|
Article 8
|
Where an issuer conducts an offering and issuance of securities as contemplated under paragraph 2 of Article 6, the FSC may reject the registration upon the occurrence of any one of the following events:
1. Fifty percent of the original directors have changed during the year of registration or during the previous two years, and a shareholder has obtained its shares in violation of the provisions of Article 43-1 of the Act. However, this provision does not apply where corrections have been made prior to the registration date.
2. Any one of the events set forth under paragraph 1 of Article 156 of the Act applies to an exchange-listed or OTC-listed company. However, this restriction does not apply to any company upon which restrictions have been imposed, in accordance with the provisions of paragraph 2 of Article 139 of the Act, with respect to the trading of its shares on a stock exchange.
3. The current offering and issuance plan is unfeasible, unnecessary, or unreasonable.
4. Any one of the following events has occurred in the implementation of a previous plan for the offering and issuance, or private placement, of securities, and the situation has not been improved:
(1) The process of implementation is seriously delayed without legitimate reason and the implementation has not been completed yet.
(2) The plan has undergone substantial change without due reasons and such change has not been completed. However, this provision does not apply where more than three years have passed between the registration date and the actual completion date of the plan.
(3) The securities offering and issuance plan has undergone material change, but said change has not yet been reported to a shareholders' meeting for approval.
(4) The company has failed in the most recent year to observe the provisions of Article 9, paragraph 1, subparagraphs 4 through 9, or provisions set out in Article 11 of the Regulations Governing the Offering and Issuance of Overseas Securities by Issuers.
(5) Failure to faithfully perform information disclosure in accordance with the Directions for Public Companies Conducting Private Placements of Securities.
(6) No reasonable benefit derived and no legitimate reason is provided. However, in the event more than three years have passed since the completion date of the plan till the registration date, such restriction does not apply.
5. An important part of the plan for the current offering and issuance of securities (such as issuance rules, source of funds, particulars of the plan, implementation schedule, and expected returns) has not been placed on the agenda of a board meeting or shareholders meeting in accordance with the Company Act and the issuer's articles of incorporation, or has not been adopted by resolution at such a meeting.
6. The company has lent a large amount of money to another party for purposes other than financing needs arising from a business transaction with another company or business firm, has not yet rectified the situation, and now intends to conduct a cash capital increase or issue corporate bonds.
7. The company has entered into an irregular transaction of material significance, and has not yet rectified the situation.
8. The company intends to conduct a cash capital increase or issue corporate bonds, but holds financial assets listed under current assets, idle assets, or idle real property with no plan to actively dispose of or develop such holdings, and their total value is equivalent to either: (1) 40 percent or more of shareholders' equity in the most recent financial report audited and attested (or reviewed) by a CPA, or (2) 60 percent of the total amount of funds to be raised through the cash capital increase or corporate bond issue that the company is registering. However, this provision does not apply when the funds to be raised will be used to purchase fixed assets and there is a concrete plan for fund raising evidencing the need to raise the funds.
9. Proceeds from the cash capital increase or corporate bond issuance are to be used to invest in a company engaged primarily in the trading of securities, or to establish a securities firm or a securities service enterprise.
10. The company has failed to prepare its financial statements in accordance with relevant acts or regulations, or with generally accepted accounting principles, and such violations are of material significance.
11. The company has violated the provisions of Article 5, paragraph 2.
12. The internal control system is seriously deficient in design or implementation.
13. The company's share price fluctuated abnormally during the month prior to the date of registration.
14. Any one of the following descriptions applies to the shareholdings of the entire body of the company's directors or supervisors:
(1) The percentage of their equity stake is in violation of Article 26 of the Act and the FSC has notified them to make up for the shortfall but they have not yet done so.
(2) The percentage of their equity stake still does not meet the required equity stake set forth under Article 26 of the Act even after accounting for the share issue that the company is now registering; provided, however, that this does not apply where the entire body of the company's directors or supervisors pledges to make up for the shortfall upon completion of the offering.
(3) During the fiscal year in which the registration is made, or during the preceding fiscal year, the entire body of the company's directors or supervisors did not honor a promise to make up for a shortfall in their equity stake.
15. The issuer or its current chairperson or general manager, or a de facto responsible person has received a fixed sentence or a more severe punishment from a court in the past three years due to violation of laws governing business and industry such as the Act, the Company Act, Banking Act, Financial Holding Company Act, or Business Accounting Act, or due to a crime involving breach of faith such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement.
