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Amendments

Title：

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

Amended Date： 2021.03.29 
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 Overseas Securities by Issuers(2010.05.11)
Date：
Article 9     Where any of the circumstances listed below exists at an issuer, the FSC may reject its plan for offering and issuance of overseas securities:
  1. Any of the circumstances referred to in Article 156, paragraph 1 of the Act.
  2. The plan for the current offering and issuance of overseas securities is unfeasible, unnecessary, or unreasonable.
  3. The implementation of any previous plan for offering and issuance, or private placement, of securities has been accompanied by any of the following problems and no improvement has been made:
    1. The implementation is seriously behind schedule without justifiable reason and has not been completed.
    2. The plan was materially changed without justifiable reason; provided, however, that this provision shall not apply where the time between the actual completion of the plan and the filing of the registration exceeds three years.
    3. The securities offering and issuance plan was materially changed without being submitted to and approved by a shareholders' meeting.
    4. The issuer has not complied in the most recent one year with Article 11 herein and with Article 9, paragraph 1, subparagraphs 4 through 9 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers.
    5. Failure to faithfully perform information disclosure in accordance with the Directions for Public Companies Conducting Private Placements of Securities.
    6. Reasonable returns have not been achieved without justifiable reason; provided, however, that this provision shall not apply if the period between the actual completion date of the plan and the registration date is more than three years.
  4. An important part of the plan for this offering and issuance of overseas securities (such as issuance rules, source of funds, project particulars, implementation schedule, and expected returns) has not been proposed and submitted to a board meeting or shareholders meeting for discussion and resolution/approval in accordance with the Company Act and the issuer's articles of incorporation.
  5. The company has lent large amounts of capital to others in excess of financing needs resulting from the company's business transactions with other companies or firms, and no improvement has yet been made at the time of registration.
  6. The company has entered into an irregular transaction of material significance, and has not rectified the situation at the time of filing the registration .
  7. The company holds financial assets listed under current assets, idle assets, or idle real property, has no plan to actively dispose of or develop such holdings, and their total value is equivalent to either: (1) 40 percent or more of shareholders' equity in the most recent CPA-audited and -attested financial report, or (2) 60 percent of the total amount of funds to be raised through the overseas securities issue that the company is registering to issue; provided, however, that this provision shall not apply when the funds to be raised will be used to purchase fixed assets and there is a concrete plan for fund raising evidencing the necessity to raise the funds.
  8. The company has provided security for a loan to another party in violation of Article 5 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, where the circumstances are serious, and the violation has not been rectified.
  9. The overseas securities being offered and issued are to be purchased by a subscriber that is related to the issuer, or the ultimate source of the funds used to purchase the issue is a party related to the issuer. The meaning of the term "related party" shall be interpreted according to paragraph 2 of Statement of Financial Accounting Standards No. 6.
  10. The total dollar amount of direct or indirect investment in mainland China exceeds the upper limit set by the Investment Commission, Ministry of Economic Affairs; provided, however, that this provision shall not apply where the capital utilization plan for the present offering is to purchase domestic fixed assets and a commitment is made not to increase investment in the mainland.
  11. Any one of the following descriptions applies to shareholdings of the entire body of the company's directors or supervisors:
    1. The percentage of their equity stake is in violation of Article 26 of the Act and the FSC has notified them to make up for the shortfall but they have not yet done so.
    2. The percent of their equity stake still does not meet the required equity stake set forth under Article 26 of the Act even after accounting for the share issue that the company is now registering; provided, however, that this shall not apply where the entire body of the company's directors or supervisors pledges to make up for the shortfall upon completion of the offering.
    3. During the fiscal year in which the registration is made, and also in the preceding fiscal year, the entire body of the company's directors or supervisors did not honor a promise to make up for a shortfall in their equity stake.
  12. The company's financial statements in the most recent two years have not been prepared in accordance with relevant acts, regulations, and generally accepted accounting principles, and such violations are significant.
  13. In the past three years, a court has rendered a final and unappealable judgment against the issuer or its current chairperson, general manager, or de facto responsible person due to violation of laws governing business operations such as the Act, Company Act, Banking Act, Financial Holding Company Act, and Business Accounting Act, or due to a breach of good faith crime such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement.
