Chapter I General Provisions
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| Article 1 | These Criteria are prescribed in accordance with Article 140 of the Securities and Exchange Act. |
| Article 2 | For securities issued or supplementarily issued pursuant to the screening procedures of the Securities and Exchange Act, the issuer, applying with Taiwan Stock Exchange Corporation ("this Corporation") for listing thereof in accordance with Article 139 of the Securities and Exchange Act, shall submit a relevant application for the listing of securities, specifying therein the particulars as required and attaching thereto the necessary supporting documents. This Corporation will examine the application in accordance with these Rules and the Implementing Procedures for Examination of the Listing of Securities.
In case the issuer and its securities underwriter have any of the following events, this Corporation will refuse to accept the due diligence report issued by the said underwriter, and will disagree to the listing of its securities:
1. Where each of the issuer and its securities underwriter has issued a due diligence report in respect of the initial listing or trading on the over-the-counter market of each other's securities.
2. Where there exists any of the events set forth in Article 26 of the Regulations Governing the Securities Firms.
3. Where the issuer and its securities underwriter are enterprises within the same group; provided, Article 6, paragraph 2, subparagraph 2 of the Supplementary Provisions to these Criteria shall not apply under the circumstances set out in the proviso to Article 26, paragraph 1, subparagraph 6 of the Rules Governing Securities Firms.
The application and the Implementing Procedures for Examination of the Listing of Securities referred to in Paragraph 1 hereof will be formulated by this Corporation, and will take effect after they have been approved by and recorded with the Competent Authority. |
| Article 3 | Where the listing of securities is approved, this Corporation shall enter into an Agreement for Listing with the entity which issues the securities and shall submit the Agreement for Listing to the Competent Authority in accordance with Article 141 of the Securities and Exchange Act. |
Chapter II The Listing of Domestic Securities
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Section 1 The Listing of Stock
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| Article 4 | Where an issuing company applying for the listing of its stock meets the criteria listed below, this Corporation will agree to list its stock:
1. Duration of corporate existence: It shall have been incorporated and registered under the Company Act for at least five years at the time of the application for listing; provided, this restriction shall not apply to public enterprises or to privatized public enterprises.
2. Amount of capital stock: The amount of its paid-in capital shall be NT$600 million or more at the time when it applies for listing.
3. Profitability: The operating profit and before-tax net profit in its own financial statements and the consolidated financial statements prepared in accordance with the Statements of Financial Accounting Standards No. 7 meet one of the following criteria, and it does not have any accumulated loss in the most recent fiscal year:
(1) Each of the operating profit and before-tax net profit for the most recent two fiscal years represents 6 percent or greater of the amount of paid-in capital in its final accounts, or the average operating profit and before-tax net profit for the most recent two (2) fiscal years represent 6 percent or greater [of the amount of paid-in capital in its final accounts] and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year; or
(2) Each of the operating profit and before-tax net profit for the most recent five (5) years represents 3 percent or greater of the amount of paid-in capital in its final accounts.
4. Dispersion of shareholdings: The number of holders of registered share certificates shall be 1,000 or more. Among them, the number of shareholders of a company limited by shares holding 1,000 shares to 50,000 shares shall not be less than 500, and the total number of shares they hold shall be 20 percent or greater of the total issued shares, or at least 10 million.
For the profitability in the consolidated financial statements referred to in Item 3 of the preceding paragraph, the influence of net profit (loss) of minority equity on it shall not be taken into account. |
| Article 5 | Where the central authority in charge of the enterprise concerned has issued an unequivocal opinion certifying that the issuing company applying for the listing of its stock is a technology-based enterprise and the said issuing company meets the criteria listed below, this Corporation will agree to list its stock:
1. Its paid-in capital is NT$300 million or more at the time when it applies for listing.
2. It has successfully developed a product or a technology with market potential, and the company has obtained an appraisal opinion from the central authority in charge of the enterprise concerned.
3. It is recommended in writing by the securities underwriter.
4. Each of its projected net worth in the financial forecast of the fiscal year in which it applies for listing and its net worth in its most recent financial report and the financial report for the most recent fiscal year represents two-thirds or greater of the amount of its paid-in capital.
5. The number of holders of registered share certificates shall be 1,000 or more. Among them, the number of shareholders holding 1,000 shares to 50,000 shares shall not be less than 500. |
| Article 6 | Where the issuing company applying for the listing of its stock is an important enterprise involved in national economic reconstruction projects which has been recognized and certified in writing by the authority in charge of the enterprise concerned and meets the following requirements, this Corporation will agree to list its stock:
1. It is incorporated under the encouragement of the government, and 50 percent or greater of the total number of its issued and outstanding shares as of the date of its application is held jointly by the Central Government or by the local autonomy organization(s) at the level of province (or municipality under direct jurisdiction of Executive Yuan) designated by the Central Government and the juristic person(s) with 50 percent or greater of its capital fund is contributed by the Central Government or the local autonomy organization(s) designated by the Central Government.
2. Its paid-in capital is NT$1 billion or more at the time when it applies for listing.
3. The dispersion of shareholdings meets the criteria set forth in Item 4, Article 4 of these Criteria. |
| Article 6-1 | Where the issuing company applying for the listing of its stock is a private enterprise participating in major national public construction projects under encouragement of the government, where it has acquired the concession agreement for investment, construction, and operation approved by the Central Government, municipality under direct jurisdiction of the Executive Yuan, and the local autonomy organization(s) or the juristic person(s) with 50 percent or greater of its capital fund contributed by the Central Government, municipality under direct jurisdiction of Executive Yuan, or the local autonomy organization(s) and the certification issued by the said agency(ies), and where it meets the following requirements, this Corporation will agree to list its stock:
1. The company is newly established for procurement of the concession agreement and its business items have been approved by the central authority in charge of the enterprise concerned.
2. Its paid in capital is NT$5 billion or more at the time when it applies for listing.
3. The total cost expected to be injected in the construction project at the time when the concession agreement is procured is NT$20 billion or more.
