,000.
    Where any securities firm violates these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, announcements, and circular letters of the TWSE, unless otherwise provided, the TWSE may notify it to make correction or improvement within a prescribed time frame, or, in addition thereto, impose a breach penalty of not more than NT$100,000.
136    Where any securities firm violates paragraph 4 of Article 25, Article 26, paragraph 2 or paragraph 3 of Article 58, subparagraph 5 of paragraph 1 and paragraph 3 of Article 75, paragraph 2 of Article 75-1, paragraph 2 of Article 75-2, Article 77-4, paragraph 5 of Article 80, Article 81, paragraph 1, 2, or 3 of Article 82, Article 82-1, paragraph 2 of Article 83, paragraph 1, 2, 3, 5, or 6 of Article 91, paragraph 2 of Article 91-1, paragraph 2 of Article 92, paragraph 2 or 3 of Article 94, or Article 113-1, or fail to make correction or improvement within the time limit designated in accordance with the preceding article, the TWSE may warn them or impose a breach penalty of not more than NT$300,000, and notify it to make correction or improvement within a prescribed time limit.
137    If any securities firm violates Article 75-5, paragraph 2 herein or the provision regarding reporting deadline in Point 3(4) of the Taiwan Stock Exchange Corporation Operational Guidelines for Omnibus Trading Accounts, the TWSE may impose a fine of NT$30,000 if the delay is 1 hour or less, or an additional fine of NT$10,000 for each additional hour's delay.
    Where any securities firm fails to key-in within the prescribed time period the clearing data in respect of margin purchases or short sales in accordance with Article 103, the TWSE shall impose a fine of NT$30,000 if the delay is 1 hour or less, or an additional fine of NT$10,000 for each additional hour's delay.
    Where any securities firm violates Article 104, paragraph 5, subparagraphs 1 or 2, the TWSE shall impose a delay fine in accordance with the following criteria, provided that this rule shall not apply where the securities firm can provide evidence proving the delayed delivery of securities or proceeds is not attributable to any intent or negligence of the securities firm:
  1. Where the delay is 1 hour or less, a fine of NT$30,000 is imposed if the volume of shortfall in securities is 5,000 lots or less, or if the settlement price in the delayed payment is NT$50 million or less; a fine of NT$40,000 is imposed if the volume of shortfall is over 5000 lots, or the settlement price is over NT$50 million.
  2. Where the delay is over 1 hour, an additional fine of NT$10,000 is imposed for each additional hour's delay.
    Securities firms shall pay fines referred to in the preceding three paragraphs to the Finance Division of the TWSE within 2 days after receiving notification of the TWSE.
138    Where any securities firm commits any of the following acts, the TWSE may impose a penalty in an amount not more than NT$1 million:
  1. 1.violation of paragraph 5 of Article 25, paragraph 2 of Article 28, paragraph 2 of Article 28-1, Article 30, Article 37, Article 75, subparagraph 9, Article 77, paragraph 1 of Article 80 or Article 86.
  2. 2.failure to make correction or improvement within the time limit designated in accordance with Article 136.
  3. 3.failure to pay the fine within the time limit specified in paragraph 3 of Article 137.
  4. 4.having been warned twice in accordance with Article 136 within the most recent half year.
    Where a securities firm violates any provisions of other TWSE bylaws, rules, or the market usage contract, the TWSE may impose a penalty in an amount of NT$1 million or less, depending upon the seriousness of the matter.
    Where a securities firm violates the provision of any subparagraph of paragraph 1 and paragraph 2 for the second time within the most recent half year, the TWSE may impose a penalty in an amount of NT$2 million.
    Where any securities firm commits the offense specified in subparagraph 2 of paragraph 1, the TWSE shall send a second notice setting forth a time limit for its correction or improvement.
139    Where a securities firm commits any of the following acts, the TWSE may suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises for a period of not more than 3 months:
  1. failure to make correction within the time limit designated by the TWSE for its violation of Article 24.
  2. having been imposed the penalty in accordance with Article 138 for three times or more within the most recent half year.
  3. failure to pay the penalty in accordance with Article 138.
  4. failure to make correction or improvement within the time limit prescribed in accordance with paragraph 3 of Article 138.
140    Where any securities firm violates paragraph 1 or paragraph 3 of Article 28, paragraph 2 of Article 85, or Article 113, the TWSE may suspend trading by it for a period of not less than 3 months but not more than 6 months.
    Where any securities firm has been halted from trading two times in any one year for violation of the provisions of Article 113, or has failed to meet the deadline for payment prescribed in accordance with Article 114, the TWSE may terminate its market usage contract.