16. The court has decided that the issuer has an obligation for damages under the Act and the issuer has not met that obligation yet.
17. Collateral has been provided for a loan of any third party in violation of Article 5 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, the circumstances are serious, and there has been no improvement.
18. There is an issue of new shares due to a merger, or an issue of new shares for the purpose of acquiring the shares of another company, or an issue of new shares for the purpose of an acquisition or demerger conducted in accordance with law, and any one of the following descriptions obtains:
(1) There has been a material violation of the provisions of Chapter 2, Section 5 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
(2) The assigned or purchased shares are not the newly issued shares of another company, non-current equity investment, or previously issued shares held by the shareholders of another company.
(3) The ownership rights over the assigned shares or the acquired business or assets are not encumbered in any way, such as through the creation of pledge thereupon or placing of restrictions on the purchase or sale thereof.
(4) There has been a violation of Article 167 paragraph 3 or 4 of the Company Act.
(5) An audit report with unqualified opinion was not issued by a CPA for a financial report of an absorbed company for the most recent fiscal year; provided, that this provision does not apply where an audit report with qualified opinion was issued together with an unqualified opinion regarding the balance sheet.
19. The event prescribed in Article 13, paragraph 1, subparagraph 3, item 6 occurs, and the directors, supervisors, and shareholders who hold 10% or more of total issued shares of the issuer fail to undertake to place a certain percentage of their shares under the custody of a centralized securities depository enterprise.
20. The FSC deems it necessary, in to protect the public interest, to reject or disapprove the issuer's application.
The term "company engaged primarily in the trading of securities" as referred to in subparagraph 9 of the preceding paragraph shall mean a company in which the issuer has directly invested, or in which a subsidiary of the said issuer has invested under the equity method, provided that its cash, cash equivalents, financial assets listed under current assets, and securities issued by the issuer account for 50% or more of the total assets value of such company, and the revenue or profit/loss respectively from trading or holding of the aforesaid assets account for 50% or more of the revenue or profit/loss of such company.
Where an issuer conducts an offering and issuance of securities as contemplated under Article 6, paragraph 2, sub-paragraph 2, or where either an OTC-listed company applying to transfer its listing to a stock exchange or an exchange-listed company applying to transfer its listing to an OTC market carries out a cash capital increase in order to achieve compliance with standards governing dispersion of equity ownership, if the underwriter evaluation report clearly explains the feasibility of the capital allocations and the reasonableness of the expected benefits of the current offering and issuance plan, then provisions regarding the necessity of the plan, as set out in subparagraph 5 of the preceding article and in paragraph 1, subparagraph 3 of this article, need not apply.
If the issuer is a securities, futures, or financial enterprise, it is not required to include financial assets listed under current assets in its calculations when totaling the value of the assets set forth under paragraph 1, subparagraph 8. The provisions paragraph 1, subparagraph 9 need not apply if the issuer is an insurance enterprise, or it is an emerging stock company conducting a cash capital increase through a new share issue in accordance with the provisions of Article 6, paragraph 2, subparagraph 2, or it is either an OTC-listed company applying to transfer its listing to a stock exchange or an exchange-listed company applying to transfer its listing to an OTC market that intends to carry out a cash capital increase in order to achieve compliance with standards governing dispersion of equity ownership.
The provisions prescribed in paragraph 1, subparagraph 8 need not apply where an issuer, for the purpose of enjoying tax incentives, conducts a cash capital increase to raise funds not greater in amount than the upper limit set by the competent authority or NT$100 million.
With respect to the issuance of new shares due to merger, issuance of new shares to accept transfer of shares of another company, or issuance of new shares due to an acquisition or demerger conducted in accordance with the law, the following parts of paragraph 1 need not apply: subparagraph 1, those provisions of subparagraph 4 that relate to implementation of a previous plan for cash capital increase or corporate bonds, and subparagraphs 13, 15, and 19.
The provisions of paragraph 1, subparagraphs 1, 13 and 19 need not apply where an issuer has engaged a securities underwriter to publicly underwrite its ordinary corporate bonds.
|
|
Article 12
|
When offering and issuing stocks, the issuer shall submit the relevant registration statement (attachments 2 through 12) based on the nature of its case, recording all of the necessary information, together with the required attachments to the FSC. Only after the registration becomes effective can the issuer proceed with such offering and issuance.
