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Amendments

Title:

Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings  CH

Amended Date: 2021.04.07 (Articles 28-2, 28-4, 28-7 amended,English version coming soon)
Current English version amended on 2020.03.30 
Categories: Primary Market > Review

Title: Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings(2008.10.23)
Date:
Article 2-1 Unless it is a state-owned enterprise, any issuer applying for listing of domestic securities shall first have applied for registration of its stock as emerging stock and have had it traded over the counter for not less than six months, and have completed relevant procedures for dematerialized registration of the issued securities, before this Corporation will accept its listing application for processing.
This Corporation will accept for processing an initial application by a foreign issuer for a first-time listing of stock issued by the foreign issuer that is not listed on any foreign securities exchange or securities market ("a primary listing") only after that foreign issuer has first been under advisement regarding listing by the lead securities underwriter, or has applied for registration of its stock as emerging stock and had it traded over the counter, for not less than six months, and the foreign issuer also undertakes that the shares for which it is applying for listing shall be delivered by the book-entry method.
The issuance of stocks delivered by the book-entry method under the preceding paragraph may be done in dematerialized form.
A foreign issuer whose stock already is or has been listed on any major foreign securities exchange or securities market and that is applying for a primary listing of its issued stock may be exempted from the requirement in paragraph 2 that the foreign issuer shall first undergo listing advisement by the lead securities underwriter or apply for registration of its stock as emerging stock and have it traded over the counter for not less than six months; provided that this paragraph shall not apply if the foreign issuer has been delisted from a major foreign securities exchange or securities market for over 6 months.
A foreign issuer that has passed the review of stock listing at any major foreign securities exchange or securities market and that, within the period of validity following the passing of such review, applies for a primary listing of its issued stock may apply on a case-by-case basis to the TAIFEX to reduce the time period specified in paragraph 2 for which the foreign issuer must first undergo listing advisement by the lead securities underwriter or apply for registration of its stock as emerging stock and have it traded over the counter, provided that the time period may be not less than 2 months, and the lead securities underwriter or the lead recommending securities firm may not be changed within such period.
Article 26 Where a foreign issuer and its depositary institution applying for listing Taiwan depositary receipts meet the following requirements, this Corporation may issue documentation evidencing approval of the listing thereof:
1. Number of units of Taiwan depositary receipts to be listed: 20 million units or more, or market value of NT$300 million or more.
2. The registered shares issued by the foreign issuer in accordance with the laws of its home country have been listed on one of the stock exchanges or securities markets approved by the Competent Authority before the listing of the Taiwan depositary receipts under the listing application.
3. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall not be less than the equivalent of NT$600 million.
4. Profitability: It does not have accumulated deficit in the most recent one (1) fiscal year and meets one of the following criteria:
(1) The income before tax for each of the most recent two years represents not less than 6 percent of the shareholders' equity as shown in its final accounts, or the average income before tax for the most recent one year is 6 percent or greater; or
(2) The ratio of income before tax to shareholder's equity in the final accounting for each of the past two (2) fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
(3) The income before tax for each of the most recent two years shall be NT$250 million or more.
5. Dispersion of shareholdings: At the time of proposed listing, the number of holders of the Taiwan depositary receipts in the Republic of China is not less than 1,000 persons, and the total number of units held by holders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50% of the shareholding is not less than 20 percent of the total units issued or is 10 million units or more.
6. There shall be no restriction on transfer of stock represented by Taiwan depositary receipts.
7. The rights and obligations of the holders of stock represented by Taiwan depositary receipts shall be identical with those of other stock of the same class issued at the same time.
The financial information referred to in Subparagraphs 3 and 4 of the preceding paragraph will be examined [by this Corporation] based on the consolidated report or the consolidated financial statement prepared by the said foreign issuer in accordance with the laws and regulations of its home country and the audit opinion issued by a certified public accountant in the Republic of China stating the differences between the accounting principles applicable in the Republic of China and the accounting principles applicable in the home country of the said foreign issuer and the impact of such differences on such financial reports.
Where it has obtained a certificate from this Corporation approving its application for listing Taiwan depositary receipts, this Corporation will, after a filing for effective registration for the issuance of such Taiwan depositary receipts has been made with the Competent Authority, submit the Agreement for Listing Taiwan Depositary Receipts to the Competent Authority for approval, and will publicly announce the listing thereof after obtaining an approval from the Competent Authority.
Article 27 This Corporation may issue documentation evidencing its approval for the listing application for stock issued by a foreign issuer whose stocks are already listed on a foreign securities exchange or securities market ("a secondary listing") if that foreign issuer meets the requirements listed below:
1. Number of shares to be listed: 20 million shares or more, or the market price of the shares to be listed is NT$300 million or more.
