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Regulations Governing the Offering and Issuance of Securities by Foreign Securities Issuers(2006.04.04) |
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Article 1
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These Regulations are prescribed pursuant to paragraph 1 of Article 22 of the Securities and Exchange Law ("the Law").
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Article 4
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To offer and issue securities, a foreign issuer shall file for Effective Registration with the Financial Supervisory Commission (FSC), Executive Yuan, submitting all the relevant documents, after having obtained a consent letter from the Central Bank.
From the date a Foreign Issuer receives the filing documents from the FSC or FSC-designated agency until the date of Effective Registration, the Foreign Issuer may not state or issue any financial or business forecast information to any specified or unspecified person, except for information issued pursuant to statutes or regulations. If the issuer publicly issues any information that is inconsistent with the filing documents, it shall amend the relevant materials and submit them to the FSC.
If there is any change in the particulars subsequent to Effective Registration, the amendment shall be registered promptly with the FSC.
For the purposes of these Regulations, the term "Effective Registration" refers to where a Foreign Issuer registers a planned offering and issuance with the FSC by duly submitting all required documents, with the registration to automatically become effective after a specified number of Business Days have elapsed since the registration materials were received by the FSC and any FSC-designated agencies unless the FSC has either returned the papers to the registrant for completion of missing items or has rejected the registration in order to safeguard the public interest.
For the purposes of these Regulations, the term "Business Day" means days on which trading takes place in the securities markets.
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Article 5
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Where a Foreign Issuer registers a planned offering and issuance to the FSC by duly submitting all required documents, the registration will automatically become effective after twelve full Business Days from the day on which the registration materials were received by the FSC and any FSC-designated agencies. However, where the Foreign Issuer is registering offering and issuance of straight corporate bonds, the Effective Registration period shall be shortened to seven Business Days.
The FSC may suspend an Effective Registration where the registration materials submitted by a Foreign Issuer are not complete or have not been completely filled out, or where it is necessary to do so in order to safeguard the public interest.
Where a Foreign Issuer submits incomplete registration materials or fails to fill out its registration materials completely and acts on its own to rectify such insufficiency before the FSC issues notification of the suspension of Effective Registration, the registration shall become effective after the Effective Registration period specified in paragraph 1 herein has elapsed from the day on which the materials rectifying the insufficiency were received by the FSC and any FSC-designated agencies.
Where a Foreign Issuer registers the offering and issuance of Taiwan Depositary Receipts or stocks and a subsequent change in the issue price prompts it to submit amended registration materials to the FSC and any FSC-designated agencies prior to the occurrence of Effective Registration, the registration will still become effective within the Effective Registration time period set forth under paragraph 1, and the provisions of the preceding paragraph shall not apply.
After receiving notice of suspension of Effective Registration, a Foreign Issuer may submit further materials to rectify the cause of suspension; if the FSC does not then reject the registration or notify the registrant to effect further rectification, the registration shall become effective after the Effective Registration period specified in paragraph 1 herein has elapsed from the day on which the rectified registration materials are received by the FSC and any FSC-designated agencies.
After the FSC suspends an Effective Registration, if the Foreign Issuer fails, within twelve Business Days from the day on which it receives a letter notifying it of said suspension, to act in accordance with the provisions of the preceding paragraph to apply for lifting the suspension, or it applies for lifting of the suspension but the cause of suspension has not been eliminated, the FSC may reject the registration.
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Article 6
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(deleted)
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Article 7
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A Foreign Issuer that registers a public offering and issuance of securities shall, pursuant to regulations, request a securities underwriter to evaluate and to issue an evaluation report, unless the Foreign Issuer intends to issue straight corporate bonds.
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Article 8
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Where a Foreign Issuer has filed registration documents or applied for approval of the offering and issuance of securities, the FSC may reject the registration upon the existence of any of the following events:
1. the particulars registered are in violation of laws and regulations, or there are any misrepresentations or false statements contained in the application;
2. the offering and issuance registered involves the raising of funds, and is accompanied by either of the following circumstances:
(1) the funds raised will be invested directly or indirectly in mainland China; or
(2) the cumulative amount invested by the Foreign Issuer directly or indirectly in mainland China exceeds 40% of its net worth, provided that this provision shall not apply where the funds to be raised through the current offering and issue will be used to acquire fixed assets within the Republic of China; or
3. the FSC deems it necessary to reject the registration or application for protection of the public interest.
