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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(2015.01.29)
Date：
Article 3     On the front cover of the prospectus, the common stock code shall be printed in the upper right hand corner, and the following particulars shall be printed in sequential order:
  1. The name and seal of the company or preparatory office.
  2. Where the prospectus is prepared for the purpose of issuing the following securities:
    1. Issuance of new shares: the source of this new issue, types of new shares, number of shares, value, conditions of the issue, the public underwriting ratio, and manner of underwriting and sale allocation. If there are specially agreed conditions for preferred shares, the page number in the prospectus where these are set forth in full shall be separately noted.
    2. Issuance of corporate bonds: types, value, interest rate, conditions of issue, the public underwriting ratio, and manner of underwriting and sales allocation. If there are conversion or subscription features, the page number in the prospectus where these are set forth in full shall be separately noted.
    3. Issuance of employee stock warrants: number of units issued, number of shares subscribable per stock option certificate, option exercise conditions, and method of performance. For option exercise conditions, readers may be referred simply to the page number in the prospectus where such conditions are listed in full.
    4. Issuance of new restricted employee shares: type of issue, number of shares, value, and conditions of issue. For conditions of issue, readers may be referred simply to the page number in the prospectus where the conditions are listed in full.
    5. Establishment by public offering: authorized capital amount, source of the current issue of new shares, types of new shares, number of shares, value, conditions of issue and the number of shares subscribed by the promoters.
    6. Other.
  3. Summary of the purpose of the capital application plan and the projected possible effect thus created. The page numbers in the prospectus where this is set forth in full shall also be noted.
  4. Fees and charges related to the current issue:
    1. Underwriting fees.
    2. Other fees and charges, including such other fees and charges as related to certified public accountants and attorneys (no itemization is required).
  5. The following statements shall be printed in a conspicuous manner:
    1. The effective registration of the securities may not be cited in an advertisement as proof of the veracity of registration particulars, or to guarantee the value of the securities.
    2. If the prospectus contains false or omitted information, the issuer and its responsible person and all other persons who sign or affix their seal on the prospectus shall be held liable in accordance with laws.
    3. Before making any investment, investors shall go to the information disclosure website designated by the Financial Supervisory Commission (FSC) to carefully read the content of the prospectus and take note of the company's risks. The page number in the prospectus where these are set forth in full must be separately noted.
    4. The web addresses for enquiry about the prospectus, including the address of the information disclosure website designated by the FSC and the web address used by the company to disclose information relating to the prospectus.
  6. Publication date.
    A prospectus prepared in order to register for public offering and issuance of securities shall note on its front cover that it is a draft version for the purpose of such registration.
    Where any of the following occurs, the company shall make a statement to that effect in bold typeface on the cover of the prospectus:
  1. Where there has been a change in the common stock code referred to in the preceding paragraph, both the original stock code and the new stock code shall be printed in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
  2. Where there has been a change in the company name as referred to in the first paragraph, the change shall be disclosed by printing the new and old names adjacently in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
  3. If stabilization operations are proposed in connection with cash capital increase in accordance with the relevant regulations, the following statement shall be noted: "To deal with price fluctuations in the stock market, the underwriter may proceed with stabilization operations regarding the issued shares of the current right issue if necessary."
  4. Where an issuer is registering to issue shares at below par value, it shall also note that the company is issuing the new shares at a discount.
  5. The par value of the shares.
  6. Where an issuer is registering to issue straight corporate bonds and purchasers of the bonds are restricted, it shall note the restriction.
  7. Where new shares are issued upon merger or acquisition (including merger or consolidation, acquisition, or split) or acquisition of another company's shares, if there are any restrictions on transfer or pledge of the issued shares, such restrictions shall be noted.
  8. For cases of establishment by offering and of public offerings by companies whose shares are neither listed on the stock exchange (hereinafter, are "unlisted") nor traded on an over-the-counter (OTC) market, the following shall also be noted: "The shares are neither listed on the stock exchange nor traded on an OTC market."
Article 6     When a company registers to offer and issue securities pursuant to Article 6, paragraph 2 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, or when it registers an initial public issuance of its stock pursuant to Article 66, paragraph 1 of the same Regulations, the content of a prospectus, unless otherwise provided in Chapter IV (Prospectus for Incorporation by Offering), shall include the information set forth in Chapter II.
