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Title：

Taiwan Stock Exchange Corporation Directions for Lead Securities Underwriters Mandated to Assist Principals in Complying with ROC Laws and Regulations and the Taiwan Stock Exchange Corporation Rules Related to TWSE Listing  CH

Amended Date： 2022.09.21 
Categories： Primary Market > Management > Primary Listings
Article Content Content Search Article No. Search Legal Basis Amended Article Legislative History Chinese

Title： Taiwan Stock Exchange Corporation Directions for Lead Securities Underwriters Mandated to Assist Principals in Complying with ROC Laws and Regulations and the Taiwan Stock Exchange Corporation Rules Related to TWSE Listing(2021.03.31)
Date：
Article 1     These Directions are specially adopted pursuant to Articles 28-2 and 34 of the TWSE Rules Governing Review of Securities Listings ("Review Rules") and Article 6-1 of the TWSE Rules for Regulating TWSE Primary Listed Companies and Taiwan Innovation Board Primary Listed Companies After Listing, to regulate the scope of duties of a lead securities underwriter assisting a TWSE primary listed company and a Taiwan Innovation Board Primary Listed company in complying with ROC securities-related laws and regulations and relevant TWSE rules and the content of the mandate contract.
Article 2     A lead securities underwriter assisting a TWSE primary listed company, Taiwan Innovation Board listed company or a Taiwan Innovation Board primary listed company (“Principal”) in complying with ROC securities laws and regulations and relevant TWSE rules shall perform the following duties:
  1. Assign specialists to assist and counsel the Principal in complying with ROC securities-related laws and regulations and the TWSE rules, bylaws, public announcements, and listing contract.
  2. Before the Principal holds a press conference concerning material information, the lead securities underwriter shall provide consultation and advice and also review the completeness and legitimacy of the disclosure of information. If the Principal is known or found to have failed to comply with the guidelines for press conferences concerning material information, the lead securities underwriter shall initiate contact with the Principal requesting compliance and notify the TWSE as required.
  3. When the TWSE conducts analysis and management of material events and other supervisory procedures concerning the Principal, the lead securities underwriter shall assist the Principal in completing matters requested by the TWSE, and attend relevant TWSE supervisory meetings together with the Principal to assist the Principal in providing explanations and preparing information.
  4. Urge the Principal to perform its undertakings made to the TWSE at the time it became listed on the TWSE. If the Principal is discovered to have failed to fulfill any undertaking, the lead securities underwriter shall immediately notify the TWSE.
  5. Hold annually or assist the directors, supervisors, general manager, spokesperson, deputy spokesperson, financial officer, accounting officer, research and development officer, internal audit officer, and litigious and non-litigious agent of the Principal in participating as required in courses on corporate governance and commercial and legal affairs, to understand relevant legal liabilities. When such personnel resign or are transferred, the lead securities underwriter shall ascertain the reasons and shall notify the TWSE of any material irregularity.
  6. Attend the Principal’s board of directors meetings as a non-voting delegate to offer consultations and advice as appropriate. Review minutes of board of directors’ meetings after the meetings to ascertain the operation of the board of the Principal. Also assign specialists to establish communication mechanisms with independent directors. Assist the Principal in selecting eligible director nominees to form an effectively functioning board of directors.
  7. Pay an annual site visit to the Principal’s major business establishments or subsidiaries to ascertain their operations. Interview the actual responsible persons and key personnel such as those in charge of finance and business and compile interview records.
  8. Assist the Principal annually in holding investor conferences in the ROC.
  9. Collect information that has a material effect on the shareholders equity or securities price of the TWSE primary listed company from mass media coverage at the Principal’s major business establishments, and assist the company in publicly disclosing relevant material information. If it is discovered that the Principal is unable to make a timely disclosure of material information, the lead securities underwriter shall immediately request the required disclosure from the Principal and notify the TWSE.
Article 3     The mandate contract entered into between the lead securities underwriter and the Principal shall be adopted by the Principal’s board of directors include at least the following matters:
  1. Duration of the mandate contract:
    1. From the initial TWSE listing date of the stock of the TWSE primary listed company to the three subsequent fiscal years. If the case being handled is a case under Article 6, paragraph 1, subparagraphs 1 to 3 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers ("Foreign Issuer Regulations"), the duration shall be from the year when the offering is completed to the two subsequent fiscal years.
    2. For the listing of stocks on the Taiwan Innovation Board, the mandate shall continue from the date of initial listing.
  2. Before holding press conferences regarding material information, the Principal shall notify and consult the lead securities underwriter. The lead securities underwriter shall be obligated to faithfully maintain the confidentiality of any undisclosed information of the TWSE listed company that it has learned.
  3. Assist the Principal annually during the duration of the mandate contract in the relevant procedures and reporting matters when the Principal holds or is invited to participate in an investor conference in the ROC.
  4. During the duration of the mandate contract, the lead securities underwriter shall assign personnel to the Principal’s board of directors meetings as non-voting delegates, review minutes of board of directors’ meetings after the meetings, and establish communication mechanisms with independent directors. The lead securities underwriter shall also assist the Principal in selecting eligible director nominees to form an effectively functioning board of directors.
