||Taiwan Stock Exchange Corporation Procedures for Review of Call (Put) Warrant Listings(2006.09.22)
An issuer applying to the TSEC for recognition of qualification to issue call (put) warrants and meeting the qualifications set forth under Article 4 of the Application for Taiwan Stock Exchange Corporation Rules Governing Review of Call (Put) Warrant Listings shall, in accordance with regulations, submit the Application for Recognition of Qualification to Issue Call (Put) Warrants filled out in full along with the required documents to the personnel of the appropriate office of this Corporation for certification of receipt, whereupon they shall be distributed to the case-handling units for processing. A case handler receiving the assignment of the case shall proceed in accordance with Point 5 of these Procedures.
After receiving approval from the competent authority to issue call (put) warrants, an issuer applying to the TSEC for listing of the planned call (put) warrants issue shall, between 2:00 and 3:00 on the afternoon of the date of application, submit the application along with the required attachments to the TSEC in accordance with the preceding paragraph. After receipt of the application, case-handling personnel shall undertake review in accordance with the provisions of Article 6 of these Procedures.
After acceptance of an issuer's application for the projected issue of call (put) warrants, the TSEC case handler shall undertake a review of the documents and attachments. Procedures, deadlines, and matters to be reviewed shall be as follows:
(1) The case handler shall determine whether the documents submitted by the issuer are complete, and fill out a Checklist for Applications for Listing of Call (Put) Warrants (Attachment 6). Where the documents submitted are found to be incomplete, the case handler shall request the issuer to supplement the required documents or information within a prescribed period of time. Where documents are not supplemented by the deadline, the case handler shall issue a notice of rejection of the application, with a copy submitted to the competent authority.
(2) Key points to be reviewed:
(i) Call (put) warrants
The case handler shall examine whether the issuance plan for the call (put) warrants and the underlying securities conform to Articles 10 and 11 of the TSEC Rules Governing Review of Call (Put) Warrant Listings, and shall fill out a Call (Put) Warrant Issuance Plan Checklist (Attachment 7).
(ii) Financial report
The case handler shall review the most recent financial report of the issuer (which is not required to be submitted if no information has been updated) in accordance with the provisions of Paragraph 1, Subparagraph 1 of the preceding Article, and ascertain whether it conforms to the requirements of Article 4, paragraph 2, subparagraphs 1 and 2 of the TSEC Rules Governing Review of Call (Put) Warrant Listings; and, if it does not conform to the requirements of Article 4, paragraph 2, subparagraph 1 of those Rules, whether it has taken the measures set out in Article 5 of those Rules.
(iii) Public sale prospectus
The case handler shall examine whether the form and content of the issuer's prospectus for public sale conforms to the Guidelines for Particulars to be Listed in the Issuer's Public Prospectus for Issuance of Call (Put) Warrants, and shall fill out a Call (Put) Warrant Public Sale Prospectus Checklist (Attachment 8).
(iv) Disclosure of strategy for offsetting risks
The case handler shall examine whether the strategy put forth by the issuer for offsetting risks includes concrete provisions for all possible risks and losses associated with the given issue of call (put) warrants and the associated hedging strategies, and shall fill out a Checklist for Strategies for Offsetting Foreseeable Risks in Issues of Call (Put) Warrants (Attachment 9).
(v) Lawyer's Legal Opinion
The case handler shall examine the lawyer's opinion and other related forms and documents submitted by the issuer with regard to whether the terms of issuance of the call (put) warrant, guaranty agreement, guarantor information, public sale prospectus, the declarations of the issuer, and the issuer's status with respect to the circumstances under Article 12 of the Rules Governing Review of Call (Put) Warrant Listings have been thoroughly reviewed, the documents have been found to be valid, and whether the issuer conforms to relevant laws and regulations. The case handler shall then fill out a Checklist for the Lawyer's Legal Opinion on Call (Put) Warrants (Attachment 10).
(vi) Distribution of call (put) warrants
The case handler shall determine whether the distribution of call (put) warrant holders after the complete sale of the issue conforms to the standards set forth in Articles 10 and 12 of the Rules Governing Review of Call (Put) Warrant Listings, and shall fill out a Call (Put) Warrant Holders Distribution Checklist (Attachment 11).
(3) Review Procedures and Schedule
The TSEC case handler shall complete review of the issuance plan by market opening on the first business day after receipt of the application for issuance of call (put) warrants and report the same to the competent authority. The case handler shall also submit the listing agreement executed between the TSEC and the issuer to the competent authority for approval.
Following TSEC issuance of approval documents to the issuer, the TSEC shall undertake a further review of the items of the issuer's application and the related documents, and where circumstances are found during the review period requiring approval to be withheld, the TSEC may cancel the letter of approval and shall report the same to the competent authority.
The issuer shall submit related materials to the TSEC in accordance with the following provisions:
(1) Following the TSEC's issuance of documents for approval of the issuance plan for call (put) warrants, the issuer shall enter into the TSEC designated website for information disclosure its public announcement of issuance of call (put) warrants. After completion of sale of warrants and approval of the listing agreement by the competent authority, the issuer shall, at least two business days prior to the projected listing date, submit the warrant holder distribution information (Attachment 11) and a roster of warrant holders, and consult with the TSEC on the projected listing, with a projected listing date that may not be later than ten business days after the date of consultation with the TSEC.
After completion of all necessary arrangements for listing with the TSEC, the issuer shall pay the yearly listing fee and the performance bond to the TSEC.
The amount of the performance bond referred to in the preceding paragraph shall vary with the issuer's credit rating as follows:
(i) Those obtaining a rating of "A" or above from Taiwan Ratings, Moody's Investors Service, Standard & Poor's Corp., or Fitch Inc., or a rating of A (twn) or above from Fitch Ratings Limited, Taiwan Branch, or a rating of A.tw from Moody's Investors Service: NT$10 million per call (put) warrant issue, shall be paid to the TSEC before listing.
(ii) Those obtaining a rating of "BBB" or above from Taiwan Ratings, a rating of BBB- (twn) or above from Fitch Ratings Limited, Taiwan Branch or a rating of Baa1.tw, Baa2.tw, Baa3.tw or above or Baa1, Baa2, or Baa3 from Moody's Investors Service, "BBB" from Standard & Poor's Corp., or "BBB" from Fitch Inc.: NT$20 million per call (put) warrant issue, shall be paid to the TSEC before listing.
(iii) Those receiving a definite rating aside from those listed in the two preceding subparagraphs: NT$40 million per call (put) warrant issue, shall be paid to the TSEC before listing.
The performance bond payable by the issuer may be deposited in the form of a bank guarantee. Before contacting the TSEC to make the arrangements for listing, the issuer shall first carry out the guarantee procedures with a bank, and deliver the original letter of guarantee to the TSEC. However, the guaranteeing bank may not be an affiliate of the issuer nor may it and the issuer belong to the same financial holding company.
Yearly market listing fees shall be determined by the mutatis mutandis application of the provisions for collection of company stock fees under the TSEC Schedule of Securities Listing Fees.
(2) After the issuer has made arrangements for the projected listing date, the TSEC shall undertake matters related to the public announcement for listing, and shall report the same to the competent authority, submitting the company's application form and attachments, along with the aforementioned review materials.