    When a company that is neither listed on a stock exchange nor traded on an OTC market issues new shares in connection with a cash capital increase without holding a public offering, or issues corporate bonds with warrants, or convertible corporate bonds, or new shares in connection with a merger or acquisition, or new shares in connection with acquisition of another company's shares, or when a public company issues straight corporate bonds, employee stock warrants, or new restricted employee shares, or once again registers a public offering and issuance of securities in the same fiscal year it has previously done so, the contents of the prospectus shall include:
  1. The front cover, inside cover, and back cover: Shall include the information set forth in Article 3 to Article 5.
  2. Company summary: Shall include the information set forth in Article 8, Article 9, Article 10, paragraph 1, subparagraphs 2 and 4, and Article 11, subparagraph 2, subparagraph 3, items 3 and 4, subparagraph 4, and subparagraph 7.
  3. Operation summary: Shall include the information set forth in Article 19, subparagraph 1, items 1 to 3 and subparagraph 2, items 1 and 4, Article 21, subparagraphs 1 and 3, and Article 22.
  4. Issuance plan and implementation status: Shall include the information set forth in Article 24, Article 25, and Article 26, subparagraphs 1 to 5.
  5. Financial summary: Shall include the information set forth in Article 27, subparagraph 4, Article 28 (but not including the notes and schedules of the financial reports and statements of major accounting items), Article 29, subparagraph 2, and Article 30.
  6. Special items to be included: Shall include the information set forth in Article 31, paragraph 1, subparagraph 1, item 2, subparagraphs 2 to 5, subparagraph 7, subparagraph 9, subparagraph 11, and subparagraph 12 and Article 32.
    When a company registers to issue straight corporate bonds , and purchasers of the bonds are restricted to professional investors as defined in the GreTai Securities Market Rules Governing Management of Foreign Currency Denominated International Bonds, the content of the prospectus shall include the issuer's basic information, issuance rules, and planned utilization of funds, as well as the information set forth in Article 3 to Article 5 that shall be specified in the front cover, inside cover, and back cover, but otherwise is exempted from the requirements of the preceding two paragraphs.
    If the FSC has promulgated separate rules/regulations for special industries like banks, bill financing, securities, futures, insurance, financial holding, and investment trust, those rules/regulations shall be complied with.
Article 10     The section on company organization shall include the following items:
  1. Organization system: setting forth the company's organizational structure and the business in which each major department engages.
  2. Chart of affiliated enterprises: setting forth the relationship between the company and its affiliated enterprises, cross-shareholding ratios, numbers of shares held, and actual investment amounts.
  3. General manager, assistant general manager(s), deputy assistant general manager(s), and the manager of each department and branch institution: (Schedule 2)
    1. Name, nationality, work experience (educational background), amount and nature of shareholdings: setting forth the names; major work experience (educational background); positions concurrently held with other companies; job commencement date; number of shares held by them, their spouses, minor children, and held through nominees; and the acquisition of employee stock warrants.
    2. For those who are the spouses of or are related to the general manager or assistant general manager within the second degree of kinship, they shall also set forth their corporate position, name and relationship to the general manager or assistant general manager.
  4. Directors and supervisors: (Schedules 3 and 4)
    1. Name, nationality or place of registration, work experience (educational background), amount and nature of shareholdings: setting forth the names; major work experience (educational background); positions concurrently held with this and other companies; appointment date and term; date of initial appointment; number of shares held by them at the time of appointment and those held presently by them, their spouses, minor children, and held through nominees, and the possession of professional knowledge. In the case of the representative of a corporate shareholder, the name of the corporate shareholder and the names of its 10 largest shareholders (and the holding percentage of each) shall be noted. If any of those 10 largest shareholders is a corporate shareholder, the name of the corporate shareholder and the names of its 10 largest shareholders (and the holding percentage of each) shall be noted.
    2. For those who are the spouses of or are related within the second degree of kinship to other managers, the directors or supervisors, they shall also set forth their corporate position, name and relationship to those other managers, the directors or supervisors.
  5. Promoters:
    1. For companies established for less than 1 year, relevant information of promoters whose shareholding percentage is among the top ten of the company shareholders shall be disclosed as pursuant to the previous subparagraph.
    2. For companies established for less than 3 years, all important transactions (including property transactions and financing of funds) between the promoters and the company since incorporation, other than the normal business transactions, shall be disclosed. For property transactions, the nature and location of the transacted item and the method for determining the transaction price shall also be disclosed. For properties purchased from a promoter, if the promoter bought the properties less than 2 years before selling them out, the promoter's purchasing costs shall also be explained.
