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Article 4-1
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After receiving an application by a foreign issuer for a primary stock listing, the undertaking personnel of the TWSE shall begin a document review of the application, its attachments, and other materials submitted by the foreign issuer, the underwriter, or the CPA:
1. Review guidelines:
1.1 The foreign issuer's consolidated financial reports for the most recent 2 years, audited and attested by a certified public accountant, shall be reviewed, and if there are irregular changes in any accounting titles, then the financial report for the preceding year shall be reviewed with particular attention to the given accounting title. If the review period extends beyond the fourth, eighth, or tenth month of the fiscal year adopted by the foreign issuer, then the foreign issuer shall be requested to additionally submit a CPA-reviewed consolidated financial report for the first quarter, the half-year, or the third quarter as a basis for the review. At the time of submission of documents by the foreign issuer, its financial forecast information for the following quarter shall also be obtained for reference. If the issuer is unable to provide the documents by the aforementioned deadlines, its application shall be returned.
1.2 The CPA audit or review report:
(1) The certifying CPAs for the most recent 3 years shall be two practicing Taiwan CPAs at a joint accounting firm approved by the competent authority for attestation of the financial reports of public companies.
(2) Another CPA shall be engaged to perform auditing and attestation when disciplinary action has been taken against the original CPA by the competent authority in the preceding 3 years, or a disposition against the CPA has been issued under Article 37, paragraph 3 of the Securities and Exchange Act, provided that this will not apply when the disciplinary action or disposition was a warning or a reprimand, and the cause of the warning or reprimand occurred 5 or more years prior to the date of application; another CPA shall also be engaged when the CPA has accumulated two or more demerits within the preceding year in accordance with the TWSE's Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for Market Listing and the GreTai Securities Market’s Regulations for Handling Deficiencies in Certified Public Accountants' Reviews of OTC Stock Listing Applications.
(3) The opinions section of the audit or review report shall explain the accounting principles adopted by the foreign issuer and the differences between those principles and the generally accepted accounting principles used in the ROC, and include an index to the notes; it shall also contain respective statements that the report has been reviewed in accordance with Taiwan's Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and generally accepted auditing standards, or has been reviewed in accordance with Taiwan's Statement of Auditing Standards No. 36, "Review of Financial Statements."
(4) The CPA shall produce an audit report that states an unqualified opinion without reference to the audit work of other CPAs.
(5) If the consolidated half-year financial reported reviewed by the CPA includes information on an important subsidiary, the financial report and related materials on that subsidiary shall also be reviewed by the CPA.
1.3 Content of the consolidated financial reports:
(1) The consolidated financial reports shall be produced using the New Taiwan Dollar as monetary unit, and shall be in Chinese, but may also add English.
(2) The consolidated financial reports shall be produced using period-on-period comparison, and shall include consolidated balance sheets, consolidated income statements, consolidated cash flow statements, consolidated statements of changes in shareholders' equity, and related notes. Statements of changes in shareholders' equity, however, need not be included in quarterly consolidated financial reports.
(3) The notes to consolidated financial reports shall state which accounting principles are employed; if they are prepared according to Taiwan accounting standards, then the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall govern, provided that Articles 21 and 22 thereof need not apply; if they are not prepared according to Taiwan accounting standards, then the differences in those standards and the Taiwan standards as applied in their balance sheet and income statement titles shall be disclosed, including material discrepancies and their dollar amounts.
1.4 Reviewers shall apprise themselves of whether the foreign issuer is in compliance with Articles 28-4, 28-5, and 28-6 of the TWSE's Rules Governing Review of Securities Listings, and whether any circumstance under any subparagraph of Article 28-8, paragraph 1 of the same Rules that would make market listing inappropriate apply to the foreign issuer or any company subject to its control.
2. Review procedures:
2.1 The TWSE may initiate the following review procedures as it deems necessary for a review:
(1) Requesting that the foreign issuer, the underwriter, or the CPA attach additional information and an explanation of the information.
(2) Requesting that the foreign issuer engage a CPA, attorney, or other institution designated by the TWSE to undertake an audit of the foreign issuer within a scope designated by the TWSE, and to submit the results of the audit to the TWSE.
2.2 The recommendations for the internal control system issued by a CPA for the most recent 3 years shall be examined, and the foreign issuer shall be requested to engage a CPA to issue a special audit report on the internal control system.
2.3 The TWSE shall gain an understanding of the applicant's production of financial forecast data, and as needed may require the applicant to provide financial forecast data for each quarter during the review period. The data shall be provided only for use as a reference in the review of the given case, and may not be made public or otherwise divulged.
2.4 The provisions of the TWSE's Regulations Governing the Particulars to be Recorded in Prospectuses for Initial Listing of Securities shall apply to the particulars recorded in the prospectus submitted by foreign issuers applying for a primary listing.
2.5 The securities underwriter and CPA handling an application for a primary listing by a foreign issuer shall apply the TWSE's Regulations Governing the Reporting of Basic Information on Advisory Client Companies by Securities Underwriters, Directions Governing the Particulars to be Recorded in the Securities Underwriter's Evaluation Report for Initial Listing of Securities, Assessment and Auditing Procedures for Securities Underwriters Handling Initial Applications for Market Listing, Regulations for Handling Deficiencies in the Evaluation Report or Other Relevant Information Submitted by a Securities Underwriter and Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for Market Listing.
