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Amendments

Title：

Regulations Governing the Offering and Issuance of Securities by Foreign Issuers  CH

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

Title： Regulations Governing the Offering and Issuance of Securities by Foreign Issuers(2013.08.27)
Date：
Article 6     A foreign issuer that files to publicly offer and issue the securities listed below shall engage a securities underwriter to conduct an evaluation and issue an evaluation report:
  1. A domestic issue of corporate bonds in which a securities underwriter is engaged to conduct underwriting to the public, provided that this does not apply to an issue of straight corporate bonds.
  2. A primary exchange (or OTC) listed company domestically issuing new shares in connection with a cash capital increase, issuing new shares in connection with a merger, issuing new shares in connection with acquiring shares of another company, or issuing new shares in connection with an acquisition or demerger.
  3. A primary exchange (or OTC) listed company or emerging stock company publicly offering and issuing overseas securities. Issuers of straight corporate bonds, however, are not subject to this restriction.
  4. A secondary exchange (or OTC) listed company issuing new shares in connection with a capital increase or issuing new shares to sponsor issuance of TDRs.
  5. A secondary exchange (or OTC) listed company making a domestic secondary public offering of stock or sponsored issuance of TDRs using shares that have already been issued and are held by shareholders.
  6. An emerging stock company issuing new shares in connection with a cash capital increase and allocating a certain percentage of the total amount of newly issued shares for issuance to the public.
    The concluding opinion of the evaluation report referred to in the preceding paragraph shall be published in the prospectus.
Article 8     When a primary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1 to 3, or an emerging stock company conducts a case under Article 6, paragraph 1, subparagraphs 1, 3 or 6, the FSC may reject the filing if any of the following circumstances exist:
  1. The present plan for the offering and issuance of securities is unfeasible, unnecessary, or unreasonable.
  2. Any previous plan for offering and issuance or private placement of securities has, without just cause, failed to be executed on schedule or failed to produce reasonable benefit. However, in the event more than 3 years have passed from the completion date of the plan until the filing date, such restriction does not apply.
  3. Any previous private placement of securities did not conform to Articles 43-6 to 43-8 of the Act or the provisions of the Directions for Public Companies Conducting Private Placements of Securities, where the circumstances are serious.
  4. Any important content of the present plan for the offering and issuance of securities (such as issuance rules, source of funds, or particulars of the plan) has not been placed on the agenda of a board meeting or shareholders meeting and adopted by resolution at such a meeting.
  5. 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, and has not yet rectified the situation.
  6. The company has entered into a non-arm's-length transaction of material significance, and has not yet rectified the situation.
  7. The company is filing for registration of a cash capital increase or issue of corporate bonds, but holds financial assets listed under current assets, idle assets, or investment 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 the equity in the most recent financial reports 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 issuance. However, this provision does not apply if the funds to be raised will be used to purchase real estate, plants, or equipment, and there is a concrete fund raising plan evidencing the need to raise the funds.
  8. The company has failed to prepare its financial statements in accordance with relevant acts or regulations and with applicable accounting principles, where the circumstances are of material significance.
  9. Any circumstance in violation of Article 4, paragraph 3.
  10. The internal control system is materially deficient in design or implementation.
  11. The company's share price fluctuated abnormally during the month prior to the date of filing.
  12. The foreign issuer or its current chairperson, general manager, or de facto responsible person has received a sentence of imprisonment for a fixed term or a more severe punishment from a court in the past 3 years due to violation of laws governing business and industry or due to a crime involving breach of faith such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement, or has an obligation for damages arising from a violation of securities laws or regulations and has failed to duly perform the obligation.
  13. A subscriber, or an ultimate source of subscription, of the present offering and issuance of overseas securities is a related party of the foreign issuer. The term "related party" is as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
  14. As the FSC otherwise deems necessary to protect the public interest.

