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Amendments

Title：

Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses  CH

Amended Date： 2023.12.29 
Article Content Chapter Content Search Article No. Search Legal Basis Amended Article Legislative History Chinese

Title： Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses(2013.12.31)
Date：
Article 7     The items required under these Regulations shall all be included in a prospectus, which shall also contain an index, page references and summary (Schedule 1). If any required information is unavailable or is omittable per SEC approval, "None" or "N/A" shall be marked following that item.
    If noting of any required information would be repeated, such information may be noted just at one item/place. The referenced page shall be noted at all other items/places.
Article 20     For property, plant and equipment and other real properties, the following items shall be recorded:
  1. Self-owned assets:
    1. Setting forth the names, number, acquisition dates, acquisition cost, revaluation gains and non-depreciated balance amount of the property, plant and equipment if the acquisition cost is 10 percent or more of the paid-in capital or NT$100 million or more. The use, insurance, encumbrances, and any other restriction of rights with respect to the property, plant and equipment shall also be disclosed. However, in the case of shares issued by a company with no par value or a par value other than NT$10 per share, the calculation of 10 percent of the paid-in capital shall be replaced by 5 percent of the equity attributable to owners of the parent. (Schedule 41)
    2. Setting forth the names, lot size, premises locations, acquisition dates, acquisition costs, revaluation gains, non-depreciated balance amount, published value or house/apartment's appraised value and the proposed future disposition or development plans of the idle real properties and the real properties which have been held for 5 fiscal years or more for investment purposes. (Schedule 42)
  2. Rental properties:
    1. Finance lease: The standards and items to be disclosed are identical with item (1) of the previous subparagraph.
    2. Operating lease: For all the operating lease assets the rent amount of which exceeds NT$5 million a year, their names, number, lease term, annual lease amount, names of lessors, and the current status of use shall be set forth. (Schedule 43)
  3. Each factory's current condition and facility productivity ratio for most recent 2 fiscal years. (Schedules 44, 45)
Article 26     For the current issue of new shares in connection with acquisition or merger, the following items shall be specified:
  1. Plan content:
    1. Content of the merger or acquisition plan: including the purpose of the merger or acquisition; the integration plan for financial, business, personnel, information, etc. affairs after the merger or acquisition and anticipated benefits; the share conversion ratio and the basis upon which it was calculated; proposed schedule; items that materially affect the share conversion ratio after the public announcement of the merger or acquisition; effects on net value per share and earnings per share; matters related to the assumption of rights and obligations of the extinguished company (including principles for handling treasury shares and already-issued equity securities), and the basic identifying information of the company to be merged or acquired (Schedule 51).
    2. Content of the split plan: the purpose of the split; estimated value of the operations and assets planned to be assigned to the existing company or new company; share conversion rates and the basis upon which they were calculated; the total number and the types and quantities of the shares to be acquired by the split company or its shareholders; matters related to assumption by the existing company or new company of rights and obligations of the split company (including principles for handling treasury shares and already-issued equity securities); matters related to the reduction, if any, in capital of the split company; anticipated benefits of the split.
  2. Merger or acquisition contract.
  3. Opinion of an independent professional on the reasonableness of the share conversion rate of the merger or acquisition plan.
  4. Any restrictions on future transfer or pledge of new shares issued due to the merger or acquisition.
  5. The projected consolidated balance sheet as of the record date for calculating the share conversion ratio between the merging and merged companies.
  6. Financial reports of the merged company for the most recent 2 fiscal years, audited and attested by a CPA or CPAs. (If the merged company is not a publicly issued company, its financial reports may be audited and attested by a single CPA.)
  7. Minutes of the shareholders meeting of the merged company at which the resolution for merger was passed; however, this restriction shall not apply where any act or regulation provides otherwise.
  8. Summary of the merged company's financial and business conditions:
    1. The main content of the merged company's business operations, current products and their uses or current services, the condition of the supply of the main raw materials, and the sales areas for the main products or services shall be set forth.
