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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(2022.09.05)
Date：
Article 5     Where a foreign issuer registers a planned offering and issuance with the FSC by duly filing all required documents, the registration will automatically become effective after 12 full business days from the day on which the filing documents were received by the FSC and any FSC-designated agencies, unless the effective registration period of 20 days set out in Article 5-1 applies. However, the effective registration period shall be 7 business days if the foreign issuer is conducting one of the cases listed in subparagraphs 1 to 6 below; the effective registration period shall be 3 business days if the foreign issuer is conducting a case listed in subparagraph 7 below:
  1. A case of a primary exchange (or OTC) listed company or emerging stock company publicly offering and issuing overseas straight corporate bonds, or issuing employee stock warrants or new restricted employee shares.
  2. A case of a foreign issuer that has already duly issued stock and files, through the TWSE or TPEx, a primary exchange listing or primary OTC listing contract with the FSC for its stock, and subsequently conducts a public sale of new shares issued to effect a cash capital increase before the initial exchange listing or OTC listing.
  3. A case of a TIB primary listed company that is applying to be reclassified as a primary exchange listed company under Chapter III of the Listing Review Rules and will issue new shares for cash capital increase.
  4. A case of a foreign issuer that files, through the TWSE or TPEx, an exchange listing or OTC listing contract with the FSC for its sponsored issuance of TDRs, and subsequently conducts a public sale of TDRs before the initial exchange listing or OTC listing.
  5. A case of a secondary exchange (or OTC) listed company that makes 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. A case of an emerging stock company issuing new shares for a cash capital increase without conducting a public issue.
  7. A case of a foreign issuer publicly offering and issuing domestic straight corporate bonds.
    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 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 12 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.
Article 5-1     For a primary exchange (or OTC) listed company conducting a case set out in Article 6, paragraph 1, subparagraph 1 or 2, if any of the following circumstances exists, the registration will become effective 20 full business days from the date on which the filing documents were received by the FSC and FSC-designated agencies:
  1. A previous case conducted under Article 6, paragraph 1, subparagraph 1 to 3 or 6 was rejected, voided, or revoked by the FSC. However, this restriction need not apply where the case was voided or revoked by the FSC because the issuance had not been fully subscribed and fully paid for in cash following the date of arrival of the notice of effective registration.
  2. The company 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 laws or regulations during the fiscal year when the registration was filed or during the previous fiscal year.
  3. The operating income or net profit before tax of the company show consecutive losses in the most recent 2 fiscal years or the latest financial report indicates that the net asset value per share is lower than its par value.
  4. The company is required to allocate special reserve for non-arm's length transactions and such requirement is not yet lifted.
  5. Any of the following circumstances occurs or has occurred during the fiscal year of registration or the previous 2 fiscal years. However, if neither the operating revenue nor asset value of the transferred items nor the expenses accumulated for R&D exceeds 10 percent of the total operating revenue or asset value on the financial report of the fiscal year preceding the time of the transfer or of the R&D expenses for the same period, this restriction does not apply.
    1. Entering into, amending, or terminating any contract for lease of the company's business in whole, or for entrusted business, or for regular joint operation with others.
    2. Transferring the whole or any essential part of its business or assets.
    3. Accepting the transfer of another's whole business or assets, with a material affect on the business operation of the company.
    4. Transferring a portion of its operations or R&D results to another company.
  6. A change in one-third or more of the directors has occurred in the fiscal year of registration or the previous 2 fiscal years and any one of the following circumstances exists. However, this restriction does not apply if more than half of the company's directors are controlled by the original major shareholders before and after such change:
    1. The submitted financial reports indicate an addition to the principal products (meaning any product from which the operating revenue accounts for 20 percent or more of operating revenue) and that the total operating revenue or operating income from the added principal product accounts for 50 percent or more thereof in that fiscal year. However, if the increase in the operating revenue for a principal product from one period to the next does not reach 50 percent or more, that principal product is not required to be counted.
    2. The submitted financial reports indicate that the company has acquired an on-going or completed construction project and the operating revenue or operating income from that project has reached 30 percent or more thereof in that fiscal year.
    3. The submitted financial reports indicate that the company has received transfer of a portion of the operations or R&D results of another company other than an affiliated company and that the operating revenue or operating income from that partial operations or R&D result has reached 30 percent or more thereof in that fiscal year.
  7. The securities underwriter, at the time the company files for registration, has received cumulatively 5 or more demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association.