2. The registered shares issued by the foreign issuer in accordance with the laws of its home country have been listed on one of the stock exchanges or securities markets approved by the Competent Authority before the listing of the stocks under the listing application.
3. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall be the equivalent of NT$600 million or more.
4. Profitability: It does not have accumulative loss for the most recent one (1) fiscal year and meets one of the following criteria:
(1) The income before tax for the most recent one year represents not less than 6 percent of the shareholders' equity as shown in its final accounts; or
(2) The ratio of income before tax to shareholder's equity in the final accounting for each of the past two (2) fiscal years is 3 percent or higher, or the average is 3 percent or higher, and the profitability in the most recent fiscal year is better year-on-year than in the preceding year.
(3) The income before tax for the most recent two years shall be NT$250 million or more.
5. Dispersion of shareholdings: At the time of the proposed listing, the number of registered shareholders in the Republic of China is not less than 1,000 persons, and the total number of shares held by shareholders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50% of the shareholding is 20 percent or more of the total number of issued shares or is 10 million shares or more.
6. The stock to be listed shall be the same class of stock listed on other stock exchanges or securities markets. The rights and obligations of the holders of stock shall be identical with those of the same class of stock listed on other stock exchange or securities markets. Local holders of the stock shall not be restricted from selling the stock on foreign stock exchanges or securities markets.
The provisions of Paragraph 2 of Article 26 shall apply mutatis mutandis to the financial reports referred to in Subparagraphs 3 and 4 of the immediately preceding paragraph.
Where it has obtained a certificate from this Corporation approving the application of the foreign issuer for the listing of its stock, this Corporation will, after a filing for effective registration of the issuance of such stock made with the Competent Authority, submit the Agreement for Listing Foreign Stock to the Competent Authority for approval, and will publicly announce the listing thereof after obtaining an approval from the Competent Authority.
Article 27-1 This Corporation may issue documentation evidencing approval of listing of the stock or Taiwan depositary receipts of a foreign issuer that applies for a secondary stock listing or that sponsors issuance of Taiwan Depositary Receipts by a depositary institution if the Industrial Development Bureau of the Ministry of Economic Affairs or a professional institution engaged by this Corporation issues an unequivocal opinion it is a technology enterprise, has successfully developed marketable goods or technology, and meets each of the following criteria:
1. Number of shares to be listed or units of Taiwan depositary receipts to be listed: 20 million shares or more, or shares with a market price of NT$300 million or more; or 20 million units or more, or units with a market price of NT$300 million or more.
2. The securities underwriter has provided a written recommendation.
3. The registered shares issued by the foreign issuer in accordance with the laws of its home country have been listed on one of the stock exchanges or securities markets approved by the Competent Authority before the listing of the stocks or Taiwan depositary receipts under the listing application.
4. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall be the equivalent of NT$300 million or more.
5. Profitability: There are neither accumulated deficits in the most recent accounting year nor the period of the most recent financial report audited and certified by a Certified Public Accountant as of the time of application for listing.
6. Dispersion of shareholdings: At the time of the proposed listing, the number of registered shareholders or holders of the Taiwan depositary receipts in the Republic of China is not less than 1,000 persons, and the total number of shares held by the shareholders or holders of the Taiwan depositary receipts other than insiders of the foreign issuer and juristic persons of which such insiders own over 50% of the shareholding is 20 percent or more of the total number of issued shares or is 10 million shares or more.
1. Number of shares to be listed: 20 million shares or more, or shares with a market price of NT$300 million or more.
2. The securities underwriter has provided a written recommendation.
3. The registered shares issued by the foreign issuer in accordance with the laws of its home country have been listed on one of the stock exchanges or securities markets approved by the Competent Authority before the listing of the stocks or Taiwan depositary receipts under the listing application.
4. Shareholders' equity: At the time of application for listing, the shareholders' equity stated on the financial report audited and certified by a Certified Public Accountant for the most recent period shall be the equivalent of NT$500 million or more.
5. Profitability: There are neither accumulated deficits in the most recent accounting year nor the period of the most recent financial report audited and certified by a Certified Public Accountant as of the time of application for listing.
6. Dispersion of shareholdings: At the time of the proposed listing, the number of registered shareholders in the Republic of China shall not be less than 1,000 persons, and the total number of shares held by the shareholders who hold 1,000 shares to 50,000 shares shall represent 20 percent or more of the total number of issued shares, or shall be 10 million shares or more. In addition, the total number of registered shareholders shall be 2,000 persons or more, and the ratio of shareholding by the general public other than the insiders of the company shall not be less than 25 percent of its total issued shares.
7. The stock to be listed shall be the same class of stock listed on other stock exchanges or securities markets. The rights and obligations of the holders of stock shall be identical with those of the same class of stock listed on other stock exchanges or securities markets. Local holders of the stock shall not be restricted from selling the stock on foreign stock exchanges or securities markets.
