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Amendments

Title:

Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities  CH

Amended Date: 2020.08.17 
Categories: Primary Market > Management > Information Disclosure

Title: Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Listed Companies(2005.11.30)
Date:
Article 2 "Material information" of listed companies in these Procedures means the following matters:
1. Dishonor of a negotiable instrument due to insufficient deposits and notation of settlement subsequent to dishonor of a negotiable instrument, refusal of a financial institution to honor a transaction, or other loss of credit of a listed company or a responsible person, parent company, or subsidiary thereof, or a significant change in shareholding of the parent company; or, after dishonor of a negotiable instrument of a listed company due to insufficient deposits or refusal of a financial institution to honor a transaction of a listed company, any alteration of trading method, suspension of trading, or delisting of the stock thereof, and the status of any application to restore the original conditions.
2. Any serious effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, or motion for provisional attachment or provisional injunction, or enforcement thereof, with respect to a listed company or a responsible person thereof.
3. A serious decrease in output or complete or partial suspension of work, leasing out of a company plant or principal equipment, or pledge or mortgage of all or a principal portion of a company's assets.
4. Any event set forth in Paragraph 1 of Article 185 of the Company Law.
5. Reorganization or bankruptcy procedure of a listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, including any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws such as the Company Act or the Bankruptcy Act.
6. Change in chairman, president, a juristic-person director or supervisor or representative thereof, an independent director or supervisor, or a natural-person director or supervisor.
7. Change of certified public accountant (CPA) for any reason other than internal adjustments within the certifying accounting firm.
8. Change of company spokesperson, acting spokesperson, financial officer, accounting officer, research and development officer, or internal control officer.
9. Change in accounting year.
10. Signing or rescission of an important memorandum of understanding or strategic alliance or plan for business cooperation with another company or important contract, changing of important content of a business plan, completion of development of a new product, successful development and formal entry into the full-scale production stage of an experimental product.
11. Resolution by the board of directors to carry out a capital reduction, merger or consolidation, spin-off, acquisition, acquisition of shares, dissolution, issue of new stock for capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of other securities, private placement of securities, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or failure by companies participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, to convene on the same day and pass resolutions by their boards of directors or shareholders' meetings, or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, or veto by either side of the proposal for merger, consolidation, spin-off, acquisition, or acquisition of shares;
or resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation.
12. (deleted)
13. (deleted)
14. Resolution by the board of directors to distribute dividends or a change in dividend distributions by a resolution of the board of directors or a shareholders' meeting.
15. Resolution by the board of directors or a shareholders' meeting to directly or indirectly carry out an investment plan of an amount reaching not less than 20 percent of the company's paid-in capital and NT$100 million.
16. A change by resolution of the board of directors in a plan for capital increase by cash or offering of corporate bonds after such plan has become effective upon registration or approved upon application, or such change in a plan for private placement of securities after recordation.
17. Resolution of the board of directors on the date for convening a shareholders' meeting or special shareholders' meeting, the cause or subjects of such a meeting, or the date of suspension of changes to entries in the shareholders' roster
18. Important resolution of a shareholders' meeting or special shareholders' meeting.
19. (deleted)
20. Acquisition or disposal of assets by the listed company, or a subsidiary thereof whose shares have not been publicly issued domestically, where within the applicable scope of property under Article 3 of the Criteria Governing Acquisition or Disposal of Assets by Public Companies promulgated by the Competent Authority and moreover in the presence of any of the circumstances set forth in Article 30 or 31 [of said Criteria] as requiring public announcement, with the exceptions of merger, consolidation, spin-off, acquisition, and assignment of shares, and of derivatives trading for which the information is reported on a monthly basis.
Where a listed company under the preceding paragraph acquires or disposes of any domestic open-end fund including stock or bond funds, public announcement and reporting is not necessary, unless it is a privately placed fund; public announcement and reporting is required in the event of any unrealized losses on derivatives trading amounting to 3 percent or more of shareholders equity.
21. (deleted)
22. Endorsements and guarantees by the listed company and subsidiaries thereof whose shares have not been publicly issued domestically, in an amount reaching a level set forth in the subparagraphs of Paragraph 1 of Article 25 of the Criteria Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the Competent Authority; or total endorsements and guarantees by a listed company itself in favor of enterprises in the same group reaching 50 percent or more of the company's net worth on its financial statements for the most recent period.
23. Monetary loans to other persons by the listed company and subsidiaries thereof whose shares have not been publicly issued domestically, in an amount reaching a level set forth in the subparagraphs of Paragraph 1 of Article 22 of the Criteria Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the Competent Authority.
24. (deleted)
25. Suspension of business transactions between the company and a major purchaser or supplier, where such purchaser or supplier accounted for 10 percent or more of the company's total amount of sales or purchases in the most recent fiscal year.
26. Occurrence of a disaster, group protest, strike, or environmental pollution event, where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes permits pertaining to pollution, or imposes administrative fines reaching NT$100,000 or more.  27. (deleted)
28. Dishonor of a negotiable instrument, declaration of bankruptcy, or other similar circumstance with respect to a principal debtor of the company; inability by a principal debtor in favor of whom the company has made an endorsement or guarantee to settle a matured negotiable instrument, [loan], or other debt.
