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Operating Rules of the Taiwan Stock Exchange Corporation(2007.04.09) |
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Article 50
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Where a listed company satisfies any of the following conditions, this Corporation shall in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to suspend the trading of such securities, or such company may apply to terminate its listing pursuant to Paragraph 4 of Article 50-1; provided, where the circumstance in subparagraph 2 applies to a listed company, this Corporation may first proceed to announce suspension of trading of its listed securities and then apply to the Competent Authority for recordation:
1. Failure to produce and register and publicly announce financial reports or financial projections by the deadlines provided in laws and regulations.
2. Where any condition specified in Article 282 of the Company Act exists, and a court has prohibited the transfer of its shares pursuant to Subparagraph 5 of Paragraph 1 of Article 287 of the Company Act.
3. Any document or information that has been submitted is suspected to be untrue, and upon the request of this Corporation to explain the matter, no explanation is provided within the prescribed time period.
4. The securities transfer institution established at the location of this Corporation is withdrawn, or a dummy transfer institution is established such that no transfers are processed, and upon the order of this Corporation to correct the situation within a time period, no correction is made.
5. The financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act was not produced pursuant to relevant laws and regulations and generally accepted accounting principles, such violations were serious and corrections or rewrites were not made within the specified time period; or the CPA certifying the publicly announced and registered semi-annual or annual financial report issues a disclaimer of opinion or an adverse opinion in the audit report, or issues an adverse opinion or disclaimer of opinion in the review report.
6. Violation of relevant rules concerning the material information of a listed company, such violation was serious, and there is the need to suspend trading in its securities.
7. Where a listed company has violated the undertaking it gave when applying for listing.
8. Where a listed company, going public in accordance with Article 6-1 of Rules Governing the Review of Securities Listings, critically delays its construction schedule or materially violates provisions prescribed in the concession contract.
9. Violation of the provisions of Subparagraph 8 of Paragraph 1 of Article 49, and failure to satisfy Subparagraph 8 of Paragraph 2 of the same Article within three months.
10. Violation of the provisions of Subparagraph 9 of Paragraph 1 of Article 49, and failure to carry out, within three months of the trading day next following the date the trading method was changed, remedial procedures as provided in Subparagraph 9 of Paragraph 2 of the same Article and to submit relevant evidentiary documentation.
11. Loss of controlling interest, as defined in Subparagraph 1 of Article 4 of the Financial Holding Company Act, in a subsidiary, where a competent authority has ordered it to make corrections within a certain period.
12. Violation of Paragraph 1, Subparagraph 10, Subparagraph 11, or Subparagraph 12 of Article 49, and inability to achieve compliance with Paragraph 2, Subparagraph 10, Subparagraph 11, or Subparagraph 12 of the same article within three months from the trading day next following the date of change of trading method.
13. Other events deemed necessary to suspend the trading in securities.
Where a listed company satisfies the conditions specified above such that its trading has been suspended, upon satisfying the below conditions, and upon not satisfying any other of the above conditions, this Corporation may in accordance with Article 147 of the Securities and Exchange Act report to and obtain the permission of the Competent Authority to resume trading in the securities:
1. Where the suspension of trading was ordered pursuant to Subparagraph 1 of the preceding Paragraph, and a new financial report or financial projection has been publicly announced and registered in accordance with laws and regulations.
2. Where the suspension of trading was ordered pursuant to Subparagraph 2 of the preceding Paragraph, and the judicial order prohibiting transfer has expired, and reorganization has not been ordered by the court, or a dismissal of application for reorganization has not been rendered pursuant to Subparagraph 2 of Paragraph 3 of Article 285-1 of the Company Act.
3. Where the suspension of trading was ordered pursuant to Subparagraph 3 of the preceding Paragraph, and corrections have been made in accordance with regulations or explanations have in fact been provided upon the request of this Corporation.
4. Where the suspension of trading was ordered pursuant to Subparagraph 4 of the preceding Paragraph, and substantive improvements have in fact been made in accordance with regulations.
5. Where the suspension of trading was ordered pursuant to Subparagraph 5 of the preceding Paragraph, and corrections or rewrites are made to the financial report in accordance with relevant regulations and generally accepted accounting principles; or there has been a re-audit by the CPA, who has issued an audit report without the original disclaimer of opinion or adverse opinion or a review report without the original adverse opinion or disclaimer of opinion, or an audit report without a qualified opinion under, or review report that is not qualified under, Subparagraph 3 of Paragraph 1 of Article 49.