4. The remaining term of the concession agreement is 20 years or more at the time when it applies for listing.
5. Its directors, supervisors, shareholders holding 5 percent or more of its total issued and outstanding shares, or its shareholders or operators who make equity investment in the form of technical know-how and hold 0.5 percent or more of its total issued and outstanding shares or 100,000 shares or more shall have the technical capability, financial means, and other necessary abilities as required for the completion of the concession agreement, and a certification issued by the agency approving the concession agreement has been obtained.
6. The dispersion of shareholding meets the criteria set forth in Item 4, Article 4 of these Criteria. |
| Article 7 | The fact that the company applying for listing meets the criteria set forth in Items 2 and 3 of Paragraph 1 of Article 4 and Item 4 of Article 5 of these Criteria shall be substantiated by the financial statements or financial forecasts which have been duly audited and certified or reviewed by two or more certified public accountants of an accounting firm; provided that for a stated-owned enterprise, the financial statements (in the form of two-year comparison table) for the most recent year shall be audited and certified by certified public accountants, and if in the other year, the securities have not been publicly issued, the financial statements audited by the auditing agency may be used instead.
The amount of capital referred to in Item 1 of Article 5 and Item 2 of Article 6 of these Criteria shall be the amount shown on the certifying documents following registration (or amendment registration). |
| Article 8 | Where an issuing company merely applies with this Corporation for listing its common stock or various preferred stock, the amount of paid-in capital required under Articles 4, 5 and 6 hereof shall be calculated on the basis of the total par value of all shares to be listed. In respect of the dispersion of shareholdings, the number of registered shareholders and the ratio between the number of shares held by them and the total number of issued and outstanding shares shall be computed and determined in accordance with the respective type of the stock to be listed.
Where an issuing company applies for listing its common stock along with various preferred stock, the total amount of the par value of the common stock to be listed shall be NT$600 million or more, and various preferred stock to be listed shall be NT$300 million or more. Each type of the stock to be listed shall meet the criteria governing the dispersion of shareholding. |
| Article 9 | Notwithstanding the fact that an issuing company applying for the listing of its stock meets the listing criteria set forth in these Criteria, this Corporation may disagree to its listing if the issuing company has any of the events listed below, except for any of those in Subparagraphs 10, 12, or 13 under which this Corporation shall disagree to its listing, and is deemed by this Corporation to be inappropriate for listing:
1. It has any of the events set forth in Items 1 and 2, Paragraph 1 of Article 156 of the Securities and Exchange Act, or has made misrepresentation or false statement or conducted unlawful activities that may affect the price of its securities after listing thereof, and will cause fear that the market order may be affected or the public interests may be harmed.
2. It has merged other company for less than one full fiscal year; provided that the above shall not be applicable if prior to the merger the profitability of the surviving company and that of the merged company meet the listing criteria.
3. Its financial or business affairs are not independent from other person(s).
4. It has had any major labor dispute or environmental pollution that will certainly affect its normal financial and business operations, and has not improved it.
5. It has been discovered any major abnormal transaction and has not improved it.
6. After the capital increased through the issuance of new shares which has been effected and is being effected in the year in which it applies for listing is included in the amount of paid-in capital in its final account for the respective year, it does not meet the listing criteria .
7. It has borrowed from non-financial institution without interest or with interest rate lower than the normal interest rate and, after recalculating the interest expenses according to the normal rate, it does not meet the listing criteria.
8. It has failed to effectively implement its written accounting systems, internal compliance systems, internal audit systems, or has failed to prepare financial reports in accordance with laws and regulations and generally accepted accounting principles, and the event of this failure is considered as material.
9. There has been major deterioration in its business operation.
10. Where the company applying for listing conducted any activities in violation of the principle of good faith in the most recent five years, or where its directors, supervisors, general manager or de facto responsible person violated the same principle in the most recent three years.
11. Where the directors, supervisors and shareholders who hold 10 percent or greater of its total issued and outstanding shares have transferred a large number of shares in the year in which it applies for listing and in the most recent fiscal year.
12. Where the company applying for listing has less than five members on its board of directors, or less than 2 independent directors; less than three supervisors, or less than one independent supervisor; or where within the past year the board of directors or supervisor(s) have been unable to independently exercise their functions. Additionally, the elected independent directors and independent supervisor(s) shall be confined to persons other than juristic persons or representatives thereof set forth in Article 27 of the Company Act, and at least one of each shall be a professional in accounting or finance.
13. Where the Company applying for listing has been registered for trading as an emerging stock on the OTC market in the fiscal year of the listing application and the most recent fiscal year thereto, and there has been, from the OTC registration date onward, any trading of stock issued by the applicant company by any incumbent director, supervisor, or shareholder holding 10 percent or greater of its total issued and outstanding shares other than on the emerging stock market; provided, this restriction shall not apply where such trading is for purposes of underwriting under Article 11 of these Criteria or for other legitimate reason.
14. Where the listing is considered by this Corporation as inappropriate due to its scope of business, nature or special circumstances.
Items 3, 11 and 12 of the immediately preceding paragraph shall not apply to companies applying for listing which are government-owned enterprises.
The ending date of the applicable periods referred to in various Items of Paragraph 1 of this Article shall be the day immediately before the date on which the letter approving its Agreement for Listing is issued by the Competent Authority. |
| Article 10 | An application for initial listing of stock filed by an issuing company shall not be approved unless and until share certificates representing at least 50 percent of the number of shares held by each of the following persons of the issuing company specified in the application for listing (with the total number of such shares being not less than the ratio specified in Paragraph 2 of this Article), along with the remaining share certificates representing all other shares after deducting those required for public offering, have been placed in centralized custody with a centralized securities depository enterprise incorporated with the approval of the Competent Authority; provided however, that if the total number of shares held by directors and supervisors is less than the total number thereof held by them at the time when they were elected as directors and supervisors, then the total number of shares at the time when they were elected shall be the basis for counting the number of shares under this Article. If the number of shares represented by share certificates placed in centralized custody pursuant to the above is less than the ratio specifies in Paragraph 2 of this Article, the shortage shall be made up by other shareholders:
1. Where the application for listing is filed in accordance with the provisions of Article 4 or Article 6 of these Criteria, its directors, supervisors and the shareholders holding 10 percent or greater of the total number of issued and outstanding shares of the issuing company.