141    Where a securities firm commits any of the following acts, the TWSE may restrict or suspend the trading, in whole or in part, of its dealing or brokerage business or at its business premises or terminate the market usage contract:
  1. violation of Article 30 by making false statements or reports to the TWSE that result in damages to the TWSE or others.
  2. violation of Article 83, paragraph 1 by producing false records and vouchers.
  3. violation of Article 89 by offsetting outside the Exchange or transacting outside the Exchange or transacting securities that are not listed by the TWSE without the approval of the Competent Authority.
  4. violation of Article 75, subparagraph 5 or having any event set forth in Article 90, paragraph 1 or Article 94, paragraph 2 that seriously damages the rights and interests of the principal, which has been verified by the TWSE.
  5. violation of Article 83, paragraph 5 of, Article 96, or Article 97.
  6. a disposition under Article 142, paragraph 1, subparagraph 4, where corrections have not been made after 3 months.
  7. any events set forth in Article 3 of the Regulations Governing Special Inspection of and Guidance to Securities Firms as prescribed by the TWSE, and has not been able to improve after being subject to guidance for several times.
  8. failure to present relevant account books or certificates within a specified time limit, after being subject to a disposition under Article 142, paragraph 1, subparagraph 1.
142    Where a securities firm commits any of the following acts, the TWSE may temporarily halt trading, in whole or in part, of its dealing or brokerage business or its business premises and report to the Competent Authority:
  1. violation of Article 25, paragraph 2 by evading or refusing the inspection or the inquires of personnel sent by the TWSE.
  2. violation of the settlement obligation specified in Article 113, paragraph 1.
  3. its net worth is less than one-half of its paid-in capital referred to in Article 28-1, paragraph 2 for 6 consecutive months.
  4. regulatory capital adequacy ratio lower than 50 percent, where corrections have not been made after 3 months.
  5. violation of the provisions of these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE to such an extent that it is likely to affect the trading, clearing, and settlement of trades on the securities market.
    The TWSE may resume its trading status if the cause of the circumstance under subparagraph 1, 3, 4, or 5 of the preceding paragraph ceases to exist.
    Where trading by any securities firm halted by the TWSE in accordance with paragraph 1, subparagraph 2, the number of days for which its trading is halted may be used to offset against the number of days for which its trading shall be suspended pursuant to Article 140, paragraph 1.
143    Where it is discovered by the TWSE that any securities firm is suspected to have violated Article 5, paragraph 2, Article 27, Article 78, Article 85, paragraph 1, or other relevant provisions of the Securities and Exchange Act, the matter shall be reported to the Competent Authority for its disposition.
    Where any securities firm or securities underwriter is suspected to have violated the provisions of Article 5, paragraph 2, the matter shall be dealt with by the TWSE in accordance with relevant regulations and shall be reported to the Competent Authority for its recordation.
    The TWSE shall, pursuant to the resolutions adopted by the Special Management Committee formed in accordance with the Regulations for Management of Clearing and Settlement Fund under Joint Responsibility System, reduce the trading volume of securities by a securities firm for its own account or on the account of its principals, or restrict or halt its trading, and shall report the matter to the Competent Authority.
    The TWSE may, on the grounds of a disposition by the GreTai Securities Market to halt or suspend trading by a securities firm, render an appropriate disposition with respect to the same securities firm, and submit it for recordation by the Competent Authority and post-approval by the TWSE's board of directors.
144    Where any employee of a securities firm violates these Operating Rules, the Regulations Governing Brokerage Contracts, or other bylaws, rules, regulations, public announcements, or circular letters of the TWSE, the TWSE may, depending upon the severity of the violation, notify the securities firm to give warning to its employee, or to halt him from executing business activities for 1 to 6 months.
145     Any disposition pursuant to Article 136 or 138 of this Chapter shall be submitted to the competent authority for review and recordation.
    Any disposition restricting or suspending trading pursuant to Article 139, Article 140, or Article 141 of this Chapter shall be submitted to the Board of the Directors of the TWSE for resolution and then submitted to the Competent Authority for review and recordation.
    Any disposition of termination of the market usage contract pursuant to Article 141 of this Chapter shall be submitted to the Board of the Directors of the TWSE for resolution and then submitted to the Competent Authority for approval.
145-1    Any disposition taken pursuant to this Chapter shall be effective upon delivering the notice to the securities firms concerned.
 
   Chapter XII Supplemental Provisions
146    These Rules shall come into force after they are reported to and approved by the Competent Authority and publicly announced.
    The amendments to these Operating Rules shall come into force from the date of their public announcement, with the exception of the amendment to Article 76, paragraph 1, subparagraph 4 announced on 20 August 2009, which shall come into force from 23 November 2009.