29. Any re-filing and public announcement of the regular annually filed internal control system statement of a listed company due to any change in the content thereof.
30. (deleted)
31. Mass media reportage or provision of information by investors sufficient to affect the market status of a listed company's securities.
32. Insufficient centralized custody ratio after a listed company has placed stocks in centralized custody pursuant to regulations and prior to expiry of the custody period, as the result of withdrawal, due to a court execution order or some other reason, of stocks of personnel whose stocks had been placed in centralized custody.
33. Occurrence of any of the changes in shareholding set forth in Paragraphs 1 or 2 of Article 369-8 of the Company Law and receipt of notice of the same.
34. Provisional injunction ruling suspending exercise of the authority of office of one of the directors or supervisors of the company.
35. (deleted)
36. Where capital amendment registration has been carried out due to capital reduction: the effect of the capital reduction on the company financial report (including any discrepancy between the amount of paid-in capital and the number of shares outstanding and the effect on net worth per share) and planned share conversion operations, and any subsequent failure to execute such share conversion plan.
37. Issuance of an undertaking by a company applying for listing for the first time and subsequently inability to perform the undertaking; failure to carry out remedial procedures within three months of the day of the aforesaid occurrence.
38. Any matter required to be publicly announced and reported pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company promulgated by official letter of the Competent Authority.
39. Voidance of the permit of a financial holding company by the competent authority thereof, or penalization of a financial holding company by the competent authority thereof because of a violation of any applicable provision of the Financial Holding Company Law, or loss by a financial holding company of controlling shareholding (as defined in Subparagraph 1 of Article 4 of the Financial Holding Company Law) in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
40. (deleted)
41. Increase or decrease in the number of held companies of an investment holding company.
42. Resolution by the board of directors or a shareholders' meeting of a listed company to apply for termination of listing for trading of its securities.
43. (deleted)
44. Expression of an objection by an independent director of a listed company to any policy resolution of the board of directors.
45. Forfeiture by the directors and supervisors as a whole of subscription rights to shares in a number reaching one-half or more of subscribable shares upon cash capital increase of a listed company, and opening of the shares for subscription by a specific person or persons through negotiation.
46. Where a listed company holds more than 70 percent of the total issued shares or total capital of a listed (or OTC) subsidiary thereof; or where 70 percent of the total issued shares or total capital of a listed company is held by another listed (or OTC) company.
47. Any other major policy resolution of the board of directors or other matter having a significant effect on shareholders' equity or securities prices of a listed company or an affiliated company thereof.
If an "other loss of credit" in Subparagraph 1 of the preceding paragraph is inability to redeem issued matured ordinary corporate bonds, convertible corporate bonds, corporate bonds with warrants, or corporate bonds privately placed under Paragraph 2 of Article 248 of the Company Law, the monetary amount and quantity unredeemed and status of negotiations with creditors as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until redemption has been completed in full. If dishonor of negotiable instruments due to insufficient deposits has occurred and remediation has not yet been made after this Corporation has rendered a disposition of altered trading method or suspension of trading, the date of dishonor, number, monetary amount, and correspondent bank(s) of any dishonored negotiable instrument(s) not yet notated as settled as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until remediation has been carried out.
With respect to a resolution by the board of directors to carry out a merger or consolidation, spin-off, acquisition, acquisition of shares as referred to in subparagraph 11 of [Paragraph 1], if the counterparty is a foreign company, the listed company shall promptly, completely, and accurately input information related to the resolution for, process of, and method of the merger or consolidation, acquisition, or acquisition of shares, of the foreign business.
Under the circumstances in Subparagraph 32 of Paragraph 1, in addition to complying with the requirements set forth in Article 3, the listed company shall, by the day next following the expiry of the time limit of which the company is notified by letter of this Corporation for replacing shares withdrawn from custody, input the amount of shares replaced and date of replacement.
Where any circumstance in any subparagraph of Paragraph 1 applies to any unlisted (non-OTC) major subsidiary of a listed company, it shall be deemed material information of the listed company. The term “major subsidiary” means any subsidiary of the listed company as defined according to generally accepted accounting principles to which any of the following circumstances has applied in each of the most recent two fiscal years (with the information being based on the annual financial reports audited and attested by a certified public accountant), or any subsidiary that the certified public accountant deems to have a significant effect on the financial report of an audited company:
(1) Where 30 percent or more of the listed company's operating revenue is derived from the single subsidiary.
(2) Where 50 percent or more of a listed company's major materials or major commodities, in terms of its quantities or dollar purchase amounts thereof, is derived from the single subsidiary.
(3) Where 50 percent or more of the listed company's total output value (including from self-production, contracting, and outsourcing) is derived from the single subsidiary.
(4) Where the company's dollar amount of original investment in the single subsidiary reaches 40 percent of the company's paid-in capital and also NT$300 million or more.
(5) Where the aggregate dollar amount of the company's monetary loans and guarantees and endorsements to the single subsidiary reaches 40 percent of its net worth and also NT$300 million or more.