2.6 The undertaking personnel shall provide the key points of the audit results, requesting relevant expert opinion and consulting relevant information as needed to produce written proposals for the purpose of reference during the review process.
2.7 Applications for a primary listing by a foreign issuer shall be submitted for deliberation by the Securities Review Committee within 8 weeks after receipt of the application documents. Under exceptional circumstances, however, the Administration Department, 10 days prior to the Review Committee meeting, may extend the deadline for submission to the Review Committee based upon review requirements or at the request of the applicant company, subject to the signed approval of the president of the GTSM. Extensions granted at the request of the applicant company are be limited to a maximum period of 1 month.
3. The provisions of Article 4, paragraphs 2 and 3 of the TWSE Procedures for Review of Securities Listings in regard to retaining an outside reviewer to give a consulting opinion, and the provisions regarding review by the Committee for Review of Stock Exchange Securities Listings apply mutatis mutandis to applications for primary listing by a foreign issuer, provided that when any circumstance of the subparagraphs of Article 28-8, paragraph 1 apply or in the case of re-reviews, the approval of two-thirds or more of the Review Committee members present is required, and the Review Committee must submit the concrete reasons for their overall consideration that approval of the listing be granted.
4. The provisions of the TWSE's Procedures for Review of Securities Listings in regard to consideration by the board of directors, return of applications and re-reviews, forwarding to the competent authority, and listing and trading of stocks shall apply mutatis mutandis to applications for primary listing by a foreign issuer.
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Article 6
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Listings shall be handled as follows, with the exception of a foreign issuer applying for a primary stock listing that applies or files for a cash capital increase, issuance of bonus shares, or a listing of common stock not issued within the territory of the ROC in accordance with Article 28-12 of the TWSE's Rules Governing Review of Securities Listings:
1. Where a foreign issuer and its agent or depositary institution apply for the listing of additional stock or Taiwan depositary receipts as a result of capital increase by cash and the rights and obligations of the holders of stock or Taiwan depositary receipts to be newly issued are identical with those of the stock or depositary receipts already listed, or where a foreign issuer participated with already-issued stock in the issuance of Taiwan depositary receipts to be listed which carry the same rights and obligations as those of the Taiwan depositary receipts already listed, the TWSE may, after examination of the Application (Report) for Additional Issuance of Foreign Stocks/Market Listing and Trading of Taiwan Depositary Receipts (Attached Charts 23 and 24), issue an approval document for listing, and after effective registration with the competent authority and completion of issuance, announce the listing thereof.
2. If a foreign issuer and its depositary institution participate by means of shelf registration in the issuance of Taiwan depositary receipts for listing, and those depositary receipts carry the same rights and obligations as those of Taiwan depositary receipts already listed, the TWSE may, after examination of the Application for Additional Issuance and Listing of Taiwan Depositary Receipts by Means of Shelf Registration by a Foreign Issuer (Attached Chart 25), issue an approval document for listing, and after effective registration with the competent authority and completion of issuance, announce the listing thereof.
3. Where a foreign issuer and its agent or depositary institution apply for the listing of additional stock or Taiwan depositary receipts as a result of a cash capital increase through a new share issue to existing shareholders with priority subscription rights or the issuance of bonus shares, or as a result of a request for conversion or warrant subscription with respect to already-issued convertible corporate bonds, corporate bonds with warrants, or other securities having an equity conversion nature, and the rights and obligations of the newly issued stock or Taiwan depositary receipts are identical with those of the stock or depositary receipts already listed, the TWSE will, after having examined the Application (Report) for Additional Issuance of Foreign Stocks/Market Listing and Trading of Taiwan Depositary Receipts (Attached Charts 23 and 24), publicly announce the listing thereof.
4. Where a foreign issuer and its depositary institution apply for the reissuance and listing within the amount of the original issuance, or within the scheduled issue period for shelf registration and the number of units that may be issued, of those Taiwan depositary receipts which carry the same rights and obligations as those of the Taiwan depositary receipts already listed, the undertaking employee shall, upon receipt of the submitted Application for Re-issuance and Listing by a Foreign Issuer of Taiwan Depositary Receipts Within the Redeemable Limit/ Application for Reissuance and Listing by a Foreign Issuer of Taiwan Depositary Receipts within the Scheduled Issue Period for Shelf Registration (Attached Charts 26 and 27)publicly announce the listing in accordance with the provisions of Article 28, paragraph 4 of the TWSE’s Criteria for the Review of Securities Listings.
Where the Taiwan depositary receipts issued by a foreign issuer have already been listed, and the shareholders issue through a depositary institution Taiwan depositary receipts in Taiwan with the already-issued shares that they hold, the TWSE may, after examination of the Application for Issuance and Listing of Unsponsored Taiwan Depositary Receipts (Attached Chart 28), issue an approval document for listing, and after approval by the competent authority and completion of issuance, announce the listing thereof.
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