2. Where the application for listing is filed in accordance with the provisions of Article 5 of these Criteria or where the applicant is an information software enterprise, its directors, supervisors, shareholders holding 5 percent or greater of the total number of issued and outstanding shares, and/or shareholders whose equity investment is made in the form of patent rights or technical know-how, and who are working for the issuing company and hold 0.5 percent or greater of the total number of shares or 100,000 or more shares as of the date on which the application for listing is filed. However, this restriction shall not apply where shareholding of a recommending securities firm during the period of registration as emerging stock exceeds 5 percent of the total issued shares of said issuing company as a result of subscription or trading of operating securities during the emerging stock trading period.
The total number of shares with respect to the share certificates to be placed in centralized custody by the issuing company under the preceding paragraph refers to the total number of issued and outstanding shares calculated as the aggregate of shares of common stock that have already been publicly offered and issued or privately placed and shares of common stock subscribable or convertible through preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, and convertible corporate bonds that have already been publicly offered and issued or privately placed; the total ratio of share certificates to be placed in centralized custody by the issuing company shall be calculated as set forth below, provided, the number of shares to be placed in centralized custody by the issuing company shall not exceed a maximum of 50 percent of its original total number of issued and outstanding shares, and share certificates placed in centralized custody shall be confined to share certificates of publicly offered and issued common stock:
1. Where the total number of issued and outstanding shares is 30 million or less, share certificates representing 30 percent thereof shall be placed in depository; provided, where the shares are new shares issued by the issuing company for cash capital increase that, less the number of shares reserved to be made available for purchase by company employees under applicable regulations, were publicly sold in full prior to listing, this may discretionarily be reduced to “25 percent thereof shall be placed in custody.”
2. Where the total number of issued and outstanding shares is more than 30 million but 100 million or less, share certificates representing 20 percent of the portion of shares in excess of 30 million shares shall be placed in centralized custody in addition to those required under the preceding item.
3. Where the total number of issued and outstanding shares is more than 100 million but 200 million or less, share certificates representing 10 percent of the portion of shares in excess of 100 million shall be placed in centralized custody in addition to those required under the preceding item.
4. Where the total number of issued and outstanding shares is more than 200 million, share certificates representing 5 percent of the portion of shares in excess of 200 million shall be placed in centralized custody in addition to those required under the preceding item.
Among the share certificates placed in centralized custody by the directors, supervisors and shareholders pursuant to the provisions of Paragraph 1 of this Article, one-fifth of the portion thereof comprising not less than 50 percent of the shares held by the respective person with the total number of shares being not less than the ratio specified in Paragraph 2 of this Article may be taken back only after the lapse of two full years from the listing date thereof; thereafter, one-fifth thereof may be taken back once every six months. The share certificates other than those referred to in the preceding sentence and those for public offering may be taken back after the lapse of one full year from the listing date thereof. However, for an issuing company that applies for listing under the provisions of Article 4, where the total number of its shares required to be placed in centralized custody for two years and in centralized custody for one year is confirmed to exceed 50 percent of the issued shares of the
issuing company, and the issuing company has paid-in capital of at least NT$30 billion, if the portion of the number of shares required to be placed in centralized custody exceeding the above-stated 50 percent of issued shares has been pledged to a financial institution by the director, supervisor, or shareholder of the issuing company who holds the shares for purposes of guaranteeing financing for the company or for him/herself, evidentiary documents furnished by the financial institution may be substituted for shares required to be placed in centralized custody for one year; provided, if the pledge is released during the custody period, the director, supervisor, or major shareholder shall deposit the same amount of shares into centralized custody; or, if the subject of the pledge is disposed by the financial institution, the issuing company shall contact other directors, supervisors, or major shareholders to deposit the same amount of shares into centralized custody.
Directors, supervisors, and shareholders shall not rescind the custodial agreement during the term thereof. Share certificates and vouchers evidencing that share certificates are placed in centralized custody shall not be transferred or pledged. The validity of centralized custody shall not be affected by a change of the identity of the holders of share certificates in centralized custody; provided that, however, if the holder's identity changes during the custody period and if the holder has negotiated with the directors and/or supervisors taking office at the time of initial public offering to make up the same number of shares for placing in centralized custody, he may take back the same number of shares without being subject to the said restrictions.
The provisions of Paragraph 1 of this Article shall not apply to directors, supervisors and shareholders of government authorities, government-owned enterprises, or which have obtained an approval from the authority in charge of the enterprise concerned for the sale of the shares held by them and have been determined to be inappropriate to place such share certificates in centralized custody.
The total ratio of share certificates to be placed in centralized custody as specified in Paragraph 2 of this Article shall not apply to government-owned enterprises.
When the directors and supervisors of an issuing company referred to in Paragraph 3 above take back their share certificates placed in centralized custody after lapse of the centralized custody period, if such taking back causes the total shares placed in centralized custody by all the directors and supervisors to become less than the ratio of total shareholding under the "Regulations Governing the Shares Ownership Ratio of the Directors and Supervisors of Public companies and Examination and Enforcement Thereof" (hereinafter referred to as the "Shareholding Ratio"), the directors and supervisors may only take back the portion in excess of the Shareholding Ratio. The remaining shares shall continue to be placed incentralized custody. If re-election of directors and supervisors occurs during the centralized custody period, the portion of the shares of all re-elected directors and supervisors meeting the Shareholding Ratio shall continue to be placed in centralized custody. This provision shall also apply
after lapse of the centralized custody period. |
| Article 10-1 | An application for initial listing of stock filed by an issuing company in accordance with Article 6-1 shall not be approved unless and until its directors, supervisors, shareholders holding 5 percent or more of the total issued and outstanding shares, and the shareholders whose equity investment is made in the form of technical know-how and who hold 0.5 percent or more of the total number of issued and outstanding shares or 100,000 shares or more have placed all of their shares specified in the application for listing, less the shares required for public offering, and representing at least 50 percent of the total number of issued and outstanding shares of the company, with a centralized securities depository enterprise incorporated with the approval of the Competent Authority; provided however, that if the total number of shares held by directors and supervisors is less than the total number of shares held by them at the time when they were elected as directors and supervisors, then the total number of
shares at the time when they were elected shall be the basis for counting the number of shares under this Article. If the number of shares represented by share certificates placed in custody pursuant to the above is less than 50 percent of the total issued and outstanding shares, the shortage shall be made up by other shareholders.
