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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 Companies with Listed Securities(2015.07.13)
Date:
Article 2     The term "TWSE listed company" as used in these Procedures means any TWSE listed company or TWSE primary listed company as prescribed in Article 43 of the TWSE Operating Rules.
    The meanings of "parent" and "subsidiary" as used in these Procedures shall be determined in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry.
    The term "major subsidiary" as used in these Procedures means a subsidiary that meets the conditions of Article 2-1 of the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants or Article 6 of the Regulations Governing the Auditing and Attestation of Financial Statements of Financial Enterprises by Certified Public Accountants.
    The term "net worth" as used in these Procedures means the equity attributable to owners of the parent on the balance sheet prepared pursuant to regulations governing the preparation of financial reports for the relevant industry issued by the competent authority.
    The term "halt of trading" as used in these Procedures means the TWSE may direct a trading halt in listed securities for a specific period with or without an application made by the TWSE listed company, for the TWSE listed company to disclose information publicly according to these Procedures.
    The term "resumption of trading" as used in these Procedures means the TWSE may direct a trading resumption in listed securities with or without an application made by the TWSE listed company.
Article 4     "Material information of TWSE listed companies" 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 material 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 material effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution, with respect to a listed company or a responsible person thereof; or a chairperson or managerial officer of the company violates the Securities and Exchange Act, Futures Trading Act, Company Act, Banking Act, Insurance Act, Act Governing Bills Finance Business, Financial Holding Company Act, or Commercial Accounting Act, or is indicted for a crime of corruption malfeasance in office, fraud, breach of trust, or misappropriation.
  3. Any material effect on company finances or business resulting from any 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 Article 185, paragraph 1 of the Company Act of the Republic of China (ROC).
  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, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws, or any material change in any of the above matters.
  6. Appointment of or change in chairman, general manager, a juristic-person director or supervisor or representative thereof, an independent director, a natural-person director or supervisor, or a member of the functional committee established pursuant to the Securities and Exchange Act, or change in one-third or more of directors, or in the case of a primary listed company, where there is no independent director with a registered household address in the ROC.
  7. Change of certified public accountant (CPA) for any reason other than internal adjustments within the certifying accounting firm.
  8. Personnel changes such as a change of spokesperson, acting spokesperson, important operations officer (chief executive officer, chief operating officer, chief marketing officer, or chief strategy officer), principal financial officer, principal accounting officer, research and development officer, chief internal auditor, or in the case of a primary listed company, of its litigious or non-litigious agent.
  9. Change in accounting year, or any accounting change resolved upon by the board of directors that is required to be submitted for the competent authority's approval and publicly announced and reported in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, or any non-approval by the competent authority of any application made to the competent authority for an accounting change.
  10. Any material effect on company finances or business resulting from any signing, amendment, termination, or rescission of an important memorandum of understanding, a plan for a strategic alliance or other business cooperation or mutual non-competition commitment, or an important contract, change in any material respect of a business plan, completion of development of a new product, or 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, division, acquisition, exchange or conversion of shares or transfer of shares from another, dissolution, issue of new stock for capital increase, record date of a capital reduction or cash capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of new restricted employee shares, issue of other securities, private placement of securities, change in par value per share, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof, or any material change in any of the above matters; or failure by companies participating in a merger, consolidation, division, acquisition, or transfer of shares from another, 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, division, acquisition, or transfer of shares from another, or veto by either side of the proposal for merger, consolidation, division, acquisition, or transfer of shares from another; 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. The date, time, and venue of an investor conference that a company holds or is invited to attend and relevant information connected with it, or the disclosure by any other means of financial and business information that has not been entered into the Market Observation Post System.
  13. A resolution by the board of directors to publish financial forecast information, the inapplicability of such financial forecast information, or the correction or updating of such financial forecast information, or, in the case of a company that has published complete financial forecasts, when the difference in any of the following reaches 20 percent or greater, and the sum involved reaches NT$30 million and 0.5 percent of share capital:
    1. The difference between the self-assessed (unaudited) comprehensive income as publicly disclosed and filed within 1 month after the close of the fiscal year and the forecasted comprehensive income as most recently publicly disclosed and filed.
    2. The difference between the actual comprehensive income stated in the publicly disclosed and filed annual financial report and the forecasted comprehensive income.
