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Title：

Taiwan Stock Exchange Corporation Rules Governing the Particulars to be Recorded in Prospectuses for Initial Securities Listing Applications  CH

Amended Date： 2024.08.09 (Articles 6 amended,English version coming soon)
Current English version amended on 2023.11.29 
Categories： Primary Market > Review
Article Content Content Search Article No. Search Legal Basis Amended Article Attachment Legislative History Chinese

Title： Taiwan Stock Exchange Corporation Rules Governing the Particulars to be Recorded in Prospectuses for Initial Securities Listing Applications(2021.05.05)
Date：
Article 1     These Rules are established in accordance with Article 30, Paragraph 3 of the Securities and Exchange Act.
Article 2     Matters to be included in the prospectus submitted by a domestic issuing company applying for an initial listing of securities are governed mutatis mutandis by the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses (hereafter referred as the "Prospectus Regulations") in addition to these Rules. Where the company is in the banking, bills finance, securities, futures, insurance, investment trusts or other special business, such matters are also governed by said regulations mutatis mutandis unless otherwise required by the Financial Supervisory Commission (hereafter referred as the "Competent Authority").
    Matters to be included in the prospectus submitted by a foreign issuer applying for primary listing of stocks or primary listing of stocks on the Taiwan Innovation Board (hereafter referred as "Foreign Issuing Company") are governed mutatis mutandis by Article 17 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers (hereafter referred as "Foreign Issuer Regulations") in addition to these Rules.
    Matters to be included in the prospectus submitted by a foreign issuer and its depositary institution applying for a listing of Taiwan Depository Receipts and by a foreign issuer applying for a secondary listing of stocks or listing of bonds are governed by Articles 25, 34, and 50 of the Foreign Issuer Regulations.
    A foreign issuer participating in the issue of Taiwan Depository Receipts and apply for a primary listing shall disclose a consulting opinion issued by an industry expert commissioned by a securities underwriter, along with a general evaluation opinion of the securities underwriter, in the prospectus.
Article 3     Matters to be included in the simplified prospectus submitted by an issuing company applying for initial listing that satisfies the requirements for the adoption of a simplified prospectus under these Rules are governed mutatis mutandis by Article 34, paragraph 2 of the Prospectus Regulations.
Article 4     Front cover of the prospectus (supplementing Article 3 of the Prospectus Regulations):
  1. Where an issuing company files an application for the listing of securities for the first time in accordance with Article 4, paragraph 2 or 3, or Article 28-1, paragraph 5 or 6 of the Rules Governing Review of Securities Listings (Listings Review Rules), it shall include the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks in accordance with Article 5, paragraph 2 (or paragraph 3 of the same article, or Article 28-1, paragraph 5 or 6) of the Listings Review Rules and we are not required to meet the listing criteria with regard to profitability."
  2. Where an issuing company files an application for the listing of securities as a technology or cultural and creative enterprise, it shall include the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks in accordance with Article 5 (or Article 28-1, Paragraph 2) of the Listings Review Rules and, as a technology or cultural and creative enterprise, our business entails considerable risks."
  3. Where an issuing company files an initial application for the listing of securities in accordance with Article 6 of the Listings Review Rules, it shall include the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks in accordance with Article 6 of the Listings Review Rules and, as an important enterprise involved in national economic reconstruction projects, we are not required to meet the listing criteria with regard to profitability".
  4. Where an issuing company applies for listing as an information software enterprise, it shall include the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks according to provisions governing information software enterprises and are engaged in information software business".
  5. Where an issuing company applies for listing as an investment holding, financial holding company or venture capital company, it shall include the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks as an investment holding, financial holding company or venture capital company and are engaged in the holdings or investment business."
  6. Where an issuing company files an initial listing application in accordance with Article 6-1 of the Listings Review Rules, it shall include the period of existence of the concession agreements acquired by the company and the following wording in clear typeface on the front cover of the prospectus: "Investors are hereby put on special notice that we are a company applying for a listing of stocks in accordance with Article 6-1 of the Listings Review Rules. We are an enterprise participating in major national public construction projects under encouragement of the government and are not required to meet the listing criteria with regard to profitability."
