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Article 3
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A foreign issuer and its agent institution or depositary institution in the Republic of China applying to list stocks, Taiwan depositary receipts (TDRs), or bonds it has issued shall, in accordance with the rules of the TWSE, fill out in full an Application for Market Listing of Taiwan Depositary Receipts, Application for Primary Listing of Foreign Stocks, Application for Secondary Listing of Foreign Stocks, or Application for Market Listing of Foreign Bonds (Attachments 1 to 3), and submit them along with proper documentation to the appropriate office of the TWSE for certification of receipt, whereupon, following registration and assignation of a case number, they shall be distributed to the Administration Department for processing. The Administration Department shall arrange an efficient deployment of human resources under its authority, appointing specific personnel or a task force of two or more persons. Following distribution, the case handlers shall take appropriate custody of the application and supporting documents.
A foreign issuer applying for secondary listing of stocks or for sponsoring issuance of TDRs by a depositary institution pursuant to Article 27-1 of the Rules Governing Review of Securities Listings, or applying for primary listing of stocks pursuant to Article 28-1 of the same Rules, shall apply to the TWSE for an unequivocal opinion form indicating that the company is a technology enterprise and has successfully developed products or technology and those products or technology are moreover marketable, and shall also pay in advance an application review fee payable to the Ministry of Economic Affairs Industrial Development Bureau or the TWSE-designated professional institution, and forward a carbon copy and relevant documents to the Ministry of Economic Affairs Industrial Development Bureau or the TWSE-designated professional institution. After receiving the opinion form, the management shall request by letter the Ministry of Economic Affairs Industrial Development Bureau or the TWSE-designated professional institution to express an opinion. Only when the TWSE has received the unequivocal opinion from the Ministry of Economic Affairs Industrial Development Bureau or the TWSE-designated professional institution indicating that the company is a technology enterprise and has successfully developed products and technology and those products or technology are moreover marketable, and has notified the foreign issuer by letter, may the foreign issuer submit the application for listing.
The foreign issuer shall submit the application within 1 year from the date the aforementioned Ministry of Economic Affairs Industrial Development Bureau or the TWSE-designated professional institution issues its review opinion, and, if the deadline has been passed, shall re-apply to the TWSE.
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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 case handler of the TWSE shall begin a document review of the application, its appendices, and other materials submitted by the foreign issuer, the underwriter, or the CPA:
- Review guidelines:
- The foreign issuer's 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 items, then the financial report for the preceding year shall be reviewed with particular attention to the given accounting item. From the date that the applicant company submits its application documents until its listing, it shall, in compliance mutatis mutandis with the requirements of the competent authority regarding public announcement and filing of financial reports, submit all of its quarterly and annual financial reports to the TWSE, and upload the electronic versions of the aforesaid financial reports to the Internet information reporting system designated by the TWSE, to serve as a basis for review. If the review period crosses over the fiscal year of the application, the TWSE shall request the applicant company to additionally submit the unaudited four major financial statements of the fiscal year of the application to serve as reference for review.
- The CPA audit or review report:
- 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.
- None of the following circumstances may apply to the CPAs engaged by the applicant company, but this restriction does not apply if the disciplinary action or disposition or the cause in fact of the deficiency occurred 5 or more years before the date of application for listing:
- In the preceding 3 years, disciplinary action has been taken against the CPAs by the competent authority, or a disposition against the CPAs has been issued under Article 37, paragraph 3 of the Securities and Exchange Act, and the disciplinary action or disposition was a warning or a reprimand.
- The CPAs have accumulated two or more demerits within the preceding year under the TWSE Regulations Governing the Handling of Errors by Certified Public Accountants in Auditing of Initial Applications for TWSE Listing or the GreTai Securities Market Regulations for Handling Deficiencies in Certified Public Accountants' Reviews of GTSM Listing Applications.
- 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 regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, 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."
- The CPA shall produce an audit report that states an unqualified opinion without reference to the audit work of other CPAs.
- If the quarterly financial reported reviewed by the CPA includes information on a major subsidiary, the financial report and related materials on that subsidiary shall also be reviewed by the CPA, and the CPA shall issue an opinion on the major subsidiary without reference to any other accountant's review.
- Content of the financial reports:
- The financial reports shall be produced using the New Taiwan Dollar as monetary unit, and shall be in Chinese, but may also add English.
- The financial reports shall be produced using period-on-period comparison, and shall include balance sheets, statements of comprehensive income, statements of cash flows, statements of changes in equity, and the accompanying notes.
- The notes to financial reports shall state the accounting principles used by the foreign issuer. If the financial reports are prepared in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, then Article 7, paragraph 1 of those regulations governing the preparation of annual parent company only financial reports need not apply. If they are not prepared in accordance with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, then the differences, including material discrepancies and their dollar amounts, from the regulations governing preparation of financial reports adopted by the competent authority, as reflected in the period-to-period balance sheet and the statement of comprehensive income, shall be disclosed.
- Reviewers shall apprise themselves of whether the foreign issuer is in compliance with Articles 28-4, 28-5, and 28-6 of the TWSE 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.
- Review procedures:
- The TWSE may initiate the following review procedures as it deems necessary for a review:
- Requesting that the foreign issuer, the underwriter, or the CPA attach additional information and an explanation of the information.
- 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.
- 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.
- 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.
- The provisions of the TWSE 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.
- The securities underwriter and CPA handling an application for a primary listing by a foreign issuer shall apply the TWSE 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.
- The case handler 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.
- 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.
- 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.
- The provisions of the TWSE 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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