    3. The difference between the actual comprehensive income stated in the publicly disclosed and filed annual financial report and the self-assessed (unaudited) comprehensive income as publicly disclosed and filed within 1 month after the close of the fiscal year.
    In the case of a company whose shares have no par value or a par value other than NT$10, for the calculation of the aforesaid 0.5 percent of share capital under the forepart of this paragraph, 0.25 percent of net worth shall be substituted.
  14. Resolution by the board of directors to distribute or not to distribute dividends, or a change in dividend distributions by a resolution of the board of directors or a shareholders meeting, or resolution of a record date for dividend distribution, or change of date of distribution of cash dividends after an ex-dividend announcement, or failure to distribute cash dividends by the date set for distribution of the cash dividends.
  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 share capital or NT$1 billion, or any material change in any of the above matters. In the case of a company whose shares have no par value or a par value other than NT$10, for the calculation of the aforesaid 20 percent of share capital, 10 percent of net worth shall be substituted.
  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 a change by resolution of the board of directors in a plan for private placement of securities after passage of the plan by a resolution of the board of directors or a shareholders meeting.
  17. Resolution of the board of directors on the date for convening an ordinary 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 regular shareholders meeting or special shareholders meeting.
  19. There is any material event of internal control fraud, non arms-length transaction, or defalcation of assets.
  20. Where any of the following provisions is met:
    1. An acquisition or disposal, by the TWSE listed company or by a subsidiary whose shares have not been publicly issued domestically, of assets within the scope of Article 3 of the Regulations Governing Acquisition or Disposal of Assets by Public Companies adopted by the competent authority and where the circumstances of Article 30 or 31 of those Regulations require public disclosure and filing, with the exception of the following circumstances:
      1. Public disclosure has already been made of a merger, consolidation, division, acquisition, or transfer of shares from another pursuant to subparagraph 11 of this paragraph.
      2. Public disclosure has already been made of an acquisition or disposal of privately placed securities pursuant to subparagraph 24 of this paragraph.
      3. The information pertains to derivatives trades that must be reported by the 10th of each month.
      4. An acquisition or disposal of any type of open-end fund.
    2. Public disclosure and filing is required in the event of any unrealized losses on derivatives trading amounting to 3 percent or more of net worth.
  21. Resolution by the board of directors (or a shareholders meeting) to permit a managerial officer (or director) to engage in competitive conduct, or knowledge by the company that a managerial officer is operating the same kind of business independently or on behalf of another person, or a director is involved in conduct within the company's scope of business independently or on behalf of another person, and the investment or business that the managerial officer or director is engaged in is a Mainland-area enterprise, and there has been any failure to duly obtain permission from the board of directors (or a shareholders meeting), or there is any material change in any of the above matters.
  22. Public disclosure and filing of endorsements and guarantees by the listed company as required under Article 25 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies.
  23. Public disclosure and filing of monetary loans to other persons by the listed company as required under Article 22 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the competent authority.
  24. Acquisition or disposal of privately placed securities by a listed company or a subsidiary thereof.
  25. Suspension of business transactions between the listed company and a major purchaser or supplier, where the purchaser or supplier accounted for 10 percent or more of the company's total amount of sales or purchases as stated in the parent company only (or individual) financial report for the most recent fiscal year.
  26. Occurrence of a disaster, group protest, strike, environmental pollution event, or any other material event, where the company incurs a material loss, or where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes or voids a permit pertaining to pollution, or where the administrative fines for one single event have accumulated to NT$1 million or more.
  27. Finalization of negotiation results of a negotiation meeting called between the listed company and a creditor bank.
  28. Dishonor of a negotiable instrument, filing for bankruptcy or reorganization, or any other similar circumstance, on the part of a related party of the listed company or principal debtor to the company or a joint and several guarantor of a principal debtor; or inability by a principal obligor, in favor of whom the listed company has made an endorsement or guarantee, to settle a matured negotiable instrument, loan, or other obligation.
  29. Any re-filing and public disclosure of the regular annually filed internal control system statement due to any change in the content thereof; or obtaining of the Internal Control Special Audit Report for the special audit of internal controls conducted by the CPA.
