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Article 48-1
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A secondary listed company shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Secondary Listed Foreign Securities prescribed by the TWSE.
Upon receiving approval from the Competent Authority to issue call (put) warrants, a call (put) warrant issuer shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Listed Warrants/Stocks prescribed by the TWSE.
A trustee institution or special purpose company shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Trustee Institutions and Special Purpose Companies prescribed by the TWSE.
A real estate securitization trustee institution shall be required to report on time the matters in accordance with the Procedures for Verification and Disclosure of Material Information on Real Estate Securitization Trustee Institutions prescribed by the TWSE.
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Article 49-1
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If any of the circumstances listed below apply to a primary listed company, the TWSE may place that company's listed shares under an altered trading method:
1. Net worth, as indicated in its duly announced and filed consolidated financial report for the most recent period, of less than one-half of its share capital stated in the financial report, with net worth defined as shareholders' equity stated in the consolidated financial report less minority interests.
2. Failure to convene and bring to completion a regular shareholders meeting within 6 months after the conclusion of the business year.
3. The CPA-issued audit or review report indicates substantial doubt about the going-concern assumption, or the certifying CPA issued an audit or review report with a qualified opinion concerning the duly announced and filed financial report for the most recent fiscal year or half-year, provided that this restriction shall not apply if it is due to figures from an investee company's financial report that was not audited and attested by a CPA being used to calculate the amount of, and gains (losses) on, long-term equity investments for that primary listed company's semi-annual financial report, and the certifying CPA has fully disclosed in the audit report the reasons for the qualified opinion and the possible impact on the monetary amount of any accounting items, and there are no material irregularities.
4. It violated any rule or regulation relating to listed foreign securities such as rules or regulations regarding the disclosure of material information, was notified to conduct supplementary disclosure procedures, failed to do so before the deadline, and the circumstances of the case were serious.
5. Any petition for its reorganization has been submitted to the court in its home country.
6. If the situation in Article 28-8, paragraph 1, subparagraph 4 of the TWSE's Rules Governing Review of Securities Listings applies to the incumbent director, supervisor, or general manager of the primary listed company or any company it controls, and corrective action is not taken within the period prescribed by the TWSE.
7. Inability to redeem ordinary corporate bonds or convertible corporate bonds upon maturity or upon creditor request.
8. A negotiable instrument has been dishonored by a financial institution due to insufficient funds and the TWSE is aware of the situation.
9. Explanations in a press conference concerning material information fail to clarify the points in question and the TWSE deems it necessary to protect the rights and interests of investors.
10. The TWSE deems necessary based on any other reason.
When a primary listed company's securities have been placed under an altered trading method due to any circumstance in a subparagraph of the preceding paragraph, if the company meets the respective requirements listed below and is free of any other circumstances in the subparagraphs of the preceding paragraph, the TWSE may restore the regular trading method for the company's listed shares:
1. After placement under an altered trading method pursuant to subparagraph 1 of the preceding paragraph, the net worth in its CPA-audited and attested annual and semi-annual consolidated financial reports as duly filed and announced for the most recent two periods is one-half or more of its share capital as stated therein, and has not declined in comparison to the net worth stated either in the previous CPA-audited and attested annual or semi-annual consolidated financial reports as duly filed and announced.
2. After placement under an altered trading method pursuant to subparagraph 2 of the preceding paragraph, it convenes and brings to completion the regular shareholders meeting.
3. After placement under an altered trading method pursuant to subparagraph 3 of the preceding paragraph, the CPA-issued audit report for its most recent consolidated financial report indicates there is no longer any substantial doubt regarding the going-concern assumption; or its financial report has already shown improvement and after conducting a re-audit the CPA issues an audit with an unqualified opinion or issued an unqualified review report; or the semi-annual financial report of the investee company has already duly been reviewed or audited by a CPA.
4. After placement under an altered trading method pursuant to subparagraph 4 of the preceding paragraph, it conducts supplementary disclosure procedures as per notification.
5. After placement under an altered trading method pursuant to subparagraph 5 of the preceding paragraph, the petition for its reorganization is withdrawn, provided that the altered trading method implementation period may not be less than 3 months.
6. After placement under an altered trading method pursuant to subparagraph 6 of the preceding paragraph, supplementation or corrective action is taken.