    The provisions of the preceding paragraph do not apply to cases of issuance of new shares in connection with merger, issuance of new shares in connection with receiving transfer of shares of another company, or issuance of new shares in connection with acquisition or demerger conducted in accordance with related laws.
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, and engage a lawyer to review the relevant legal issues and issue a legal opinion:
  1. A domestic issue of corporate bonds with equity characteristics in which a securities underwriter is engaged to conduct underwriting to the public.
  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.
    A primary exchange (or OTC) listed company that files for a case under subparagraphs 1 to 3 of paragraph 1 shall, in the accounting year when the offering is completed and in the subsequent 3 accounting years, engage a securities underwriter to assist it in complying with ROC securities laws and regulations.
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 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 of the following circumstances has existed with respect to any previous plan for offering and issuance or private placement of securities, and the circumstance has not been corrected:
    1. Without just cause, the process of implementation has been seriously delayed, and the implementation has not yet been completed.
    2. Without just cause, the plan has undergone material change 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. The securities offering and issuance plan has undergone material change, but the change has not yet been reported to a shareholders' meeting for approval.
    4. The company has failed in the most recent fiscal year to scrupulously observe the provisions of Article 10, paragraph 1, subparagraphs 2 to 6, and paragraph 3.
  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 liquid financial asset investments, idle assets, or investment property, with no plan to actively dispose of or develop such holdings, and they amount to either: (1) 40 percent or more of the equity attributable to owners of the parent 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 or used for merger of a company that is not engaged primarily in the business of trading of securities, and furthermore there is a concrete fund raising plan evidencing the need to raise the funds.
  8. Proceeds from the cash capital increase or corporate bond issuance plan are to be used to invest in a company engaged primarily in the business of trading of securities, or to establish a securities firm or a securities service enterprise.
  9. 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.
  10. Any circumstance in violation of Article 4, paragraph 3.
  11. The internal control system is materially deficient in design or implementation.
  12. The company's share price fluctuated abnormally during the month prior to the date of filing.
  13. 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.
  14. 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.
  15. There is an issuance of new shares in connection with a merger, or an issuance of new shares in connection with receiving transfer of shares of another company, or an issuance of new shares in connection with an acquisition or demerger conducted in accordance with related laws, and any of the following circumstances exists:
    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 received or acquired shares are not newly issued shares of the other company, non-current equity investment held by it, or previously issued shares held by the shareholders of the other company.
    3. The ownership rights over the received shares or the acquired business or assets are encumbered or limited in such a way that restrictions on the trading rights are imposed.
    4. An audit report with unqualified opinion was not issued by a CPA for the most recent annual financial report of a merged target company; provided, that this provision does not apply where an audit report with qualified opinion was issued together with an unqualified opinion on the balance sheet.
  16. An event set out in Article 5-1, paragraph 1, subparagraph 6 occurs, and any of the following circumstances exists:
    1. A filing for issuance of new shares for cash, and any director or supervisor, or shareholder who holds shares over 10 percent of the total issued shares of the issuer, fails to undertake to place a certain percentage of their shares under the custody of a centralized securities depository enterprise.
    2. A filing for issuance of corporate bonds with equity characteristics, for which the issuance rules do not specify that the offerees are required, from the issuance date of the corporate bonds, to place the corporate bonds and any subsequently converted or subscribed shares under the custody of the centralized securities depository enterprise for 1 year.
  17. 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.
  18. The securities underwriter, at the time the foreign issuer files for registration, has received cumulatively 10 demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association, and three months have not elapsed since the date when the demerit points cumulatively reached 10 points. However, this restriction does not apply to an issue of new shares for cash capital increase that are to be sold in the public sale prior to an initial exchange or OTC listing.
  19. As the FSC otherwise deems necessary to protect the public interest.
    The term "engaged primarily in the business of trading of securities" as referred to in subparagraphs 7 and 8 of the preceding paragraph shall mean—with respect to a company merged by the issuer, or a company in which the issuer has directly invested, or in which a subsidiary of the issuer has invested under the equity method—that the merged or invested company's cash, together with cash equivalents, financial assets listed under current assets, and holdings of securities issued by the issuer account for 50 percent 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 percent or more of the revenue or profit/loss of such company.
    When a foreign issuer conducts a case under Article 5, paragraph 1, subparagraph 2 or 3, the provisions of subparagraph 7 of paragraph 1 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 paragraph 1 of this article, 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, 12, and 13 of paragraph 1 need not apply.