  30. Failure to make a public disclosure or a filing within a prescribed time limit; an error or omission in a financial report prepared by a listed company, with respect to which Article 6 of the Enforcement Rules to the Securities and Exchange Act requires a correction to and further a restatement of the financial report; a CPA issues an audit or review report containing an opinion other than an unqualified or modified unqualified opinion on a publicly disclosed and filed annual or semiannual financial report, except in cases where the CPA issues a qualified audit or review report for the reason of annual amortization of losses, as permitted by a law or regulation, or for the reason that the amount of investment by a non-major subsidiary or of investment accounted for using the equity method, and the gain or loss thereupon, as presented in the interim financial report is calculated on the basis of the investee company's financial report that have not been audited or reviewed by a CPA. However, if the above-mentioned non-major subsidiary is a subsidiary of a financial holding company, the subsidiary's interim financial report shall be audited or reviewed by a CPA in accordance with applicable laws and regulations.
  31. (deleted)
  32. Insufficient centralized custody ratio after stocks have been placed 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 Article 369-8, paragraph 1 or 2 of the Company Act and receipt of notice of the same.
  34. A director or supervisor is subject to a provisional injunction suspending them from the exercise of their powers or is subject to an emergency disposition; or, a director is subject to a provisional injunction suspending the director from the exercise of powers or is subject to an emergency disposition and the board of directors is thereby rendered unable to exercise its powers.
  35. Any matter required to be publicly disclosed and filed by the company pursuant to the Regulations Governing Share Repurchase by Listed and OTC Companies.
  36. Occurrence of any the following matters due to a capital reduction or change of par value per share:
    1. Completion of amendment registration of a change to capitalization.
    2. Passage of a plan for share replacement operations.
    3. Any subsequent failure to execute such share replacement plan.
    4. At the time of announcement of the financial report, the listing procedures for the new shares replacing the old ones due to the capital reduction or change of par value per share have yet to be completed, resulting in a discrepancy between the number of common shares used as the calculation basis for net worth per share in the financial statement and the number of outstanding shares.
    5. If the TWSE listed company is required to carry out share replacement operations due to a capital reduction, and the transferee company of the demerger is neither a TWSE listed nor a GTSM listed company, then 3 business days before the date on which trading will resume, public disclosure and filing shall be made of the following information for the demerged company and the transferee company of the demerger for the day prior to the record date of the demerger: the unaudited or CPA-reviewed share capital, net worth, and net worth per share, and the CPA-attested (or reviewed) earnings per share for the most recent period.

  37. Issuance of an undertaking upon applying for listing and subsequently inability to perform the undertaking; failure to carry out remedial procedures within 3 months of the day of the aforesaid occurrence.
  38. Any matter required to be publicly disclosed and filed pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company.
  39. Revocation by the competent authority of the permit of a financial holding company or of a listed company defined as a bank or a securities, futures, or insurance company under Article 2 of the Organic Act Governing the Establishment of the Financial Supervisory Commission, or penalization of any of the above by the competent authority for violation of the Financial Holding Company Act, Banking Act, Insurance Act, Act Governing Bills Finance Business, or laws and regulations relating to securities and futures; or the loss by a financial holding company of controlling shareholding in a subsidiary, as defined by Article 4, subparagraph 1 of the Financial Holding Company Act, where the competent authority has ordered remediation within a certain time limit.
  40. The circumstance set forth in Article 50, paragraph 1, subparagraph 14, or Article 50-3, paragraph 1, subparagraph 11 of the TWSE Operating Rules exists, and the TWSE has announced suspension of trading of the listed securities or announced the halt or resumption of trading in the listed securities according to these Procedures.
  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 to apply for termination of listing for trading of its securities, or any material change in such a matter.
  43. A donation to a related party or a major donation to a non-related party under the Regulations Governing Procedure for Board of Directors Meetings of Public Companies.
  44. Objection or expression of reservation by an independent director or a member of the remuneration committee about a resolution by, respectively, the board of directors or a remuneration committee meeting, that has been included in a record or stated in written; for a listed company that has established an audit committee, any matter adopted with the approval of two-thirds or more of all directors without having been passed by the audit committee; any remuneration passed by the board of directors that is more favorable than the suggestion by the Remuneration Committee.
  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 share capital of a TWSE listed (or GTSM listed) subsidiary thereof; or where 70 percent of the total issued shares or total share capital of a listed company is held by another TWSE listed (or GTSM listed) company.