7. After placement under an altered trading method pursuant to subparagraph 7 of the preceding paragraph, the company settles its obligation or reaches a conciliation agreement with the creditor.
8. Within 3 months from the next business day after placement under an altered trading method pursuant to subparagraph 8 of the preceding paragraph, it extinguishes the debt under the negotiable instrument by actual settlement of the amount of the negotiable instrument or completes payment negotiation procedures with its financial institution, and has the negotiation documents signed and certified by a CPA and attorney and submits them together with other relevant documentation to the TWSE for review and recordation.
9. After placement under an altered trading method pursuant to subparagraph 9 of the preceding paragraph, it clarifies the points in question.
10. After placement under an altered trading method under subparagraph 10 of the preceding paragraph, it provides supplementation or takes corrective action as required by the TWSE.
Within 1 month after it places the listed shares of a primary listed company under an altered trading method pursuant to the circumstances of paragraph 1, or restores that company's listed shares to the regular trading method under paragraph 2, the TWSE shall file with the Competent Authority for recordation.
If a secondary listed company, or a foreign issuer that issues Taiwan Depositary Receipts or the depositary institution thereof, breaches an undertaking executed at the time of its application for listing, the TWSE may depending on the case impose a breach penalty of NT$30,000 and order it to make supplementation or corrections within a certain period of time.
After a primary listed company, under Article 28-7 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings, adds in its articles of incorporation or organizational documents any important matters as designated by the TWSE in connection with the protection of shareholders equity, it shall submit the draft amended provisions regarding important matters in connection with the protection of shareholders equity of its articles of incorporation or organizational documents to the TWSE 15 days before the shareholders meeting. If the TWSE deems that the draft amended provisions are likely to impair shareholders equity, it may issue an opposing opinion to the draft amended provisions. If the primary listed company, without the prior approval of the TWSE, fails to submit the draft amended provisions by the above-stated deadline, or proceeds to pass the draft amended provisions after the TWSE has issued an opposing opinion, the TWSE may impose a penalty of NT$30,000.
If the TWSE deems that any provision of a primary listed company's articles of incorporation or organizational documents is likely to impair shareholders equity, it may require the primary listed company to amend its articles of incorporation or organizational documents by a deadline. If the primary listed company fails to amend its articles of incorporation or organizational documents by the deadline, the TWSE may impose a penalty of NT$30,000, and further impose a deadline for amendment of the articles of incorporation or organizational documents. If the primary listed company still fails to amend the articles of incorporation or organizational documents by the deadline, the TWSE may designated its listed stock as securities placed under an altered trading method. However, if in an individual case the circumstances of the impairment to shareholder equity are serious, the TWSE may proceed directly to designate the listed stock as securities placed under an altered trading method, without first imposing the penalty.
When listed stock of a primary listed company is designated as securities placed under an altered trading method because of circumstances in paragraph 5, then once the articles of incorporation or organizational documents have been amended so that there is no longer any likelihood of impairment to shareholder equity, nor is there any other of the circumstances set out in the subparagraphs of paragraph 1, the TWSE may resume normal trading of the company's listed stock.
When the TWSE designates the listed stock of any primary listed company as securities placed under an altered trading method pursuant to paragraph 5, or resumes normal trading of its listed stock pursuant to paragraph 6, it shall report to the competent authority for recordation within one month after executing the measure.
If a secondary listed company, or a foreign issuer that issues Taiwan Depositary Receipts or the depositary institution thereof, fails to make supplementation or corrections within the period of time under the preceding paragraph, the TWSE may place its listed securities under an altered trading method and the provisions of paragraph 3 shall apply mutatis mutandis.
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Article 50-3
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If any of the circumstances listed below applies to a primary listed company, trading of its listed shares shall be suspended by the TWSE after it reports to and obtains the approval of the Competent Authority pursuant to Article 147 Securities and Exchange Act:
1. Failure to publicly announce and file its financial report by the prescribed deadline.
2. Any suspected misrepresentation is discovered in a document or information submitted by it, and it fails to provide an explanation by a specified deadline as requested by the TWSE.
3. Failing to appoint a professional shareholder services agent in the Republic of China to handle stock affairs, and then failing to take corrective action by the specified deadline, as confirmed by the TWSE.