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Article 9
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The FSC may void or revoke an Effective Registration for the offering and issuance of securities granted to a Foreign Issuer where any of the following circumstances is discovered:
1. where the securities have not been fully subscribed and the cash proceeds therefrom have not been fully collected within three months from the date on which the notification of Effective Registration from the FSC is received; provided that the FSC may grant an extension of three months upon application therefor with legitimate reasons and provided further that such extension shall be limited to one;
2. where the particulars registered are in violation of laws and regulations, or there are any misrepresentations or false statements contained in the application;
3. where no application has been submitted to the Taiwan Stock Exchange or the GreTai Securities Market to trade Taiwan Depositary Receipts, stocks, or bonds on the Taiwan Stock Exchange or on an OTC market, or where the Taiwan Depositary Receipts, stocks, or bonds do not meet the criteria for trading on the Taiwan Stock Exchange or on an OTC market; provided, that this provision does not apply to straight corporate bonds denominated in New Taiwan Dollars for which no application has been submitted for trading on the Taiwan Stock Exchange or on an OTC market; or
4. where such voidance or revocation is necessary for protection of the public interest or because there has been a violation of FSC regulations.
Where an Effective Registration is obtained by a Foreign Issuer for the offering and issuance of securities but is subsequently voided or revoked by the FSC pursuant to the provisions of the preceding paragraph, securities not yet issued shall not be issued, and in case the proceeds thereof have already been collected, the Foreign Issuer shall return the proceeds, along with interest computed in accordance with law, within ten (10) days after receiving the notice of voidance or revocation from the FSC; in case securities have already been issued, the Depositary Institution shall sell the securities under the custody of the Custodian Institution and deliver the sales proceeds, after deduction of indispensable fees and expenses, to the holders of securities.
Where an Effective Registration is obtained by a Foreign Issuer for the offering and issuance of bonds or stocks but is subsequently voided or revoked by the FSC pursuant to the provisions of paragraph 1 of this Article after the collection of the proceeds, the Foreign Issuer shall return the proceeds already collected, along with interest computed in accordance with law, through the designated institution within ten (10) days after receiving the notice of voidance or revocation from the FSC.
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Article 10
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After a Foreign Issuer has obtained an Effective Registration for the offering and issuance of securities, it shall act in accordance with the following provisions:
1. Except for Foreign Issuers that Sponsor Issuance of Taiwan Depositary Receipts or regular corporate bonds in connection with accepting the assignment of shares of a Taiwan company or in connection with a merger or acquisition that involves a Taiwan company and is carried out in accordance with the law, a Foreign Issuer must outsource collection of the proceeds to a financial institution for deposit in a special account, and must further enter into a proceeds collection agreement and a proceeds deposit contract with the bank(s) that collect the proceeds in its behalf and maintain custody of the proceeds in a special account. Within two days of the date on which such an agreement is entered into, the Foreign Issuer must post the name of the bank, the date the agreement was entered into, and other such information to the information disclosure website specified by the FSC.
2. The certificates shall be certified unless physical certificates are not printed, and such certification may be handled in accordance with the provisions of the Rules Governing Certification of Corporate Stock and Bond Issues by Public Companies; provided, that this shall not apply where an entire issue of Taiwan Depositary Receipts is deposited with the centralized securities depository enterprise, is delivered through the book-entry system, and can only be redeemed under limited conditions.
3. Where the Foreign Issuer adds or subtracts items from the investment targets listed in its funds utilization plan or increases/decreases the amount of existing items such that the aggregate amount of funds required for the original items increases or decreases by an amount equal to or greater than 20% of the total amount of funds to be raised, the issuer shall report the change for approval by the Central Bank. After such approval is obtained, the issuer shall register the amendment to the plan and shall post amendment-related information to the information disclosure website specified by the FSC.
4. When there occurs any material event requiring immediate announcement under the securities laws and regulations of the country where the securities are listed and the rules of the listing securities exchange, the information shall simultaneously be posted to the information disclosure website specified by the FSC.
The funds raised in accordance with the provisions of subparagraph 1 of the preceding paragraph shall be remitted by the lead securities underwriter in accordance with the applicable provisions of the Statute for Regulation of Foreign Exchange.
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Article 13
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The particulars inscribed on the Taiwan Depositary Receipts and bonds, if issued in scrip form, shall be written in the Chinese language or in both the Chinese and English language; provided, that in case of any discrepancy between the Chinese and English texts, the Chinese text shall prevail.
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Article 14
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A Foreign Issuer sponsoring a Depositary Institution in issuance of Taiwan Depositary Receipts shall file a Registration Form for Sponsoring Issuance of Taiwan Depositary Receipts corresponding to the nature of the issue (Attachments 1 through 4), specifying therein the required particulars, together with the required supporting documents, and may proceed to the issuance only after Effective Registration with the FSC.