  47. If a listed company issues securities outside of Taiwan, the making of any adjustment for differences in the overseas financial report due to inconsistency in the accounting principles applied in the two places with respect to financial information filed for any period in the place of overseas listing; or if the financial report of a primary listed company is not prepared according to the generally accepted accounting principles (GAAP) as described in Article 3 of the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the differences in items between the accounting principles employed and those of the ROC and the monetary amounts affected, and the certifying CPA's opinion on the aforementioned matters.
  48. If the circumstances set forth in Article 53-25 of the TWSE Operating Rules exist.
  49. Any other material policy resolution of the board of directors, or other circumstances having a material effect on the shareholders' equity or securities prices of a listed company.
    If an "other loss of credit" in subparagraph 1 of the preceding paragraph is inability to redeem issued matured straight corporate bonds, convertible corporate bonds, corporate bonds with warrants, or corporate bonds privately placed under Article 248, paragraph 2 of the Company Act, 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 the TWSE 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, division, acquisition, or transfer of shares from another as referred to in paragraph 1, subparagraph 11, if the counterparty is a foreign company, the TWSE 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 transfer of shares from another, of the foreign business.
    Under the circumstances in paragraph 1, subparagraph 32, in addition to complying with the requirements set forth in Article 6, the TWSE listed company shall, by the day following the expiry of the time limit of which the company is notified by letter of the TWSE for replacing shares withdrawn from custody, input the amount of shares replaced and date of replacement.
Article 6     A TWSE listed company shall input the material information or explanations into the Internet information reporting system designated by the TWSE within the filing time limits of the following subparagraphs:
  1. When any circumstance in any of the subparagraphs of Article 4, paragraph 1 of these Procedures applies to the TWSE listed company, except for subparagraph 40, where the material information shall be input within an hour after the TWSE announces the suspension, halt or resumption of trading in the securities, in the event of any of the circumstances in the remaining subparagraphs, the material information shall be input an hour before the beginning of trading hours on the trading day following the date of occurrence of the event. However, if a press release is issued earlier, the information shall be input simultaneously with the press release.
  2. If the TWSE listed company discovers mass media reportage of any circumstance under Article 4, paragraph 1, or reportage sufficient to affect the market price of its listed securities, or any reportage that diverges from facts, the company shall immediately input an explanation of the material information no later than 12 noon on the day of discovery. However, if the discovery occurs on a weekend, a regular holiday, or after 12 noon of the given trading day, the explanation shall be input an hour before the beginning of trading hours on the trading day following the date of discovery of the media reportage.
  3. When the circumstances of any subparagraph under Article 11, paragraph 1 apply to a TWSE listed company, information on the event shall be input on the date of occurrence of the event or on the same day as the media reportage, except under the circumstances of paragraph 1, subparagraph 7, in which case the information shall be input at the time of the press conference or within two hours after the press conference. If the press conference is convened on the date of occurrence of the event or the same day as the media reportage, however, the content shall be input no later than two hours after the press conference.
    The date of occurrence of the event referred to in subparagraph 1 of the preceding paragraph means the date of agreement, date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of a resolution of the board of directors or a committee established by it, or other date that can confirm the counterparty and monetary amount of the transaction, whichever date is earlier; however, for any investment requiring the approval of the competent authority, the earliest of the above dates or the date of receipt of approval by the competent authority shall apply.
     The filing time limits under the subparagraphs of paragraph 1 shall be based on Taiwan time, and the filings shall be made in Chinese, provided that they may also be simultaneously made in English. In addition, when foreign laws or regulations impose time constraints concerning material information that, under these Procedures, a TWSE listed company must report on behalf of a foreign enterprise, the TWSE may accommodate the time constraints on the foreign enterprise and make a simultaneous disclosure.
     If a TWSE listed company issues securities outside of the ROC, and during the duration of those securities, undergoes any event in Article 4, paragraph 1, it shall simultaneously input the information or explanations in English into the Internet information reporting system designated by the TWSE, or, if it undergoes any material event that requires immediate reporting under the laws, regulations, or securities exchange rules of the country of listing or the country of the company's registration, it shall simultaneously input that information into the Internet information reporting system designated by the TWSE. If it receives a written inquiry from the securities regulatory agency or securities exchange of the country of listing or the country of the company's registration with respect to any matter with a material effect on shareholder equity or the price of securities, it shall immediately forward to the TWSE a copy of the content of the written enquiry and any response to it.