  6. Remuneration paid to directors, supervisors, general manager, and assistant general manager(s) for the most recent fiscal year (Schedules 5 and 6):
    1. The company may opt either to disclose aggregate remuneration information, with the name(s) indicated for each remuneration range, or to disclose the name of each individual and the corresponding remuneration amount.
    2. If any of the following applies to the company, it shall disclose the remuneration paid to each individual director and supervisor:
      1. A company that has posted after-tax deficits in the parent company only financial reports or individual financial reports within the most recent 2 fiscal years shall disclose the remuneration paid to individual directors and supervisors. This requirement, however, shall not apply if the company has posted net income after tax in the parent company only financial report or individual financial report for the most recent fiscal year and such net income after tax is sufficient to make up the accumulated deficits.
      2. A company that has had an insufficient director shareholding percentage for 3 consecutive months or longer during the most recent fiscal year shall disclose the remuneration of individual directors; one that has had an insufficient supervisor shareholding percentage for 3 consecutive months or more during the most recent fiscal year shall disclose the remuneration of individual supervisors.
      3. A company that has had an average ratio of share pledging by director supervisors in excess of 50 percent in any 3 months during the most recent fiscal year shall disclose the remuneration paid to each individual director supervisor having a ratio of pledged shares in excess of 50 percent for each such month.
      4. If the total amount of remuneration received by all of the directors and supervisors in their capacity as directors or supervisors of all of the companies listed in the financial reports exceeds 2 percent of the net income after tax, and the remuneration received by any individual director or supervisor exceeds NT$15 million, the company shall disclose the remuneration paid to that individual director or supervisor.
    3. Compare and analyze the total remuneration as a percentage of net income stated in the parent company only financial reports or individual financial reports, paid by this company and by all consolidated entities (including this company) for the most recent 2 fiscal years to each of this company's directors, supervisors, general managers, and assistant general managers, and describe the policies, standards, and packages for payment of remuneration, the procedures for determining remuneration, and its linkage to business performance and future risk exposure.
    "Affiliated enterprise" in subparagraph 2 of the preceding paragraph refers to an affiliated enterprise meeting the requirements in Article 369-1 of the Company Act.
Article 15     The description of the status of issue and private placement of employee stock warrants shall include the following items:
  1. For employee stock warrants issued by the Company but not yet mature, the date of effective registration from the competent authority; issue date, number of units issued; ratio of subscribable shares to total issued shares; subscription period, exercise method; period and ratio in which subscription is restricted; number of shares that have been obtained through exercise of subscription rights, NT dollar amount of the shares subscribed, number of shares that have not been subscribed, subscription price per share of the unsubscribed shares, and ratio of the number of unsubscribed shares to the number of issued and outstanding shares up to the date of printing of the prospectus, and effect on shareholders' equity. (Schedule 28)
  2. Names and subscription status of managerial officers who have obtained employee stock warrants and of employees who rank among the top ten in terms of the number of shares to which they have subscription rights through employee stock warrants acquired, cumulative to the date of printing of the prospectus. (Schedule 29)
  3. Status of any private placement of employee stock warrants during the 3 most recent fiscal years up to the date of printing of the prospectus: Shall disclose the date on which the private placement was approved at a shareholders meeting and the amount thus approved; the basis for and reasonableness of the pricing; the manner in which the specified persons were selected (where the offerees have already been arranged, the names of the offerees as entities or individuals and the relationship between the offerees and the company shall also be described); the reasons why the private placement was necessary; the targets of the private placement, their qualifications, subscription amounts, subscription price, relationship with the company, participation in the operations of the company, actual subscription price, the difference between the actual subscription price and the reference price; the effect of the private placement on shareholders' equity; and for the period from receipt of payment in full to the completion of the related capital allocation plan, the status of use of the capital raised through the private placement of employee stock warrants, the implementation progress of the plan, and the realization of the benefits of the plan. (Schedule 30)
Article 16     The description of the status of "new restricted employee shares" shall include the following items:
  1. Dates of effective registration from the competent authority for all new restricted employee shares under which the vesting conditions have not been fully met; issue date; number of shares issued; number of shares still available for issuance; issue price; vesting conditions; restricted rights; custody status; measures to be taken when vesting conditions are not met; number of shares that have been redeemed or bought back; number of shares in which the restrictions on rights have been released; number of shares in which the restrictions on rights have not been released; and ratio of the number of shares in which the restrictions on rights have not been released to the number of total issued shares and the effect on shareholders' equity. (Schedule 31)
  2. Names and acquisition status of managerial officers who have acquired new restricted employee shares and of employees who rank among the top ten in the number of new restricted employee shares acquired, cumulative to the date of printing of the prospectus. (Schedule 32)
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 20 percent or more of the paid-in capital or NT$300 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 20 percent of the paid-in capital shall be replaced by 10 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, fair 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 22     The section on "important contracts" shall include all supply/sales contracts, technologies cooperation contracts, construction contracts, long-term loan agreements, and all other important contracts which are likely to impact the investors' rights, whether they are currently effective or have expired in the most recent fiscal year, and shall include the parties, major content, restrictive provisions and the commencement and termination dates of the contracts. (Schedule 49)
Article 24     The plan for the current cash capital increase, issuance of corporate bonds, issuance of employee stock warrants, or issuance of new restricted employee shares shall specify the following items:
  1. Sources of capital: Description of whether a cash capital increase or issue of corporate bonds is the capital source for the current plan. If the capital is used to acquire or to invest in other companies, or to expand or newly construct property, plant and equipment, the prospectus shall set forth the total amount of the plan. If the funds from the current offering are insufficient, the fund raising methods and sources shall also be described.
