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Article 8
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Where any of the following conditions apply to an issuer, the TWSE may withhold approval for qualification; however, if the circumstance set forth in subparagraph 4 applies to an issuer, but the issuer has shown concrete improvement in the circumstances, and the competent authority has recognized the improvement, the issuer may be exempted from the restriction thereunder：
- The issuer has made incomplete submission of required application documents, and failed to supplement those documents by the deadline prescribed by the TWSE.
- The particulars of the issuer's application do not conform to laws and regulations, or contain false and misleading presentations.
- There is an instance of major default by the issuer which has yet to be settled, or less than 4 years have elapsed since settlement of the default.
- Non-conformance by the issuer with any of subparagraphs 2 to 5 of Article 38, paragraph 1 of the Standards Governing the Establishment of Securities Firms, or any similar circumstances in cases where the issuer is a foreign institution.
- The issuer lacks appropriate mechanisms for risk management.
- The issuer has been incapable of meeting obligations in connection with any previous issue of call (put) warrants.
- The issuer has been incapable of carrying out issuance in conformance with relevant TWSE regulations governing call (put) warrants within the previous year and unable to achieve conformance within the period of time prescribed by the TWSE.
- Preparation of the issuer's financial reports does not conform with generally accepted accounting principles or its internal control system is not capable of functioning effectively.
- The issuer has violated Article 6 of the Issuance Rules, or review of matters requiring disclosure show threat of serious influence to its financial condition.
- There are serious equity disputes or violation of regulations sufficient to affect financial operations of the issuer that have not been resolved or rectified.
- Where there is factual evidence of irregular circumstances in the issuer's finances or operations.
- There is nonconformance with provisions of these Rules relating to the issuer's financial status.
When any circumstance set forth in the subparagraphs below occurs after an issuer obtains qualification approval, its issuance of call (put) warrants shall be suspended, and resumed only after such circumstances are rectified. The issuance of any warrants already approved but not yet issued shall be suspended, and the suspension shall be reported to the competent authority; the validity of any call (put) warrants already issued shall not be affected. This paragraph shall also apply when the issuer is a foreign institution and the circumstances of any subparagraph herein exist with respect to its head office.
- The issuer does not simultaneously operate underwriting, trading for its own accounts, and brokerage or intermediary services.
- The latest financial report, audited and attested or reviewed by a CPA, fails to conform 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.
- The latest financial report, audited and attested or reviewed by a CPA, fails to conform to the standard of no accumulated deficit as in Article 4, paragraph 2, subparagraph 3, unless documentation issued by the parent company with no accumulated deficit as in the latest financial report showing its financial convenants to the issuer, or an irrevocable guaranty agreement issued by a financial institution as in Article 5, is furnished.
- The issuer's regulatory capital adequacy ratio falls below 150 percent, or remains below 200 percent for a period of 3 consecutive months.
- In the case of an issuer that is a foreign institution, the issuer's credit rating fails to achieve the minimum prescribed standard.
If any of the events listed in the subparagraphs below occurs after an issuer has obtained qualification approval, the issuer shall be restricted from applying for issuance of call (put) warrants for 1 year. The issuance of warrants already approved but not yet issued shall be suspended, and the suspension shall be reported to the competent authority for recordation. However, the validity of call (put) warrants already issued shall not be affected.
- The issuer is ranked in Level 5 for the most recent year, or in Level 4 for the most recent 2 years, in the assessment conducted pursuant to the Operational Guidelines for Assessment of Securities Firms Risk Management System.
- The issuer has violated Article 17, paragraph 1 herein or provisions of the TWSE Operation Directions Governing Liquidity Providers of Call (Put) Warrants, and it has been sanctioned within the most recent year by the TWSE or the GreTai Securities Market by imposition of penalties in a cumulative amount of NT$300,000 or more or by restriction of application for issuance of call (put) warrants two times.
- The issuer has been restricted by the TWSE from applying for issuance of call (put) warrants because of an irregularity in the quotation system of its call (put) warrant liquidity provider in the current year, and it still has failed to take corrective action.
Directions for handling irregularities in the quotation system of a call (put) warrant liquidity provider shall be separately prescribed by the TWSE.
The TWSE may report an issuer in writing to the competent authority for recordation if the issuer fails to issue any call (put) warrants for 1 year or more, or if the issuer has been under suspension from call (put) warrants issuance pursuant to paragraph 2 for 1 year or more and still fails to take corrective action.
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