     If any circumstance under Article 5 applies to a TWSE secondary listed company, it shall file a report within the time limits under paragraphs 1 to 4. However, the circumstance under Article 5, paragraph 1, subparagraph 18 shall be handled no later than the date of discovery, and as promptly as possible within the time period allowed for the filing of material information under the laws or regulations of the home country or the country of listing of the secondary listed company.
     If the circumstance under the preceding paragraph falls within the purview of laws or regulations of the company's home country or country of listing, then the company, within the time limit prescribed by such laws or regulations, shall simultaneously input information into the TWSE-designated information reporting website in Chinese.
Article 11      The term "material information used in a TWSE listed company's press conference concerning material information" means the following items provided by the TWSE listed company on its own initiative, or investigated and verified at the initiative of the TWSE:
  1. The dishonoring of a negotiable instrument due to insufficient deposits, refusal by a financial institution to honor a transaction, or other loss of credit of a listed company or the parent or a subsidiary of the listed company.
  2. Any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, provisional attachment, provisional injunction, or compulsory execution with respect to a TWSE listed company or its responsible person which has a material effect on the company's finances or business.
  3. A serious decrease in output or a complete cessation of work.
  4. A resolution by the board of directors of a TWSE listed company, its parent, or its subsidiary to petition a court for bankruptcy or reorganization, or a third party's petition to a court for its bankruptcy or reorganization, or a court ruling prohibiting transfer of the company's shares pursuant to relevant laws and regulations.
  5. The signing, termination, or rescission of an important memorandum of understanding, strategic alliance, plan for business cooperation, mutual non-competition agreement, or important contract, or a change in important content of a business plan, or the completed development of a new product or the successful development and formal beginning of mass production of trial products, which has a material effect on the finances or business of the company.
  6. A resolution by the board of directors or a shareholders' meeting to apply for termination of TWSE listing for trading of its securities.
  7. A resolution by the board of directors for a capital reduction (excluding retirement of treasury shares), merger or consolidation, cancellation of a merger or consolidation, spin-off, acquisition, exchange, conversion or acquisition of shares, dissolution, or participation in the establishment of or conversion into a financial holding company, investment holding company, or subsidiary of such a company, or the inability to convene a subsequent shareholders' meeting by a company participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, or the veto of a proposal for merger, consolidation, spin-off, acquisition, or acquisition of shares. This provision shall not apply under the following two circumstances:
    1. A merger conducted under Article 18, paragraph 6 of the Business Mergers and Acquisitions Act, where the non-surviving enterprise has share capital of less than NTD 1 billion, or a merger/acquisition conducted in accordance with Article 19 of the Business Mergers and Acquisitions Act. If the merged/acquired enterprise is a company with shares having no par value, or a par value other than NT$10, the enterprise's net worth shall be substituted for the above-mentioned calculation of share capital.
    2. A capital reduction by a major subsidiary or by a subsidiary of an investment holding company or a financial holding company as specified in Article 7, paragraph 3.
  8. Transactions between the TWSE listed company and related parties: acquisition or disposal of real property, or acquisition or disposal of assets other than real property, where the monetary amount of the individual transaction, or of cumulative transactions with the same trading counterparty within 1 year, reaches 20 percent of the company's share capital, 10 percent of its total assets, or NT$300 million. In the case of a company with shares having no par value or a par value other than NT$10, 10 percent of the net worth shall be substituted for the above-mentioned calculation of 20 percent of share capital. However, this requirement shall not apply to transactions between the above-mentioned TWSE listed company and related parties in any of the following circumstances:
    1. Trading of government bonds, repo/reverse repo trades of bonds, or subscription or redemption of domestic money market funds.
    2. A financial holding company, banking enterprise, insurance enterprise, securities enterprise, or any subsidiary thereof, acquiring or disposing of publicly offered open-end funds issued by its parent or subsidiary companies, or engaging in bill or bond transactions.
    3. Transactions with a parent company or a subsidiary of the TWSE listed company, or between subsidiaries of the TWSE listed company.
  9. The occurrence of a disaster, group protest, strike, or environmental pollution event resulting in a disposition by a competent authority, where the estimated insurance-indemnified loss exceeds 20 percent of the company's share capital or is NT$300 million or more. In the case of a company with shares having no par value or a par value other than NT$10, 10 percent of the net worth shall be substituted for the above-mentioned calculation of 20 percent of share capital.
