| Title： |
Taiwan Stock Exchange Corporation Guidelines Governing the Particulars to be Recorded in a Public Offering Prospectus for Call (Put) Warrants(2008.12.31) |
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Article 3
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The following items shall be printed in the order below on the cover of a public offering prospectus:
1. Issuing company name and seal.
2. This public offering prospectus is prepared for the purpose of issuing call (put) warrants.
3. The following items in summary description:
(1) The date of issuance and duration of the warrants.
(2) Detailed information on the underlying index, underlying securities or basket of securities.
(3) The type of call (put) warrants, units issued, and the issue's total value.
(4) Terms and conditions of issuance (with the following conditions set off in a distinctive typeface: the issuance price, strike price or strike index, and exercise period; for knock-out call warrants or knock-out put warrants, conditions regarding upper and lower price or index caps and the fact that the date on which the closing price of the underlying security/securities or the closing index of the underlying index reaches the upper or lower price or index cap will be deemed the final trading day for the warrants, which will mature on the second following business day, requiring automatic settlement exclusively in cash at the closing price of the underlying security/securities or the closing index of the underlying index on the warrants' final trading day). For a call warrant, the abovementioned strike price or strike index may not exceed 150 percent of the underlying security's closing price or the underlying index's closing index on the date of application; for a put warrant, the strike price or strike index may not be lower than 50 percent of the underlying security's closing price or the underlying index's closing index on the date of application, provided that the above ratios may be exceeded when the strike price and the closing price of the underlying security or securities differ by less than NT$30. A reasonable cause and explanation for any terms of issuance not conforming to the above standards must exist and must be fully disclosed to investors.
(5) The method of calculating the issuance price, including the price of the underlying security or underlying index, strike price or strike index, duration of the warrants, interest rate, volatility, and other reference factors, and a comparison table showing other warrants in the preceding year with the same listed underlying security or index.
(6) Detailed information on the guarantor and the guaranty agreement or collateral.
(7) The leverage effect and premium.
(8) The number of shares (or beneficial interest units, or depositary receipt units, or index points) represented by each issuance unit.
4. The following statements shall be set off in a distinctive typeface:
(1) Call (put) warrants involve a high degree of risk. Purchasers should understand that call (put) warrants may have no value at maturity, and should be prepared for the possibility of losing the subscription price.
(2) An issuer may not use the fact of having obtained approval of qualification for issuance of call (put) warrants or TWSE approval for listing of its planned call (put) warrants issue in any promotion as proof of the matters under application or as a guarantee of the value of the call (put) warrants.
(3) The issuer, the issuer's responsible person, and other persons whose seal or signature appear on the prospectus bear legal liability for any misrepresentation or nondisclosure within the prospectus.
5. The printing date.
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Article 6
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A public offering prospectus shall include the following items:
1. Details of the plan for issuance of the call (put) warrants.
2. A CPA's audit opinion.
3. A lawyer's opinion on the legality of the issue.
4. The issuer's and guarantor's credit ratings.
5. Information on the underlying indexes, underlying securities or basket of securities.
6. The governing law for all disputes arising from the call (put) warrant issue shall be the law of the Republic of China.
7. In the event of legal action, the Taiwan Taipei District Court shall be the court of competent jurisdiction; where arbitration is stipulated, the terms and conditions governing the arbitration shall control.
8. Other important stipulations.
9. Other items required by the competent authority or the TWSE.
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Article 8
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The issuance plan shall list the following items:
1. The date of issuance and duration of the warrants.
2. Detailed information on the underlying indexes, underlying securities or basket of securities (including, in the case where the underlying securities of the warrants are stocks, a CPA audited or reviewed financial report for the most recent period that shows no losses, and a statement of the reason for issuing warrants on the underlying securities).
4. Terms and conditions of issuance (including issuance price, strike price or strike index, duration, and the number of shares (or beneficial interest units, or depositary receipt units, or index points) represented by each issuance unit; for knock-out call warrants or knock-out put warrants, conditions regarding upper and lower price caps and the fact that the date on which the closing price of the underlying security/securities or the closing index of the underlying index reaches the upper or lower price or index cap will be deemed the final trading day for the warrants, which will mature on the second following business day, requiring automatic settlement exclusively in cash at the closing price of the underlying security/securities on the warrants' final trading day, with such conditions set off in a distinctive typeface). For a call warrant, the abovementioned strike price or strike index may not exceed 150 percent of the underlying security's closing price or underlying index's closing index on the date of application; for a put warrant, the strike price may not be lower than 50 percent of the underlying security's closing price or the underlying index's closing index on the date of application, provided that the above ratios may be exceeded when the strike price and the closing price of the underlying security or securities differ by less than NT$30. A reasonable cause and explanation must exist for any terms of issuance not conforming to the above standards and must be fully disclosed to investors.
5. The method of calculating the issuance price, including the price of the underlying security or the underlying index, strike price or strike index, duration of the warrants, interest rate, volatility, and other reference factors, and a comparison table showing other warrants in the preceding year with the same listed underlying security.
6. Detailed information on the guarantor and the guaranty agreement or collateral.
7. The required particulars as specified in Article 8 of the TWSE Operating Rules Governing Liquidity Providers for Call (Put) Warrants.
8. Procedures for exercising the warrants, and the terms requiring cancellation of call (put) warrants when surrendered for exercise.
9. Procedures for exercise/delivery when the warrant holder exercises the option. When the issuer may opt for cash settlement of call warrants to be paid in securities, or when the warrant holder may opt for cash settlement of put warrants to be paid in securities, the conditions shall be set off in a distinctive typeface.
10. Strategies for offsetting foreseeable risks.
11. Stipulations regarding adjustment of the strike price of the call (put) warrants and related matters by the issuer of the underlying securities due to distributions of dividends or bonuses, increases or decreases in capital, stock splits or consolidations, and related matters, or the distribution of dividends on underlying exchange-traded funds (ETFs) and related matters by the securities investment trust enterprise (SITE). If the issuer's adjustments are not made according to the TWSE reference formula, that fact shall be noted in a distinctive typeface in the public offering prospectus.
12. The methods for handling a merger by the issuer of the underlying securities, alteration of the securities' trading method, suspension of sale or de-listing of the securities, or the de-listing of the ETF as a result of dissolution or bankruptcy of the SITE or a voidance of the approval.
13. The methods for handling the listing of the call (put) warrants or the de-listing or suspension of sale of the warrants by the stock exchange.
14. Clarification regarding whether or not there are plans for a reverse issue of call (put) warrants against the same underlying securities within the coming three months.
15. Other items required by the competent authority or the TWSE.
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Article 10
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The prospectus shall list the following items related to the underlying index and underlying securities:
1. A company profile when the underlying object is not an index (when the underlying is an exchange-trade fund as announced by the TWSE, the name of the component companies of the fund shall be listed).
2. Information on the price of the underlying securities or index (to include trading volumes, highest and lowest prices, and monthly closing prices for the most recent year; if the underlying object is an index, include the highest and lowest prices, and monthly closing indexes for the most recent year).
3. Condensed balance sheets and income statements for the underlying securities for the most recent two years, except for exchange-trade funds as announced by the TWSE.
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