  7. Where an issuing company issues new shares to increase cash capital and commissions a securities underwriter to handle the public offering before an initial listing, it shall include the following wording in clear typeface on the front cover of the prospectus: "This Prospectus is applicable to an initial listing of securities. We plan to issue new shares to increase the cash capital and commission a securities underwriter to handle the public offering before the listing."
  8. Where an issuing company provides publicly offered and issued stock for an over-allotment option for the lead securities underwriter, such company shall include the following wording in clear typeface on the front cover of the prospectus: "For cases of underwriting initial listings, there will be no price limits for the first five trading days after listing. Investors shall be aware of the risks of trading."
  9. Where a Foreign Issuing Company applies for a primary listing of stocks, it shall include the following wording in clear typeface on the front cover of the prospectus: "For the year of listing and three fiscal years thereafter, the Company will continue to commission the lead securities underwriter to assist the Company with compliance with R.O.C. securities laws and regulations, the Taiwan Stock Exchange rules and regulations and bulletins, and listing contracts."
  10. A domestic issuing company or foreign issuer applying for the initial listing of stocks on the Taiwan Innovation Board shall include the following wording in clear typeface on the front cover of the prospectus:
    1. “The Company is an applicant for the initial listing of stocks on the Taiwan Innovation Board in accordance with Article 29, paragraph 1 (or paragraph 2) of the Listings Review Rules. The Company is not subject to any profitability requirement as a listing condition and engages in substantially risky business, therefore its stocks are for trading by eligible investors only. Investors should pay particular attention to the above.”
    2. “The Company will continue to engage a lead securities underwriter from the date of listing to assist the Company with its compliance with the Republic of China securities laws and regulations, the listing contract, and other bylaws and rules and regulations. If the engagement of the lead securities underwriter is terminated during the listing period, the Company shall appoint a new securities underwriter as successor within one month of the effective date of the termination. Should the Company fail to so appoint within the prescribed time limit, the Company will be deemed to violate the undertaking issued at the time of the listing application, in which case the TWSE may suspend the trading of or delist the Company’s listed securities in accordance with the Operating Rules.”
  11. A Foreign Issuing Company shall specify the following fees as related to the application for listing of its shares in clear typeface on the front cover of the prospectus:
    1. Underwriting fees, exposition and counseling fees, compensation for securities underwriting on a firm commitment basis, or best-efforts underwriting fees.
    2. Listing review fees.
    3. Other fees, including fees for accountants, lawyers, and printing etc. No detailed enumeration for each item is required.
Article 4-1     Inside of the front cover of the prospectus (supplementing Article 4 of the Prospectus Regulations):
    The issuer's industry, operation and other important risks, and the page index of the detailed explanation of risks shall be included in the inside of the front cover of the prospectus in clear typeface and with texts easy to read.
Article 5     Abstract of the prospectus (supplementing Article 7 of the Prospectus Regulations and revising Appendix 1):
  1. Where the listing application is filed in accordance with Article 6-1 of the Listings Review Rules or by the applicant as a technology enterprise or information software enterprise, the job titles, names, and shareholdings of the major shareholders, technical stock shareholders, chief of each unit at each level, technical and R&D chiefs, and relevant technical and R&D personnel shall be added.
  2. Where the company applying for listing is in the form of an investment holding or financial holding company, a summarized list of companies controlled by the company applying for listing or subsidiaries shall be added, including company names, addresses, telephone numbers, major products, market structures, shares held by the investment holding or financial holding company in such controlled companies or subsidiaries, and operating income, profitability and the ratio between the operating income of the controlled companies or subsidiaries and that of the investment holding or financial holding company for the past two fiscal years.
  3. In the event new shares are issued to increase capital and a securities underwriter is commissioned to handle the public offering before a primary listing, details regarding the proposed number of shares to be issued for capital increase and purposes of the capital increase shall be provided, and disclosure of the plan of cash capital increase shall be increased through the application of Articles 24, Subparagraphs 1, 8, and 10 of the Prospectus Regulations mutatis mutandis.