6. Where the suspension of trading was ordered pursuant to Subparagraph 6 of the preceding Paragraph, and corrections or improvements have been made in accordance with rules governing the confirmation and disclosure of material information by a listed company and other relevant regulations.
7. Where the suspension of trading was ordered pursuant to Subparagraph 7 of the preceding Paragraph, and corrections or improvements have been made pursuant to relevant laws and regulations, so as to be consistent with the undertaking given by the listed company.
8. Where the suspension of trading was ordered pursuant to Subparagraph 8 of the preceding Paragraph, and substantive corrections or improvements have in fact been made pursuant to relevant laws and regulations.
9. Where the suspension of trading was ordered pursuant to Subparagraph 9 of the preceding Paragraph, and corrections or improvements have been made in accordance with relevant regulations.
10. Where the suspension of trading was ordered pursuant to Subparagraph 10 of the preceding Paragraph, and remedial procedures as set forth in Subparagraph 9 of Paragraph 2 of the preceding article have been carried out within six months of the trading day next following the date of suspension of trading, and the listed company has produced relevant evidentiary documentation that it has carried out the remediation.
11. Where the suspension of trading was ordered pursuant to Subparagraph 11 of the preceding Paragraph, and corrections have been made by the deadline set by the competent authority for the target industry.
12. Where the suspension of trading was ordered pursuant to Subparagraph 12 of the preceding Paragraph, and corrections or improvements have been made within six months of the trading day next following the date of suspension of trading.
13. Where suspension of trading was ordered pursuant to Subparagraph 13 of the preceding Paragraph, and corrections or improvements have been made in accordance with relevant rules and regulations.
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Article 51
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Upon a merger between listed companies or between a listed company and an OTC company, if the surviving company remains a listed company, the securities of the non-surviving company shall be de-listed. If by reason of the merger, the surviving company issues new shares or certificates of entitlement to new shares of the same class of stocks that are already listed, listing of the shares may commence from the record date of the merger; provided, trading of the securities of the non-surviving company shall be suspended eight trading days before the record date of the merger (and non-inclusive of that date), and a de-listing application shall be completed and filed with this Corporation, annexing the relevant documents, at least 13 trading days before the record date of the merger (and non-inclusive of that date).
Where a listed company merges with an unlisted or non-OTC company by using as consideration an follow-on issue (whether by public offering and issuance or private placement) of shares or securities that may be converted into or may be used to subscribe shares, and the surviving company after the merger remains a listed company, except in the case of a securities, financial, or insurance company with special approval from the authority in charge of the industry concerned, all the following conditions shall be met by the unlisted or non-OTC company:
1. The financial data of the unlisted company or non-OTC company that was merged and the consolidated financial data of the two merged companies satisfy the profitability requirements of listed companies enumerated in Article 4 of the Rules Governing the Review of Securities Listings; provided, the said provision shall not apply where the net worth per share of the surviving company, both in the most recent financial year and on the most recent pro-forma financial report, is higher than the net worth per share of the original listed company. Where the above proviso is satisfied, if the listed company or the merged unlisted (non-OTC) company, from the date next following the date of the balance sheet in the most recent financial report to the date the application is filed with this Corporation, undergoes any material change in capital affecting the net worth per share, such as a capital increase or reduction or distribution of dividends, the net worth per share of the surviving company shall be higher than
the net worth per share of the original listed company, and the certifying CPA shall submit a review opinion following the imputed adjustment.
2. The unlisted company or non-OTC company being merged does not satisfy the circumstances specified in Subparagraphs 1, 3, 4, 6, 8, and 11 of Paragraph 1 of Article 9 of the Rules Governing the Review of Securities Listings.
3. The most recent annual financial reports of the unlisted company or non-OTC company being merged have been audited by a CPA approved by the Competent Authority to audit publicly listed companies, and the auditor issues an unqualified opinion.
4. Where the merged unlisted/non-OTC company is a foreign company meeting the conditions set forth in Article 21 of the Business Mergers and Acquisitions Act, the listed company shall submit the following documents for reference. Provided, that subparagraphs 1 and 2 and paragraph 4 shall not apply where the foreign company complies with Article 27, paragraph 1, subparagraphs 2 and 4 of this Corporation's Rules Governing the Review of Securities Listings:
(1) documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
(2) financial report for the unlisted or non-OTC company being merged, and an audit report with an unqualified opinion issued by the certifying CPA.
(3) an opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
(4) a written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the listed company and the foreign company, issued by a CPA other than the original certifying CPA who is approved by the Competent Authority to perform financial certification for public companies.