    When a primary exchange (or OTC) listed company issuing overseas straight corporate bonds has engaged a securities underwriter to publicly underwrite the bonds, the provisions of paragraph 1, subparagraph 12 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, if it is issuing new shares or sponsoring issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it may be exempted from the mutatis mutandis application of subparagraphs 2, 5, 12, and 13 of paragraph 1.
Article 10     After a foreign issuer has obtained an effective registration for the domestic offering and issuance of securities, it shall act in accordance with the following provisions:
  1. Except in cases of issuance of new shares or sponsored issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, issuance of straight corporate bonds, issuance of employee stock warrants, issuance of new restricted employee shares, or sponsored issuance of TDRs for purposes of conversion of convertible corporate bonds or corporate bonds with warrants or performance of warrant obligations, the foreign issuer must retain a financial institution to collect proceeds on its behalf and deposit those proceeds in the segregated account that it has opened. Before beginning to collect proceeds, it shall enter into a payment collection agreement and a payment deposit agreement with the bank that collects proceeds on its behalf and deposits them in the segregated account. Within 2 days from the date on which it enters into those agreements, it shall input the relevant information such as the name of that contracted bank and the date on which the contract was signed into the FSC-designated information reporting website. The collection and deposit in the segregated account of proceeds by that bank may not be handled by the same business unit of that bank. The foreign issuer may draw on those proceeds only after they are collected in full, and must input the data regarding the collection of proceeds in full into the FSC-designated information reporting website within 2 days after the date on which those proceeds are collected in full.
  2. The foreign issuer shall, within 10 days after the end of each quarter, post the funds utilization plan and the quarterly report on the status of funds utilization to the information reporting website specified by the FSC. However, this provision does not apply to a secondary exchange (or OTC) listed company that sponsors an issue of TDRs using shares that have been issued and are held by the shareholders.
  3. In the case of a primary exchange (or OTC) listed company that conducts a cash capital increase or corporate bond issue, or a secondary exchange (or OTC) listed company that conducts a cash capital increase or sponsors an issue of TDRs, it shall on a quarterly basis contact the original lead underwriter or the attesting CPA to issue an evaluation opinion on the reasonableness of the progress made in utilization of the funds and the handling of unused funds and on whether any change to the plan is involved, and shall input this information together with the information referred to in the preceding subparagraph to the information reporting website specified by the FSC.
  4. If there is any change in the items of the fund utilization plan or any adjustment to amounts of individual items, such that the aggregate amount of any decreases in, or the aggregate amount of any increases in, the amount of funds originally required for the individual items reaches 20 percent or more 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 make the amendment to the plan and, within 2 days from the day the amendment is passed by a resolution of the board of directors shall input amendment-related information to the information disclosure website specified by the FSC, and submit the amendment to a shareholders' meeting for ratification. The issuer also shall, at the time of the change and subsequently within 10 days after the end of each quarter, contact the original lead underwriter to issue an evaluation opinion on the reasonableness of the progress made in utilization of the funds and of the purposes for unused funds and shall input this information together with the information referred to in paragraph 2, subparagraph 2 to the information disclosure website specified by the FSC. However, this provision does not apply to a secondary exchange (or OTC) listed company that sponsors an issue of TDRs using shares that have been issued shares and are held by the shareholders.
  5. In the case of a primary exchange (or OTC) company that issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it shall, within 10 days after the end of each quarter during the first year after completion and registration of the case, contact the original lead underwriter to issue an evaluation opinion on any effect of the merger, acquisition of shares of another company, or acquisition on the finances, business, or shareholders' equity of the issuer, and shall enter the opinion to the information disclosure website specified by the FSC.
  6. In the case of a primary exchange (or OTC) company or emerging stock company that conducts a cash capital increase or issue of corporate bonds, before the utilization plan of the cash capital increase or corporate bond issue is accomplished, the company shall disclose the progress of the plan in its annual report. In the case of a corporate bond issue, within 2 days after the raising of capital has been completed and by the 10th day of each month during the issuance period of the corporate bonds, information relating to the issuance of the corporate bonds shall be input into the information disclosure website specified by the FSC.
  7. 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 input to the information disclosure website specified by the FSC. This also applies for any event voluntarily announced by the foreign issuer.
  8. For straight corporate bonds denominated in New Taiwan Dollars, the funds raised shall be retained in New Taiwan Dollars, and used in substantive investment in Taiwan, or for other purposes limited solely to the scope approved by the Central Bank. For straight corporate bonds denominated in foreign currency, the funds raised shall be retained as foreign currency, and may not be converted into New Taiwan Dollars for use.