4. Failure to prepare its duly announced and filed financial report according to the relevant regulations and to the accounting principles of the Republic of China, the United States of America, or international financial accounting principles, as the case may be, and the circumstances are serious, and the company is notified to correct or make a restatement of the financial report but fails to do so by the specified deadline; or its certifying CPA has issued an audit report containing a disclaimer of opinion or adverse opinion, or issued a review report with an adverse opinion or disclaimer of opinion, in connection with the annual or semi-annual financial report that it announced and filed.
5. Violation of any rule or regulation regarding the disclosure of material information on a listed foreign company, in which the circumstances of the case are serious and necessitate the suspension of the trading of its securities.
6. Violation of an undertaking issued at the time it applied for listing; provided that this subparagraph does not apply to an amendment to any provision of the articles of incorporation or organizational documents involving any important matter in connection with the protection of shareholders equity.
7. Violation of Article 49-1, paragraph 1, subparagraph 7, and inability to meet the requirements of paragraph 2, subparagraph 7 of that same Article within 3 months.
8. Violation of Article 49-1, paragraph 1, subparagraph 8, and inability to complete the supplementation procedures specified in paragraph 2, subparagraph 8 of that same Article within 3 months from the next business day after its shares are placed under an altered trading method.
9. Violation of Article 49-1, paragraph 5, and failure to amend the articles of incorporation or organizational documents within 3 months from the next business day following placement of the stock under an altered trading method.
10. Any other circumstance requiring that the trading of listed securities be suspended.
When trading of the listed securities of a primary listed company is suspended due to any circumstance in a subparagraph of the preceding paragraph, if the company meets the respective requirements listed below and is free of any other circumstances in the subparagraphs of the preceding paragraph, then after filing with the Competent Authority and obtaining its approval pursuant to Article 147 of the Securities and Exchange Act the TWSE may publicly announce restoration of the trading of its listed securities:
1. After suspension of trading pursuant to subparagraph 1 of the preceding paragraph, has duly made a supplementary announcement and filing of its financial report.
2. After suspension of trading pursuant to subparagraph 2 of the preceding paragraph, has duly made corrections, or provided explanations as requested by the TWSE, with solid evidence.
3. After suspension of trading pursuant to subparagraph 3 of the preceding paragraph, has duly taken corrective action with solid evidence.
4. After suspension of trading pursuant to subparagraph 4 of the preceding paragraph, has made corrections to or a restatement of its financial report as required by the TWSE; or its CPA conducts a re-audit and issues an audit report free of the original disclaimer of opinion or adverse opinion, or a review report free of the original adverse opinion or disclaimer of opinion; or there is no audit report containing a qualified opinion or review report containing a qualified opinion in connection with Article 49-1, paragraph 1, subparagraph 3.
5. After suspension of trading pursuant to subparagraph 5 of the preceding paragraph, has made supplementation or taken corrective action pursuant to rules or regulations regarding disclosure of material information on listed foreign companies.
6. After suspension of trading pursuant to subparagraph 6 of the preceding paragraph, has made supplementation or taken corrective action pursuant to regulations and is in compliance with the undertaking it issued.
7. After suspension of trading pursuant to subparagraph 7 of the preceding paragraph, it makes supplementation or takes corrective action pursuant to regulations.
8. After suspension of trading pursuant to subparagraph 8 of the preceding paragraph, completed the supplementation procedures under Article 49-1, paragraph 2, subparagraph 8 within 6 months after the next business day after trading was suspended and presented the relevant evidentiary document to verify that it has done so.
9. After suspension of trading pursuant to subparagraph 9 of the preceding paragraph, has amended the articles of incorporation or organizational documents, and there is no longer any likelihood of impairment to shareholders equity.
10. After suspension of trading pursuant to subparagraph 10 of the preceding paragraph, it makes supplementation or takes corrective action pursuant to the relevant rules and regulations.
If any of the circumstances listed below applies to a primary listed company, the TWSE shall file with the Competent Authority for approval to delist its listed securities pursuant to Article 144 of the Securities and Exchange Act:
1. Dissolution upon cancellation of its organizational registration in its home country.
2. Declaration of bankruptcy by a final and unappealable court ruling in its home country.
3. A ruling of the court in its home country approving reorganization, or dismissing a petition for reorganization, becomes final and unappealable.