For the new shares issued as a result of the merger referred to in the preceding two paragraphs, if such shares are of a different class from the listed securities, then such shares shall conform to Paragraph 2 of Article 14 of the Rules Governing the Review of Securities Listings.
Where a listed company undertakes a merger pursuant to Paragraph 2, and the additional common shares or overseas depositary receipts issued (whether by public offering or private placement) due to the merger will account for 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed companies, any directors, supervisors, and shareholders holding more than 10 percent of the issued shares of the company being merged shall place in centralized custody in compliance with all the below-listed provisions any additional common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued due to the merger that they hold, with the exception that a listed company that merges into itself a subordinate company in which it holds 50 percent or more of the issued shares may be exempted from the provisions regarding the ratio of total shares that shall be placed in centralized custody; provided, this requirement may be waived where a listed company merges with a subordinate company of which it holds 90 percent or more of the outstanding shares in accordance with Article 316-2 of the Company Act:
1. Such persons obtaining common shares publicly offered and issued due to the merger shall place into centralized custody with the central securities depository approved for establishment by the competent authority all of the common shares publicly offered and issued due to the merger that they hold, and in aggregate not less than the number of shares calculated under Paragraph 2 of Article 10 of this Corporation's Rules Governing the Review of Securities Listings for the total amount of common shares offered and issued as a result of the merger. In case of shortage, negotiation shall be made with other shareholders holding common shares publicly offered and issued due to the merger to make up the shortfall. Of the shares placed in central custody, one-half may be withdrawn after a full six months has elapsed from the date that listed trading thereof commences. The remaining portion of shares may be withdrawn in full only after one full year has elapsed from the date that listed trading commences.
2. Such persons obtaining privately placed common shares due to the merger shall issue a written undertaking not to transfer the shares within a certain period. The written undertaking shall furthermore state: “The Taiwan Stock Exchange Corporation may from time to time send personnel to carry out spot checks to ascertain whether I have faithfully abided by my undertaking not to transfer the common shares I have obtained through private placement due to the merger. After expiration of the period in which I have undertaken restricted transfer, for those shares I obtained due to the merger that are still classified as privately placed common shares, I shall continue to abide by the restrictions on transfer under Article 43-8 of the Securities and Exchange Act.” The total ratio of privately placed common shares subject to the undertaking regarding restriction of transfer referred to above and the period of the restriction of transfer shall accord with the provisions of the preceding subparagraph.
3. Such persons obtaining overseas depositary receipts issued for capital increase due to merger shall provide a written undertaking that for a certain period of time they shall not redeem or transfer the overseas depositary receipts held by them, and shall incorporate provisions restricting redemption into the contract signed and entered into with the custodian institution. The total ratio of global depositary receipts subject to restriction of redemption or transfer and the period of the restriction shall accord with the provisions of subparagraph 1.
Where the merger between a listed company and other companies does not conform with the preceding four Paragraphs, or where a new company is created as a result of the merger, the original listed company shall apply for the termination of listing. The surviving company or the newly established company may apply for listing of stocks after completion of the merger.
Where a listed company, pursuant to the Business Mergers and Acquisitions Act, Company Act, or other laws or regulations, acquires shares, business, or assets of an unlisted/non-OTC company, with shares or securities that may be converted into or may be used to subscribe shares as consideration, if such transaction reaches any of the following standards, such unlisted/non-OTC company shall additionally comply with all of the conditions set out in paragraph 2, and that unlisted/non-OTC company and any director, supervisor, or shareholder holding 10 percent or more of the shares thereof who has holdings of the new common shares (including those publicly offered and issued or privately placed) or overseas depositary receipts issued by the listed company for such capital increase shall also deposit the share certificates into central custody in accordance with the provisions of paragraph 4:
1. If the book entry amount of the shares or securities that may be converted into or may be used to subscribe shares that are obtained by the unlisted/non-OTC company as a result of being acquired reaches 70 percent or more of its book net asset value, or the shares or securities that may be converted into or may be used to subscribe shares that are paid by the listed company for the acquisition reach 10 percent or more of the aggregate shares already issued and anticipated to be issued by the listed companies.
2. If the total number of shares acquired from shareholders of the unlisted/non-OTC company reaches 70 percent or more of its issued shares.
3. If the operating revenue or operating profit or book net asset value of a division being spun off from the unlisted/non-OTC company to the listed company reaches 70 percent or more of its entire operating revenue or operating profit or book net asset value, or reaches 10 percent or more of the entire operating revenue or operating profit or book net asset value on the listed company's pro forma financial statements.
