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Regulations Governing the Offering and Issuance of Securities by Securities Issuers(2008.05.02) |
| Date： |
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Article 6
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An issuer registering to offer and issue securities shall submit a prospectus.
If any one of the following events occurs when the issuer has registered, the issuer shall ask the lead securities underwriter to evaluate the situation and a lawyer to review the relevant legal issues. The above-mentioned underwriter and lawyer shall provide evaluation report and legal opinions in accordance with regulatory requirements:
1. The cash issuance of new shares, issuance of new shares due to merger, issuance of new shares due to an acquisition of shares from another company, or issuance of new shares due to an acquisition or demerger conducted in accordance with law, by a public company whose stocks have been listed on a stock exchange (hereinafter referred to as "listed") or by an OTC company.
2. Public sale of stock of a company whose stock is approved for trading in the business places of securities firms in accordance with Article 5 of the GreTai Securities Market Rules Governing Review of Emerging Stocks Traded on Over-the-Counter Markets (hereinafter referred to as an "emerging stock company"), after the Stock Exchange or GreTai Securities Market files the listing or OTC listing contract with the FSC, and before the company has issued new shares for cash and engaged a securities underwriter or recommending securities firm to handle the initial listing or OTC listing.
3. An emerging stock company, or a company whose stock has not been listed on a stock exchange (hereinafter referred to as "unlisted") or whose stock has not been traded in the business places of securities firms, that conducts an issue of new shares for cash and allocates a certain percentage of the aggregate new shares to be publicly offered in accordance with Article 18.
4. The offering is used to establish a company.
5. The corporate bonds are to be offered publicly through a securities underwriter. If the issuer issues ordinary corporate bonds, it can be exempted from providing a securities firm evaluation report and legal opinion.
If the securities firms have obtained reports from the credit rating institutions approved or recognized by the FSC in the past year, they can be exempted from the requirement that the lead underwriter must issue an evaluation report.
The legal opinions in paragraph 2 and the preceding paragraph, and concluding opinions of the evaluation reports or rating report, shall be provided in the prospectus.
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Article 12
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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.
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Article 18
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If the number of registered shareholders holding 1,000 shares or more of an emerging stock company, unlisted company, or a company whose shares are not traded in the business places of securities firms does not reach 300, or the company fails to reach the shareholding dispersion standard prescribed by the competent authorities, upon conducting cash offering of new shares, the company shall allocate 10% of the new shares for public offering and is exempted from paragraph 3 of Article 267 of the Company Act which prescribes that the current shareholders shall be entitled to subscribe the new shares in proportion to their respective shareholding percentage, unless any one of the following events occurs. However, if the shareholder meeting decides to set a higher percentage, its resolution shall be applicable:
1. It conducts the initial public offering.
2. It has been incorporated for less than 2 complete fiscal years.
3. The company's final operating profit and pre-tax income as ratios of paid-in capital as reported in the individual financial statements and the consolidated financial report compiled in accordance with the Statement of Financial Accounting Standards No. 7, fail to meet any of the below conditions. However, the profitability as reported in the said consolidated financial report does not take into account the effects on the company of net income (loss) on its minority shareholdings.
(1) the said ratios for the most recent fiscal year reach four percent or more, and the company has no accumulated losses for the most recent accounting period;
(2) the said ratios for the most recent two fiscal years reach two percent or more;
(3) the average of the said ratios for the most recent two fiscal years reaches two percent or more, and the profitability of the company for the most recent fiscal year is more favorable than that for the previous fiscal year.
4. The number of shares allocated for public offering in accordance with the 10% requirement or the percentage set by the resolution of the shareholders meeting does not reach 500,000.
5. Preferred stocks with warrants are issued.
6. Any situation where the FSC considers the public offering is unnecessary or inappropriate.
Where a company is a major national economic enterprise as determined and certified by the competent authority for the enterprise, the provisions of subparagraphs 1 through 3 of the preceding paragraph shall not be applicable.
Where an issuer publicly offers its securities in accordance with paragraph 1, the prices the employees of the issuer or the original shareholders pay for the new shares in the same issuance shall be the same as the price set for public offering, and it shall be noted in the prospectus and subscription form that its shares are not listed on the Stock Exchange or not listed for trading on any OTC market.
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