  4. An issuing company providing publicly offered and issued shares for an over-allotment option for the lead securities underwriter shall explain clearly information pertaining to the lead securities underwriter's over-allotment and price stability.
  5. Where a company applies for listing as a venture capital company, it shall additionally provide (1) a summarized list of the five largest invested companies, including company names, major products, market structures, shares held by the applicant in such companies, and the ratio of the applicant's total investment to its total assets as shown in its current financial reports, (2) the ratio of its total investment to its total assets both at the time it applies for listing and as at the date of financial reports in the last two fiscal years, (3) its investments in TWSE (or GTSM) listed securities and securities listed on the Emerging Stock Market.
Article 6     Risk assessment (supplementing Article 9 of the Prospectus Regulations):
  1. An issuing company with subsidiaries meeting one of the standards of a "major subsidiary" as provided in Article 2-1, Paragraph 2 of the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Article 5 of the Regulations for Auditing and Attestation of Financial Statements of Financial Institutions by Appointed Certified Public Accountants in the last fiscal year or the fiscal year of the listing application shall additionally include an exposition on the risks of the subsidiaries.
  2. A Foreign Issuing Company shall additionally explain various risks clearly, such as the overall economy, any changes in the political and economic environments, foreign exchange controls, taxes and relevant laws and regulations of its place of registration and major places of operation, and whether such places recognize the effect of conclusive judgments of Taiwan civil courts, and also state the response measures undertaken.
  3. A domestic issuing company or foreign issuer applying for the initial listing of stocks on the Taiwan Innovation Board shall additionally describe its key core technologies and ability to innovate or innovative operational model, and also the possible risks to arise out of any changes to the material technologies, products, policies, operational models, or core-technology personnel, together with the countermeasures taken.
Article 7     Company organization (supplementing Article 10 of the Prospectus Regulations and revising Appendix 2):
  1. Where the listing application is filed in accordance with Article 6-1 of the Listings Review Rules or by the applicant as a technology enterprise or information software enterprise, the qualifications and CVs of the technical and R & D personnel shall be added.
  2. Where the issuing company has non-directors who substantially perform a director's duties or control the company's personnel, finance or business operation, thereby substantially directing directors in their performance of duties, such non-directors' names, education, work experiences, shareholdings, concurrent positions held in the issuing company and other companies, relationship with the issuing company's directors, and actual control over the issuing company shall be added; in the event of a Foreign Issuing Company, the above-mentioned non-directors' legal responsibilities under the laws and regulations of the place of registration shall further be identified.
  3. A domestic issuing company or foreign issuer applying for the initial listing of stocks on the Taiwan Innovation Board shall additionally describe the work experience and qualifications of the core-technology personnel.
Article 8     Capital and shares (supplementing Article 11 of the Prospectus Regulations and revising Appendix 12):
Where the application is filed in accordance with Articles 6-1 and 29 of the Listings Review Rules or by the applicant as a technology enterprise or information software enterprise, the changes in equity among the current directors of technology shares, technical and R&D personnel, and each of the shareholders holding 5% or more shares shall be added.
Article 9     Company operation (supplementing Article 19 of the Prospectus Regulations):
  1. Where the listing application is filed in accordance with Article 4, paragraph 2 or 3, or Article 28-1, paragraph 5 or 6 of the Listings Review Rules, the information about operation model and its risks, and the future development plan shall be added.
  2. Where the listing application is filed by the applicant as a technology enterprise, the following information shall be added:
    1. On market and production and sale, an R & D plan containing an analysis of product technology and sustainable development, including:
      1. The level, source, protection (patent rights and status of legal protection), and upgrading of production and development technology of products.
      2. The competitive edge, life cycle and potential for sustainable development of current major products and the R & D plans for new products.
    2. Where the enterprise is in the biotechnology industry, pharmaceutical industry, or medical-apparatus industry, the following information shall be added: the fact that it has obtained license from the Competent Authority according to laws and regulations for conducting clinical trials on human bodies or field experiments or for domestic engagement in R & D in the biotechnology industry or medical-apparatus industry; track records of the production and sale of products or provision of technical services in connection with biotech or medical apparatus; together with the ratio of the operating revenue and R & D cost of the products and related technical services to the total operating revenue of the company in the most recent year.