    When a foreign issuer conducts a case under Article 5, paragraph 1, subparagraph 2, the provisions of subparagraph 7 of the preceding paragraph need not apply; if the underwriter evaluation report clearly states the feasibility of the capital allocations and the reasonableness of the expected benefits of the present plan for offering and issuance of securities, then the provisions regarding the necessity of the plan, as set out in subparagraph 6 of paragraph 1 of the preceding article and in subparagraph 1 of the preceding paragraph, need not apply.
    When a primary exchange (or OTC) listed company issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, the provisions of subparagraphs 2, 5, 11, and 12 of paragraph 1 need not apply.
    When a primary exchange (or OTC) listed company issuing straight corporate bonds has engaged a securities underwriter to publicly underwrite the bonds, the provisions of paragraph 1, subparagraph 11 need not apply.    When a secondary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1, 4, or 5, the subparagraphs of paragraph 1 hereof shall apply mutatis mutandis. However, a secondary exchange (or OTC) listed company issuing straight corporate bonds that has engaged a securities underwriter to publicly underwrite the bonds may be exempted from the mutatis mutandis application of paragraph 1, subparagraph 11, and a secondary exchange (or OTC) listed company that issues new shares or sponsors issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger may be exempted from the mutatis mutandis application of subparagraphs 2, 5, 11, and 12 of paragraph 1.
Article 43     A foreign issuer intending to issue and offer bonds domestically shall file a Registration Statement for Offering and Issuance of Bonds by foreign issuers corresponding to the nature of the issue (Attachments 17 to 19), specifying the required particulars, and annexing 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 TDRs on the TWSE or on an OTC market, registers the offering and issuance of convertible corporate bonds or corporate bonds with warrants, may sponsor issuance of TDRs to enable execution of conversions or the performance of stock option obligations, in which case such TDRs shall carry the same rights and obligations as TDRs traded on the TWSE or on an OTC market.
Article 44     (deleted)
Article 45     A foreign issuer that files to register the offering and issuance of straight corporate bonds and that meets the conditions of each of the following subparagraphs may submit the Shelf Registration Statement for Issuance of Straight Corporate Bonds by a foreign issuer (Attachment 20), complete with all required information and all required documents, to the FSC for effective registration and complete the issuance within the expected issuance period.
  1. The issuer is a primary exchange (or OTC) listed company that has been domestically listed, or whose securities have been trading on the OTC market, for a combined total of a full 3 years, or is a secondary exchange (or OTC) listed company whose stocks, or securities representing its stocks, have been listed and traded on one of the overseas securities markets approved by the competent authority for a full 3 years. However, in either of the following circumstances, this restriction shall not apply:
    1. An issuer filing to issue straight corporate bonds is a company controlled by another company, the bonds are fully guaranteed by the controlling company, and the stock of the controlling company has been listed and traded on one of the overseas securities markets approved by the competent authority for a full 3 years.
    2. The issuer is an overseas financial institution that has been approved by the FSC to establish a domestic branch in the ROC, and the stock of the financial institution's parent holding company has been listed and traded on one of the overseas securities markets approved by the competent authority for a full 3 years.
  2. The issuer's net worth, as stated in the CPA audited and attested financial report for the most recent year, is not less than NT$500 million.
  3. The issuer is not currently in material breach of contract or material default on the payment of principal and interest, with respect to any previously issued corporate bonds or other debt, or more than 3 years have passed since the date of resolution of any previous instance of such breach or default.
  4. The issuer has not been sanctioned by the FSC or the competent authority of its overseas country of listing within the past 3 years for any breach of information disclosure regulations.
  5. Any plan for a cash capital increase or issuance of corporate bonds that received effective registration from the FSC or the competent authority of the overseas country of listing within the past 3 years has been executed according to schedule and with no material alteration.
  6. The CPA engaged by the issuer has received no warning or any other more serious sanction under the law within the past 3 years due to work related to the offering and issuance of securities.
  7. The lead underwriter engaged by the issuer has received no sanction pursuant to law or regulation ordering it to dismiss a director, supervisor, or managerial officer, or any other equally or more serious sanction, within the past 3 years due to work related to the offering and issuance of securities.
    Article 5 shall apply mutatis mutandis to a foreign issuer that files for registration in accordance with the preceding paragraph.
    The expected issue period referred to in paragraph 1 shall not exceed 2 years counting from the date of effective registration. The foreign issuer shall set the period at the time of registering with the FSC.
Article 46     When issuing straight corporate bonds within the expected issue period as referred to in the preceding article, the foreign issuer shall, on the next business day after it has completed collecting the payment, submit the Supplementary Shelf Registration Statement for Issuance of Straight Corporate Bonds by a foreign issuer (Attachment 21) complete with all required information, together with the required documents, to the FSC for recordation.
    With respect to issuance by a foreign issuer of straight corporate bonds during the expected issue period referred to in the preceding article, the FSC may cancel a foreign issuer's current supplementary issue of straight corporate bonds if there is any violation of Article 7, Article 8, or paragraph 1 of the preceding article.
Article 49     When offering and issuing bonds, a foreign issuer shall specify in the offering plan the following particulars:
  1. Projected date of issuance.
  2. Coupon rate.
  3. Method for payment of interest.
  4. Interest payment date(s).
  5. Type of the bonds, face value, and the aggregate amount of the issue.
  6. The availability of collateral or guarantee.
  7. Name of the trustee for the creditors and the major terms and conditions. (The trustee shall be limited to a 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 intended place of listing.
  11. Use of proceeds and projected benefits thereof; however, for offering and issuance of straight corporate bonds, the projected benefits from use of the proceeds are not required to be specified.
  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 TDRs to enable the execution of conversions shall state the type of the underlying securities represented by the TDRs, the quantity of securities underlying each unit of TDRs, the names of the depositary institution and custodian institution, the schedule for issuance of the TDRs, 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, 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. For corporate bonds with detachable warrants, the total number of warrant units to be issued and the method for calculating the price per unit of the warrants.
    6. Where a foreign issuer sponsors issuance of TDRs to perform its stock option obligations, it shall state the type of the underlying securities represented by the TDRs, the quantity of securities underlying each unit of TDRs, the names of the depositary institution and custodian institution, the schedule for issuance of the TDRs, and other particulars as required per stipulation.
    7. Warrant price adjustment.
    8. Method for payment of the share price upon exercise of warrants.
    9. Rights and obligations after exercise of warrants.
  15. The fact that the governing law of the contract shall be the laws of the ROC. However, when the conditions of Article 45, paragraph 1, subparagraphs 1 to 3 are met, law other than the laws of the ROC may be adopted as the governing law of the contract.
  16. The fact that, in case of litigation, the District Court of Taipei, Taiwan shall have jurisdiction. However, if the governing law of the contract is law other than that of the ROC, other courts may be stipulated as having jurisdiction over litigation.
  17. The details of any stipulations regarding arbitration, if arbitration is stipulated.
  18. Other important matters agreed upon by the contracting parties.