If the registration statement submitted by the issuer, or the information recorded therein, is incomplete, or any one of the events prescribed under Article 5 herein occurs, and the issuer submits the necessary supplementation before receiving a stop order from the FSC regarding its registration, its registration shall become effective when the effective registration period set forth in Article 13 has elapsed, counting from the date on which the FSC and FSC-designated institutions receive supplementation in full.
The registration of an issuer of a cash issue of new shares that, prior to that registration becoming effective, submits to the FSC and FSC-designated institutions updated relevant data due to a change in the issue price, shall still become effective based on the effective registration period set forth in Article 13 herein, and the provisions of the preceding paragraph do not apply.
|
|
Article 13
|
For an issuer conducting any of the case types listed below, registration shall become effective 20 business days from the date on which the FSC and FSC-designated institutions receive its registration form for the issue of new shares:
1. Establishment by offering.
2. Any one of the types of share issue set forth under Article 6, paragraph 2, subparagraphs 1 and 3, where the circumstances in any one of the following items exist:
(1) An issue conducted in accordance with paragraph 2 of Article 6 has been previously rejected, disapproved or revoked by the FSC. However, this restriction need not apply where, since the registration took effect or upon arrival of notification of approval, the issue has not been fully subscribed and payment therefore has not been fully collected in cash while the case has been rejected or revoked by the FSC.
(2) The issuer has been sanctioned two or more times by the FSC in accordance with Article 178 of the Act for violating the Act or other relevant acts and regulations during the fiscal year when the registration was filed or during the previous fiscal year.
(3) The profits or net profits before tax of the issuer show losses in the recent two years or the latest financial report indicates that the net asset value of its shares is lower than its par value.
(4) The issuer is required to allocate special reserve for its non-arm's length transactions and such reserve is not canceled yet;
(5) An event set forth under Article 185 of the Company Act has occurred in the year of registration or the previous two years or a portion of the business or R&D result is transferred to another company. However, if the business income of those transferred items or the expenses accumulated for R&D does not exceed 10% of the business profit or R&D expenses shown by the financial report of the previous year, such restriction does not apply;
(6) A material change has occurred among the company's governance personnel or top management right in the year of registration or the previous two years and any one of the following events takes place:
(i) The submitted financial report indicates an addition to the principal products (meaning that the business income derived from the products accounts for 20 percent or more of the business income of the company) and that the total business income or profit derived from the added principal products accounts for 50% or more of the same respective categories of that year. However, the difference between the business income for the preceding and following periods did not reach 50 percent or more therefore the principal products may not be counted;
(ii) The submitted financial report indicates that the issuer has acquired an on-going or completed construction project and the business income or profit from that project has reached 30% of the same respective categories of that year;
(iii) The submitted financial report indicates that the issuer has been transferred a portion of the business and R&D results of another company and the business income or profit derived from that partial business and R&D result has reached 30% of the same respective categories of that year.
Except for an issuer filing for registration pursuant to the provisions of the preceding paragraph, the registration of an issuer that files to issue new shares shall become effective 12 business days after the date on which the FSC and FSC-designated institutions receive its registration form. However, for an issuer other than those in the financial holding, banking, bills finance, credit card, and insurance businesses that conducts any of the matters listed below, or that has obtained a credit rating report from a credit rating institution approved or certified by the FSC in the most recent year, the effective registration period shall be shortened to seven business days:
1. An emerging-stock company, or company that is unlisted or not traded on an OTC market, issues new shares due to a cash capital increase, and is not required to allocate a certain percentage of the newly issued shares to a public offering.
2. An emerging-stock company, or company that is unlisted or not traded on an OTC market, issues new shares due to merger, or issues new shares due to an acquisition or demerger conducted in accordance with law.
3. An emerging-stock company issues new shares due to a cash capital increase pursuant to Article 6, paragraph 2, subparagraph 2.
4. Either an OTC-listed company has applied to transfer its listing to a stock exchange or an exchange-listed company has applied to transfer its listing to an OTC market, and the Taiwan Stock Exchange or the GreTai Securities Market has filed the exchange listing or OTC listing with the FSC, and the company is now carrying out a cash capital increase in order to achieve compliance with standards governing dispersion of equity ownership.
Where an issuer issues new shares due to the acquisition of shares of another company, and files for effective registration with the FSC on the same day, that registration becomes effective 12 days from the date on which the FSC and FSC-designated institutions receive the registration application.