  2. For the current issue of corporate bonds, relevant particulars, the method for raising the bond redemption funds, and the method for custody of the funds, shall be disclosed in accordance with Article 248 of the Company Act. If an FSC approved or recognized credit rating institution has been engaged to conduct a credit rating of the bonds, the prospectus shall set forth the name of the credit rating institution, the date of the rating, and the credit rating results shall also be disclosed. If conversion, exchange, or subscription rights are attached to the bonds, the issuance and conversion, exchange, or subscription rules, possibility of dilution of equity under the terms and conditions of issuance, and effect on shareholder equity shall be disclosed.
  3. For the current issue of preferred shares, the prospectus shall set forth the par value per share, issue price, effect of issuance terms and conditions on preferred share shareholders' equity, possible conditions of dilution, effect on shareholder equity, and items provided under Article 157 of the Company Act shall be disclosed. If conversion or subscription rights are attached to the shares, the prospectus shall set forth the issuance and conversion rules or subscription rules (including enjoyment and assumption, after the compulsory conversion of the original preferred shares, of rights and obligations existing on the original preferred shares before conversion, such as dividends that have not yet been distributed) shall be disclosed.
  4. For unlisted preferred shares or preferred shares not to be traded on an OTC market issued by a listed company listed on the stock exchange or traded on an OTC market, the prospectus shall set forth the purpose of the issue, reasons why such shares are not to be listed or traded on an OTC market, the effect on existing shareholders and potential investors, and whether there is any plan to apply for listing or trading on an OTC market shall be disclosed.
  5. If new shares are issued by a company that has received approval (in accordance with the provisions of Article 5 of the GreTai Securities Market Rules Governing Review of Emerging Stocks Traded on Over-the-Counter Markets) for its shares to be traded on OTC markets, the company shall describe its futures plans for listing its shares (or trading them on an OTC market).
  6. If employee stock warrants are to be issued, disclose the rules governing the issuance and exercise of employee stock warrants.
  7. If new restricted employee shares are to be issued, disclose the rules governing the issuance of new restricted employee shares.
  8. Explanation of the feasibility, necessity, and reasonableness of the current plan and an analysis of the influence of each type of funding on the dilution of earnings per share for the fiscal year of the company's registration and the following year. For issuance of stock at below par value, the necessity and reasonableness of issuing new shares at a discount shall be explained, as well as the reasons for not using other capital raising methods and the reasonableness thereof, and the amount of offsets against capital reserves or retained earnings.
  9. Explanation of the mechanism for setting the current issue price, conversion price, exchange price, or subscription price.
  10. Capital utilization estimates and possible resulting effects: Explanation of the progress of the capital utilization and the projected resultant effects after the completion of the current plan:
    1. In the case of acquiring other companies or expanding or newly constructing property, plant and equipment, the prospectus shall set forth the projected possible increased production/sales volume, value, cost structure (including total cost and unit cost), changes of profitability, improvement of product quality and other potential effects upon the completion of the current plan shall be described.
    2. In the case of investing in other enterprises, the following items shall be set forth:
      1. The after-tax net profit of the invested company for the most recent 2 fiscal years, purposes of the investment, planned use of the funds and the relatedness of the enterprise's operations to the company's line of business, and the loss/profits from investment and its impact on the company's operations. If 20 percent or more of the investee enterprise's common shares are held, the prospectus shall set forth the projected schedule for fund use by the investee enterprise, the number of years within which the invested funds are to be recovered, the projected effect each fiscal year before recovery of the funds, and its influence on the company's profitability and earnings per share.