    Foreign issuers filing to offer and issue straight corporate bonds, convertible bonds, or corporate bonds with warrants shall be limited to primary exchange (or OTC) listed companies and secondary exchange (or OTC) listed companies, unless the foreign issuer meets FSC-specified conditions or is an emerging stock company entitled to file to offer and issue straight corporate bonds denominated in New Taiwan Dollars.    Where TDRs are obtained through conversion of corporate bonds or the exercise of stock options, the provisions of Article 37, paragraph 1 shall apply when the holder of the receipts asks the depositary institution to redeem them.
Article 50     For issuance and offering of bonds, a prospectus shall be prepared. In addition to the particulars required in accordance with the laws and regulations of the foreign issuer's country of registration or the country where its shares are listed, the following particulars shall be specified in the prospectus:
  1. Offering Plan for the bonds and the agreed-upon matters.
  2. The concluding opinion of the evaluation report of the securities underwriter, provided that this shall not be required for an issue of straight corporate bonds.
  3. Credit rating certificate issued by a credit rating institution (if any).
  4. Other outstanding bonds.
  5. Trustee agreement.
  6. Paying agency agreement, conversion agency agreement or subscription agency agreement.
  7. Letter of creation of security or provision of guarantee, if any.
  8. Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the foreign issuer's country of registration and country in which its shares are listed.
  9. The highest, lowest and average market prices for the most recent 6 months of the securities issuable upon conversion, in case of convertible bonds or upon exercise of warrant, in case of corporate bonds with warrants, on the stock exchange where its stocks are listed.
  10. Other important matters agreed upon by the parties or required to be specified by the FSC.

    Where a foreign issuer meets the provisions set out in the proviso to subparagraph 15 of paragraph 1 of the preceding article, the governing law and the court with jurisdiction over litigation shall be disclosed in prominent lettering on the cover of the prospectus.    The draft prospectus shall be transmitted, as an electronic file in the format prescribed by the FSC, to the information disclosure website specified by the FSC and, within 30 days from the date of receipt of the notice of effective registration, the final amended prospectus shall be transmitted as an electronic file to the information disclosure website specified by the FSC.
Article 56     A primary exchange (or OTC) listed company or emerging stock company offering and issuing overseas corporate bonds shall file the respective Registration Statement for a Sponsored Issue of Overseas Corporate Bonds corresponding to the nature of the case (Attachments 30 to 32), specifying the required particulars, together with the required supporting documents, and may proceed with the issue only after the registration filing with the FSC becomes effective.
    When a primary exchange (or OTC) listed company has already offered and issued overseas corporate bonds, if the conversion rules or warrant exercise rules stipulate that overseas depositary receipts will be provided for conversion or exercise of the overseas corporate bonds, it shall file a Registration Statement for a Sponsored Issue of Overseas Depositary Receipts (Attachments 33 and 34) specifying the required particulars, and annexing the required supporting documents, and may proceed with the issue only after the registration filed with the FSC becomes effective.
    Chapter III of the Regulations Governing the Offering and Issuance of Overseas Securities by Issuers shall apply mutatis mutandis to a primary exchange (or OTC) listed company or emerging stock company offering and issuing overseas corporate bonds.
Article 60     A primary exchange (or OTC) listed company or emerging stock company issuing employee stock warrants or new restricted employee shares shall file a Registration Statement for Issuance of Employee Stock Warrants (Attachment 36) or Registration Statement for Issuance of New Restricted Employee Shares (Attachment 36-1), specifying the required particulars, together with the required supporting documents, and may proceed with the issue only after the registration filing with the FSC becomes effective.
    The provisions of Chapter IV of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to a primary exchange (or OTC) listed company or emerging stock company issuing employee stock warrants or new restricted employee shares.