Paragraph 1, subparagraph 2 does not apply to cases of issuance of new shares due to merger, issuance of new shares to accept transfer of shares of another company, or issuance of new shares due to acquisition or demerger conducted in accordance with law.
|
|
Article 21
|
A public company may issue corporate bonds only after it has submitted the Registration Statement for Issuing Corporate Bonds (attachments 13 and 14), provided all information required therein and sent the registration statement along with relevant documents to the FSC and obtained an effective registration.
In the event the public company registers with the FSC and FSC-designated institutions in accordance with the preceding paragraph, its registration shall become effective 7 business days after the Registration Statement for Issuing Corporate Bonds is received by the FSC or its designated institution. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
The provisions of paragraph 2 of Article 12, Article 15, and Article 16 shall apply mutatis mutandis to public companies that file for registration in accordance with paragraph 1.
After registering for issuing corporate bonds, if the public company changes the terms of issuance or the interest rate and then submits the modified relevant documents to the FSC and FSC-designated institution before the original registration becomes effective, its registration will become effective in accordance with the time frame prescribed in the preceding paragraph.
|
|
Article 22
|
In the event the issuer meets all the following conditions simultaneously, it may submit the Shelf Registration Statement for Issuing Corporate Bonds (attachment 15), provide all information required therein, along with all required documents to the FSC for effective registration. In addition, it shall complete the issuance within the scheduled issuance period.
1. Its stocks have been listed in the stock exchange market or OTC for a combined period of three years or more. However, this provision does not apply under the following circumstances:
(1) Where the issuer is a government-owned enterprise;
(2)Where the issuer is a financial holding company conforming to Article 4 paragraph 4 of the Financial Holding Company Act providing that the subsidiary bank, subsidiary insurance company, or subsidiary securities firm be listed or its shares be traded in the business places of securities firms for a total of three years.
2. It has periodically or non-periodically disclosed its financial information to the public in accordance with Article 36 of the Act or other relevant laws for the past 3 years.
3. No occurrence of rejection, disapproval, or withdrawal by the FSC with regard to the offering and issuance of securities for the past three years. However, this restriction need not apply to the case where, since the registration taking effect or upon arrival of notification of approval, the issuance has not been fully subscribed and payment thereof has not been fully collected in cash and the case has been rejected or revoked by the FSC.
4. The cash capital increase or corporate bond issuance plans approved or effectively registered with FSC for the past three years have been implemented in accordance with the schedules and no material changes have occurred.
5. Within the past year, a credit rating institution approved or recognized by the FSC has rated the issuer or the corporate bonds as up to or above a certain level.
6. The certified public accountants retained by the issuer have not received a warning or more severe sanctions for their handling of securities offering and issuance within the last 3 years.
7. The lead underwriter retained by the issuer has not been punished in accordance with Article 66, subparagraph 2 of the Act to discharge its director, supervisor, or manager or with more severe sanctions in connection with handling of securities offering and issuance within the last 3 years.
Paragraph 2 of Article 12, Articles 15 and 16, and paragraphs 2 and 4 of the preceding article shall apply mutatis mutandis to the issuer that registers with the FSC in accordance with the preceding paragraph.
The scheduled issuance period referred to in paragraph 1 may not exceed two years counting from the date of effective registration. The issuer shall set the said period at the time of registering with the FSC.
Where an issuer issues corporate bonds during the scheduled issuance period, it shall consign an underwriter to underwrite the issuance on a firm commitment basis.
|
|
Article 23
|
When issuing corporate bonds within the scheduled issuance period as referred to in the preceding Article, the issuer shall, on the next business day after it has put such issuance plan in public announcement in accordance with Article 252 of the Company Act and completed payment collection, submit the Supplementary Form for the Shelf Registration for Issuing Corporate bonds (attachment 16) complete with all required information, together with required documents, to the FSC for recordation.
In case of change of accountant or lead underwriter retained by the issuer during the scheduled issuance period as referred to in the preceding Article, qualifications prescribed in paragraph 1, subparagraph 6 or 7 of the preceding article shall apply to the succeeding accountant or lead underwriter.
The FSC may cancel the additional complementary issue of corporate bonds supplemental to the current issuance in case where an issuer violates Articles 7 and 8 and paragraph 1 of the preceding article during the scheduled issuance period.
|
|
Article 26
|
A public company may issue exchangeable corporate bonds whose repayment subject is the stocks, held by the public company for more than two years, of a listed company or a company whose shares are traded at the business places of securities firms in accordance with Article 3 of the GreTai Securities Market Rules Governing Review of Securities Traded on Over-the-Counter Markets.
