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Article 49
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Where any of the following events exists, this Corporation may place the listed securities under altered-trading-method category:
1.The latest individual financial report as registered and publicly announced in accordance with Article 36 of the Securities and Exchange Act, shows that its net worth is less than one-half of its share capital stated on the financial report. For a holding company, its net worth refers to the amount of shareholders equity stated on the consolidated financial report, less minority interest. However, when a listed company records as a deduction from shareholders equity the cost of shares bought back by it pursuant to Article 28-2 of the Securities and Exchange Act or of shares held in said listed company by subsidiaries thereof, the par value of treasury stock held in said listed company by the listed company and subsidiaries thereof may be deducted from the share capital stated on the financial report in the calculation of the above-stated ratio.
2. A shareholders meeting has not been held within six months after the end of the fiscal year; provided that with valid reasons and with the approval of the competent authority of the Company Act, the meeting is held within the approved time period, the above shall not be applicable.
3. Where an audit or review report issued by the CPA for the latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates substantial doubt about the going-concern assumption, or the certifying CPA issues a qualified audit report for the semi-annual or annual financial reports, or for a company other than a holding company issues a qualified review report for the semi-annual consolidated financial report, as publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act, because there were restrictions on the scope of the audit, or because the accountant deems there to be anything improper in the choices of accounting policies by the management or in the disclosure of the financial statement; however, this restriction shall not apply to a semi-annual financial report where the CPA has issued the qualified audit report for the reason that an amount of long-term equity investment and profit/loss thereupon is
calculated on the basis of statements of the invested company that have not been certified by a CPA, and the certifying CPA fully discloses in the audit report the reasons for the qualified opinion and the monetary amounts of any accounting items that may be affected thereby, and no material irregularities are present. However, if an above-mentioned invested company is a major subsidiary included in the preparation of the consolidated statement or a public subsidiary of a financial holding company, its semi-annual financial report shall also be reviewed or audited by a CPA in accordance with applicable laws and regulations.
4.Violation of relevant rules concerning the material information of a listed company, and failure to rectify the situation within the specified time after having been notified to proceed with disclosure process, and such violation was serious.
5. Two-thirds or more of the directors or supervisors have been provisionally ordered to be suspended of the performance of their authorities and duties.
6. An application for re-organization has been filed to the court in accordance with Article 282 of the Company Act.
7. Half or more of the directors of the company have changed so that the shareholding is too concentrated to meet the then-current shareholding dispersion criteria for listing, or its incumbent directors, supervisors, or president meet any of the conditions under Subparagraph 8 of Paragraph 1 of Article 9 of this Corporation's Rules Governing the Review of Securities Listings and fail to make improvement within a specified time period ordered by this Corporation.
8. The company is unable to punctually pay for the common corporate bonds or convertible corporate bonds which have matured or which the creditors requested it to redeem.
9. Dishonor of a negotiable instrument by a financial institution because of insufficient funds on deposit, where this Corporation is aware of such dishonor.
10. After a split, the paid-in capital of an ordinary company or a technology company fails to comply with Article 4, Paragraph 1, Subparagraph 2 or Article 5, Subparagraph 1, respectively, of the Rules Governing the Review of Securities Listings.
11. The number of companies held by an investment holding company falls below two companies; provided, for investment holding companies created as the result of share conversion, general assignment, assignment of business, or split, this shall not apply within one year of the date of listing for trading.
12. Failure to abide by an undertaking to purchase the shares of minority shareholders of a listed (or OTC) subsidiary in which it has shareholding of more than 70 percent.
13. Failure to handle stock affairs matters in compliance with Article 44, paragraph 3, or discovery in an audit by Taiwan Depository & Clearing Corporation of deficiencies and failure to make corrections by a deadline imposed for making corrections for a serious violation in a specific case.
14. Where explanations given in a press conference concerning material information fail to clarify points in question, and this Corporation deems it necessary to protect the rights and interests of investors.
15. Upon other necessary reasons as determined by this Corporation.
Where a listed company has the conditions specified above such that its securities has been placed under altered-trading-method category, upon satisfying the below conditions, and upon not having any other of the above conditions, this Corporation may resume the trading method to normal settlement method:
1.Where the change of trading method was ordered pursuant to Subparagraph 1 of the preceding Paragraph, if the latest-period financial report indicates that the CPA has already issued an audit or review report stating that there is no longer any substantial doubt about the ongoing-concern assumption, or the annual and semi-annual individual financial reports for the most recent two periods audited and certified by a CPA and registered and publicly announced pursuant to Article 36 of the Securities and Exchange Act each shows net worth exceeding NT$300 million and reaching one-half or more of the share capital stated on the financial report, and each has shown no decline from the net worth stated on the annual and semi-annual individual financial reports for the preceding period audited and certified by a CPA and duly registered and publicly announced. For a holding company, its net worth refers to the amount of shareholders equity stated on the consolidated financial report, less minority interest.
2.Where the change of trading method was ordered pursuant to Subparagraph 2 of the preceding Paragraph, and the shareholders meeting has been held.