(6) Where a single subsidiary's profit/(loss) before tax accounts for 50 percent of the listed company's profit/(loss) before tax on its consolidated financial statements and also NT$300 million or more.
Where any circumstance in any subparagraph of Paragraph 1 applies to any held company or subsidiary of a listed company that is an investment holding company or financial holding company, it shall be deemed material information of the listed company. "Subsidiary" means a subsidiary under Subparagraph 4 of Article 4 of the Financial Holding Company Law.
Where the dollar amount of the combined investment in any single enterprise by a listed company and/or any of its subsidiaries as defined according to generally accepted accounting principles exceeds 10 percent of the company's net worth, if such invested single enterprise is not a domestic public company, and there occurs in respect thereof any of the events set out in Article 7, Subparagraphs 1 to 8, of the Securities and Exchange Law Enforcement Rules, the Listed Company shall report on its behalf before the opening of trading hours on the business day next following the day it learns of the occurrence of an above-stated event or of the media reportage of the event.
Where any circumstance in any subparagraph of Paragraph 1 applies to a non-listed (non-OTC) parent company of a listed subsidiary company thereof, or where any subsidiary of such parent company, as subsidiary is defined according to generally accepted accounting principles, encounters any matter set forth in Paragraph 1 as a matter that must be reported by a company that is a parent or subsidiary, it shall be reported by the listed company. If the parent company is a foreign company, [the listed subsidiary] shall report on its behalf any of the particulars set forth in the following subparagraphs before the opening of trading hours on the business day next following the day it learns of the occurrence or media reportage of such event with respect to the parent company:
(1) Material change in shareholder equity.
(2) Material change in business policy.
(3) Material disaster resulting in serious reduction or complete cessation of production.
(4) Material effect on shareholders' equity or company operations resulting from a change in laws, regulations, or rules of the home country
(5) Mass media reportage about the parent company sufficient to affect securities prices of a listed subsidiary in Taiwan.
(6) Occurrence of any other material event that shall be immediately reported pursuant to law or regulation of the foreign company's home country.
Article 3 A listed company to which any circumstance set forth in any subparagraph of Paragraph 1 of the preceding article applies, or that discovers mass media reportage of any circumstance set forth in any subparagraph of the preceding article or any reportage that diverges from facts shall handle those of such cases conforming to the circumstances set forth in Paragraph 1 of Article 2 of this Corporation's Procedures for Press Conferences Concerning Material Information of Listed Companies in compliance with Article 5 of said Procedures, and shall handle all other such cases by inputting the content or explanations of the information into the Internet information reporting system designated by this Corporation before the commencement of trading hours of the trading day next following the date of occurrence of the event (date of contract signing, date of payment, date of consignment trading, date of transfer, date of resolution of the board of directors,
or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; however, for investment for which approval of the Competent Authority is required, the earlier of the above date or the date of receipt of approval by the Competent Authority shall apply) or date of the media reportage; provided, where a press release is issued prior thereto, it shall be input at the time of issuance of the press release. Where foreign laws or regulations impose time constraints concerning material information that a listed company is required to report on behalf of a foreign enterprise under these Procedures, the listed company may accommodate the time constraints on the foreign enterprise and make the disclosure simultaneously therewith. Where any circumstance in paragraph 1 of the preceding article applies to a listed company that has issued securities overseas, the company shall at the same time input the content or explanations of the information in
English into the Internet information reporting system designated by this Corporation.
A listed company shall not convene an investor/press conference during trading hours; if the company voluntarily wishes to disclose any relevant information prior to convening an investor/press conference, it shall input the information into the Internet information reporting system designated by this Corporation, and shall not disclose the information to any specific person(s); it shall furthermore input the complete relevant conference content on the date of the conference.
Article 9 If any of the following circumstances applies to a listed company, this Corporation may impose on a case-by-case basis a breach penalty of NT$30,000; provided, however, that if the cumulative number of penalties within one year reaches two or more (inclusive of the current penalty), a breach penalty of NT$50,000 shall be imposed as the current penalty. Where a company that is required to make up a disclosure and is notified to do so within two business days from delivery of the notice, still fails to comply by the deadline, a breach penalty of NT$10,000 per day may be imposed until the date of compliance and the information may be generally disclosed through this Corporation's information transmission system.
1. The listed company violates any provision of these Procedures.
2. The listed company arbitrarily publishes unconfirmed news or discloses information that diverges from fact.
3. The listed company fails to submit relevant sampling check materials within the time limit set by this Corporation.
If any circumstance set forth in any subparagraph of the preceding paragraph applies to a listed company, and this Corporation has imposed a per day penalty and the company still fails to comply by the deadline and the circumstances of the particular case are severe, this Corporation may alter the original trading method of the company's listed securities to full-cash delivery or suspend trading of the securities pursuant to Article 49 and Article 50 of this Corporation's Operating Rules.
A listed company on which a breach penalty is imposed shall pay the penalty to this Corporation's Finance Department within five days from receiving notice from this Corporation.
If any circumstance under Subparagraph 2 of Paragraph 1 is found on the part of a listed company, this Corporation shall compile the relevant information and submit it to the competent authority as a basis for it to take further measures.