4. There is a material change in the company's scope of business such that the TWSE deems it unsuitable to continue listed trading.
5. Six months after trading of its listed shares is suspended pursuant to any subparagraph of paragraph 1, any circumstance in any subparagraph of paragraph 1 still exists.
6. The most recent duly announced and filed consolidated financial report, or a consolidated financial report announced and filed on a supplementary basis, shows a negative net worth.
7. The Competent Authority has ordered suspension of the trading of all of its securities due to a circumstance under Article 156 of the Securities and Exchange Act and the suspension has for been effective for 3 months or longer.
8. Serious breach of the listing contract.
9. The shareholding in it by another exchange- (or OTC-) listed company (including another primary listed or primary-OTC-listed company) accounts for 70 percent or more of its total issued shares or authorized capital.
10. Any other circumstance that necessitates the suspension of the listing of securities.
When trading of the listed shares of a primary listed company has been suspended by the TWSE due to any circumstance in paragraph 1, subparagraph 1, 4, or 8 and the suspension has lasted for a full 6 months during which the company has not taken corrective action, and the TWSE has announced but not yet implemented the delisting of the company's listed shares, if the company then meets the respective requirements listed below, is free of any other circumstance in any subparagraph of the preceding paragraph, and submits relevant substantiating evidence to apply to the TWSE at least 8 working days before the implementation date, then after obtaining the approval of the Competent Authority, the TWSE may announce a waiver of implementation of the company's delisting:
1. If trading of its listed shares was suspended by the TWSE, due to a circumstance in subparagraph 1 or 4 of the preceding paragraph, for a full 6 months during which it failed to take corrective action, and it submits the regularly scheduled financial report that it previously failed to submit before the original deadline, or it duly makes corrections or restates the relevant financial report.
2. After announcement of its delisting due to a circumstance in paragraph 1, subparagraph 8, it completes the supplementary procedures listed under Article 49-1, paragraph 2, subparagraph 8, and submits the relevant documents as evidence.
After the announcement of the delisting of a primary listed company's listed shares, if that company completes supplementation before the delisting implementation date, it shall be eligible to have delisting implementation waived on those grounds only if the company has not previously been given a waiver of implementation of delisting of its listed shares for the same reason.
The Procedures for Handling Applications by Listed Companies for the Delisting of Securities shall apply mutatis mutandis to a primary listed company that applies to delist its listed shares.
If any of the following conditions applies to any foreign stock, Taiwan Depositary Receipt, or foreign bond that is listed with the TWSE by a secondary listed company, the TWSE may suspend the trading of, or delist, that stock, depositary receipt, or bond after reporting to and obtaining the approval of the Competent Authority:
1. The listed shares, or foreign securities represented by Taiwan Depositary Receipts, of a secondary listed company have already been suspended from trading or delisted by the securities exchange on which they are listed.
2. There has been a ruling by a court of the issuer's home country that duly prohibits transfer of the listed shares, foreign securities represented by Taiwan Depositary Receipts, or foreign bonds, of a secondary listed company.
3. A secondary listed company, depositary institution, or issue agent violates government laws or regulations, or the bylaws, rules, or public announcements of the TWSE, or refuses to pay the listing fee, or fails to perform the obligations required by the listing contract.
4. The TWSEs deems it necessary to delist the listed shares, Taiwan Depositary Receipts, or foreign bonds, of a secondary listed comapny, based on any other reason sufficient to affect market order or investor rights and interests.
If due to the expiration of the issuing period, or if in accordance with the provisions of Article 145 of the Securities and Exchange Act the foreign issuer and its depositary institution, or the agent of the foreign issuer applies for the delisting of the listed shares, foreign securities, Taiwan Depositary Receipts, or foreign bonds, of a secondary listed company, such application shall be made to the TWSE for inclusion of its opinion, and then reported to and approved by the Competent Authority before the delisting becomes effective.