Among the share certificates placed in custody under the preceding paragraph, one-fifth of the portion thereof may be taken back only after the lapse of four full years from the listing date thereof; thereafter, one-fifth thereof may be taken back once every six months. If after lapse of the said period, the project constructed by the company has not been fully completed and the operation has not commenced, the custody period may be extended until the project is fully completed and the operation commences; provided, however, that if partial operation has commenced before the project is fully completed, the custody period shall be extended until the company's annual financial report shows an operating profit and before-tax net profit. The custody agreement shall not be terminated during the term thereof. Share certificates and vouchers evidencing that share certificates are placed in custody shall not be transferred or pledged. The validity of custody shall not be affected by any change of the identity of the holders of share certificates in custody.
Upon application for listing, the issuing company shall commit that if during the custody period it issues new shares for capital increase by cash, its shareholders who have placed their share certificates in custody at the time of listing shall place in custody additional 50 percent of the shares subscribed by or distributed to them. The provision of Paragraph 2 above shall apply mutatis mutandis to the custody and taking back of such share certificates.
The provisions of Paragraph 1 shall not apply where, during the period in which an issuing company applying for initial listing of its stock is registered as an emerging stock company, shareholding of its recommending securities firm exceeds 5 percent of the total issued shares of said issuing company as a result of subscription or trading of operating securities during the emerging stock trading period. |
| Article 11 | Where an issuing company applies for initial listing of its common stock or various preferred stock, it shall allocate in accordance with the stipulations of this Corporation certain percentage of shares and retain a securities underwriter to offer such shares to the public before the shares are listed. Except for the shares of a securities firm, it shall be specified in the underwriting agreement that a certain proportion of the shares to be offered to the public shall be reserved for subscription by the securities underwriter, and the said proportion shall be not less than 10 percent and not more than 25 percent of the total number of underwritten shares; provided that the above requirement shall not be applicable if the issuing company has issued new shares during the period between six months before the day on which it applies for listing and the day on which its stocks are listed, and has allocated in accordance with the stipulations of these Criteria certain percentage of shares to be listed for
public offering, and if the shareholdings have been dispersed in compliance with the criteria set forth in these Criteria.
An issuing company which applies for the listing of its stock pursuant to Article 5 of these Criteria shall retain a securities underwriter to sell its stock on a firm commitment basis, and shall specify in the underwriting agreement in accordance with Paragraph 2 of Article 71 of the Securities and Exchange Act that the securities underwriter shall reserve for its own account 50 percent of the shares to be offered to the public.
The provisions in the preceding two paragraphs regarding subscription by the securities underwriter shall not apply to state-owned applicant company.
The total number of shares to be allocated by the issuing company for public sale under paragraph 1 refers to the total number of issued and outstanding shares calculated as the aggregate of shares of common stock that have already been publicly offered and issued or privately placed and shares of common stock subscribable or convertible through preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, and convertible corporate bonds that have already been publicly offered and issued or privately placed; provided, share certificates allocated for public sale shall be confined to share certificates of publicly offered and issued common stock. |
| Article 12 | An issuing company applying for the listing of its stock shall, after its Agreement for Listing has been approved by the Competent Authority and after it has been notified thereof by a letter of this Corporation, offer its stock to the public in accordance with the provisions of the preceding article. In case the stock applied for listing have not been listed within three months after the date of the aforesaid notice given by this Corporation, this Corporation shall after obtaining an approval from the Competent Authority cancel the said Agreement for Listing. However, if an application for extension is filed by the issuing company with adequate cause, the said deadline may be extended for three (3) additional months after such application has been approved by this Corporation and subsequently recorded with the Competent Authority; provided that such extension shall be limited to one only. |
| Article 12-1 | An issuing company that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the company intends to apply for listed trading of the securities, it may file such application only after first completing public issuance examination and approval procedures with the Competent Authority.
A listed company may not list its privately placed securities during the period of restriction of transfer as set forth in Article 43-8 of the Securities and Exchange Act; it also may not list common shares created by the exercise of conversion rights or subscription rights. If, once the period of restriction of transfer has elapsed, the company intends to apply for listed trading of the securities, it may file such application only after first completing public issuance examination and approval procedures with the Competent Authority. However, it may be exempted from the requirement of carrying out public offering prior to listing under Article 11.
Where the Competent Authority has restricted the listed trading of securities issued by a listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer has elapsed. |
| Article 13 | In case an issuing company whose stock has been de-listed and traded on the over-the-counter market files an application again for the listing of its stock, this Corporation will agree to the listing after having reviewed and confirmed that it no longer has the events based on which the stock were de-listed and that the listing criteria set forth in Articles 4, 5 or 6 hereof are met. Under such circumstances, the provisions of Articles 9 and 11 of these Criteria shall not be applicable. |
| Article 14 | Where a listed company issues new shares that are of the same type of stocks as those which has already been listed and applies for listing the new shares, such new shares may be listed in accordance with the provisions of Paragraph 2 of Article 139 of the Securities and Exchange Act, and any certificates carrying right to convert bonds into stock issued by the said listed company may also be listed on the exchange of this Corporation in accordance with the said provisions of the Securities and Exchange Act.
Where a listed company issues new shares that are not of the same type of stocks as those which have already been listed and applies for listing of the new shares, this Corporation may agree to list the new shares if the total par value of the shares under application for listing is NT$300 million or more and the said company allocates in accordance with Paragraph 1 of Article 11 of these Criteria a certain percentage of the shares and retains a securities underwriter to offer the shares to the public before they are listed. The issuing company may specify in the underwriting agreement that the securities underwriter reserves for its own account a certain proportion of the shares (except for the shares of a securities firm) to be offered to the public. Such proportion shall be not more than 15 percent of the total underwritten shares, and the issuing company shall comply with the shareholding dispersion standards in Article 4, Paragraph 1, Subparagraph 4 of these Criteria. Provided, this Corporation may
disagree to the listing in any of the following events:
1. Its before-tax net profit for the most recent two years is in a negative figure.
2. At the time of approving the issuance of new shares, the Competent Authority deemed it inappropriate to offer the new shares to the public at market price, and the causes therefor have not been extinguished.
