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Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies(2008.07.10) |
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Article 3
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a company fails to effect announcement and reporting in accordance with the provisions of Article 2, it may not repurchase its own shares on a centralized securities exchange market or at the place of business of a securities firm. Whenever the cumulative number of shares repurchased accounts for at least two percent of the shares issued by the company, or the cumulative value of shares repurchased amounts to at least NT$300 million, the company shall, within two days from the day of the occurrence of one of the above facts, make an announcement of the date, number, type, and price of the shares.
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Article 7
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For a company repurchasing its own shares, except for a repurchase taking place under the circumstances described in Article 43-1, paragraph 1 of the Securities and Exchange Act, the total number of shares repurchased per day may not exceed one third of the total number planned for the repurchase. The company may not provide price quotations prior to the beginning of trading hours, and shall appoint not more than two securities brokers to execute the repurchase.
A company repurchasing its own shares shall not be subject to the restriction regarding the number of shares repurchased specified in the preceding paragraph where the number of shares repurchased is not more than 200,000 shares per day.
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Article 8
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For a company repurchasing its own shares for reasons specified in Article 28-2, paragraph 1, subparagraphs 1 through 3 of the Securities and Exchange Act, the total monetary amount of shares repurchased shall not exceed the retained earnings plus the following realized capital gains:
- 1. gain on disposal of assets that has not yet been transferred to the retained earnings account; and
- 2. the gains listed under Article 241 of the Company Act ("income derived from the issue of new shares at a premium" and "income from endowments received by the company"); provided, however that where the endowment received consists of the company's own shares, the income shall not be recorded until the shares have been sold.
The term "retained earnings" as used in the preceding paragraph includes legal reserve, special reserve, and undistributed earnings. However, the following items shall be excluded:
- 1. Earnings distributed through resolution of a meeting of the board of directors or a meeting of the shareholders.
- 2. Special reserve set aside by the company pursuant to Article 41, paragraph 1 of the Securities and Exchange Act. However, special reserve set aside pursuant to Article 14, paragraph 1 of the Regulations Governing Securities Firms shall not be subject to this restriction.
Calculation of the dollar amount of shares that may be repurchased shall be based on financial reports for the latest accounting period prior to a resolution of a meeting of the board of directors. The financial reports must have been audited or reviewed in a lawful and transparent manner by a certified public accountant, and must have been issued an unreserved audit opinion or standard review opinion. However, if, due to considerations of long-term investment holdings and associated investment profit and loss on such holdings, the financial reports for the given period were calculated based on financial reports of the invested company that were not audited or reviewed by a certified public accountant, and were issued a reserved opinion by the accountant, this restriction shall not apply.
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