  5. When the lead securities underwriter makes a request to access or read relevant information in accordance with TWSE requirements or the stipulations of the mandate contract, the Principal shall cooperate with the request.
  6. When the lead securities underwriter assists the Principal in legal compliance pursuant to the mandate contract, it shall exercise the due care of a good administrator. If any matter attributable to the lead securities underwriter results in a breach of the mandate contract, the lead securities underwriter shall be held liable for damages for any injury caused to the Principal (including, but not limited to, any default penalty, change of trading method, suspension of trading, or delisting imposed on the Principal by the TWSE).
Article 4     The Principal may not terminate the mandate contract with the lead securities underwriter before the expiration of the mandate contract except for reason of a failure by the original lead securities underwriter to perform the mandate contract, a material dispute between the parties on the performance of the mandate contract, or other legitimate reasons.
    The Principal to terminate the mandate contract with the original lead securities underwriter pursuant to the preceding paragraph shall state in writing the reasons for the termination and the name of the succeeding securities underwriter that will continue to assist in legal compliance, and attach a written undertaking by the succeeding securities underwriter committing it to bear the obligations of lead securities underwriter, and the new mandate contract. The duration of the new mandate contract shall not be shorter than the remaining duration of the original mandate contract. The duration of the mandate of a Taiwan Innovation Board Primary Listed company is the listing period.
    The mandated securities underwriter referred to in the preceding two paragraphs shall be registered members of the Taiwan Securities Association with places of business in the ROC.
    The relevant provisions of these Directions shall apply when the Principal mandates another securities underwriter to assist in legal compliance pursuant to paragraph 2.
    If the Principal fails to mandate another securities underwriter to assist in legal compliance pursuant to paragraphs 2 and 3, and such a mandate is required for the initial TWSE listing of stock, it is deemed to have "breached an undertaking made at the time of the application for TWSE listing." The TWSE may report the breach to the competent authority for recordation pursuant to Article 50-3, paragraph 1, subparagraph 6 and Article 50-9, paragraph 1, subparagraph 8 of the Operating Rules of the Taiwan Stock Exchange Corporation, and then suspend the TWSE trading of the securities of the TWSE primary listed company. If such a mandate is required for the handling of a case under Article 6, paragraph 1, subparagraphs 1 to 3 of the Foreign Issuer Regulations after TWSE listing, the TWSE may take dispositive measures pursuant to Chapter III of the TWSE Rules for Regulating TWSE Primary Listed Companies and Taiwan Innovation Board Primary Listed Companies After Listing.
Article 5     A lead securities underwriter may not resign before the expiration of the mandate contract except in the case of a merger, demerger, or business transfer, or when the competent authority voids its permit, approves its dissolution, or orders it to cease business, or for another legitimate.
    The lead securities underwriter under the preceding paragraph shall state in writing the reasons for the resignation and the name of the qualified succeeding securities underwriter that will continue to assist in legal compliance, jointly signed by the new and the original securities underwriters, and attach a letter of consent by the TWSE listed company, the undertaking by the new securities underwriter to bear the obligations of lead securities underwriter, and the new mandate contract, to report to the TWSE for recordation.
    When the TWSE has given approval for a lead securities underwriter to resign, the succeeding securities underwriter that continues to assist in legal compliance shall be subject to all relevant provisions of these Directions.
Article 6     A lead securities underwriter and a succeeding securities underwriter shall, during the period when they are mandated by a TWSE primary listed company, Taiwan Innovation Board listed company or a Taiwan Innovation Board primary listed company to assist in legal compliance, retain relevant documents, working papers, data or interview records in connection with the assistance process and site visits made. The TWSE may requisition and review these when necessary.
    A lead securities underwriter and a succeeding securities underwriter shall upload the records of assistance with legal compliance mentioned in the preceding paragraph over the internet to the TWSE designated e-filing system on a quarterly basis. The TWSE shall select 5% for random inspection each year, provided the following are subject to priority random inspection and included in the above selected percentage and number of cases:
  1. where the competent authority or judicial authority instructs that inspection be conducted or evidence be furnished
  2. where an information is filed in the informant’s name, with concrete evidence introduced
  3. where the media reports material irregularity with the finance or business of the Principal
  4. where the securities underwriter fails to a material extent to present records of assistance with legal compliance as required
  5. where the TWSE primary listed company or Taiwan Innovation Board primary listed company is subject to a decision or disposition not less than an administrative fine by the competent authority according to laws and regulations or a penalty by the TWSE according to requirements for violating to a material extent ROC securities related laws and regulations or TWSE listing related rules
  6. where the TWSE deems it necessary for other reasons
    If a securities underwriter violates these Directions, the TWSE may requisition and review documents, working papers, or data referred to in paragraph 1, and may, pursuant to the TWSE Regulations for Handling Deficiencies in an Evaluation Report or Other Related Information Submitted by a Securities Underwriter, issue a demerit or refuse for a certain time period to accept assessment reports produced by that securities underwriter.
Article 7     These Directions shall take effect after being submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.