  10. The voidance of a financial holding company's permit, or the voidance of a permit, by the relevant competent authority, of a TWSE listed company that is a bank, securities, futures, or insurance enterprise as defined in the Organic Act Governing the Establishment of the Financial Supervisory Commission, or the loss by a financial holding company of statutory controlling shareholding in a subsidiary, where the competent authority has ordered remediation within a specified time limit.
  11. The occurrence of any circumstance under Article 4, paragraph 1, subparagraphs 4, 19, 27, 40 or 46, except where the TWSE has announced the halt or resumption of trading in the listed securities in accordance with these Procedures.
  12. Any major policy resolutions of the board of directors of the company, or any other circumstance with a material effect on shareholder equity or the price of its securities.
     For a major subsidiary of a TWSE listed company, or a subsidiary that meets the standards of Article 7, paragraph 3, or a TWSE listed company that is a subsidiary in a parent-subsidiary relationship in which the domestic parent company is neither TWSE listed, GTSM listed, nor registered as an emerging stock company and encounters any circumstance under the subparagraphs of paragraph 1 herein, it will be deemed material information of a TWSE listed company, and a press conference shall be held by the TWSE listed company.
Article 13-1     Where a TWSE listed company plans to publicly disclose or convene a board of directors meeting to adopt resolutions on any of the following before 5 P.M. on a business day, it shall apply to the TWSE for a halt of trading, with a Halt Application submitted (Appendix 4) stating the reason(s) and relevant content, on the business day before the public disclosure or meeting, provided it may submit the application before 7:30 A.M. on the business day of the public disclosure or meeting in the event of an emergency preventing timely application:
  1. A serious decrease in output or a complete cessation of work.
  2. Any event set forth in Article 185 of the Company Act, except where the event has no material impact on shareholder equity or securities prices.
  3. A petition to court for bankruptcy or reorganization.
  4. Merger or consolidation, division, acquisition, or exchange, conversion or transfer of shares, or cancellation of any of the above, except where no shareholders' resolution is required for the merger or consolidation as under Article 18, paragraph 7, Article 19, paragraph 1, Article 29, paragraph 6, Article 30, paragraph 1, Article 36, paragraphs 1 and 2, Article 37, paragraph 1 of the Business Mergers And Acquisitions Act, or no material impact is caused to shareholder equity or securities prices.
  5. Completion of development of a new product, successful development and formal entrance into mass production of trial products, and major development progress of a new product or new technology, except where no material impact is caused to shareholder equity or securities prices.
  6. Other circumstances with a material effect on shareholder equity or securities prices.
    Where a TWSE listed company discovers mass media reportage or other information indicating circumstances with a material effect on its shareholder equity or securities prices, it shall apply to the TWSE for a halt of trading if it is unable to provide an explanation on the day of said discovery.
    The TWSE may reject the aforementioned application if:
  1. The application is made where the circumstance in paragraph 1 or 2 does not occur.
  2. The halt is unnecessary as a public disclosure has been made by the TWSE listed company.
  3. The TWSE deems the application unjustified or deems a halt unadvisable.
Article 13-2     The TWSE may give public notice of a trading halt of securities of a TWSE listed company according to the following provisions:
  1. The TWSE finds upon deliberation that the application for a halt of trading made by the TWSE listed company according to Article 13-1, paragraph 1 or 2, justified.
  2. Mass media reportage or other information indicates a circumstance with a material effect on the shareholder equity or securities prices of the TWSE listed company has occurred, said company is unable to provide a full explanation of the material circumstance, and the TWSE deems a halt of trading necessary to comply with the needs of the exchange market or protect shareholder equity.
  3. The TWSE listed company is unable to provide a full explanation of the information relevant to the cause for the halt, and the TWSE deems it necessary to continue with the halt.
    Each halt of trading shall last from at least one to not more than three business days and may continue to be enforced where necessary.
    A TWSE listed company is subject to a halt of trading by the TWSE shall immediately report to the TWSE in the event of a material change to the cause for the halt.