      2. If investing in companies where special approval is required, the prospectus shall set forth the status of approval or permission from the competent authority in charge of such special permit enterprises, and whether any terms or conditions attached to the approval or permission have an effect on this offering and issuance of securities.
    3. In the case of replenishing operating capital or paying off liabilities, the following items shall be set forth:
      1. The amount of debt matured annually, repayment plan, status of projected relief of financial burden, current capital utilization status, amount of needed capital and proposed usage plan, and each month's projected schedule of cash receipts and expenditures for the fiscal year of the registration and the coming 1 fiscal year. (Schedule 50)
      2. The policy for collection of accounts receivable and payment of accounts payable, capital expenditure plan, and the financial leverage and debt ratio (or the self-provided capital and risk capital ratio) for the fiscal year of the registration and the coming 1 fiscal year, and the reasons for paying off liabilities or enriching operating capital.
      3. If the capital increase plan involves paying off liabilities, the prospectus shall set forth the purpose for borrowing funds and the effect achieved in doing so. If the funds were borrowed to purchase a piece of land for construction, or to pay for the costs of a construction project, or to undertake contracted works, the prospectus shall set forth the estimated total amount needed from the purchase of the construction land to the completion of sale of the construction project or the completion of the contracted works, the source of extra capital needed, the capital for each stage of construction and the progress of the construction, the original reason for borrowing funds, and the timing and amounts for recognizing any profits/losses and the anticipated possible effects of such recognition and the status of realization thereof.
      4. In the projected schedule of cash receipts and expenditures, if the total combined amount of any significant capital expenditures and long-term equity investments in the future reaches 60 percent of the amount of the current capital raising plan, the prospectus shall specify the necessity, anticipated sources of funding, and benefits of those expenditures and investments.
    4. In the case of buying a piece of land for construction, or paying the costs of a construction project, or undertaking contracted works, the prospectus shall set forth the estimated total amount needed from the purchase of the construction land to the completion of sale of the construction project or the completion of the contracted works, the source of extra capital needed, the capital for each stage of construction and the progress of the construction, the original reason for borrowing funds, and the timing and amounts for recognizing any profits/losses and the anticipated possible effects of such recognition and the status of realization thereof.
    5. In the case of purchasing an unfinished project and assuming the burden of the seller's unfulfilled contract, the prospectus shall set forth the buyer's reason for the transfer, the basis on which the acquisition price was determined, and the effect of the process of acquisition on the rights and obligations of the parties to the contract.
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 31     The section on "special items to be included" shall set forth the important contents of the registration statement, including:
  1. Summary of the internal control system: The prospectus shall set forth the CPA's suggestions for improving the internal control system and improvements to major flaws discovered through internal auditing in the most recent 3 fiscal years, and shall also disclose the following items:
    1. Internal control statement.
    2. Where the company has retained CPAs to exclusively review its internal control systems, the prospectus shall set forth the reason for doing so, the CPAs' review opinions, measures the company has taken for improvement, and the condition of improvement on lacking items.
  2. Those who have retained an FSC-approved or -recognized credit rating institution to conduct a credit rating/evaluation shall disclose the credit rating/evaluation report issued by the credit rating institution.
  3. Summary opinion from the securities underwriter's assessment.
  4. Attorney's legal opinion.
  5. Summary opinion stated in the case checklist schedule written by the issuer and reviewed by a CPA.
  6. The improvement status of the items notified to be corrected, if at the time the company registered (or applied for approval of) the previous offering and issuance of securities the FSC had notified it to make self-correction on certain items.
  7. The items notified to be further disclosed, if at the time the company registered the current offering and issuance of securities the FSC had notified it to make supplemental disclosure on certain items.
  8. The statement or promised items disclosed in the prospectus from the company's registration (application) for offering and issuance of securities for the first time, the preceding time, and within the most recent 3 fiscal years, and the current state of fulfillment of such.
  9. The major content of any dissenting opinion of any director or supervisor regarding any material resolution passed by the board of directors, where there is a record or written statement of such opinion, for the most recent fiscal year and up to the date of printing of the prospectus.