    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.
    A primary exchange (or OTC) listed company or emerging stock company offering and issuing overseas securities, after obtaining effective registration, shall be required mutatis mutandis to do the matters set out in paragraph 1, subparagraphs 2 to 7, and additionally, within 10 days after issuance, upload the prospectus prepared in accordance with the securities laws and regulations of the country where the offering took place to the information disclosure website specified by the FSC. However, this uploading need not be done in the case of issuance of overseas depositary receipts that are for purposes of overseas corporate bond conversion or exercise.
    When a primary exchange (or OTC) listed company or emerging stock company offers and issues overseas securities, if any specific persons or strategic investors subscribe to the securities, the company shall disclose the subscription list as well as individual subscription prices and quantities in the prospectus and shall input them to the information disclosure website specified by the FSC. If it receives a written inquiry from the competent authority for securities of the country in which the securities are listed, it shall report to the FSC within 2 days from the date on which it receives the inquiry and at the same time that it provides the information requested by the inquiry.
    A foreign issuer that domestically issues stock, certificates of payment for shares, bonds, or TDRs issued by a depositary institution shall deliver them by book-entry transfer, and shall not print physical certificates of the securities. However, a foreign issuer that is required to issue the securities in certificated form under the laws or regulations of its country of registration shall have the foreign custodian institution enter into a depository agreement with the central securities depository and confirm the issuance volume before it may issue the securities domestically.
    If securities are delivered by book-entry transfer, the issuance, transfer, or cancellation shall be handled in accordance with the relevant rules of the central securities depository.
    Within 30 days from the date it receives permission for the issuance of new shares from the competent securities registration authority of the country of its registration, a foreign issuer shall deliver the securities to subscribers, and prior to delivery it shall make a public announcement through the information disclosure website specified by the FSC.
Article 12     Before it may offer and issue stock, a primary exchange (or OTC) listed company or emerging stock company is required to have filed a Registration Statement for the Domestic Offering and Issuance of Stock by a foreign issuer (Attachments 1 to 5) specifying the required particulars, together with the required documentation, with the FSC and obtained effective registration therewith.
Article 36     When a secondary exchange (or OTC) listed company sponsors issuance of TDRs, only after the TDRs are listed or traded on the OTC market may shareholders of the company engage the depositary institution to issue TDRs in Taiwan using shares that have already been issued and are held by the shareholders, in which case a filing shall duly be submitted with all of the relevant documents attached. The filing will become effective 7 business days from the date it is accepted for processing by the FSC and the institution designated by the FSC
    Where shareholders of a secondary exchange (or OTC) listed company engage a depositary institution to issue TDRs domestically using shares that have already been issued and are held by the shareholders, they shall engage a securities underwriter to conduct an evaluation and issue an evaluation report and to sell the depositary receipts on a firm commitment basis, and the securities underwriter shall deliver the prospectus on their behalf. The engaged depositary institution and custodian institution shall be the same depositary institution and custodian institution as were engaged by the secondary exchange (or OTC) listed company that sponsored issuance of the TDRs. And the rights and obligations of the stock represented by the TDRs shall be the same as the rights and obligations of the stock represented by the TDRs of which the secondary exchange (or OTC) listed company sponsored issuance. The securities underwriter shall explain the method and basis for the pricing of the issue.
    The content of the prospectus referred to in the preceding paragraph, in addition to the particulars required in accordance with the laws and regulations of the secondary exchange (or OTC) listed company's country of registration and country of listing, shall also specify the following items
  1. On the front cover of the prospectus, the TDR code shall be printed in the upper right hand corner, and the following items shall be printed in sequential order:
    1. Name of the company.
    2. The prospectus is prepared for purposes of an issue of TDRs: the source of the securities represented by the TDRs; the quantity of the securities represented; the total number of units issued; the price-setting method for the current issue; the premium/discount percentage of the issue price to the underlying stock price; the total monetary amount of the issue; the public underwriting percentage; the underwriting and allotment method. For the issuance plan, the internal page numbers to consult for the related content may be noted.
    3. The following content shall be printed prominently:
      1. Country of registration of the issuer.
      2. The issuer is a company that is a foreign enterprise listed in Taiwan, and the prospectus is prepared for purposes of the offering and issuance of TDRs in Taiwan by the depositary institution that has been engaged by shareholders of the secondary exchange (or OTC) listed company using shares that have already been issued and are held by them.