Article 28-1 This Corporation may issue documentation evidencing listing approval of the application by a foreign issuer for a primary stock listing if that issuer meets all of the requirements listed below:
1. It complies with regulations in connection with the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area.
2. At the time it applies for listing, the applicant company or any of its controlled companies shall have an operational track record of three years or longer.
3. The company scale meets one of the following criteria:
(1) At the time of application for listing, paid-in capital or shareholders' equity is NT$600 million or higher.
(2) At the time of listing, market capitalization is NT$1.6 billion or higher.
4. Its cumulative income before tax for the most recent three fiscal years is NT$250 million or higher, and its income before tax for the most recent fiscal year is NT$120 million or higher, and it does not have any accumulated deficit.
5. Its number of shareholders of record is 1,000 or more, and the number of shareholders other than insiders of the foreign issuer and juristic persons of which such insiders own over 50% of the shareholding is no less than 500 and their total shareholdings constitute 20 percent or more of the total issued shares or not less than 10 million shares.
6. It is recommended, in writing, by two or more securities underwriters.
"Controlled company" in the preceding paragraph means any of the following circumstances:
1. Any controlled company in which the foreign issuer directly holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
2. Any controlled company in which the foreign issuer, indirectly through a subsidiary company, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
3. Any controlled company in which the foreign issuer directly, or indirectly through a subsidiary, holds more than 50 percent of the issued voting shares or has contributed more than 50 percent of the capital.
If a foreign issuer is a professional investor and its purpose is to directly, or indirectly through a subsidiary company, control the operations of a holding company or companies, 70 percent or more of that foreign issuer's operating income in its consolidated financial statement shall be derived from a controlled company or companies.
Article 28-2 The securities underwriter referred to in the preceding article shall be registered as a member of the Taiwan Securities Association and establish a place of business within the Republic of China.
A lead securities underwriter must undertake, in writing, that it has performed due diligence procedures, that the evaluation report, other documentation, and attachments it issues all are true, and that it has not concealed or omitted any material financial or operating information regarding the foreign issuer.
The foreign issuer and its directors shall assist the securities underwriter to conduct due diligence procedures, and provide any required information.
A foreign issuer shall continuously engage a lead securities underwriter from the date of listing to the end of the two subsequent fiscal years to assist it in compliance matters regarding Republic of China securities acts and regulations, the bylaws, rules, and public announcements of this Corporation, and the listing contract.
Article 28-6 If a foreign issuer that is a subsidiary of a parent company applies to list its stock as a primary stock listing, and complies with the provisions of this Chapter but cannot meet all of the following requirements, and this Corporation deems it inappropriate for listing, this Corporation shall not approve its stock listing:
1. It shall submit the consolidated financial statement of the parent company and all of its subsidiaries prepared in accordance with Republic of China, United States, or international accounting standards. If that statement is not prepared in accordance with ROC financial accounting standards, the foreign issuer shall disclose any items with material discrepancies and the amount of any monetary impact of those discrepancies, and an opinion expressed by an ROC-licensed CPA regarding those items.
2. As calculated based on the consolidated financial statement submitted pursuant to the preceding subparagraph, total shareholders' equity in the most recent fiscal year shall be NT$1 billion or higher, and each of operating income and income before tax in each of the most recent two fiscal years shall be three percent or more of total shareholders' equity, provided that the aforesaid profitability percentages need not apply if the amount of purchases/sales transactions between the foreign issuer and its parent company in the fiscal year in which it applies for listing and the most recent fiscal year do not constitute 10 percent of the foreign issuer's total purchases/sales.
3. The total holdings of its shares by the parent company and its affiliated companies, and their corporate directors, supervisors, and representatives; shareholders holding over 10 percent of the total number of shares; and by their related parties may not be more than 70 percent of the total number of its shares. If those total holdings exceed 70 percent, the foreign issuer shall reduce that percentage to 70 or lower when it conducts the pre-listing public sale of its shares.
4. In the fiscal year in which it applies for listing and the most recent fiscal year, it does not derive more than 50 percent of its operating revenue, or more than 70 percent of its principal raw materials, principal products, or the amount of its total purchases, from the parent company, provided that these restrictions shall not apply if due to special industry characteristics, conditions of supply and demand in the market, or another legitimate reason.
Article 28-10 A foreign issuer applying for a primary stock listing shall first allocate 10 percent of its total number of shares as recorded in its listing application documentation to a cash capital increase through a new share issue and engage a securities underwriter to conduct a pre-listing public sale of those shares under mutatis mutandis application of the provisions of the Securities and Exchange Act, Article 71, paragraph 1 regarding securities underwriting on a firm commitment basis.