3. The most recent application for public offering and issuance of securities was returned or disapproved by the Competent Authority, and the causes therefor were material and have not been improved.
4. The securities previously issued by the company were restricted from listing for causes under Paragraph 1 of Article 156 of the Securities and Exchange Act, and such causes have not be extinguished, or any event under Paragraph 1 of Article 156 of the Securities and Exchange Act has occurred.
5. There exists other events that are deemed by this Corporation as inappropriate for listing.
A listed company applying for listing of shares issued by it that are not of the same type of stock as those already listed and that are redeemable for cash upon maturity shall comply with the provisions of the preceding paragraph; however, the shareholding dispersion standards in Article 4, Paragraph 1, Subparagraph 4 of these Criteria shall not apply.
A listed company shall promptly report to this Corporation, by submitting a Listed Securities Report Form, any common shares created through the exercise of conversion rights or subscription rights under any preferred shares with warrants, convertible preferred shares, corporate bonds with warrants, and convertible corporate bonds offered and issued by it, and may be exempted from the requirement of public offering under Article 11. Provided, if such offered and issued preferred shares are prohibited from listing under the proviso to paragraph 2 of this Article, common shares created through the exercise of conversion rights or subscription rights thereunder shall also be prohibited from listing. |
Section 2 The Listing of Special Business Enterprises or Companies Having Special Type of Orga
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| Article 15 | In addition to complying with the relevant provisions of these Criteria, securities, financial and insurance enterprises applying for listing their stock shall first obtain a letter of consent from the authority in charge of the enterprises concerned, before this Corporation will accept their applications.
Aside from complying with the relevant provisions of these Criteria, a securities company applying for listing its stock shall have contemporaneously engaged in securities underwriting, buying and selling for its own account and such activities as commission agent or intermediary for at least five full fiscal years. |
| Article 16 | Where an issuing company other than a government-owned enterprise applies for the listing of its stock and, in any of the most recent two fiscal years, its operating income derived from construction business represents 20 percent or greater of its total operating income, or its gross profit derived from construction business represents 20 percent or greater of its gross profit, or its operating income or gross profit derived from construction business is more than the operating income or gross profit derived from other items of its business activities, it shall in addition to complying with the relevant provisions of these Criteria, meet the following conditions:
1. There shall have been eight full fiscal years since its incorporation.
2. The amount of its paid-in capital shall be NT$600 million or more at the time when it applies for listing.
3. The net worth before distribution of earnings shown in its financial forecast for the fiscal year in which application for listing is filed and in the most recent financial report and for the most recent fiscal year shall exceed one-third of the total value of its assets.
4. The total value of house units and land to be sold, and leased assets (minus net worth of accumulated depreciation) shown in its financial forecast for the fiscal year in which application for listing is filed and in the most recent financial report and for the most recent fiscal year shall not exceed 70 percent of its net value; provided that if the company has obtained the use license for less than one year, such portion may be exempt from including in the calculation of the house units and land to be sold.
5. Its operating profit and before-tax net profit for each of the most recent three fiscal years shall be in positive figures, and it does not have accumulated loss in the most recent three fiscal years.
6. Where all income accounts are accounted based on the percentage completion method, the full completion method shall be adopted; where a portion of income accounts are accounted based on the percentage completion method, the full completion method and the percentage completion method, as the case may be, shall be adopted. In case the full completion method is used in declaring the income accounts, the profit and loss statements for the most recent three fiscal years shall have been prepared based on the percentage completion method and shall have been reviewed by certified public accountants and evaluated by the securities underwriter by comparing with the original profit and loss statements; and both of the auditor's report and the underwriter's evaluation report confirm that its profitability meets the listing criteria.
7. Where its profitability remains in compliance with the criteria for listing of its stock after the profit derived from each project as prescribed below is deducted according to the calculation of certified public accountants:
(1). Purchase or sale of completed or uncompleted construction projects by others (referring to those for which invested construction cost have exceeded 40 percent of total construction cost).
(2). Purchase or sale of bare-land or house units already built.
(3). Acquisition and subsequent sale of either land or house originally held by the opposite party/parties as co-contractor.
(4). Sale of house or land to related party. |
| Article 17 | Where the issuing company referred to in the immediately preceding article, other than a government-owned enterprise, contracted with construction companies with the total contract sum in excess of NT$200 million in each of the most recent two fiscal years or where the contract sum is less than NT$200 million, the construction companies are the related persons of the issuing company, then in each of the said two fiscal years the following provisions shall be complied with:
1. Each of the said construction companies shall be a Class A construction firm; its financial statements and gross profit gained from each individual project in the most recent two fiscal years shall have been jointly audited and certified by two certified public accountants of an accounting firm.
2. The gross profit for each individual project of the issuing company and construction companies in the most recent two fiscal years does not show abnormal circumstances.
3. The contracting process, pricing strategy and payment terms have been evaluated by a professional institution as reasonable.
4. The construction companies did not in the most recent two years materially violated any relevant building and construction laws and regulations, nor did the construction companies materially breach the construction contracts with development companies in the most recent two years.
5. It does not have unusual or abnormal fund transmission with the construction companies.
6. There does not exist between the issuing company and the construction companies any of the events set forth in Item 3, Paragraph 1 of Article 9 hereof. |
| Article 18 | Where an issuing company of a group enterprise, other than a government-owned enterprise, applies for the listing of its stock but does not meet the following requirements, this Corporation may disagree to its listing if the listing of its stock is deemed to be inappropriate by this Corporation, notwithstanding the fact that its application is otherwise in compliance with these Criteria:
1. In the fiscal year in which the application for listing is filed and in the most recent fiscal year, the profitability of those companies within the same group enterprise whose securities are listed, other than companies listed under Article 5 and Article 6 of these Criteria, meets the criteria set forth in Article 4 hereof.
2. In the fiscal year in which the application for listing is filed and in the most recent fiscal year, the profitability of those companies within the same group enterprise whose securities are traded on the over-the-counter market, other than a government-owned enterprise whose stock is traded on the over-the- counter market, meets the criteria for trading stock on the over-the-counter market.