    2. Where the merged company is not a public company, if assets listed among the merged company's major assets during the most recent 2 fiscal years or during the current period up to the printing date of the prospectus are bought/sold in an amount equivalent to 20 percent of the company's paid-in capital, or if such amount reaches 300 million New Taiwan Dollars or more, any endorsements, guarantees, or loans made to other parties shall be set forth. However, in the case of shares issued by a company with no par value or a par value other than NT$10 per share, the calculation of 20 percent of the paid-in capital shall be replaced by 10 percent of the equity attributable to owners of the parent. (Schedules 52 to 54)
    3. In accordance with Article 21, subparagraph 1, a summary of the merged company's investments in other companies shall be set forth.
    4. In accordance with Article 22, important contracts signed by the merged company shall be set forth and the effect on the company's financial and business conditions after the merger shall be described.
    5. In accordance with subparagraph 2 of Article 9, major litigation, non-litigation, and administrative disputes of the merged company and related companies shall be set forth and the effect on the company's financial and business conditions after the merger shall be described.
    6. If the merged company is a construction company or has a construction department, the estimated income and gross profit for each construction project during the fiscal year of registration and the preceding fiscal year shall be set forth, and the estimated sales of completed but not yet sold projects shall be described.
Article 27     The section on "summary financial data for the most recent 5 fiscal years" shall include the following items:
  1. Condensed balance sheet and statement of comprehensive income: Setting forth the condensed balance sheet and statement of comprehensive income information for the most recent 5 fiscal years. Listed and OTC-traded companies shall also set forth the condensed balance sheet and statement of comprehensive income information up to the quarter immediately preceding the prospectus' printing date. For those who have been notified by the FSC to revise their financial information, all the figures/numbers used shall be the revised ones, and the status and reasons for such revision shall be noted. Those who are notified by FSC to make the corrections by themselves shall make note of the status and reasons for the corrections. (Schedule 55)
  2. Matters of material significance which affected the comparability of the above-mentioned condensed financial statements, such as accounting changes, corporate mergers, or suspension of work in the operating departments etc., and the impact of these events on the then current financial reports.
  3. The names and auditor's opinions of the attesting CPA for the most recent 5 fiscal years:
    1. Setting forth the names and audited opinions of the attesting CPA for the most recent 5 fiscal years. Except for those audited reports with an unqualified opinion, the contents of the opinion shall be fully described.
    2. If there was change/replacement of the CPA within the most recent 5 fiscal years, explanation made by the company's previous and current CPA over the causes for such change/replacement shall be set forth.
  4. Financial analysis: Consolidated analysis of the financial data for the most recent 5 fiscal years shall be made. Listed and OTC-traded companies shall include in such analysis the then current financial data up to and until the quarter immediately preceding the prospectus' printing date. The financial analysis shall at least include the below-listed items, and explanations shall be given of the causes of changes in the financial ratios for the preceding 2 fiscal years. (Schedule 56)