  14. New shares are issued for the purpose of a merger, for the purpose of acquiring the shares of another company, or for the purpose of an acquisition or separation conducted in accordance with law, and such issue has been conducted under any of the following conditions:
    1. The issue involves a material violation of the provisions of Chapter II, Section V of the Regulations Governing the Acquisition or Disposal of Assets by Public Companies.
    2. The acquisition of shares or of a corporation involves shares that are not newly issued by another company, or the non-current equity investment holdings of another company, or outstanding shares that are held by the shareholders of another company.
    3. The ownership rights of the acquired shares, business, or assets are impaired or encumbered in some way, such as through the creation of pledge thereupon or placing of restrictions on the purchase or sale thereof.
    4. The provisions of Article 167, paragraph 3 or 4 of the Company Act are violated.
    5. An audit report with unqualified opinion was not issued by a CPA regarding the financial report on the acquired company for the most recent fiscal year, except where an audit report with qualified opinion was issued together with an unqualified opinion regarding the balance sheet.
  15. The internal control system is materially flawed in terms of either design or enforcement.
  16. The company's share price has fluctuated abnormally during the month prior to the date of registration of the offering and issuance.
  17. The provisions of Article 8, paragraph 2 are violated.
  18. Other acts and regulations are violated, or where the FSC deems disapproval necessary for protection of the public interest or national reputation.

    The foregoing subparagraphs 4 to 10 are not applicable in the case of registrations to use outstanding shares to sponsor issuance of overseas depositary receipts, or to use outstanding shares to engage in trading on offshore stock exchanges.
    The provisions of paragraph 1, subparagraphs 3 and 10 shall not apply where the issuer registers to sponsor issuance of overseas depositary receipts through capital increase, which in turn is done in order to acquire a foreign company, to acquire the shares of a foreign company, or to issue new shares for the purpose of an acquisition or separation of a foreign company conducted in accordance with the law.    When an issuer that is a financial holding company, banking enterprise, securities enterprise, or futures enterprise, calculates the assets of paragraph 1, subparagraph 7, it need not include financial asset items listed under current assets in such calculations. An issuer that is an insurance enterprise need not apply the provisions of paragraph 1, subparagraph 7.
Article 10     With regard to an issuer's offering and issuance of overseas securities, after a registration becomes effective or approval of application is granted, the FSC may revoke or annul the registration or the approval if it discovers any of the following situations:
  1. The overseas securities have not been fully subscribed to and the cash proceeds thereof have not been fully collected within three months from the date on which the FSC's notice of effective registration is received; provided, however, that the FSC may grant an extension of three months upon application where proper reasons have been given (only one extension shall be allowed).
  2. The issuance of overseas depositary receipts is sponsored, or the overseas stock is offered and issued, using a method that is at variance with the particulars of registration (application) and the issuance rules set forth in the accompanying documents, and no application for change has been filed with the FSC before the date of execution of a deposit contract or the date of fixing the price for the issuance; provided, however, that this provision shall not apply if the issuer registers (applies) to use outstanding shares to sponsor issuance of overseas depositary receipts, or to use outstanding shares to engage in trading on offshore stock exchanges.
  3. Overseas convertible bonds or bonds with warrants are not issued in accordance with registration (application) particulars, the statement of issuance methods, and other conversion rules or warrant exercise rules, and where no application for change has been filed with the FSC before the date for fixing the price of the issue.
  4. Violation of Article 20, paragraph 1 of the Act.
  5. Violation of Article 8 herein.
  6. Violation of, or failure to perform, any undertaking made at the time it offered and issued securities, where the circumstances are serious.
  7. During the period from the date on which registration becomes effective until the date on which the securities offering is completed, any publicly disclosed financial forecasts or issued information is inconsistent with the registration documentation, and there is a material impact on the securities price or shareholders equity.
  8. There is a violation of any provision of these Regulations, or of any restriction or prohibition that was in place at the time of the FSC's notice of effective registration or approval of application.
    Overseas securities shall not be listed and traded overseas in New Taiwan Dollars.
Article 12     An issuer registering to use either (i) a capital increase through a new share issue or (ii) outstanding shares, to sponsor issuance of overseas depositary receipts by a depositary institution, shall, depending on the nature of the issue, file [one of ten different types of] Registration to Sponsor Issuance of Overseas Depositary Receipts (Attachments 1 to 5), specifying therein the required particulars, together with the required supporting documents, and may proceed to the issuance only after the registration filed with the FSC has become effective.