A public company may issue exchangeable corporate bonds only after it has submitted the Registration Statement for Issuing Exchangeable Corporate bonds (attachment 17), provided all information required therein, along with required documents to the FSC, and after such registration becomes effective.
Paragraph 2 of Article 12, Articles 15 and 16, and paragraphs 2 and 4 of Article 21 shall apply mutatis mutandis to the public company registering with the FSC in accordance with the preceding paragraph. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
When issuing exchangeable corporate bonds, the issuer shall set out the following items in the terms of issuance and exchange:
1. Article 29, paragraph 1, subparagraphs 1 through 8, 10, 11, 13, and 17 shall apply mutatis mutandis.
2. The procedures for requesting exchange and the ways of payment.
3. The deposit procedures for the underlying shares.
The aforementioned deposit procedure shall be conducted by a centralized securities depository enterprise. During the period of deposit, the underlying shares may not be pledged or retrieved.
The bondholder who requests for exchange shall fill out the Exchange Request Form and submits the form along with the bonds in question to the issuer or its agent. The exchange becomes effective at the time of receipt of the aforementioned documents. After receiving the exchange request from the bondholder, the issuer or its agent shall deliver the exchange underlying stock to the bondholder within the next business day. If the exchange results in odd-lot units of less than 1,000 shares, the stocks can be delivered within 5 business days.
When issuing exchangeable corporate bonds, the issuer shall engage securities underwriter(s) to handle a public offering of the entire issue, to which the provisions of Article 30, Article 32, paragraph 1, Article 35, and Article 38 shall apply mutatis mutandis.
|
|
Article 27
|
Exchange-listed or OTC-listed companies shall submit the Registration Statement for Issuing Convertible Bonds (attachments 18 and 19), provide all information required therein, along with required documents to the FSC for registration. The companies can commence issuing convertible bonds only after the registration becomes effective.
Registration to issue convertible corporate bonds filed by an exchange-listed or OTC-listed company at which any of the circumstances set forth in Article 13, paragraph 1, subparagraph 2 exists shall become effective 20 business days from the date on which the FSC and FSC-designated institutions receive its registration form.
Registration to issue convertible corporate bonds submitted by an exchange-listed or OTC-listed company, except those filing in accordance with the preceding paragraph, shall become effective 12 business days after the date on which the FSC and FSC-designated institutions receive its registration form. However, with the exception of financial holding, bill finance, or credit card enterprises, the waiting period for effective registration will be shortened to seven business days in the event the issuer or its corporate bond issue has within the last year been graded by a credit rating institution approved or recognized by FSC.
An emerging stock company or a company not listed or traded at the places of business of securities firms that submits a registration in accordance with paragraph 1 shall submit with the registration a credit rating report on the subject issue produced by a credit rating agency approved or recognized by the FSC. The Registration Statement for Issuing Convertible Bonds will become effective seven business days after its receipt by the FSC and FSC-designated institutions. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
Where registration is filed pursuant to paragraph 1 herein, Article 12, paragraph 2, Article 15, Article 16, and Article 21, paragraph 4 shall apply mutatis mutandis.
|
|
Article 33
|
The conversion of convertible bonds to stocks shall not be subject to Article 140 of the Company Act providing that the issue price of the stocks may not be below par value.
The conversion price for convertible bonds issued by an emerging stock company may not be lower than the weighted average transaction price for the company's common shares during the period preceding the price determination date, nor may it be lower than the company's net value per share as reported in the financial report for the most recent fiscal period, audited and attested (or reviewed) by a CPA, and a recommending securities firm shall be retained to give an opinion on the reasonableness of the issue price.
The issuing and conversion price for convertible bonds issued by an emerging stock company, an unlisted company, or a company not traded on an OTC market shall not be lower than the company's net value per share as reported in the financial report for the most recent fiscal period, audited and attested (or reviewed) by a CPA, and a CPA shall be retained to give an opinion on the reasonableness of the issue price.
|
|
Article 39
|
An exchange-listed or OTC-listed company may only issue corporate bonds with equity warrants after it has submitted the Registration Statement for Issuing Corporate Bonds with Equity Warrants (attachments 22 and 22-1), and provided all information required therein, along with required documents to the FSC for registration, and the registration has become effective.
Registration to issue corporate bonds with warrants filed by an exchange-listed or OTC-listed company where any of the circumstances under Article 13, paragraph 1, subparagraph 2 exist shall become effective 20 business days from the date the FSC and FSC-designated institutions receive the registration form.