    1. Financial structure:
      1. Ratio of liabilities to assets.
      2. Ratio of long-term capital to property, plant and equipment.
    2. Debt service ability:
      1. Current ratio.
      2. Quick ratio.
      3. Interest coverage folds.
    3. Operating ability:
      1. Account receivables' turnover rate.
      2. Average days for cash receipts.
      3. Inventory's turnover rate.
      4. Payables turnover rate.
      5. Average days for sale of goods.
      6. Turnover rate for property, plant and equipment.
      7. Total assets' turnover rate.
    4. Profitability:
      1. Assets return ratio.
      2. Equity return ratio.
      3. Net profit ratio.
      4. Earning per share.
    5. Cash flow:
      1. Cash flow ratio.
      2. Cash flow sufficiency ratio.
      3. Cash re-investment rate.
    6. Leverage
      1. Operational leverage.
      2. Financial leverage.
  5. Description of major variations of accounting items: Comparing the most recent 2 fiscal years' accounting items in the balance sheets and statements of comprehensive income; if there is a 10 percent or more variation in the monetary amounts, and if such sum has reached 1 percent of the total assets value of the then current fiscal year, a detailed analysis of the causes for such changes shall be made. (Schedule 54)
Article 34     Where a company registers to offer and issue securities in accordance with the provisions of paragraph 2 of Article 6 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, if the prospectus for companies listed on the stock exchange or traded on an OTC market, written in accordance with Chapter II, has been posted (in the form of electronic files, prepared in the format prescribed by the FSC) to the information reporting website designated by the FSC and has been provided in printed format at the following places for investors to read, a simplified version of the prospectus may be used for delivery to the subscribers and offerees:
  1. Taiwan Stock Exchange Corporation
  2. GreTai Securities Market
  3. Securities & Futures Institute
  4. Taiwan Securities Association
  5. The head office of the lead underwriter and co-underwriter for this offering and issuance.
    Any party to which the following circumstances apply shall not be restricted by the regulations of the preceding paragraph and may directly deliver the simplified version of its prospectus to subscribers or offerees:
  1. The party is preparing to issue ordinary corporate bonds.
  2. The party has handled a public offering and issuance of securities during the same accounting year in accordance with the regulations of the preceding paragraph, and is once again registering the public offering and issuance of securities.
  3. The party is a company not listed on a stock exchange or traded on an OTC market issuing new shares in connection with a cash capital increase (in which case it is exempt from public offering requirements), corporate bonds with warrants, convertible corporate bonds, new shares in connection with merger or acquisition, or new shares in connection with acquisition of another company's shares, or is a public company issuing employee stock warrants or new restricted employee shares.
Article 36     For cases of incorporation by public offering, the following items shall be included:
  1. Process of company incorporation: Provide the reason for incorporation by public offering, a register of promoters, and the names, experience, number of shares subscribed, types of capital contribution of the promoters whose share subscription percentage is among the top ten, and whether the promoters meet the qualifying criteria under the relevant acts; share dispersal and status of related enterprises holding shares shall also be disclosed.
  2. Minutes of promoters meeting.
  3. The condition of the market in which the promoter's enterprise belongs and future expandability.
  4. The contents of the promoters' business plan:
    1. Scope of business: setting forth the main products or businesses.
    2. Operating principles and strategies: setting for the principles and strategies for each aspect of operation.
    3. Plan for business development: setting forth long and short-term business development plans, the main target market, and competitive strategies.
    4. Concrete plan for execution:
      1. Facilities at the operation location: setting forth the factors taken into consideration in choosing the operation location and factory address, and the method for deciding the transaction price.
      2. Setting forth the educational background of the principal managers.
      3. Organizational system: setting forth the structure of the organization and the purposes, duties, and responsibilities of each of the main departments.
      4. Human resources plan: setting forth the need for human resources, the method for hiring employees, nurturing, training, promotion and relocation, evaluation, salary system, and employee fringe benefits.
      5. Setting forth the items in the plan for allocation of finances and use of capital.
    5. Setting forth the operating plan and the production and sale plan for the forthcoming fiscal year.
    6. Setting forth, item by item, whether there was any trade in major assets, financing, or guaranty conditions (Schedule 66), or other aspects of trade between the promoters and their related persons within the most recent year.
  5. The name and address of the bank authorized to collect the payment for the subscribed share, and the proof that the promoters have paid their share subscription price pursuant to the relevant regulations.
  6. The offering circular.
  7. The securities underwriter's summary evaluative opinion.
  8. The authority in charge of the enterprise, and major laws and regulations applicable to the enterprises.
  9. Any other documentation required to be included by the competent government authority.
    If the FSC has promulgated separate rules/regulations for special industries like banks, bill financing, securities, futures, insurance, financial holdings, and trust and investment, those rules/regulations shall be complied with.