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Article 15
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After the issuance of Taiwan Depositary Receipts, no additional depositary receipts shall be issued without obtaining an Effective Registration from the FSC, except under the following circumstances:
1. Where new shares are issued as a result of cash capital increase and the original shareholders have the pre-emptive rights under the laws and regulations of the Foreign Issuer's home country, or the Foreign Issuer issues bonus shares, additional depositary receipts corresponding to the amount of the newly issued shares may be issued; provided, that the additional depositary receipts shall carry the same rights and obligations as those of the depositary receipts for which Effective Registration was previously obtained from the FSC.
2. Where Taiwan Depositary Receipts have been redeemed, depositary receipts within the amount of the original facility may be re-issued by the Depositary Institution; provided that the re-issuance by the Depositary Institution within the amount of the original facility shall have been authorized and specified in the deposit contract and custody contract.
For additional Taiwan Depositary Receipts corresponding to the amount of the newly issued shares pursuant to Item 1 of the preceding paragraph, the Depositary Institution shall deliver the additional depositary receipts to the holders within thirty (30) days after the Foreign Issuer is permitted to issue new shares in accordance with the laws and regulations of its home country and shall, before delivery of the additional depositary receipts, make public announcement and file a report to the Central Bank of the total dollar amount and units of the issuance, the ratio of additional depositary receipts that a holder of each unit of the original depositary receipts is entitled to receive and the total amount of securities represented by the additional depositary receipts, and shall post the relevant information to the information disclosure website specified by the FSC.
The additional Taiwan Depositary Receipts issued in accordance with subparagraph 1 of paragraph 1 above shall be listed on the stock exchange or an OTC market on the date when such depositary receipts are delivered to the holders.
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Article 25
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After a Foreign Issuer has obtained Effective Registration from the FSC to Sponsor Issuance of Taiwan Depositary Receipts, it shall file the following documents with the FSC within ten (10) days after issuance of the Taiwan Depositary Receipts:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. copy of the deposit contract;
3. copy of the custody contract;
4. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the actual offering terms and the contents granted Effective Registration by the FSC; and
5. other documents required by the FSC.
When the Foreign Issuer provides the Depositary Institution with any information pursuant to the deposit contract, a report thereof shall be filed with the FSC within three (3) days after such provision.
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Article 26
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After the issuance of Taiwan Depositary Receipts, the Depositary Institution shall, within ten (10) days after the end of each month, submit to the Central Bank a Monthly Report on the Liquidity and Redemption of Taiwan Depositary Receipts (Attachment 8), and post the information to the information disclosure website specified by the FSC.
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Article 27
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A Foreign Issuer intending to issue and offer bonds shall file a Registration Form for Offering and Issuance of Bonds by Foreign Issuers corresponding to the nature of the issue (Attachments 5 to 6), specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after Effective Registration has been obtained from the FSC.
Where a Foreign Issuer, having already Sponsored Issuance of Taiwan Depositary Receipts on the Taiwan Stock Exchange or on an OTC market, registers the offering and issuance of convertible corporate bonds or corporate bonds with warrants, may Sponsor Issuance of Taiwan Depositary Receipts to enable execution of conversions or the performance of stock option obligations, in which case such Taiwan Depositary Receipts shall carry the same rights and obligations as Taiwan Depositary Receipts traded on the Taiwan Stock Exchange or on an OTC market.
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Article 28
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A Foreign Issuer registering the offering and issuance of bonds shall obtain a credit rating from a bond rating institution approved or recognized by the FSC, indicating that its credit worthiness is above a certain required rating; provided, that the above shall not apply to those who register the offering and issuance of convertible bonds or corporate bonds with warrant and are in compliance with Article 284-4 of the Law and Articles 247, 249 and 250 of the ROC Company Law.
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Article 29
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A Foreign Issuer shall designate the following agents in the territory of the Republic of China to handle the related matters:
1. agent for the issuance of bonds;
2. agent for payments (of interests and principal);
3. agent for conversion or subscription of shares; and
Foreign exchange matters relating to the proceeds resulted from issuance and offering of the bonds shall be handled pursuant to paragraph 2 of Article 13 hereof.
Foreign exchange matters relating to the payment (of interest and principal), conversion or share subscription as specified in paragraph 1 above shall be handled in accordance with the relevant provisions of the Statute for Regulation of Foreign Exchange
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Article 30
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When offering and issuing bonds, a Foreign Issuer shall specify in the offering plan the following particulars:
1. projected date of issuance;
2. interest rate;
3. method for payment of interest;
4. interest payment date(s);
5. type of the bonds, price per unit and total issue size;
6. security;
7. name of the trustee for the creditors and the major terms and conditions (trustee shall be limited to financial institution or trust enterprise only);
8. method for repayment (e.g. repayment at maturity, pre-mature repayment, redemption or put) and the relevant dates thereof;
9. paying agent;
10. method of underwriting and place of listing;
11. use of proceeds and projected benefits;
12. offering period and approach to be taken in case of under-subscription;
13. In case of issuance and offering of convertible bonds, the following particulars shall be specified:
(1) conversion procedure;
(2) conversion agent;
(3) method for determining the terms and conditions of the conversion (including conversion price, conversion period, types of the securities to be converted, etc.)