    An issuer registering to use a capital increase through a new share issue to sponsor issuance of overseas depositary receipts shall state the basis for setting the issue price, the legitimacy thereof, and any effects on shareholders' equity and refer the same to a shareholders meeting for approval by resolution.
Article 15     In registering to sponsor issuance of overseas depositary receipts, the issuer shall submit an issuance plan that specifies the following particulars:
  1. purpose of the offering.
  2. projected date of issuance, total dollar amount, total number of units to be issued, number of the underlying securities evidenced by overseas depositary receipts, and method for determining the per unit issue price.
  3. rights and obligations of the holders of overseas depositary receipts.
  4. source of the underlying securities evidenced by overseas depositary receipts; where the issuance of overseas depositary receipts is sponsored through cash capital increase, if a shareholders' meeting authorizes the board of directors to adjust the issuance amount in accordance with market conditions within the scope of the authorized issuance, and all the depositary receipts are issued in one tranche, such shall be expressly stated in the offering plan.
  5. statement of issuance methods: It shall be expressly stated whether all the depositary receipts will be publicly issued or whether a portion thereof will be subscribed to by specific person(s). If it is agreed that a portion thereof will be subscribed to by specific person(s), the purpose of subscription by specific person(s), the total number of units subscribed to by the specific person(s), total dollar amount, and the relation between the specific person(s) and the issuer shall be specified in the offering plan. However, if the issuer files for registration with the FSC to sponsor an issuance of overseas depositary receipts using shares, obtained due to the split, of holders of overseas depositary receipts previously sponsored for issuance by the split company, the issuer may deliver the full amount to the holders of the aforementioned overseas depositary receipts previously sponsored for issuance by the split company.
  6. place of issuance and transaction.
  7. the funds utilization plan and the expected returns (where the issuer is sponsoring issuance of overseas depositary receipts through cash capital increase).
  8. where the issuer registers to sponsor issuance of overseas depositary receipts through capital increase and its purpose in so doing is to merge with a foreign company, to acquire the shares of a foreign company, or to issue new shares for the purpose of an acquisition or separation of a foreign company conducted in accordance with law, the offering plan shall specify the following particulars:
    1. the name and volume of shares (business operations or assets) acquired, and the name of the party from whom they are to be acquired;
    2. schedule for implementation and completion of the plan;
    3. method of determining the share exchange ratio, and the legitimacy thereof;
    4. any conditions or restrictions upon future transfer of the shares, business, or assets to be acquired;
    5. expected returns; and
    6. where the company to be acquired or the company whose shares are to be acquired is an related enterprise or related party, the issuance plan shall specify the issuer's relationship with the related enterprise or related party, the reason for choosing the related enterprise or related party, the necessity for such choice, and the impact upon shareholders' equity.
  9. allocation of responsibility for payment of relevant fees incurred during the offering period and the period when the facility remains outstanding.
  10. other items as required by the FSC.
Article 16     When a holder of overseas depositary receipts requests redemption, it may request the depositary institution to deliver the underlying securities to itself, or to sell the underlying securities and then pay the sales proceeds to the holder after deducting tax and other relevant fees.