3. The major business or product of the company applying for listing does not compete with that of any other companies within the same group enterprise.
4. Where there are business transactions between the company applying for listing and other companies within the same group enterprise, written rules and regulations governing the financial and business affairs among them shall have been formulated and approved by the board of directors of each such company, and in addition, each company within a group enterprise shall execute an undertaking in writing to the effect that its financial and business affairs with other companies are free from irregularity. Where there is no business transaction between them, the company applying for listing shall execute an undertaking in writing to the effect that in case there is any business transaction in the future, it will be free from irregularity.
5. Its financial and business conditions and its rules and regulations above-mentioned shall not be materially abnormal as compared with those of other enterprises in the same industry.
6. The company applying for listing shall have the capability to independently market the product(s) sold by it to other companies within the same group enterprise.
7. The cost for procurement of products from or the operating income derived from selling products to other companies within the same group enterprise in the fiscal year in which the application for listing is filed and in the most recent two fiscal years is less than 50 percent of its total cost for procurement of products or operating income; provided that this provision shall not apply to the procurement amount or operating income derived from the parent company or subsidiary or in cases of company split pursuant to the Company Act or Business Mergers and Acquisitions Act.
The provisions of Subparagraphs 1 and 2 of the preceding paragraph shall not apply where during such periods the amount of purchase/sale transactions between the companies is less than 10 percent of the total amount of purchases/sales of the applying company or, in cases of company split pursuant to the Company Act or the Business Mergers and Acquisitions Act, where the amount of purchase/sale transactions between the listed company carrying out the split and the transferee company of the split is less than 30 percent of the total amount of purchases/sales of the transferee company of the split.
Application of the provisions of Items 1 and 2 of the preceding paragraph may be waived in situations resulting from unique characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes. |
| Article 19 | Where a subsidiary, other than a government-owned enterprise, applies for the listing of its stock but does not meet the following requirements, this Corporation may disagree to the listing if the listing of its stock is deemed to be inappropriate by this Corporation, notwithstanding the fact that its application meets the criteria set forth in these Criteria:
1. A consolidated financial statement of the parent company and all of its subsidiaries which is prepared in accordance with the accounting principles of the home country of its parent company and an audit opinion issued by a certified public accountant in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the parent company and the impact of such differences on such financial statement shall be submitted along with the application.
2. According to the consolidated financial statement submitted pursuant to the preceding paragraph, the total amount of shareholders' equity shall be NT$1 billion or more in the most recent fiscal year and the operating profit and before-tax net profit shall each represent 3 percent or greater of the total amount of shareholders' equity in each of the most recent two fiscal years; provided, if the applicant company is applying for listing pursuant to Article 5, Article 6, or Article 6-1, or if the amount of its purchase/sale transactions with its parent company in the fiscal year of the application for listing and in the most recent fiscal year is less than 10 percent of its total amount of purchases/sales, it will not be subject to the above-stated profitability ratio.
3. The total number of shares of the company applying for listing held by its parent company, affiliated companies and its directors, supervisors, representatives and shareholders who hold 10 percent or greater of the total number of its issued and outstanding shares and its related persons shall not exceed 70 percent of the total number of its issued and outstanding shares. If this 70 percent limit is exceeded, the company applying for listing shall additionally set aside a certain percentage of its shares for public offering along with its initial public offering, so as to reduce the percentage of shares held by the aforesaid persons to 70 percent or lesser.
4. It shall have at least three independent directors, and at least two independent supervisors.
5. Its operating revenue derived from its parent company in the fiscal year of the application for listing and in the most recent fiscal year shall not exceed 50 percent of its operating revenue; its principal raw materials or principal products or total amount of purchases [obtained from its parent company] during such periods shall not exceed 70 percent of its purchases. However, this restriction shall not apply where the cause is characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes. |
| Article 20 | Guidelines for examination of applications for listing by investment and holding companies, financial holding companies, or any other company of any specific type of organization not covered in this Section will be separately prescribed by this Corporation. |
Section 3 The Listing of Other Securities
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| Article 21 | Certificates carrying warrants or rights to subscribe to or purchase stock issued by a listed company may be listed on the exchange of this Corporation only after an application for listing thereof has been filed with this Corporation within 15 days after the application for capital increase has been approved by the Competent Authority or after the said capital increase has been recorded with the Competent Authority and has come into force. Certificates evidencing payment of the stock issued may be listed on the exchange of this Corporation only after an application for listing thereof has been filed with this Corporation within 15 days after the application for capital increase has been approved by the Competent Authority or after the said capital increase has been recorded with the Corporation Authority and has come into force, and after the share prices have been fully paid up. |
| Article 22 | This Corporation will, upon receiving a letter of notification from the Competent Authority, publicly announce the listing of bonds issued by government. Where an issuer applies for listing financial bonds that have been approved for issuance and for listing corporate bonds issued by a listed company, this Corporation may agree to its listing. |
| Article 23 | Where a securities investment trust enterprise applies for the listing of a domestic closed-end mutual fund raised by the securities investment trust enterprise which complies with the following requirements and has been approved for public offering, this Corporation may agree to the listing of its beneficiary certificates:
1. The total issuing amount of the mutual fund is NT$2 billion or more.
2. The number of holders of such mutual fund holding beneficial units of NT$1 million or less shall not be less than 1,000, and the total amount of all beneficial units held by such holders shall not be less than NT$400 million.
Where a domestic securities investment trust enterprise applies for the listing of an exchange traded fund (ETF) raised by it which has been publicly offered and established by it with the approval from the Competent Authority, and which has a minimum net asset value of NT$200 million, this Corporation may agree to the listing of its beneficiary certificates, unless otherwise provided by this Corporation. |
| Article 23-1 | Where a trustee institution or special purpose company applies for the listing of beneficiary securities or asset-backed securities offered by it that have been approved for public issuance and meet all of the below-listed conditions, this Corporation may agree to the listing of such securities:
1. The total issue amount of the beneficiary securities or asset-backed securities under application for listing is NT$500 million or more.