    3. Where a company terminated part of its business, spun off part of its business into independent companies, or was transferred to or merged with other companies in the year prior to applying for a listing due to business adjustment, the following information shall be added: the businesses terminated, transferred or merged; currently existing businesses; and the ratio of the operating revenue and R & D cost of the currently existing businesses to the total operating revenue of the company in the preceding year.
    4. With regard to the number of operating personnel in the most recent two years, information reflecting the turnover of officers, technical and R & D personnel, and other employees shall be added.
  3. Where the listing application is filed according to provisions governing information software enterprises:
    In addition to matters prescribed in Item A and D of the preceding subparagraph, the following information shall be added: future stability and growth of profits and subject items for research, R & D budget and business development projects for the most recent five years and next five years.
  4. Where the company files the listing application as an investment holding, financial holding company or venture capital company, in addition to its management and investment strategies, the applicant shall further include the operation and profits of each of its controlled companies, subsidiaries or invested companies regarding the market and production and sale.
  5. Where the company files the listing application in accordance with Article 6-1 of the Listings Review Rules, besides a general description of its operation and its business plans, the following information shall be added:
    1. Construction plans and feasibility analyses.
    2. Financial plans for construction periods (including forecasts for cash flow and plans for capital increase, capital decrease, loans, and debt service).
    3. Risk management plans for constructions periods.
    4. Business plans and related assumptions.
    5. Financial plans for operational phases (including forecasts for the operating revenue, operational costs and profits, financial forecasts, and plans for capital increase, capital decrease, loan and debt service for the first five years of the operational phase), unless the company has already commenced operation by the time it files the listing application.
  6. A domestic issuing company or foreign issuer applying for the initial listing of stocks on the Taiwan Innovation Board shall additionally provide the following information:
    1. Market and production and marketing: Said company shall additionally provide an analysis of the core technologies of products and ongoing research and development plans, including:
      1. levels, sources, assurances (patent rights and legal protections available), and upgrades of product production and development technologies.
      2. competitive edge, shelf lives, and capacities for continued development of current major products, and research and development plans of new products.
    2. If in the biotechnology and medicine industry, said company shall additionally advise the clinical trial progress of its core products.
    3. as regards the number of active employees in the most recent two years, said company shall additionally advise the turnovers of officers, technology and R & D personnel, and other employees.
  7. An issuing company shall add the following information:
    1. Whether the company has the ability to adjust itself to meet any changes in the economic environment.
    2. Whether the transactions among the issuing company and persons related to its subsidiaries are reasonable. (This requirement does not apply to business transactions conducted by public enterprises in accordance with the Audit Act.)
Article 10     Summary financial data and financial statements within the last five years (supplementing Article 27 and Article 28 of the Prospectus Regulations):
  1. If the financial reports of the domestic issuing company for the last seven consecutive years after the public issue or those of the Foreign Issuing Company for the last seven consecutive years were audited and certified by the same accountant, the company shall explain the reasons for not changing the accountant, independence of the current certified accountant, along with specific measures taken by the company to reinforce the accountant's independence in certification.
  2. The Foreign Issuing Company may present summary financial data for the most recent three years only.
  3. The financial statements presented by the Foreign Issuing Company shall be the consolidated financial statements for the most recent two years and most recent period as audited or reviewed by the accountant. Said company shall provide the consolidated financial statements for the most recent year and most recent period as audited or reviewed by the accountant if it is to apply for the primary listing of stocks on the Taiwan Innovation Board.
Article 11     Special matters (supplementing Article 31 of the Prospectus Regulations):
  1. The internal control statement complied by the self-assessment internal control system of the domestic issuing company and the report obtained from the accountant commissioned to conduct professional examination.