      3. An investor shall carefully read the contents of this prospectus, and shall note that, because the foreign issuer is not sponsoring this issue of TDRs, the investor should refer to the information publicly announced by the foreign issuer concerning its financial and business data and operating condition.
      4. The effective registration of the securities may not be used in any advertisement as proof of the veracity of registration particulars or as a guarantee the value of the securities.
      5. If there is any misrepresentation or nondisclosure in the content of the prospectus, the persons who have signed or sealed the prospectus shall be held liable in accordance with law.
      6. Web addresses for querying prospectus information, including the information disclosure website specified by the FSC.
    4. Date of printing.
    5. Related underwriting fees.
    6. In the event of any of the following circumstances, the company shall note the circumstance on the cover in a prominent font:
      1. Where there has been a change in the code of the TDRs, the original stock code shall be printed along with the new stock code in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
      2. Where there has been a change in the company name, the change shall be disclosed by printing the new and old names adjacently in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
    7. A prospectus prepared in order to register for public offering and issuance of securities shall note on its front cover that it is a draft version for the purpose of such registration.
  2. The inside front cover of the prospectus shall have the following items relevant to the current issue printed in sequential order:
    1. The prospectus distribution plan: specify the places where the prospectus will be displayed, the distribution methods, and the methods for requesting and obtaining the prospectus.
    2. Name, address, web address, and telephone number of the shareholder services agent.
    3. Name, address, web address, and telephone number of the depositary institution.
    4. Name, address, web address, and telephone number of the custodian institution.
    5. Name of the domestic lawyers who prepared the legal opinion, and the name, address, web address, and telephone number of the law firm. If opinions of any other lawyers are used (e.g. lawyers of the country of registration and the country of the principal place of business), the above information for those lawyers shall also be disclosed together.
    6. Address of website on which can be queried trading information of the country where the securities represented by the TDRs are listed and information on the finances and business of the company.
  3. The content of the prospectus shall specify the following items:
    1. Motivation and purpose for raising funds through the public offering.
    2. Method for setting the price and an explanation.
    3. Evaluation report provided by the securities underwriter.
    4. TDR issuance plan and matters stipulated therein.
    5. The principal content of the custody agreement (or other custody documents) and the depositary agreement.
    6. Any matters requiring attention in connection with restrictions on securities transactions by foreigner nationals, tax burdens, and tax payment procedures, of the secondary exchange (or OTC) listed company's country of registration and country in which its shares are listed.
    7. Rights exercisable by, or restrictions placed on, holders of the TDRs or the securities represented by the TDRs.
    8. The highest, lowest, and average market prices of the stock represented by the TDRs for the most recent 6 months on any securities trading markets on which it is listed and the closing price on the business day preceding the filing date. A note shall also be made stating the differences in each of the aforesaid market prices between the markets on which the security is listed. If the period of listing has been less than 6 months, the stated period may be the actual period of listing.
    9. Any other important stipulations or other matters that the FSC requires to be specified.
  4. The back cover of the prospectus shall be signed or sealed by more than half of the company's directors and by its general manager.
  5. The securities underwriter and its responsible person, CPAs, lawyers, and other experts shall sign or seal the prospectus indicating their endorsement of the part for which they are responsible.
    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, which shall be done by the depositary institution.
    The offering and issuance of TDRs in Taiwan by a depositary institution that has been engaged by shareholders of a secondary exchange (or OTC) listed company using shares that have already been issued and are held by them shall be subject mutatis mutandis to the provisions of Article 5, paragraphs 2 to 6; Article 7, paragraph 1, subparagraphs 1, 4 to 6, and 9 and paragraph 2; Article 8, paragraph 1, subparagraph 12; Article 9, paragraphs 1 and 3; and Article 10, paragraph 1, subparagraph 1 and paragraph 2.
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 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.
    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 the issuance and offering of bonds, a prospectus shall be prepared. The content of the prospectus shall be prepared as follows:
  1. The provisions of Article 17 and Article 34, respectively, shall apply mutatis mutandis to the issuance of corporate bonds with equity characteristics by primary exchange (or OTC) listed companies and secondary exchange (or OTC) listed companies.
  2. The provisions of paragraph 1 and paragraph 2 of Article 20 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall apply mutatis mutandis to the issuance of straight corporate bonds by foreign issuers. However, in the case of secondary exchange (or OTC) listed companies and those meeting the conditions specified by the FSC, on the back cover of the prospectus, the name of the company and name of its responsible person may be specified in lieu of the company seal and signature or seal of the responsible person, and the English prospectus(es) prepared in accordance with the laws and regulations of the country of registration and the country of listing shall also be attached.