2. The date of maturity of the securities is at least one year from the date of listing for trading.
3. The number of beneficiaries or holders is not less than five persons, and the total amount of any individual holdings of such beneficiary securities or asset-backed securities shall not exceed 20 percent of the total issue amount.
4. The limit on par value is NT$10,000. |
| Article 23-2 | Where approved real estate investment trust beneficiary securities offered and issued by a domestic closed-end real estate investment trust fund established by a trustee institution meet all the below-listed conditions, and the offering trustee institution applies for listing, this Corporation may agree to the listing thereof:
1. The total issue amount is NT$3 billion or more.
2. The duration of the contract must be one year or more from the date of listing for trading.
3. The number of beneficiaries holding a total amount of NT$1 million or less of the beneficial units shall not be less than 500, and the total amount of all beneficial units held by such beneficiaries shall not be less than NT$200 million.
4. The total price amount of the beneficial units held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficiary securities. Provided, this restriction shall not apply where the holder is an independent institutional investor.
5. Each beneficiary security shall represent 1,000 beneficial units, and have a par value limited to NT$10,000.
6. The owner of the real estate or rights owner of rights related to the real estate invested in by the fund, in accordance with Article 6, paragraph 1, subparagraph 5 of the Regulations Governing the Offering or Private Placement of Real Estate Investment Trust or Real Estate Asset Trust Beneficiary Securities by Trustee Institutions, shall place in full the beneficiary securities it holds from the assignment of the real estate or real estate related rights in centralized custody, and shall undertake that it shall neither release the beneficiary securities from custody, nor transfer or pledge the beneficiary securities or certificates under custody, before one year has elapsed from the time it comes to hold them, and only after one year has elapsed may it retrieve them in full.
Where approved real estate asset trust beneficiary securities offered and issued by a trustee institution meet all the below-listed conditions, and the offering trustee institution applies for listing, this Corporation may agree to the listing thereof:
1. The total issue amount of the real estate asset trust beneficiary securities under application for listing is NT$500 million or more.
2. The date of maturity is at least one year from the date of listing for trading.
3. The number of beneficiaries shall be no less than five, and furthermore the total amount of the first-payment-priority beneficiary securities held by any five beneficiaries shall not exceed 50 percent of the total issue amount of the beneficiary securities; if the securities are tranched, the calculation shall be based on the issue amount after tranching. Provided, this restriction shall not apply where the holder is an independent institutional investor.
4. The par value shall be limited to NT$100,000.
5. Beneficiary securities under application for listing shall be rated by a credit rating institution.
The term “independent institutional investor” in this Article means a juristic person or institution under Article 13, paragraph 1, subparagraph 1 of the Real Estate Securitization Act or a fund under Article 13, paragraph 1, subparagraph 2 of the same Act; and does not mean a promoter of a real estate investment trust or a settler of a real estate asset trust, or an interested party thereof, or an affiliated enterprise as referred to in the Company Act, or a related party or substantially related party as defined in Statement of Financial Accounting Standards No. 6. |
| Article 24 | Guidelines governing examination of the listing of other securities that are not stipulated in these Criteria shall be separately stipulated by this Corporation. |
Chapter III The Listing of Foreign Securities
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| Article 25 | This Corporation shall publicly announce the listing of government bonds issued by foreign governments and bonds issued by international organizations, upon being notified by the Competent Authority.
Foreign issuers applying for the listing of bonds in respect of which the issuance has been approved shall be limited to those foreign companies whose stock has been listed on the exchange of this Corporation, or which sponsor the issuance and listing of Taiwan depositary receipts, or which meet the listing criteria set forth in Items 2 through 6 of Paragraph 1 of Article 26 or Items 2 through 6 of Paragraph 1 of Article 27 hereof.
Where foreign issuers apply for the listing of bonds and the underlying pricing of which is computed in foreign currency, this Corporation may issue certificates approving the listing thereof if they meet the criteria for the listing set forth in Paragraph 2 hereof.
Where it has obtained a certificate from this Corporation approving its application for listing bonds, this Corporation will, after the issuance of such bonds has been approved by the Competent Authority, submit the Agreement for Listing Foreign Bonds to the Competent Authority for approval, and will publicly announce the listing thereof after obtaining an approval from the Competent Authority. |
| Article 26 | Where a foreign issuer and its depositary institution applying for listing Taiwan depositary receipts meet the following requirements, this Corporation may issue a certificate approving the listing thereof:
1. Number of units of Taiwan depositary receipts to be listed: 20 million units or more, or market value of not less than NT$300 million.
2. The registered share certificates, or securities representing its share certificates, issued by the foreign issuer in accordance with the laws of its home country have been listed for over one year on one of the stock exchanges or securities markets approved by the Competent Authority.
3. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall not be less than the equivalent of NT$1 billion.
4. Profitability: The before-tax net profit for each of the most recent two (2) fiscal years is in positive figure, and it does not have accumulated loss and meets one of the following criteria:
(1) The before-tax net profit for each of the most recent two years represents not less than 6 percent of the shareholders' equity as shown in its final accounts, or the average before-tax net profit for the most recent one year is 6 percent or greater; or
(2) The ratio of before-tax net profit to shareholder's equity in the final accounting for each of the past two (2) fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
(3) The before-tax net profit for each of the most recent two years shall be NT$400 million or more.
5. Dispersion of shareholdings: At the time of proposed listing, the number of holders of Taiwan depositary receipts in the Republic of China shall not be less than 1,000 persons, and the total number of units held by those holders of Taiwan depositary receipts who hold 1,000 units to 50,000 units represents not less than 20 percent of the total units issued, or shall be 10 million units or more. In addition, the total number of holders of registered share certificates represented by the said Taiwan depositary receipts shall be (2,000 persons or more, and the ratio of shareholding by the general public other than the insiders of the company shall not be less than 25 percent of its total issued and outstanding shares.
6. There shall be no restriction on transfer of stock represented by Taiwan depositary receipts.
7. The rights and obligations of the holders of stock represented by Taiwan depositary receipts shall be identical with those of other stock of the same class issued at the same time.