When a listed company files an application under Paragraph 1, Paragraph 2, or the preceding paragraph, it shall fill in the application form and submit relevant documents (attachments). After this Corporation has examined and approved the application, a written opinion approving the merger (or acquisition) shall be sent to the company. The said written opinion shall state "This approval letter is provided only for purposes of the applicant company registering with (applying to) the Competent Authority for capital increase and issuance of new shares as a result of merger (or acquisition). If the application is not approved by the Competent Authority, this approval letter shall become void."
If an unlisted/non-OTC company that is acquired or assigns business operations as set out in paragraph 6 is a foreign company, the provisions of paragraph 2, subparagraph 4 shall apply mutatis mutandis.
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Article 51-3
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Where a single listed company, pursuant to Article 31 of the Business Mergers and Acquisitions Act, converts its shares to another newly established or already-listed existing company, and becomes a 100 percent held subsidiary of such newly established or already-listed existing company, after the Competent Authority has given approval, the securities of the newly established or already-listed existing company shall be listed after completion of applicable listing procedures, and the listing of the securities of the original listed company shall be terminated on the record date of the share conversion.
The provisions of the preceding paragraph shall also apply in cases where a single or multiple company(ies) limited by shares convert shares into a newly established or already-listed existing company; provided that if an unlisted (non-OTC) company(ies) converts shares together therewith, the operating revenue or operating income from said unlisted (non-OTC) company(ies) shall not exceed 50 percent of the total operating revenue or operating income on the pro-forma post-conversion consolidated financial statements of said newly established or already-listed existing company for the most recent fiscal year, and said unlisted (non-OTC) company(ies) limited by shares shall conform to the provisions of all the following subparagraphs:
1. Profitability shall conform to Subparagraph 3 of Paragraph 1 of Article 4 of this Corporation's Rules Governing the Review of Securities Listings.
2. There shall not exist any circumstance specified in Subparagraphs 1, 3, 4, 6, 8, or 11 of Paragraph 1 of Article 9 of this Corporation's Rules Governing the Review of Securities Listing.
3. The financial report for the most recent fiscal year shall have been audited by a CPA approved by the Competent Authority to audit public companies and issued an unqualified opinion from such CPA.
If any unlisted (non-OTC) company included in a conversion as set out in the preceding paragraph is a foreign company, the listed company shall submit the following documents for reference. Provided, that subparagraphs 1 and 2 of the preceding paragraph, and paragraph 7, shall not apply where the foreign company complies with Article 27, paragraph 1, subparagraphs 2 and 4 of this Corporation's Rules Governing the Review of Securities Listings:
(1) documentation of foreign investment approval by the Ministry of Economic Affairs Investment Commission.
(2) the submitted financial report, and an audit report with an unqualified opinion issued by the certifying CPA.
(3) an opinion by a Taiwan CPA regarding the differences in accounting principles applied in the Republic of China (Taiwan) and in the foreign company's home country and the resultant effects on the financial report.
(4) a written report analyzing and explaining the reasonableness of the share exchange ratio and price and overall synergy at the time of the merger between the listed company and the foreign company, issued by a CPA other than the original certifying CPA who is approved by the Competent Authority to perform financial certification for public companies.
Where an investment holding company is established by means of share conversion in accordance with Paragraph 1 or Paragraph 2, such investment holding company shall comply with the provisions of Subparagraphs 1, 2, 4, 5, 7, 8, and 9 of Paragraph 1 of Article 4 of this Corporation's Rules Governing the Review of Listing Applications by Investment Holding Companies before it may be listed.
Where circumstances in Paragraph 1 or 2 apply to a company limited by shares, the listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the newly established or already-listed existing company shall carry out with this Corporation the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, where this Corporation has inspected all the documents submitted by the company for completeness and its administering department has examined them and found them in compliance with regulations, after approval has been applied for and obtained from the Competent Authority, the trading of such company's(ies') originally listed securities shall be suspended two trading days prior to (and non-inclusive of) the record date of the share conversion; provided, where shares of a single or multiple listed or OTC companies are converted into a newly established company to form an
investment holding company, the securities of the investment holding company may be listed and traded from the record date of the share conversion, but trading of the originally listed securities shall be suspended beginning eight days before the record date of the share conversion (counting non-inclusively of that date).
1. An Application for Listing of Shares of a Newly Established Company or Listed Company Receiving Assignment of Shares shall be completed and filed, along with all specified attachments, with this Corporation no later than 15 trading days prior to (and non-inclusive of) the record date of the share conversion.
