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Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings(2011.12.09) |
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Article 28-1
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The TWSE may issue documentation evidencing listing approval of the application by a foreign issuer for a TWSE primary 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 3 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 net income before tax for the most recent 3 fiscal years is NT$250 million or higher, and its net 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 percent 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. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
7. It is recommended, in writing, by two or more securities underwriters.
Where a foreign issuer applies for a TWSE primary listing of stock, if, for the foreign issuer or a company controlled by it that accounts for 50 percent of its overall operating revenue, there has been issued an unequivocal opinion by the Industrial Development Bureau, Ministry of Economic Affairs, or a TWSE-designated professional institution, indicating that the company is a technology enterprise and has successfully developed products or technology and those products or technology are moreover marketable, if the foreign issuer meets the requirements of the following subparagraphs, the TWSE may issue evidentiary documentation indicating its approval of the listing:
1. It complies with the relevant provisions of the Act Governing Relations Between Peoples of the Taiwan Area and the Mainland Area.
2. At the time of the listing application, the applying company or the controlled company that is a technology enterprise shall have a business record of one full fiscal year or more.
3. At the time of the listing application, the paid-in capital or shareholders' equity reaches NT$300 million or more, or the market capitalization reaches NT$800 million or more.
4. At the time of the listing application, the net worth on the most current financial report audited and attested by a certified public accountant is not lower than two-thirds of the capital stock, with proof that the company has operating capital sufficient for 12 months of operation following the listing. In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the issuer’s net worth shall be not less than two-thirds of the sum of the share capital plus capital reserves minus original issue premium.
5. Its number of shareholders of record is 500 or more, and the total shareholdings of the shareholders of record other than insiders of the foreign issuer and juristic persons of which such insiders own over 50 percent of the shareholding constitute 20 percent or more of the total issued shares or not less than five million shares.
6. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
7. It is recommended by two or more securities underwriters.
When a foreign issuer applies for a TWSE primary listing of stock, if its operating revenue derived from construction business represents 20 percent or greater of its total operating revenue, or its gross profit derived from construction business represents 20 percent or greater of its total gross profit, or its operating revenue or gross profit derived from construction business is more than that derived from other business items, during the most recent 2 fiscal years, it shall meet all of the requirements provided in Articles 16 and 17 herein, in which case, the TWSE may issue evidentiary documentation indicating its approval of the listing thereof; in the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the paid-in capital requirement of Article 16, paragraph 1, subparagraph 2 shall be calculated on the basis of shareholders’ equity. However, the foreign issuer may be exempt from the requirements of Article 17, subparagraphs 1 to 3 herein if the construction company and the foreign issuer are not related parties, and the foreign issuer has established adequate internal control systems and tender procedures for contracting projects out, and the payment terms comply with usages of trade. "Controlled company" in paragraphs 1 and 2 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.
The effect of minority interest in the net income (loss) shall be deducted from the calculation of the net income before tax on the consolidated financial statement under paragraph 1, subparagraph 4.
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Article 28-6
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If a foreign issuer that is a subsidiary of a parent company applies for TWSE primary listing of its stock, and complies with the provisions of this Chapter but cannot meet all of the following requirements, and the TWSE deems it inappropriate for listing, the TWSE 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 2 fiscal years shall be 3 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. The same does not apply, however, if the applicant company meets the following criteria:
(1) Where it has an audit committee, or has independent directors constituting more than one half of the total number of directors.
(2) Where one or more persons, other than those subject to the shareholding restriction in terms of the total number of shares as set out in this subparagraph, hold 300 million shares or more. In the case of a foreign issuer whose shares have no par value or a par value other than NT$10, the same shall apply where one or more persons, other than those subject to the shareholding restriction in terms of the total number of shares as set out in this subparagraph, have the equivalent of NT$6 billion or more in shareholders’ equity.
4. It shall have at least three independent directors.
5. 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.
6. If the stock of the parent company is already traded on the TWSE (or the GTSM), at the time of its application for TWSE listing, the pro forma operating revenue or operating income as stated in the pro forma consolidated financial statements for each of the most recent 4 quarters, excluding the financial data for the applicant company, and reviewed by a CPA, was not down by 50 percent or more from the operating revenue or operating income stated in the consolidated financial statements for the same period, and the parent company has not transferred any material customers or business within the most recent 2 fiscal years.
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Article 28-7
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A foreign issuer that applies for a TWSE primary listing of its stock shall in writing undertake as follows:
1. When the TWSE deems it necessary to audit the foreign issuer's financial operations or money flow, the foreign issuer is willing to fully cooperate with the investigations of the TWSE and any attorney, CPA, or professional institution designated by the TWSE, to provide any and all information required by the TWSE, and agrees to be responsible for payment of investigation expenses.
2. The foreign issuer will appoint a professional shareholder services agent in the Republic of China to handle shareholder services, will designate a litigious and non-litigious agent within the Republic of China to handle matters relating to compliance with ROC securities acts and regulations, the bylaws, rules, and public announcements of the TWSE, and the listing contract, and will continuously engage a lead securities underwriter from the date of listing to the end of the 2 subsequent fiscal years to assist it in complying with ROC securities acts and regulations, and the listing contract. However, if the foreign issuer applies for TWSE primary listing pursuant to Article 28-1, paragraph 2, the subsequent period in which the lead securities underwriter is continuously engaged for assistance may not be less than three fiscal years.
3. Shall add important matters concerning the protection of shareholders' equity in its company bylaws or organizational documents.
4. The shares under the listing application shall be delivered by the book-entry method.
5. After listing, it will continue to comply with ROC securities acts and regulations, the listing contract, and the bylaws, rules, and public announcements of the TWSE.
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