The financial information referred to in Subparagraphs 3 and 4 of the preceding paragraph will be examined [by this Corporation] based on the consolidated report or the consolidated financial statement prepared by the said foreign issuer in accordance with the laws and regulations of its home country and the audit opinion issued by a certified public accountant in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the said foreign issuer and the impact of such differences on such financial reports.
Where it has obtained a certificate from this Corporation approving its application for listing Taiwan depositary receipts, this Corporation will, after the issuance of such Taiwan depositary receipts has been approved by the Competent Authority, submit the Agreement for Listing Taiwan Depositary Receipts to the Competent Authority for approval, and will publicly announce the listing thereof after obtaining an approval from the Competent Authority. |
| Article 27 | Where a foreign issuer applying for listing of its stock meets the criteria listed below, this Corporation may issue a certificate approving the listing thereof:
1. Number of shares to be listed: 20 million shares or more, or the market price of the shares to be listed is NT$300 million or more.
2. The registered share certificates issued by the foreign issuer in accordance with the laws of its home country have been listed for over one year on one of the stock exchanges or securities markets approved by the Competent Authority.
3. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall be the equivalent of NT$1 billion or more.
4. Profitability: The before-tax net profit for each of the most recent two (2) fiscal years is in positive figure, and it does not have accumulative loss and meets one of the following criteria:
(1) The before-tax net profit for each of the most recent two years represents not less than 6 percent of the shareholders' equity as shown in its final accounts, or the average before-tax net profit for the most recent two years is 6 percent or greater and the profitability for the most recent year is greater than that for the immediately preceding year; or
(2) The ratio of before-tax net profit to shareholder's equity in the final accounting for each of the past two (2) fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
(3) The before-tax net profit for the most recent two years shall be NT$400 million or more.
5. Dispersion of shareholdings: At the time of the proposed listing, the number of registered shareholders in the Republic of China shall not be less than 1,000 persons, and the total number of shares held by the shareholders who hold one 1,000 shares to 50,000 shares shall represent 20 percent or more of the total number of issued and outstanding shares, or shall be 10 million shares or more. In addition, the total number of registered shareholders shall be 2,000 persons or more, and the ratio of shareholding by the general public other than the insiders of the company shall not be less than 25 percent of its total issued and outstanding shares.
6. The stock to be listed shall be the same class of stock listed on other stock exchanges or securities markets. The rights and obligations of the holders of stock shall be identical with those of the same class of stock listed on other stock exchange or securities markets. Local holders of the stock shall not be restricted from selling the stock on foreign stock exchanges or securities markets.
The provisions of Paragraph 2 of Article 26 shall apply mutatis mutandis to the financial reports referred to in Subparagraphs 3 and 4 of the immediately preceding paragraph.
Where it has obtained a certificate from this Corporation approving the application of the foreign issuer for the listing of its stock, this Corporation will, after the issuance of such stock has been approved by the Competent Authority, submit the Agreement for Listing Foreign Stock to the Competent Authority for approval, and will publicly announce the listing thereof after obtaining an approval from the Competent Authority. |
| Article 27-1 | Where the Industrial Development Bureau of the Ministry of Economic Affairs or a professional institution engaged by this Corporation has submitted a clear opinion that a foreign issuer applying for listing of Taiwan depositary receipts or stocks is a technology enterprise that has successfully developed marketable goods or technology, and where such foreign issuer meets each of the following criteria, this Corporation may issue a certificate approving listing of its Taiwan depositary receipts or stocks.
1. Number of shares to be listed: 20 million shares or more, or shares with a market price of NT$300 million or more.
2. The securities underwriter has provided a written recommendation.
3. The registered share certificates issued by the foreign issuer in accordance with the laws of its home country have been listed for at least one year on one of the stock exchanges or securities markets approved by the Competent Authority.
4. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall be the equivalent of NT$500 million or more.
5. Profitability: There are neither accumulated losses in the most recent accounting year nor the period of the most recent financial report audited and certified by a Certified Public Accountant as of the time of application for listing.
6. Dispersion of shareholdings: At the time of the proposed listing, the number of registered shareholders in the Republic of China shall not be less than 1,000 persons, and the total number of shares held by the shareholders who hold 1,000 shares to 50,000 shares shall represent 20 percent or more of the total number of issued and outstanding shares, or shall be 10 million shares or more. In addition, the total number of registered shareholders shall be 2,000 persons or more, and the ratio of shareholding by the general public other than the insiders of the company shall not be less than 25 percent of its total issued and outstanding shares.
7. The stock to be listed shall be the same class of stock listed on other stock exchanges or securities markets. The rights and obligations of the holders of stock shall be identical with those of the same class of stock listed on other stock exchanges or securities markets. Local holders of the stock shall not be restricted from selling the stock on foreign stock exchanges or securities markets. |
| Article 28 | Where a foreign issuer and its agent or depositary institution apply for the listing of stock or Taiwan depositary receipts issued as a result of capital increase by cash and having rights and obligations identical with those of the stock or depositary receipts already listed; or for listing of Taiwan depositary receipts in the issuance of which the foreign issuer has participated through its previously issued shares, this Corporation may, after having inspected the supporting documents, issue documents evidencing approval of the listing and, after obtaining the approval of the Competent Authority, publicly announce the listing.
Where a foreign issuer and its agent or depositary institution apply for the listing of additional stock or Taiwan depositary receipts as a result of an issue of bonus shares and the rights and obligations of the holders of stock or Taiwan depositary receipts to be newly issued are identical with those of the stock or depositary receipts already listed, this Corporation will, after having verified that the supporting documents attached to the application are complete, publicly announce the listing thereof.
Where a foreign issuer and its depositary institution apply for the reissuance and listing within the amount of original issuance of those Taiwan depositary receipts which are reported on a monthly basis to have been previously redeemed and which carry the same rights and obligations as those of the Taiwan depositary receipts already listed, this Corporation shall, after receiving the said application, publicly announce the listing thereof. |
Chapter IV Miscellaneous Provisions |
| Article 29 | Supplementary provisions to these Criteria may be separately stipulated by this Corporation.
These Criteria and other supplementary provisions stipulated pursuant to these Criteria shall take effect after having been submitted to and approved by the Competent Authority and publicly announced. Subsequent amendments thereto shall be effected in the same manner. |