  2. The disclosure by the issuing company of information regarding corporate governance (to supplement in Attachment A).
  3. Where the issuing company has engaged in business transactions with any other company in the same group enterprise, each company shall issue a representation or undertaking in writing to confirm that all business transactions have been conducted on an arm's length basis. If no business transaction exists between the issuing company and any company in the same group enterprise, the applicant company shall issue an undertaking to the effect that all future such transactions will be conducted on an arm's length basis (not applicable to public enterprises).
  4. Description of the issuance of new shares by the issuing company to increase cash capital substantially that is already implemented or in the process of being implemented in the fiscal year of the listing application and the immediately preceding fiscal year, and an evaluation as to whether the expected benefit has been achieved.
  5. Whether the line of credit applied for is used jointly by the issuing company and any other company.
  6. Whether the issuing company has loaned any large amount of funds to others without good cause.
  7. Where the company applying for listing satisfies the requirements in Article 6-1 of the Listings Review Rules, it shall add the following:
    1. The process by which the government grants concession and the laws and regulations relevant to the projects.
    2. Abstracts of major contracts relevant to the projects.
    3. Profiles of and division of work among major shareholders and operators and certification of technical, financial and other required capabilities to completion the concession contracts.
    4. Other special matters sufficient to affect completion and operation of individual projects.
  8. Where the company applying for a listing satisfies the requirements in Article 16 of the Listings Review Rules, it shall disclose the following additional information (not applicable to public enterprises):
    1. Operation strategies after the listing (including the land acquisition strategies and business plans for the ensuing five years).
    2. Relevant information on construction projects over the past three years and up to the current year, including the name, location, area of foundation, nature of the construction contract, work commencement date, completion date (or scheduled completion date), number of stories, number of units, total floor space dollar amount reserved for own use (cost), dollar amount regarding units available for sale, gross operating profit (or projected gross operating profit), amount regarding units sold, number of units sold, work progress, and manner of construction (joint venture, self-construction or other arrangement) of each individual project.
    3. Information regarding projects not yet developed where land is acquired and planning is completed, including the name, location, area of foundation, manner of construction (joint venture, self-construction or any other arrangement), scheduled commencement date and scheduled completion date, projected number of stories of the building(s), projected number of units, projected total floor space, dollar amount reserved for own use (cost), projected sales, projected gross operating profit, current land value published, and current purposes.
    4. With regard to projects completed but not yet sold as of the current year, the projected sales and the ratio between the net sales and the total assets in the fiscal year of the listing application and the following fiscal year.
    5. The feasibility of (A) and (C) and the possibility of accomplishing (D), as evaluated by a securities underwriter.
    6. Whether, as evaluated by a securities underwriter, there is any irregularity with respect to the sources in the purchase of land or of construction work or buildings not yet completed, in the most recent five fiscal years and the fiscal year of the listing application.
    7. Where the situation under Paragraph 1, Subparagraph 6 of the same article occurs, the calculation results and impact on the profitability standard shall be described.
  9. Where any of the situations set forth in Article 10 or Article 26 of the Supplementary Provisions to the Listings Review Rules occurs in respect of the issuing company, it shall fully disclose the details of the business transactions which are not conducted on an arm's length basis and how such transactions are handled and report at the shareholders meeting.
  10. Where the domestic issuing company files an application for a listing of ordinary corporate bonds, it shall disclose the following additional information:
    1. The sources of funds for the payment of principal and interest of the corporate bonds.
    2. Where the issuing company is subject to credit rating, it shall disclose the rating report issued by the credit rating institution, including the rating level, reasons for and meaning of the rating result, and prospects evaluated etc.
  11. Fully disclose the basis and method of the joint determination of offering price by the issuing company and securities underwriter, at least including the following:
    1. The method, principle, or calculation method in regard to the offering price, along with its comparison to the internationally accepted market approach, costing method and income approach.
    2. Comparison of the financial condition, profitability and price-earnings ratio between the issuing company and TWSE listed or GTSM companies in the same trade or business.
    3. If the agreed offering price is set in accordance with a financial expert's opinion or valuation institution's evaluation report, the content and conclusions of the expert opinion or evaluation report shall be expounded.
    4. The issuing company's average stock price and trading volume within the most recent month of listing on the Emerging Stock Market.