The registration filed by an exchange-listed or OTC-listed company, except those filing in accordance with the preceding paragraph, shall become effective 12 business days after being received by the FSC and FSC-designated institution. However, with the exception of financial holding, bill finance, or credit card enterprises, the waiting period for effective registration will be shortened to seven business days if a credit rating institution approved or recognized by the FSC has in the past year rated the issuer, or the corporate bonds issued by it.
An emerging stock company or a company not listed or traded at the business places of securities firms that submits a registration in accordance with paragraph 1 shall submit with the registration a credit rating report on the subject issue produced by a credit rating agency approved or recognized by the FSC. The Registration Statement for Issuing Convertible Bonds will become effective seven business days after its receipt by the FSC and FSC-designated institutions. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
Where registration is filed pursuant to paragraph 1 herein, Article 12, paragraph 2, Article 15, Article 16, and Article 21, paragraph 4 shall apply mutatis mutandis.
|
|
Article 42
|
The face value of a corporate bond with warrant is limited to NT$100,000 or multiples thereof.
In cases where it is necessary to issue new shares due to exercise of warrants, the total number of new shares multiplied by the exercise price per share may not exceed the total issued amount, in terms of face value, of the subject corporate bonds.
The exercise price for the warrants of an emerging stock company may not be lower than the weighted average transaction price for the company's common shares during the period preceding the price determination date, nor may it be lower than the company's net value per share as reported in the financial report for the most recent fiscal period, audited and attested (or reviewed) by a CPA, and a recommending securities firm shall be retained to give an opinion on the reasonableness of the issue price.
The subscription price for shares in an emerging stock company, an unlisted company, or a company not traded on an OTC market may not be lower than its net value per share as reported in the financial report (audited and attested [or reviewed] by a CPA) for the most recent fiscal period,, and a CPA shall be retained to give an opinion on the reasonableness of the issue price.
|
|
Article 55
|
An issuer issuing employee stock warrants shall submit a report on the issuance (attachment 22) documenting all required items, together with all required documents, to apply to the FSC, and subsequently obtains the approval of the FSC.
The aforesaid report shall become effective 7 business days after its receipt by the FSC FSC-designated institutions, and paragraph 2 of Article 12, and Articles 15 and 16 shall apply mutatis mutandis. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
|
|
Article 61
|
In the event the holder of securities conducts a secondary distribution to unspecified persons in accordance with paragraph 3 of Article 22 of the Act, it shall submit the Registration Statement for Secondary Distribution of Securities (attachment 23), provide all information required therein, along with required documents to the FSC. The said holder can proceed with the secondary distribution only after the registration with the FSC becomes effective.
In the event a holder intends to register with the FSC for a secondary distribution to unspecified persons of securities that were not publicly issued in accordance with the Act, the holder shall request the issuer of the securities to file retroactively with the FSC for a review of its public issuance. Before the registration with the FSC becomes effective, the holder cannot proceed with the secondary distribution.
In the event a holder of securities registers in accordance with paragraph 1, such registration will become effective seven business days after the receipt of the Registration Statement for Secondary Distribution of Securities by the FSC and FSC-designated institutions, and the provisions of paragraph 2 of Article 12, and Articles 15 and 16 shall apply mutatis mutandis.
The provisions of paragraphs 1 and 2 may not apply to an auction or sale procedure conducted in accordance with laws.
|
|
Article 66
|
In the event that the issuer conducts initial public offering in accordance with paragraph 1 of Article 42 of the Act and paragraph 4 of Article 156 of the Company Act, it shall submit the registration statement (attachment 24) to the FSC, providing the necessary information and annexing the relevant documents such as the stock issue prospectus. The registration will become effective 12 business days after the receipt of the registration statement by the FSC and FSC-designated institutions.
The Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses and the Regulations Governing Information to be Published in Financial Institution Prospectuses for Offering and Issuance of Securities shall apply mutatis mutandis to the information to be provided in the stock issue prospectus under the preceding paragraph.
Article 5, paragraph 2 of Article 12, Article 15, and Article 16 shall apply mutatis mutandis to submission of the registration statement under paragraph 1.
If, after effective registration for initial public offering under paragraph 1, any circumstance set forth in Article 11, paragraph 1, subparagraph 3, 4, or 6 is discovered to exist, the FSC may revoke or void the effective registration.