2. An Application for Suspension of Share Transfers shall be completed and this Corporation shall directly make an announcement to the market of suspension of amendments to entries in the shareholder rosters of the listed company(ies) among the companies participating in the share conversion.
Where pursuant to Article 27 of the Business Merger and Acquisition Act a listed company undergoes general assignment to an investment holding company incorporated under Article 185, Paragraph 1, Subparagraph 2 of the Company Act, and such investment holding company complies with Subparagraphs 1, 2, 4, 5, 7, 8, and 9 of Paragraph 1 of Article 4 of this Corporation's Regulations Governing the Review of Stock Listing Applications by Investment Holding Companies, and it holds 100 percent of the assignee company's shares, it shall apply to this Corporation for amendment of content of listed securities pursuant to Article 45. However, the provisions of Subparagraph 5 of Paragraph 1 of Article 50-1 shall not apply to any change in business scope.
Under the circumstances set forth in Paragraphs 1, 2, or the preceding paragraph, where before the conversion the company is a listed (or OTC-listed) company, those shares already duly placed in centralized custody by directors, supervisors, and major shareholders thereof at the time of initial listing (or OTC listing) shall remain in centralized custody after the conversion until the expiration of the custody period; if before the conversion the company was an unlisted (non-OTC) company, and the total number of shares anticipated to be converted will account for 10 percent or more of the shares already issued and anticipated to be issued by the company that is the assignee of the shares, the centralized custody of shares held by the directors, supervisors, and major shareholders of such unlisted (non-OTC) company in the company that is the assignee of the shares shall be handled in accordance with Article 51, paragraph 4, subparagraph 1. When a listed company carries out a case under Paragraphs 1 or 2,
after this Corporation has examined and approved the application, a written opinion approving the share conversion shall be sent to the company, stating "This approval letter is provided only for purposes of the applicant company registering with (applying to) the Competent Authority for capital increase and issuance of new shares as a result of share conversion. If the application is not approved by the Competent Authority, this approval letter shall become void." Provided, where shares of a single or multiple listed or OTC companies are converted into a newly established company to form an investment holding company, the case shall be submitted directly to the Competent Authority after examination and approval by this Corporation.
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Article 51-4
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When a listed company merges with an unlisted company and the listed company is the non-surviving company, the surviving unlisted company, within one year after the merger record date, may apply to this Corporation for listing if it meets the requirements set out in all the following subparagraphs:
1. At the time of the application for merger, at least 80 percent of its operating revenue and identifiable assets as stated on its latest-period financial report audited or reviewed by a CPA is derived from business items or assets originally from the merged listed company, and its liabilities may not exceed two-thirds of its total assets.
2. Capitalization: complies with the provisions of Article 4, Paragraph 1, Subparagraph 2 of this Corporation's Rules Governing the Review of Securities Listings.
3. Profitability: after imputation based on the surviving unlisted company's latest-period financial data, complies with the provisions of Article 4, Paragraph 1, Subparagraph 3 of this Corporation's Rules Governing the Review of Securities Listings. However, this requirement does not apply if the post-merger surviving company's net worth per share on the latest-period financial report audited or reviewed by a CPA is greater than the non-surviving listed company's net worth per share on its financial report audited or reviewed by a CPA for the latest period before the merger record date.
4. Shareholding dispersion: complies with Article 4, Paragraph 1, Subparagraph 4 of this Corporation's Rules Governing Review of Securities Listings.
5. The non-surviving listed company was free of any and all circumstances set out in Articles 49, 50, and 50-1 before the merger record date, and its net worth per share was stated at not less than NT$10 on the financial reports audited or reviewed by a CPA for both the most recent period and most recent fiscal year before the merger record date.
6. Financial reports: a CPA shall have audited or reviewed the latest-period financial report, and issued a signed audit or review report containing an unqualified opinion; or, if an audit report containing other than an unqualified opinion is issued, it does not affect the fair presentation of the financial report.
7. Complies with Articles 18 and 19 of this Corporation's Rules Governing Review of Securities Listings and is free of any of the circumstances set out in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, 8, 9, and 11 of those Rules.
Once a listing application case under the preceding paragraph has been inspected for completeness of the application documents and reviewed for compliance with regulations, it may be submitted to the Competent Authority for approval, upon which its listing shall be publicly announced. Before its securities are listed, the surviving unlisted company shall deposit stock in central custody and conduct a pre-listing public offering in accordance with Articles 10 and 11 of this Corporation's Rules Governing Review of Securities Listings.
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