(4) A Foreign Issuer that Sponsors Issuance of Taiwan Depositary Receipts to enable the execution of conversions shall state the type of the underlying securities represented by the Taiwan Depositary Receipts, the quantity of securities underlying each unit of Taiwan Depositary Receipts, the names of the depositary institution and custodian institution, the schedule for issuance of the Taiwan Depositary Receipts, and other particulars as required per stipulation.
(5) conversion price adjustment;
(6) entitlement to interest and dividends in the converting year;
(7) method for handling the money that is not enough to convert into one unit of the securities issuable upon conversion;
(8) rights and obligations after the conversion.
14. In case of issuance and offering of corporate bonds with warrants, it shall be specified that the corporate bond and the warrant shall not be separable, and the following particulars shall also be specified:
(1) total number of units of the warrants to be issued, number of shares that can be subscribed per warrant and total number of shares to be issued upon exercise of warrants;
(2) warrant exercise procedure;
(3) subscription agent;
(4) method for determining the terms and conditions for the warrants (including warrant price, warrant exercise period, and the types of securities that can be subscribed for);
(5) Where a Foreign Issuer Sponsors Issuance of Taiwan Depositary Receipts to perform its stock option obligations, it shall state the type of the underlying securities represented by the Taiwan Depositary Receipts, the quantity of securities underlying each unit of Taiwan Depositary Receipts, the names of the depositary institution and custodian institution, the schedule for issuance of the Taiwan Depositary Receipts, and other particulars as required per stipulation;
(6) warrant price adjustment;
(7) manner for payment of the share price upon exercise of warrants; and
(8) rights and obligations after exercise of warrants.
15. the fact that the governing law shall be the laws of the Republic of China;
16. the fact that, in case of litigation, the District Court of Taipei, Taiwan shall be the court having jurisdiction and in case arbitration is to be used, the details thereof; and
17. other important matters agreed upon by the contracting parties.
A Foreign Issuer that applies for issuance and offering of straight corporate bonds, convertible bonds, or corporate bonds with warrants shall already have had its stocks listed and traded on an approved foreign securities market.
Where Taiwan Depositary Receipts are obtained through conversion of corporate bonds or the exercise of stock options, the provisions of Article 24, paragraph 1 shall apply when the holder of the receipts asks the depositary institution to redeem them.
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Article 34
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A Foreign Issuer that has obtained Effective Registration from the FSC for issuance of bonds shall file the following documents with the FSC within ten (10) days after issuance of the bonds:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. issuance agreement;
3. certificate issued by a credit rating institution confirming the rating of the bond currently being issued;
4. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the terms and conditions of the bonds and the contents granted Effective Registration by the FSC; and
5. other matters required to be specified by the FSC.
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Article 35
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After issuing bonds, a Foreign Issuer shall before the tenth (10th) day of each month submit to the Central Bank a Report on the Liquidity of the Bonds for the preceding month (Attachment 9), and shall further post the information to the information disclosure website specified by the FSC.
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Article 36
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A Foreign Issuer offering and issuing stocks shall file a Registration Form for Issuance and Offering of Stocks (Attachment 7) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after obtaining Effective Registration from the FSC.
The stocks applied by the Foreign Issuer for listing or OTC trading are limited to stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets.
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Article 37
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Where a Foreign Issuer registers the offering and issuance of stocks, the stocks in question shall carry the same rights and obligations as other stocks in the same class that have been listed on other stock exchanges or traded on other OTC markets.
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Article 45
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A Foreign Issuer that has obtained Effective Registration from the FSC to issue and offer stocks shall file the following documents with the FSC within ten (10) days after issuance:
1. prospectus (Note: the content of the prospectus must be posted to the information disclosure website specified by the FSC);
2. copy of the custody contract;
3. an opinion letter issued by an attorney-at-law confirming that there is no material discrepancy between the terms and conditions of actual offering and the contents granted Effective Registration by the FSC; and
4. other documents required by the FSC.
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Article 46
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After the issuance of stocks, the Foreign Issuer shall within ten (10) days after the end of each month submit to the Central Bank a Report on the Liquidity of Foreign Stocks (Attachment 10), and shall post the information to the information disclosure website specified by the FSC.
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