    5. The evaluation opinion of the securities underwriter on the reasonableness of the offering price which it jointly determines with the issuing company.
  12. The issuing company shall, based on its offering price and average stock price on the Emerging Stock Market for the most recent month of listing, calculate, using the intrinsic method, the possible impact of the issued employee subscription warrants, for which the last day of stock-based payment transaction has not arrived, on the financial statement after applying for the listing of shares of the issuing company.
  13. Where Articles 4, Paragraphs 2 and 3, or Article 28-1, Paragraphs 5 and 6 of the Listings Review Rules apply, or the applicant that is a technology enterprise or cultural and creative enterprise applies for initial listing of securities, and a securities underwriter is commissioned to handle the public offering before an initial listing, and a certain percentage of shares are reserved for allotment via negotiated sale, additional information including allotment list, number of shares to be subscribed as agreed, total number of shares for allotment as agreed, ratio of shares reserved for allotment to total shares to be offered, and matters such as period of central depository of shares for allotment and restrictions on sales, shall be included.
  14. The securities underwriter shall issue an evaluation opinion on the fairness of allotment list, number of shares for allotment, ratio of shares for allotment to total shares to be offered, restrictions on sales of allotted shares, financial resources available for payment, and adequacy of agreed matters.
  15. Where a domestic issuing company or Foreign Issuing Company commissions a securities underwriter to handle the public offering before an initial listing in accordance with Subparagraph 13, the domestic issuing company or foreign issuer shall make a statement undertaking it has not offered and will not offer any interest, direct or indirect, to potential investors interested in sale or to its appointed party in any manner or by any method. The potential investor interested in sale shall also make a statement undertaking he/she/it has not requested or received and will not request or receive any interest, direct or indirect, from the issuing company or underwriter in any manner or by any method.
  16. Where any of the situations set forth in Subparagraph 3, Paragraph 1 of Article 28-7 or Subparagraph 2, Paragraph 2 of Article 34 of the Listings Review Rules occurs in respect of a Foreign Issuing Company, it shall fully disclose any material discrepancy arising out of the prevention of the inclusion of the important matters concerning the protection of shareholders' equity in its articles of incorporation or organizational documents by a conflict with the mandatory provisions of the laws and regulations of its country of registration.
  17. Other written undertakings or representations required by relevant provisions.
Article 11-1     An issuer with mineral rights under the Mining Act and required by Article 22-1 of the Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing to submit a country-by-country report shall disclose in its prospectus that is to be submitted the country-by-country report that its enterprise group last submitted to the local tax collection authority.
    The constituent entities and contents to be included in the country-by-country report in the preceding paragraph are governed by Article 22-1, paragraph 5 of the aforementioned regulations mutatis mutandis.
Article 12     Important resolutions (supplementing Article 33 of the Prospectus Regulations):
  1. In order to adapt to changes in the economic environment and to strengthen the financial structure of the company, it is recommended that the listed company adopt a balanced dividend policy. The issuer shall additionally disclose matters relating to its future policy on dividend distribution, the timelines for initiating capital increase projects in the future, and the impact on the dilution of its profitability.
  2. A domestic issuing company or foreign issuer shall convene a shareholders' meeting to discuss the application for initial listing of shares and cash capital increase for issue of new shares for public offering prior to listing, reservation of a certain percentage of shares for allotment via negotiated sale, which matters shall be included in the notice of a shareholders' meeting under the reason for the meeting, accompanied with descriptions of these matters, and the resolution of the shareholders' meeting shall be fully disclosed.
Article 13     The applicable conditions of a simplified prospectus:
    An issuing company applying for listing securities in accordance to the Listings Review Rules may deliver a simplified prospectus to the subscribers if it has transmitted the prospectus that it had prepared in accordance with the relevant laws and regulations to the online data filing system designated by the TWSE in the electronic file format prescribed by the TWSE and and has delivered four copies of the prospectus to the TWSE.
Article 14     (Omitted)
Article 15     (Omitted)
Article 16     (Omitted)
Article 17     These Rules 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.