    The prospectus referred to in the preceding paragraph shall also specify the following particulars:
  1. Offering Plan for the bonds and the agreed-upon matters.
  2. The concluding opinion of the evaluation report of the securities underwriter and legal opinion issued by a lawyer.
  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 55     A primary exchange (or OTC) listed company filing for registration for a sponsored issue of overseas depositary receipts using either new shares issued for a capital increase or using shares that have already been issued shall file the respective Registration Statement for a Sponsored Issue of Overseas Depositary Receipts corresponding to the nature of the case (Attachments 24 to 28), 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 filing for registration of a sponsored issue of overseas depositary receipts using new shares issued for a capital increase, it shall state the basis for setting the issue price, the reasonableness thereof, and any effects on shareholders' equity and refer the same to a shareholders meeting for approval by resolution.
    If any directors, supervisors, managerial officers, or shareholders holding more than ten percent of the total shares of a primary exchange (or OTC) listed company intends to engage the depositary institution to reissue overseas depositary receipts in an amount not exceeding the number of those shares for which the overseas depositary receipts have already been redeemed they shall file an application (Attachment 29) under Article 22-2, paragraph 1, subparagraph 1 specifying the required particulars, and may proceed with the issue only after the application has been approved by the FSC.
    Overseas depositary receipts reissued under the preceding paragraph shall be limited to those overseas depositary receipts that the deposit contract and custody contract expressly provide may be reissued following redemption.
    The provisions of Chapter II 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 sponsoring issuance of overseas depositary receipts.
Article 59-2     Under any of the following circumstances, the FSC may engage the TWSE or TPEx to handle matters in connection with suspension of the public issuance of the stock of a foreign issuer:
  1. In the case of a primary exchange listed company, the stock is delisted from the TWSE.
  2. In the case of a primary OTC listed company, the OTC trading of the stock is terminated by the TPEx for reasons other than for purposes of listing on the TWSE.
  3. In the case of an emerging stock company, the OTC trading of the stock is terminated by the TPEx for reasons other than for purposes of listing on the TWSE or the TPEx.
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.
Article 61     A primary exchange (or OTC) listed company or emerging stock company that issues employee stock warrants or new restricted employee shares shall prepare a prospectus with the content in the Chinese language or a Chinese-English bilingual format, provided that if the English-Chinese bilingual format is used and there is any discrepancy in the interpretation of the meaning of the text, the Chinese version shall prevail.
    The content of the prospectus referred to in the preceding paragraph shall meet the requirements listed below, and additionally shall comply, mutatis mutandis, with Chapter III of the Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses:
  1. The content below shall be printed prominently on the front cover of the prospectus:
    1. Country of registration of the issuer.
    2. The issuer is a company that is a foreign enterprise listed in Taiwan using New Taiwan Dollars.
  2. On the inside front cover of the prospectus shall be printed the name, job title, contact telephone number, and email address of the litigious and non-litigious agent within the ROC.
  3. Content of the prospectus:
    1. Company overview, including a company introduction and the structure of the group.
    2. The financial statements printed in the prospectus shall be the consolidated financial statements audited and attested by a CPA (not including the notes and schedules to the financial report), and the CPA audit report, for the most recent 2 fiscal years as of the time of the filing for the issue of employee stock warrants or new restricted employee shares.
    3. If the filing date falls more than 45 days after the end of a given quarter, the consolidated financial statement for the most recent quarter reviewed by a CPA (but not including the accompanying notes and schedules of the financial statement), and the CPA review report, shall additionally be submitted.
    If, before the printing of the prospectus, there is any most recent financial statement audited by a CPA, it shall also be disclosed therewith.
Article 63     When a primary exchange (or OTC) listed company or emerging stock company files for a capital reduction, the FSC may reject the filing case if any of the following circumstances exists:
  1. The attesting CPA issues an audit report containing a disclaimer of opinion or adverse opinion.
  2. The attesting CPA issues an audit report containing a qualified opinion that affects the fair presentation of the financial report.
  3. The case review forms prepared by the foreign issuer or reviewed by the attesting CPA show any violation of laws or regulations or the articles of incorporation, and the circumstances are serious.
  4. Breach or non-performance of a commitment made at the time of the application for listing or OTC trading of stock, where the circumstances are serious and remain uncorrected.
  5. The FSC discovers a violation of law or regulation, where the circumstances are serious.
  6. The FSC otherwise deems necessary to protect the public interest.