A company conducting an initial public offering of stock under paragraph 1 shall concomitantly conduct an initial public offering of employee stock option certificates previously issued under Article 167-2 of the Company Act.
A company conducting an initial public offering of stock under paragraph 1 may concomitantly conduct an initial public offering of ordinary corporate bonds previously privately placed under Article 248 of the Company Act, after three years have elapsed from the delivery date of the privately placed ordinary corporate bonds.
|
|
Article 68
|
For the below-listed securities privately placed by a public company in accordance with law and securities subsequently distributed, converted, or subscribed, the public company must arrange with the FSC for a public offering, at least three full years after the delivery date of the privately placed securities, before it may apply to the Stock Exchange or the GreTai Securities Market for listing or for trading at the places of business of securities firms:
1. Stocks privately placed under Article 43-6 of the Act and shares subsequently obtained as bonus shares thereof.
2. Ordinary corporate bonds privately placed in accordance with law.
3. For employee stock option certificates privately placed under Article 43-6 of the Act, subsequently subscribed certificates of payment of shares, shares, and shares obtained as bonus shares thereof.
4. For preferred shares with warrants, corporate bonds with warrants, and convertible corporate bonds privately placed in accordance with Article 43-6 of the Act, the privately placed preferred stock with warrants, corporate bonds with warrants and convertible corporate bonds, and the subsequently subscribed certificates of payment for shares, certificates of entitlement to new shares from convertible bonds, shares, and shares obtained as bonus shares.
5. For private placement of overseas corporate bonds, overseas stocks, and participation in the private placement of overseas depositary receipts in accordance with Article 43-6 of the Act, the shares that obtained through redemption, conversion, or subscription, or obtained as bonus shares.
A filing for registration to conduct a public offering under the preceding paragraph shall be submitted to the FSC with a Registration Statement (attachments 25 to 31) specifying all required information and with the required documents attached. The registration shall become effective seven full business days after the Registration Statement is received by the FSC and FSC-designated institutions, and the provisions of Article 5, paragraph 2 of Article 12, Article 15, and Article 16 shall apply mutatis mutandis. However, the waiting period for effective registration is 12 business days in the case of a financial holding, bill finance, or credit card enterprise.
If, after effective registration for public offering under paragraph 1, any circumstance set forth in Article 11, paragraph 1, subparagraphs 3 to 6 is discovered to exist, the FSC may revoke or void the effective registration.
|
|
Article 70
|
In any of the following circumstances, the FSC may reject a filing by a public company for registration to conduct cases set forth in Article 68:
1. Less than three years have elapsed since the delivery date of the privately placed securities.
2. A lawful resolution has not been adopted by a shareholders meeting or board of directors meeting in accordance with Article 43-6 of the Act. However, this restriction may not apply where a final judgment of guilty has been handed down, the full term of the sentence has been served, and post-approval of the shareholders meeting or board of directors has been submitted.
3. The placees and their number do not comply with the provisions of Article 43-6 of the Act. However, this restriction may not apply where a final judgment of guilty has been handed down, the full term of the sentence has been served, and post-approval of the shareholders meeting or board of directors has been submitted.
4. A report is not submitted within 15 days to the competent authority for recordation in accordance with Article 43-6, paragraph 5 of the Act, or there is failure to input information regarding the private placement of securities into the information reporting website designated by the FSC in accordance with the Directions for Public Companies Conducting Private Placements of Securities. However, this restriction may not apply where a sanction has duly been imposed and an administrative fine has been paid and the report has subsequently been submitted.
5. Prior to carrying out a private placement of securities, the notice of reasons for convening of the shareholders meeting did not set out or explain matters relevant thereto, or prior to carrying out multiple issues, the notice of reasons for convening of the shareholders meeting did not set out or explain matters relevant thereto. However, this restriction shall not apply where a sanction has duly been imposed, an administrative fine has been paid, the required matters have been set out and explained in a notice of reasons for convening of a shareholders meeting, and the case has been approved at the shareholders meeting.
6. Implementation of the plan for the private placement of securities is seriously behind schedule without legitimate reason, and that plan has not been completed, has undergone a material change, or cannot yield reasonable results, provided that this restriction may not apply where more than five years has already elapsed from the date of payment for the privately placed securities to the time of filing.
7. Securities trading has been restricted under Article 139, paragraph 2 of the Act and the FSC has not yet lifted the restriction.
8. The certifying CPA issues a disclaimer of opinion or an adverse opinion in the audit report.
9. The certifying CPA issues a qualified opinion in the audit report, where such qualified opinion would affect the fair presentation of the financial report.