Article 19     With respect to an issuer that is seeking to sponsor issuance of overseas depositary receipts, once the registration becomes effective, the issuer shall, within two days after signing a deposit contract, make a public announcement of the following matters on the information reporting website specified by the FSC:
  1. total dollar amount, unit price, volume, and issue date of the overseas depositary receipts issue; provided, however, that if the overseas depositary receipts are for conversion of overseas corporate bonds, the issuer may opt to announce only the estimated number of units to be issued;
  2. the number of shares of the underlying securities and their unit price; provided, however, that if the overseas depositary receipts are for conversion of overseas corporate bonds, the issuer may opt to announce only the estimated number of shares;
  3. place of issuance and transaction;
  4. the issuer's reason for arranging for subscription by the specific person(s), the total number of units subscribed to by the specific person(s), total dollar amount, and the relationship between the specific person(s) and the issuer (the statement of issuance methods provides that a portion of the depositary receipts shall be subscribed to by specific person or persons);
  5. the proceeds plan and the expected returns (where the issuer is sponsoring issuance of overseas depositary receipts through cash capital increase);
  6. the name of the company involved in such acquisition or share exchange, the number of shares involved, the schedule for implementation and completion of the plan, the expected returns, the share exchange ratio, the method (and legitimacy thereof) for determining the value of the overseas depositary receipts for which the issuer is to sponsor issuance, and the method (and legitimacy thereof) for determining the value of the assets to be acquired by the issuer (the above disclosures are to be made where the issuer intends to acquire a foreign company, to acquire the shares of a foreign company, or to issue new shares for the purpose of an acquisition or separation of a foreign company conducted in accordance with the law);
  7. the primary impact on shareholders' equity (e.g. expenses incurred by the issuer in sponsoring issuance of the overseas depositary receipts, impact on shareholding structure, etc.).
    After the announcement of the items referred to in the preceding paragraph, should there be any change to any of these items, a public announcement of such change shall be made within two days after the closing of the offering.
Article 20     With respect to an issuer that is seeking to sponsor issuance of overseas depositary receipts, once the registration becomes effective, the issuer shall submit one of each of the following documents to the FSC for recordation within ten days after issuance of the overseas depositary receipts:
  1. a prospectus prepared in accordance with the securities acts and regulations of the country where the offering took place; provided, however, that these requirements do not apply to the issuance of overseas depositary receipts for conversion of or subscription to overseas corporate bonds;
  2. a duplicate copy of the deposit contract;
  3. a duplicate copy of the custody contract;
  4. an opinion letter in Chinese issued by an ROC attorney-at-law confirming that there is no material discrepancy between the issuance rules and the particulars of the issuance as set forth in a registration that the FSC has allowed to become effective;
  5. documentary evidence providing proof of deposit of funds collected in full, provided that such evidence need not be submitted where an issuer registers to use previously issued shares to sponsor issuance of overseas depositary receipts;
  6. a list of those whose subscriptions account for 10 percent or more of the total value of the issue as well as the individual subscription prices and quantities thereof; and
  7. other documents required by the FSC.
    If an issuer sponsoring issuance of overseas depositary receipts is required by a deposit contract to provide any information to a depositary institution, within three days after providing such information the issuer shall report such provision to the FSC for recordation.
Article 22     An issuer intending to issue and offer overseas corporate bonds shall submit a Registration to Offer and Issue Overseas Corporate Bonds (Attachments 12 to 17) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the registration filed with the FSC becomes effective.
    An emerging stock company registering to offer and issue overseas convertible bonds or overseas corporate bonds with warrants shall submit a credit rating report on the underlying from a credit rating institution approved or ratified by the FSC.
    An issuer who has issued and offered overseas corporate bonds and wishes to use overseas depositary receipts for the conversion of or subscription to overseas corporate bonds in accordance with conversion rules or warrant exercise rules shall file a Registration to Offer and Issue overseas depositary receipts (Attachments 10 to 11) specifying therein the required particulars, together with the required supporting documents and may proceed to the issuance only after the registration filed with the FSC becomes effective.
Article 26     With regard to the offering plan of overseas corporate bonds, after the registration becomes effective, the issuer shall, within two days after pricing the offering, publicly announce the following matters on the information reporting website specified by the FSC:
  1. total dollar amount of the offered overseas corporate bonds, the face value of each bond certificate, the issue price, and the projected date of issuance;
  2. interest rate(s) for the overseas corporate bonds to be offered;
  3. repayment method and term of maturity of the overseas corporate bonds to be offered;
  4. type of security (where the bonds are secured);
  5. conversion terms and important stipulations (where the issuance rules provide for conversion);
  6. method of warrant exercise and important stipulations (where the issuance rules set forth warrant exercise conditions)
  7. place of issuance and transaction;
  8. the reason why a specific person(s) is being contacted to subscribe through negotiation (in the event that such is the case), the total number of certificates to be subscribed to by the specific person(s), the total dollar amount thereof, and the relationship between the specific person(s) and the issuer;
  9. a funds utilization plan, and a statement of the expected benefits thereof; and
  10. the principal impact on shareholders' equity.
