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Article 12
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Where any of the following conditions apply, the TWSE may withhold approval for an application for market listing of a projected issue of call (put) warrants:
- The required application documents submitted by the issuer are incomplete, and it has failed to supplement the required documents by the deadline prescribed by the TWSE.
- The particulars of the issuer's application do not conform to laws and regulations, or the issuer has made false and misleading presentations in the application.
- The issuer or an affiliated company of the issuer has, during the month preceding application, released information or predictions relating to the price of the underlying securities or the underlying index of its projected warrants issue.
- When the underlying security of the projected issue of warrants is a domestic stock, and the issuer or its directors, supervisors, managers, employees, or shareholders hold 10 percent or more of the issuer's shares, or any of the above hold 10 percent or more of the shares of another company, and are at the same time a director, supervisor, manager, or shareholder with a stake of 10 percent or more in the issuing company of the underlying security or any of the issuing companies of the basket of underlying listed securities. But this provision shall not apply to a follow-on issue of call (put) warrants.
- The issuer's CPA audited and attested or CPA reviewed financial report for the most recent period is not in compliance with the standards of Article 4, paragraph 2, subparagraphs 1 and 2, provided that this shall not apply where there is non-conformance with the standards of Article 4, paragraph 2, subparagraph 1, but the measures provided in Article 5 are followed.
- When the combined total of the issue price of the currently listed, GTSM listed, and GTSM contract-based call (put) warrants issued domestically by the issuer whose term of validity has not yet expired, and the call (put) warrants issued overseas whose term of validity has not yet expired, and the projected issue of call (put) warrants, together with the amount of the guarantee or the assets provided as collateral for the overseas subsidiary's offshore call (put) warrant issuing business is subject to any of the following conditions:
- For a domestic issuer:
- For an issuer assessed under the Operation Directions for Securities Firm Risk Management Assessment Systems and given a level 1 rating, when its combined total exceeds 70 percent of its net eligible regulatory capital.
- For an issuer assessed under the Operation Directions for Securities Firm Risk Management Assessment Systems and given a level 2 rating, when its combined total exceeds 60 percent of its net eligible regulatory capital.
- For an issuer assessed under the Operation Directions for Securities Firm Risk Management Assessment Systems and given a level 3 rating, when its combined total exceeds 40 percent of its net eligible regulatory capital.
- For an issuer assessed under the Operation Directions for Securities Firm Risk Management Assessment Systems and given a level 4 rating, when its combined total exceeds 30 percent of its net eligible regulatory capital.
- For an issuer that has not been assessed under the Operation Directions for Securities Firm Risk Management Assessment Systems, when its combined total exceeds 40 percent of its net eligible regulatory capital.
- For a foreign issuer:
- The issuer's credit rating is a Taiwan Ratings Corporation Class A rating or above, a Fitch Ratings Limited, Taiwan Branch rating of A (twn) or above, a Moody's Investors Service rating of A.tw or above, a Moody's Investors Service Class A rating or above, a Standard & Poor's Corp. Class A rating or above, or a Fitch Inc. Class A rating or above, and the combined total exceeds 60 percent of its eligible net regulatory capital adequacy requirement.
- The issuer's credit rating is a Taiwan Ratings Corporation Class BBB- rating or above, a Fitch Ratings Limited, Taiwan Branch rating of BBB- (twn) or above, a Moody's Investors Service rating of Baa1.tw, Baa2.tw, Baa3.tw or above, a Moody's Investors Service Class Baa1, Baa2, Baa3 rating or above, a Standard & Poor's Corp. Class BBB- rating or above, or A Fitch Inc. Class BBB- or above, and the combined total exceeds 50 percent of its eligible net regulatory capital adequacy requirement.
- The issuer's credit rating is a Taiwan Ratings Corporation Class BB+ rating or above, a Fitch Ratings Limited, Taiwan Branch rating of BB+ (twn) or above, a Moody's Investors Service rating of Ba1.tw or above, a Moody's Investors Service Class Ba1 rating or above, a Standard & Poor's Corp. Class BB+ rating or above, or a Fitch Inc. Class BB+ or above, and the combined total exceeds 30 percent of its eligible net regulatory capital adequacy requirement.
- The issuer's credit rating is a Taiwan Ratings Corporation Class BB rating or above, a Fitch Ratings Limited, Taiwan Branch rating of BB (twn) or above, a Moody's Investors Service rating of Ba2.tw or above, a Moody's Investors Service Class Ba2 rating or above, a Standard & Poor's Corp. Class BB rating or above, or a Fitch Inc. Class BB rating or above, and the combined total exceeds 20 percent of its eligible net regulatory capital adequacy requirement.
- The issuer's credit rating is a Taiwan Ratings Corporation Class BB- rating or above, a Fitch Ratings Limited, Taiwan Branch rating of BB- (twn) or above, a Moody's Investors Service rating of Ba3.tw or above, a Moody's Investors Service Class Ba3 rating or above, a Standard & Poor's Corp. Class BB- rating or above, or a Fitch Inc. Class BB- rating or above, and the combined total exceeds 10 percent of its eligible net regulatory capital adequacy requirement.
The above-mentioned eligible net regulatory capital adequacy requirement shall be calculated based on the methods set forth within the Rules Governing Securities Firms, for Taiwan issuers.
If the issuer is a foreign institution, the aforesaid eligible net regulatory capital is calculated by (the allocated operating capital in the most recent financial reports of its branch(es) within the Republic of China or branch(es) established within the Republic of China by its wholly owned subsidiaries) x (net available funds multiplier).
- The issuer is a foreign institution, and at the time of application to issue call (put) warrants, the dollar amount of collateral supplied to provide a guarantee of performance, in a form such as certificates of deposit or government bonds pledged to the TWSE or a performance guaranty agreement issued by a financial institution, is less than 20 percent of the market value of the underlying securities represented by the non-matured listed or GTSM listed call (put) warrants (including the current issue). In addition, where a letter of undertaking stating that the premiums collected for the given issue of warrants will only be remitted into Taiwan after the expiration of the period of validity of the warrant or proof of an existing line of credit at a Taiwan bank in an amount equivalent to the premiums collected on the given issue have not been issued.
- There are irregular fluctuations in the price of the underlying security within the 3 months prior to the date of application, and a penalty has been imposed in accordance with the TWSE Rules Governing Implementation of the Stock Market Monitoring System, or the underlying security has been the subject of a notice of attention by the TWSE on 2 of the preceding 6 business days.
- There is any other factor arising out of the nature of the enterprise or exceptional circumstances that may be deemed to adversely affect the applicant's performance of the option or the price of the underlying securities.
- There are any of the conditions set forth in Article 8, paragraph 1 of these Rules.
- On the day of application, any financial or business indicator of the issuer of the underlying securities is marked with a warning in the Key Financials Section of the TWSE Market Observation Post System (MOPS), provided that this does not apply in the case of a follow-on issue of call (put) warrants.
When the circumstance set forth in Article 8, paragraph 1, subparagraph 4 applies to an issuer intending to conduct warrant business, apart from the condition that the period of any sanction imposed on the issuer to suspend its business must have expired, if the issuer has shown concrete improvement in the circumstances and the competent authority has recognized the improvement, or if the issuer fell under the subparagraph 4 circumstance for a reason other than conducting warrant business, the issuer may be exempted from restriction under the preceding paragraph.
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