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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 delisted. 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 delisting application shall be completed and filed with the TWSE, 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 the TWSE, 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 is free of the circumstances specified in subparagraphs 1, 3, 4, 6, 8, and 12 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 the TWSE'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 the TWSE'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 a listed company will undergo, as a non-surviving company, a statutory merger with an unlisted company, or will undergo, as a non-surviving company, a statutory consolidation with any other company, the listed company shall submit an application, with relevant documentation, to the TWSE no later than 30 business days before the record date of the merger or consolidation. After the TWSE has filed for and received approval from the Competent Authority, trading of the listed company's securities shall be suspended beginning two business days prior to (and non-inclusive of) the book closure date, and its securities shall be delisted from the record date 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 demerged 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 the TWSE 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 filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of merger (or acquisition). If the registration filing fails to become effective, this approval letter shall become void."
If an unlisted/non-OTC company that is acquired or transfers 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 51-1
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Where a single listed company is converted into a financial holding company pursuant to Article 29 of the Financial Holding Company Act, and after the TWSE has reported to and obtained approval from the Competent Authority, the securities of the financial holding company shall be listed for trading from the record date of the share conversion, and the securities of the originally listed company shall be delisted on the same date.
The provisions of the preceding paragraph shall also apply in cases where multiple listed or OTC companies, at least one of which is a listed company, are converted into a single financial holding company. However, if an unlisted/non-OTC company(ies) are converted together with other listed or OTC companies, such unlisted/non-OTC company(ies) shall conform to the following conditions:
1. It shall be free of any of the circumstances specified in subparagraphs 1, 3, 4, 6, 8, or 12 of paragraph 1 of Article 9 of the TWSE's Rules Governing the Review of Securities Listings.
2. Its most 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 have received an unqualified opinion from such CPA.
Where circumstances in paragraph 1 or paragraph 2 apply to a listed company(ies), the listed company whose converted shares are anticipated to account for the greatest proportion of the anticipated issued shares of the financial holding company shall carry out with the TWSE the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, after the TWSE has obtained approval from the Competent Authority, the trading of such company's(ies') original listed securities shall be suspended eight trading days prior to (and non-inclusive of) the record date of the share conversion:
1. An Application for Listing of Shares of a Listed Company Converted into a Financial Holding Company shall be completed and filed, along with all specified attachments, with the TWSE at least fifteen trading days prior to (and non-inclusive of) the record date of the share conversion.
2. A Declaration of Book Closure of Share Transfer Registrations shall be completed and filed by (inclusive of) the application date in the preceding subparagraph. The TWSE shall directly make an announcement to the market of book closure of the shareholder registers of the listed companies participating in the conversion into a financial holding company.
Where a financial holding company is established by means of transfer of operations by a listed company pursuant to Article 24 of the Financial Holding Company Act and the financial holding company holds 100 percent of the shares of the transferred company, an application for amendments to listed securities, accompanied by relevant documentation, shall be filed with the TWSE pursuant to Article 45; however, the provisions of subparagraph 5 of paragraph 1 of Article 50-1 shall not apply to the change in business scope.
Where shares of a single or multiple company(ies) limited by shares are converted into shares of a listed financial holding company pursuant to Article 29 of the Financial Holding Company Act, the financial holding company shall complete the relevant documentation and submit an application to the TWSE according to the procedures in paragraph 3 hereof. After the TWSE has obtained approval from the Competent Authority, the listed securities shall be delisted on the record date of the share conversion and the shares of the financial holding company into which they are converted shall be listed on the same day; provided, any unlisted/non-OTC company(ies) limited by shares participating in the share conversion shall conform to the requirements set forth in subparagraphs 1 and 2 of paragraph 2
Where circumstances set forth in paragraphs 1, 2, or 5 apply to a company limited by shares participating in the share conversion and the company was a listed (or OTC) company before conversion, shares that prior to conversion were already duly placed in centralized custody by the company's directors, supervisors, and major shareholders at the time of initial listing (or OTC listing) shall remain in centralized custody after the conversion until the expiry of the custody period. If a converted company was an unlisted/non-OTC company prior to conversion and it is anticipated that the company's converted shares will account for 10 percent or more of the financial holding company's issued shares and shares anticipated to be issued by it, the centralized custody of shares of the directors, supervisors, and major shareholders of such unlisted/non-OTC company shall be handled in accordance with Article 51, paragraph 4, subparagraph 1. However, this restriction shall not apply where the circumstances set forth in
paragraph 2 of Article 31 of the Financial Holding Company Act exist as a result of the share conversion.