Article 13-3     Where a TWSE listed company to which any of the circumstances in Article 13-2, paragraph 1 applies is subject to a halt of trading in its securities by the TWSE, it shall immediately fill out a Resumption Application (Appendix 5) to apply to the TWSE for resumption of trading if it complies with the following provisions and none of the other circumstances in Article 13-2, paragraph 1 applies to it. The TWSE may give public notice of resumption of trading in its listed securities:
  1. A full explanation is provided of the information relevant to the cause for the halt.
  2. The halt is no longer necessary due to a change of circumstances.
    The TWSE may directly give public notice of resumption of trading in the listed securities of the TWSE listed company if said company complies with the above provisions but fails to apply for such resumption.
Article 13-4     Procedures for halt and resumption applications shall established by TWSE listed companies and are subject to approval by resolution of their board of directors. The procedures shall expressly set forth the level with the final decision-making authority, which may not be lower than the level of president or its equivalent.
    Applications filled out by a TWSE listed company pursuant to Article 13-1, paragraph 1 or 2, and Article 13-3, paragraph 1, are governed by Article 12, paragraph 2 mutatis mutandis.
Article 15     If any of the following circumstances applies to a TWSE listed company, or a secondary listed company, the TWSE may impose on a case-by-case basis a penalty of NT$30,000. However, if the cumulative number of penalties imposed within the most recent one year reaches two or more (inclusive of the current penalty), or if the circumstances in an individual case are due to intent or material negligence, or have a material impact on shareholder equity or securities prices, the TWSE may impose a penalty of NT$50,000 to NT$5 million. Where a company that is required to make up a disclosure and is notified to do so within 2 business days from delivery of the notice fails to comply by the deadline, a penalty of NT$10,000 per day may be imposed until the date of compliance and the information may be generally disclosed through the TWSE's information transmission system.
  1. The company violates any provision of these Procedures concerning material information or investor conferences.
  2. The material information contains descriptions of an exaggerated nature or that resemble advertising or promotional language.
  3. The company arbitrarily publishes unconfirmed news or discloses information that diverges from fact.
  4. The information published does not conform with the principles for corporate governance in Article 2 of the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies, and it affects shareholder equity.
  5. The company fails to submit relevant sampling check materials within the time limit set by the TWSE.

     If an event under Article 5, paragraph 1, subparagraph 2 is found on the part of a TWSE secondary listed company, and the company fails to simultaneously report the event on the Internet information reporting system designated by the TWSE, or fails to simultaneously submit required documents and materials to the TWSE pursuant to Article 5, paragraph 2, then the TWSE, at its sole discretion, may impose a penalty of no less than NT$1 million and no more than NT$5 million. However, if the cumulative number of penalties within the most recent 1 year reaches two or more (inclusive of the current penalty), the current penalty may be increased to NT$5 million.
     The TWSE may impose a breach penalty of NT$50,000 on a TWSE listed company that violates any provision of these Procedures governing press conferences concerning material information and halt and resumption of trading for each instance of violation, provided that if the cumulative number of penalties within 1 year reaches two or more (inclusive of the current penalty), a breach penalty of NT$100,000 shall be imposed as the current penalty. In the event that any individual case of violation is due to intent or material negligence, or has a material effect on shareholder equity or the price of securities, the TWSE may impose a breach penalty of NT$100,000 to NT$1 million. If a TWSE listed company is required to take remedial action, and is notified to do so by before the next trading day after the notice but fails to do so, a breach penalty of NT$10,000 per day may be imposed until the day the action is carried out.
    If any circumstance set forth in any subparagraph of paragraph 1 applies to a TWSE listed company, or a TWSE secondary listed company, and the TWSE 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, or if, after receiving notice from the TWSE requiring it to hold a press conference or apply for a halt and resumption of trading, the TWSE listed company still fails to do so and the circumstances of the particular case are severe, the TWSE may alter the original trading method of the company's listed securities, suspend trading of the securities, or delist the securities pursuant to Article 49, Article 49-1, Article 50, Article 50-1, or Article 50-3 of the TWSE Operating Rules.
    A TWSE listed company, or a TWSE secondary listed company on which a penalty is imposed shall pay the penalty to the TWSE Finance Department within 5 days from receiving notice from the TWSE.
    If any circumstance under paragraph 1, subparagraph 3 is found on the part of a TWSE listed company or a TWSE secondary listed company, the TWSE shall compile the relevant information and submit it to the competent authority as a basis for it to take further measures.