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Title：

Taiwan Stock Exchange Corporation Standards for Determining Changes in Managerial Control and Material Changes in the Scope of Business of Listed Companies  CH

Amended Date： 2021.03.31 
Categories： Primary Market > Management > Auditing and Review
Article Content Content Search Article No. Search Amended Article Legislative History Chinese

Title： Determination Standards for the Provisions of Article 50, Paragraph 1, Subparagraph 14, and Article 50-3, Paragraph 1, Subparagraph 11 of the Operating Rules of the Taiwan Stock Exchange Corporation(2021.03.15)
Date：
Article 1     These Standards are established for the determination of whether a listed company (including a primary listed company) experiences a change in managerial control and a material change in the scope of business as set forth in Article 50, Paragraph 1, Subparagraph 14 and Article 50-3, Paragraph 1, Subparagraph 11 of the Operating Rules of the Taiwan Stock Exchange Corporation (the "TWSE Rules") .
Article 2     The term "change in managerial control" referred to in Article 50, Paragraph 1, Subparagraph 14 and Article 50-3, Paragraph 1, Subparagraph 11 of the TWSE Rules means any of the following circumstances:
  1. Any person solely or collectively with others obtains more than 50% of the issued voting shares of a listed company, causing a transfer of control.
  2. Any person solely or collectively with others has control over a majority of the voting rights of the board of directors, causing the original management of a listed company to lose its control.
  3. Other special circumstances deemed by the TWSE as a change in managerial control.
Article 3     The term "a material change in the scope of business within a certain period of time before or after a change in managerial control" referred to in Article 50, Paragraph 1, Subparagraph 14 and Article 50-3, Paragraph 1, Subparagraph 11 of the TWSE Rules means any of the following circumstances that applies to a listed company as indicated in the latest financial report of the fiscal year or term submitted before its change in managerial control or in the financial report of any of eight terms of financial reports submitted after the change in managerial control:
  1. A change occurs in the main business activities, and the aggregate amount of operating revenue generated from said business activities reaches 50% or more of the aggregate operating revenue of the current term.
  2. A change occurs in the business activities that generate 50% or more of the operating revenue in the preceding fiscal year leading to the aggregate operating revenue of said business activities being lower than 20% of the aggregate operating revenue of the current term.
  3. The net disposing book value of the property, plant and equipment, and their right-of-use assets, reaches to 100% of the net book value of the property, plant and equipment, and their right-of-use assets, as at the date of the final balance sheet.
  4. The acquiring amount of land held for construction site, construction in progress or buildings and land held for sale or the property, plant and equipment that are not within the original business scope, and their right-of-use assets, reaches 30% or more of the total asset value as at the date of the final balance sheet.
  5. Other special circumstances deemed by the TWSE as a material change in the scope of business due to the scope or nature of or special situations concerning the business activities.
    The term “change in the main business activities” in Subparagraph 1 of the preceding paragraph means the aggregate operating revenue generated from said business activities amounts to 20% or more of the aggregate operating revenue of the current term and the aggregate operating revenue generated from said business activities amounted to less than 20% of the aggregate operating revenue of the same term in the preceding year.
    Application of Subparagraph 4 of the first Paragraph may be waived if the listed company is in the building materials construction industry before and after its change in managerial control.
Article 4     When a listed company within the period stipulated by law submits its financial report to the TWSE, it shall submit the "Information Checklist of the Change in Business Scope" approved by a CPA along with the financial report.
    If a listed company experiences a change in control identified in Article 2, or if the Information Checklist stipulated in the preceding paragraph suggests there is a material change in the scope of business, the TWSE will disclose such change in the section "Change in Control and Business Scope" of the Market Observation Post System.
Article 5     These Standards shall take effect after having been submitted to and approved by the competent authority. Subsequent amendments thereto shall be effected in the same manner.