10. The case checklist filled out by the issuer and checked and issued by the certifying CPA shows any violation of law or regulation or the company's articles of incorporation, where the circumstances are serious.
11. Less than three full years have elapsed since delivery of privately placed convertible corporate bonds there has been an exercise of conversion rights.
12. The FSC discovers any violation of law or regulation, where the circumstances are serious.
|
|
Article 72
|
To issue bonus shares or carry out a capital reduction, a public company shall file for registration by submitting to the FSC a registration statement (Attachments 32 and 33) that records all required particulars and is accompanied by the required documents.
Where an exchange-listed or OTC-listed company files to register a capital reduction, the registration shall become effective 12 business days from the date on which the FSC and FSC-designated institutions receive the registration statement for a new share issue.
Registration by a public company for the cases listed below shall become effective seven business days from the date upon which the FSC and FSC-designated institutions receive the registration statement for the issuance of new shares, provided that the effective registration period for a financial holding, bank, bills finance, credit card, or insurance business shall be 12 business days.
1. Issuance of new bonus shares.
2. Capital reduction by an emerging stock company, or a company that is unlisted or whose shares are not traded at the business places of securities firms.
The provisions of Article 5, paragraph 2 of Article 12, Article 15, and Article 16 shall apply mutatis mutandis to cases handled under paragraph 1.
If, after effective registration, any circumstance in Article 11, paragraph 1, subparagraphs 3 to 6, the FSC may revoke or void the effective registration.
|
|
Article 72-1
|
When capital reserve is capitalized in accordance with Article 41, paragraph 2 of the Act, the combined amount of any portions capitalized in any one year in accordance with Article 241, paragraph 1, subparagraph 1 or 2 of the Company Act may not exceed 10 percent of paid-in capital. However, where a company undergoes an organizational change (such as a merger, acquisition, or reorganization) that results in the capitalization of undistributed earnings after the organizational change, this restriction does not apply.
An amount transferred to capital reserve in accordance with Article 241, paragraph 1, subparagraph 1 of the Company Act may not be capitalized until the fiscal year after the competent authority for company registrations approves registration of the capital increase or whatever other matter generated that portion of capital reserve.
|
|
Article 73
|
In any of the following circumstances, the FSC may reject a filing for issuance of bonus shares or capital reduction by a public company:
1. The certifying CPA issues an adverse opinion or disclaimer of opinion in the audit report.
2. The certifying CPA issues a qualified opinion in the audit report, and such qualified opinion has an impact on the fairness of presentation of the financial report.
3. The case review forms prepared by the issuer and reviewed by the certifying CPA show violations of laws or regulations or the articles of incorporation, where the violation is serious.
4. Any of the following circumstances exist with respect to a report of capitalization of earnings:
(1) the balance after statutory allocation of special reserves from undistributed earnings in accordance with paragraph 1 of Article 41 of the Act is inadequate for distribution;
(2) the listed company or company whose shares are traded at the business places of securities firms fails to prescribe a concrete dividend policy in the articles of incorporation;
(3) in the current capitalization of earnings that the listed or OTC company has reported, the entire amount of the capitalization is being accomplished through distribution of employee bonuses;
(4) the total amount of an exchange-listed or OTC-listed company's employee bonuses paid out in cash and distributed as new shares (valued at market price) exceeds 50 percent of net income for the current period or 50 percent of distributable earnings (less legal reserve, special reserve, and balance of reserves after withdrawals).
5. A capitalization of capital reserves has been reported, and one of the following circumstances exists:
(1) Losses have been incurred in the most recent two consecutive years.
(2) A provision in Article 72-1 has been violated.
6. Violation of or failure to perform commitments made at the time of application for listing or trading at the business places of securities firms, where the circumstances are serious.
7. The FSC discovers any violation of law or regulation, where the circumstances are serious.
8. Other circumstances as deemed necessary by the FSC to protect the public interest.
The term "market price" in subparagraph 4, item 4 of the preceding paragraph means the average closing price for the final month of the accounting period.
|
|
Article 76
|
These Regulations shall be enforced from the date of issuance except for Articles 10 and 71 as amended 3 March 2006 (which were enforced from 1 July 2006), Article 56-1 as amended 6 March 2007 (which was enforced from 1 January 2008), and Article 72-1 as amended 9 November 2007 (the enforcement date of which shall be set by the competent authority).
|