    After the announcement of the items referred to in the preceding paragraph, should there be any change to any of these items, a public announcement of such change shall be made within two days after the closing of the offering.
Article 27     With regard to an issuance of overseas corporate bonds, after the registration becomes effective, the issuer shall submit one of each of the following documents to the FSC within ten days of the issuance of the overseas corporate bonds:
  1. a prospectus prepared in accordance with the securities acts and regulations of the country in which the bonds are offered;
  2. a duplicate copy of the issuance agreement;
  3. a duplicate copy of the deposit contract and custody contract (if the bonds are convertible or have warrants for the purchase of overseas depositary receipts);
  4. a duplicate copy of the paying agency agreement;
  5. a duplicate copy of the purchase agreement;
  6. a duplicate copy of the trust deed;
  7. an opinion letter in Chinese issued by an ROC attorney-at-law confirming that there is no material discrepancy between the issuance rules for the overseas corporate bonds and the particulars of the issuance as set forth in a registration that the FSC has allowed to become effective;
  8. documentary evidence providing proof of deposit of funds collected in full;
  9. a list of those whose subscriptions account for 10 percent or more of the total value of the issue as well as the individual subscription prices and quantities thereof; and
  10. other items as specified by the FSC.
    Any information that the issuer is required, pursuant to the acts and regulations of the country where the stocks are issued, to provide or disclose, shall also be filed with the FSC within three days after such provision.
Article 29     An issuer registering to carry out a cash capital increase through the issue of overseas stocks, or to list its outstanding shares on a foreign securities exchange, shall file an Registration for Issuance of Overseas Stocks (Attachments 12 and 13) specifying therein the required particulars, together with the required supporting documents, and may proceed to the issuance only after the registration filing with the FSC becomes effective.
Article 34     When an overseas stock issue has been effectively registered, the issuer shall post the following particulars to the information reporting website specified by the FSC within the designated time limit:
  1. Where the offering is to raise funds, a public announcement of the following particulars shall be made within two days after the issue pricing:
    1. number of shares issued, issue price per share, total issue size, and projected date of issuance;
    2. place of issuance and transaction;
    3. if the statement of issuance methods provides that a portion of the depositary receipts shall be subscribed to by specific person(s), then the announcement shall state the purpose for subscription by the specific person(s) through negotiation, the total number of shares subscribed to by the specific person(s), the total dollar amount, and the relationship between the specific person(s) and the issuer;
    4. the funds utilization plan and the expected benefits thereof (in the case of cash capital increase through a new share issue); and
    5. the main impact on shareholders' equity (such as expenses incurred through issuance of overseas stocks, or impact on shareholding structure).
  2. Where the offering is not for the purpose of raising funds, a public announcement of the following particulars shall be made within two days after listing:
    1. number of shares listed, listed price per share, and total size of listing;
    2. place of listing; and
    3. the main impact on shareholders' equity (such as expenses incurred through issuance, or impact on shareholding structure).
    Should there be any change after the announcement or reporting of items referred to in subparagraph 1 of the preceding paragraph, a public announcement of such change shall be made and a report shall be filed with the FSC within two days after the closing of the offering.
Article 35     When an overseas stock issue has been effectively registered, the issuer shall submit one of each of the following documents to the FSC within ten days after issuance or listing:
  1. a prospectus prepared in accordance with the securities acts of the country where the stocks are issued; provided, however, that these requirements do not apply to cases where the shares have not been issued for the purpose of raising capital;
  2. a duplicate copy of the overseas stock service agency agreement;
  3. a duplicate copy of the custody contract;
  4. an opinion letter in Chinese issued by an ROC attorney-at-law confirming that there is no material discrepancy between the issuance rules for the overseas stock issuance and the particulars of the issuance as set forth in a registration that the FSC has allowed to become effective;
  5. documentary evidence providing proof of deposit of funds collected in full, provided that such evidence need not be submitted where an issuer registers to trade already-issued shares on offshore stock exchanges;6. a list of those whose subscriptions account for 10 percent or more of the total value of the issue as well as the individual subscription prices and quantities thereof; and
  6. other documents required by the FSC.
    Any information that the issuer is required, pursuant to the acts and regulations of the country where the stocks are issued, to provide or disclose, shall also be filed with the FSC within three days after such provision.