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Article 49
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If any of the following circumstances applies to a listed company, the TWSE may place its listed securities under an altered trading method:
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. When stock subscription proceeds are recorded as an addition to shareholders equity, the par-value share-issue equivalent of the stock subscription proceeds shall
be added to the calculation of the share capital 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 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 the TWSE's Rules Governing the Review of Securities Listings and fail to make improvement within a specified time period ordered by the TWSE.
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 the TWSE is aware of such dishonor.
10. After a demerger, 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, sale and assignment, transfer of business, or demerger, 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 shareholder services 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 the TWSE deems it necessary to protect the rights and interests of investors.
15. Upon other necessary reasons as determined by the TWSE.
If securities of a listed company have been placed under an altered trading method because of a circumstance in a subparagraph of the preceding paragraph, upon satisfaction of the below conditions, and freedom of any other of the above circumstances, the TWSE may resume trading of the company's securities by the normal trading method:
1. Where the change of trading method was ordered pursuant to subparagraph 1 of the preceding paragraph, the individual financial reports for the most recent two periods 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. 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 due to supplementation or correction, the circumstances specified in that subparagraph no longer exist.
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 preceding 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 the TWSE. The form shall be signed and certified by a CPA and an attorney at law and submitted to the TWSE 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, provided that if the TWSE determines there is any material deficiency in the design and execution of the company's internal control system, in addition to clarifying the points in question, the company shall revise its internal control system and shall have implemented the revisions for at least three months and obtained a CPA-issued audit opinion letter regarding the effectiveness of the aforementioned internal control system's design and execution.
14. After the trading method was changed pursuant to subparagraph of the preceding paragraph, correction or improvement is made upon the request of the TWSE.
Where the TWSE changes the trading method of listed securities pursuant to subparagraph 1 of the preceding paragraph, or where the TWSE restores the trading method to normal settlement pursuant to subparagraph 2 of the preceding paragraph, within one month of such action, the TWSE shall report such action to the Competent Authority for recordation.
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