3.Where the change of trading method was ordered pursuant to Subparagraph 3 of the preceding Paragraph, and the new audited financial report has shown improvements and the auditor renders a clean audit opinion or a clean review report, or the semi-annual financial report of the invested company has been duly reviewed or audited by a CPA.
4.Where the change of trading method was ordered pursuant to Subparagraph 4 of the preceding Paragraph, and disclosure proceeding is commenced in compliance with the notice.
5. After the trading method was changed pursuant to Subparagraph 5 of the proceeding Paragraph, the preliminary injunction order was cancelled by the court and one-third or more of the directors or supervisors are able to perform their authorities and duties.
6. After the trading method was changed pursuant to Subparagraph 6 of the preceding Paragraph, the application for re-organization was withdrawn; provided that the execution period of the changed trading method shall not be less than three months.
7. After the trading method was changed pursuant to Subparagraph 7 of the preceding Paragraph, correction and improvement was made.
8. After the trading method was changed pursuant to Subparagraph 8 of the preceding Paragraph, the company repaid liabilities or reached settlement agreement with the creditors.
9. Within three months of the trading day next following the date the trading method was changed pursuant to Subparagraph 9 of the preceding Paragraph, the listed company has completed any of the remedial procedures enumerated hereinbelow, and the listed company has produced a direct or indirect note in evidence thereof from the clearing house, and no further instance of dishonor of negotiable instruments has occurred prior to resumption of normal settlement. However, if the listed company adopts the remedial procedure of "extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument," it shall additionally submit a rechecking form prescribed by this Corporation. The form shall be signed and certified by a CPA and an attorney at law and submitted to this Corporation along with the other relevant documents and materials for approval and recordation:
(1) Extinguish the debt under the negotiable instrument by actual settlement of the amount of the instrument.
(2) Deposit the amount of the instrument into the financial enterprise that dishonored the instrument with a request that it be listed as provision for payment under "other payables."
(3) Pay the amount of the instrument out of the checking account or other payables account upon re-presentment of the instrument subsequent to its dishonoring.
10. Where correction or improvement has been made by the listed company within three months of the trading day next following the date the trading method of the securities was changed pursuant to Subparagraph 10 of the preceding paragraph.
11. Where correction or improvement has been made within three months after the change of trading method of the securities pursuant to Subparagraph 11 or Subparagraph 12 of the preceding paragraph.
12. Where correction or improvement has been made after the trading method was changed pursuant to Subparagraph 13 of the preceding Paragraph.
13. Where the points in question have been clarified after the trading method was changed pursuant to Subparagraph 14 of the preceding Paragraph.
14. After the trading method was changed pursuant to Subparagraph of the preceding Paragraph, correction or improvement is made upon the request of this Corporation.
Where this Corporation changes the trading method of listed securities pursuant to Subparagraph 1 of the preceding Paragraph, or where this Corporation restores the trading method to normal settlement pursuant to Subparagraph 2 of the preceding Paragraph, within one month of such action, this Corporation shall report such action to the Competent Authority for recordation.
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Article 49-2
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Where any of the following circumstances applies to a listed company, this Corporation may impose the periodic call auction trading method for its listed securities pursuant to the Regulations Governing Trading of Stocks in the Altered-Trading-Method Category:
1. Its listed securities have been placed under the altered-trading-method category pursuant to Article 49, paragraph 1, subparagraph 6.
2. Its listed securities have been placed under the altered-trading-method category pursuant to Article 49, paragraph 1, subparagraph 8.
3. Its listed securities have been placed under the altered-trading-method category pursuant to Article 49, paragraph 1, subparagraph 9.
4. Its latest-period financial report publicly announced and registered pursuant to Article 36 of the Securities and Exchange Act indicates that its net worth is lower than three-tenths of its share capital stated on the financial report.
5. This Corporation deems it necessary to do so for any other reason.
Where the periodic call auction trading method has been imposed for listed securities of a listed company because of a circumstance specified in a subparagraph of the preceding paragraph, and no circumstance specified in any other subparagraph of the preceding paragraph exists, this Corporation may lift the requirement of the periodic call auction trading method if the respective requirement listed among the following subparagraphs is satisfied:
1. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 1 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 6.
2. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 2 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 8.
3. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 3 of the preceding paragraph: satisfy the requirements of Article 49, paragraph 2, subparagraph 9.
4. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 4 of the preceding paragraph: satisfy the requirement that the net worth stated on the listed company's latest-period financial report audited and certified by a CPA and publicly announced and registered under Article 36 of the Securities and Exchange Act be not less than three-tenths of the share capital stated on the financial report.
5. Where the periodic call auction trading method has been imposed because of a circumstance under subparagraph 5 of the preceding paragraph: have made supplementation or correction as demanded by this Corporation.
If this Corporation imposes the periodic call auction trading method for a listed company's securities under paragraph 1, or lifts the requirement of the periodic call auction trading method for a listed company's securities under paragraph 2, it shall report the measure to the Competent Authority for recordation within one month after execution.
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