  10. Any legal sanctions against the company or its internal personnel, or any disciplinary action taken by the company against its own personnel for violation of internal controls, during the most recent fiscal year or during the current fiscal year up to the date of printing of the prospectus; and a description of the main shortcomings in the company's internal control system as well as an indication of measures for improvement.
  11. The statement issued by the securities underwriter, the issuer, and the issuer's directors, supervisors, general manager, financial or accounting officer, and the managerial officers involved in the current registration for public offering and issuance of securities, specifying that no underwriting related fees will be refunded or collected.
  12. For a case that involves the issuer conducting a cash capital increase or an offering of corporate bonds with equity characteristics and adopting book building and public underwriting, the statement issued by the securities underwriter and issuer, specifying that allocation to related parties and insiders is prohibited.
  13. Other necessary items to be supplemented and explained.
    If the issuer, in consideration of the nature of the business engaged in, has retained experts with special professional knowledge and experience in technical, operational, or financial areas to undertake an analytical comparison of the issuer's current business operational status against the future development after the current issuance of securities, and to provide an opinion regarding said issuance, the evaluation and opinion of such experts shall be disclosed.
Article 32     A company listed on the stock exchange or traded on an OTC market shall record the following matters relating to the state of its implementation of corporate governance:
  1. The state of operations of the board of directors: Number of meetings; attendance rate of each director; an evaluation of targets for strengthening of the functions of the board during the current and immediately preceding fiscal years, and measures taken toward achievement thereof; and any other matters that require reporting. (Schedule 58)
  2. The state of operations of the audit committee or the state of participation in board meetings by the supervisors: Number of meetings; rate of attendance (or of attendance as a non-voting participant) of each independent director or supervisor; and any other matters that require reporting. (Schedule 59, Schedule 60)
  3. The state of the company's implementation of corporate governance, any departure of such implementation from the Corporate Governance Best-Practice Principles for TSEC/GTSM Listed Companies, and the reason for any such departure. (Schedule 61)
  4. If the company has a compensation committee in place, the composition, duties, and operation of the compensation committee shall be disclosed. (Schedule 62)
  5. The state of the company's performance of social responsibilities: systems and measures that the company has adopted with respect to environmental protection, community participation, contribution to society, service to society, social and public interests, consumer rights and interests, human rights, safety and health, and other social responsibilities and activities, and the state of implementation. (Schedule 63)
  6. The state of the company's performance in the area of good faith management and the adoption of related measures. (Schedule 64)
  7. If the company has adopted corporate governance best-practice principles or related bylaws, it shall disclose how these are to be searched.
  8. A summary of resignations and dismissals, during the most recent fiscal year and up to the date of printing of the prospectus, of the company's chairperson of the board of directors, general manager, accounting officer, financial officer, internal audit officer, and R&D officer. (Schedule 65)
  9. Any other material information that would afford a better understanding of the status of the company's implementation of corporate governance may also be disclosed.
    The provisions of the preceding paragraph shall also apply to any securities firm, securities investment trust enterprise, securities investment consulting enterprise, or futures commission merchant that is a public company.
Article 34     The company shall deliver to subscribers or offerees the prospectus together with the payment form before an offering and issuance of securities. But if the prospect prepared by the company has included the information as required in Article 6, paragraph 1 or 2 and has been transmitted as an electronic file to the information disclosure website designated by the FSC, the company may directly deliver a simplified version of the prospectus together with the payment form to subscribers or offerees.
    The contents of the simplified version of the prospectus referred to in the preceding paragraph shall include: (Schedule 65-1)
  1. The company's common stock code and the website URL for subscribers or offerees to review the prospectus; if any of the circumstances set forth in Article 3, paragraph 3 exists, the company shall also include the information so required.
  2. Summary of the current plan for offering and issuance of securities and the anticipated possible benefits resulting therefrom.
  3. The audit or review opinions, condensed balance sheets, and statements of comprehensive income in the financial reports audited and attested or reviewed by the CPA for the most recent 3 fiscal years and the most recent period.
  4. The information set forth in Article 31, paragraph 1, subparagraphs 3 to 5 and paragraph 2; in the case of a merger, demerger, acquisition, or an issuance of new shares in connection with acquiring shares of another, the prospect shall additionally disclose an independent expert's opinion on the reasonableness of the share conversion ratio.
  5. The company seal and the signature or seal of the responsible person.
  6. Other necessary information.
Article 35     (Deleted)
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.
    The promoters shall deliver to subscribers or offerees the prospectus referred to in the preceding paragraph together with the payment form before the incorporation of the company.
    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.