A financial holding company established after conversion and meeting the requirements of Article 13 of the TWSE's Criteria Governing Information to be Published in Prospectuses for Initial Applications for Securities Listing, or a financial holding company converted from a single listed company or multiple listed or OTC companies, may prepare a simplified prospectus.
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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 securities of the original listed company shall be delisted 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 the TWSE's Rules Governing the Review of Securities Listings.
2. There shall not exist any circumstance specified in subparagraphs 1, 3, 4, 6, 8, or 12 of paragraph 1 of Article 9 of the TWSE'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 9, shall not apply where the foreign company complies with Article 27, paragraph 1, subparagraphs 2 and 4 of the TWSE'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 the TWSE'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 the TWSE the various procedures set forth in the subparagraphs hereinbelow on behalf of all the companies whose shares are being converted, and, where the TWSE 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 book closure date; 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 the TWSE no later than 30 trading days prior to (and non-inclusive of) the record date of the share conversion.
2. An Application for Share Transfer Book Closure shall be completed and the TWSE shall directly make an announcement to the market of book closure of the shareholder registers of the listed company(ies) among the companies participating in the share conversion.
Where a listed company, or that company and another company(ies), converts its shares into shares of an unlisted existing company pursuant to Article 31 of the Business Mergers and Acquisitions Act and become that existing company's wholly-owned subsidiary, the listed company shall file an application with relevant documentation to the TWSE no later than 30 business days before the share conversion record date; trading of its securities shall be suspended beginning two business days before (but non-inclusive of) the book closure date, and shall be delisted beginning from the record date of the share conversion.
If the pro forma post-share-conversion consolidated financial statement for the most recent year of the unlisted existing company that receives a transfer of shares through a share conversion under the preceding paragraph shows that more than 50 percent of its total operating revenue or operating income is derived from the listed company that participated in the share conversion, and the unlisted existing company meets all of the requirements in the subparagraphs of paragraph 2, then after the TWSE 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, and after approval has been applied for and obtained from the Competent Authority, the unlisted company's securities may be listed for trading. However, if shares are simultaneously also being converted from a non-exchange-listed/non-OTC-listed company, such company shall also meet the requirements under paragraph 2.
Where pursuant to Article 27 of the Business Merger and Acquisition Act a listed company undergoes a general transfer and assignment, or assigns business or assets under Article 185, paragraph 1, subparagraph 2 of the Company Act, it shall, at least 30 days prior to the assignment record date, file the application with the TWSE, and may remain listed if all required documents have been submitted to the TWSE, and, after review by the managing department, none of the following conditions is found:
1. The pro forma operating revenue or operating income as stated on the pro forma financial statements, excluding the business or assets under assignment, for the most recent two accounting years, has declined by 50% or more, compared with the operating revenue (including discontinued operations) or operating income (including discontinued operations) as stated on the financial statements of the same period.
2. The pro forma operating loss as stated on the pro forma financial statements, excluding the business or assets under assignment, for the most recent two accounting years, has increased by 50% or more, compared with the operating loss (including discontinued operations) as stated on the financial statements of the same period.
Where pursuant to Article 27 of the Business Merger and Acquisition Act a listed company undergoes a general transfer and assignment, or an investment holding company is 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 the TWSE's Regulations Governing the Review of Stock Listing Applications by Investment Holding Companies, and it holds 100 percent of the transferee company's shares, an application shall be filed with the TWSE 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 7, 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 transferee 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 transferee of the shares shall be handled in accordance with Article 51, paragraph 4, subparagraph 1. In addition, a company that applies for exchange listing pursuant to paragraph 7 shall
place shares in centralized custody pursuant to Article 10 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings before listing securities.
When a company carries out a case under paragraphs 1, 2, or 7, after the TWSE 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 filing for registration with the Competent Authority for capital increase and issuance of new shares as a result of share conversion. If the registration fails to become effective, 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 the TWSE.
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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 the TWSE 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 the TWSE'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 the TWSE'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 the TWSE'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 the TWSE'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 12 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 the TWSE's Rules Governing Review of Securities Listings.
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