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Amendments

Title：

Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings  CH

Amended Date： 2024.03.11 (Articles 4, 28-1, 40 amended,English version coming soon)
Current English version amended on 2024.01.12 
Categories： Primary Market > Review
Article Content Chapter Content Search Article No. Search Legal Basis Subordinate Legislation Amended Article Attachment Legislative History Chinese

Title： Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings(2020.12.08)
Date：
Article 4     Where an issuing company applying for the listing of its stock meets the criteria listed below, the TWSE will agree to list its stock:
  1. Duration of corporate existence: It has been incorporated and registered under the Company Act for at least three years at the time of the application for listing; provided, this restriction shall not apply to public (state-owned) enterprises or to privatized public enterprises.
  2. Paid-in capital: At the time it applies for listing, its paid-in capital is NT$600 million or more and the number of shares of its publicly offered and issued common stock is 30 million shares or more.
  3. Profitability: The profit before tax in its financial reports meets either of the following criteria, and it does not have any accumulated deficit in the final accounting for the most recent fiscal year:
    1. The profit before tax for the most recent two fiscal years represents six percent or greater of the share capital stated on the financial report for the annual final accounts.
    2. The profit before tax for the most recent two fiscal years represent six percent or greater of the amount of paid-in capital in its final accounts and the profitability for the most recent fiscal year is greater than that for the immediately preceding fiscal year; or
    3. The profit before tax for the most recent five years represents three percent or greater of the share capital stated on the financial report for the annual final accounts.
  4. Dispersion of share ownership: The number of registered shareholders is 1,000 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, the number of registered shareholders is at least 500, and the total number of shares they hold is 20 percent or greater of the total issued shares, or at least 10 million.
  5. An issuer listed in the food industry or whose income from catering business occupies at least 50% of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
    Where an issuing company applying for the listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the preceding paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flows from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    Where an issuing company applying for the listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The company meets the conditions set forth in subparagraphs 1, 2, 4 and 5 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the capital stock identified in the financial report.
    The TWSE will agree to list the stock of an issuing company applying for the listing of its stock in accordance with the second paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, except where its stock is already listed and traded on the GreTai Securities Market.
Article 5     Where the central authority in charge of the enterprise concerned has issued an unequivocal opinion certifying that the issuing company applying for the listing of its stock is a technology-based enterprise or a cultural and creative enterprise with market potential, and the said issuing company meets the criteria listed below, the TWSE will agree to list its stock:
  1. At the time it applies for listing, its paid-in capital is NT$300 million or more and the number of shares of its publicly offered and issued common stock is 20 million shares or more.
  2. (deleted)
  3. It is recommended in writing by the securities underwriter.
  4. Its net worth on its financial reports for the most recent quarter represents two-thirds or greater of the share capital stated on the financial report.
  5. The number of registered shareholders is 1,000 or more. Excluding company insiders and any juristic persons in which such insiders hold more than 50 percent of the shares, the number of registered shareholders is at least 500.
Article 19     Where, upon application, a subsidiary, other than a government-owned enterprise, applies for the listing of its stock but is unable to meet the requirements set forth in all the subparagraphs below, the TWSE shall disagree to the listing, notwithstanding the fact that its application meets the criteria set forth in these Rules:
  1. A consolidated financial statement of the parent company and all of its subsidiaries which is prepared in accordance with the accounting principles of the home country of its parent company and an audit opinion issued by a CPA 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 parent company and the impact of such differences on such financial statement shall be submitted along with the application, unless the applicant company is applying for listing pursuant to paragraph 2 or 4 of Article 4, or Article 5, Article 6, or Article 6-1, or in the fiscal year of the application for listing and the most recent fiscal year the amount of purchase/sales transactions between it and its parent company is less than 10 percent of its total purchase/sales amount.
  2. According to the consolidated financial statement submitted pursuant to the preceding paragraph, the total amount of net worth shall be NT$1 billion or more in the most recent fiscal year and the profit before tax shall each represent 3 percent or greater of the total amount of net worth in each of the most recent two fiscal years, provided that such shall not apply where such event is the product of business nature, market demand and supply condition, government policy, or any other reasonable cause.
  3. The total number of shares of the applicant company held by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, shall not exceed 70 percent of the total number of its issued shares. If this 70 percent limit is exceeded, the applicant company shall conduct a pre-listing initial public offering to reduce the percentage of shares held by the aforesaid persons to 70 percent or lesser. However, the same does not apply where persons, other than those restricted by this subparagraph with respect to the total amount of shareholdings, hold a total of no less than 300 million shares in the applicant company.
  4. (deleted)
  5. The applicant company's operating revenue derived from its parent company in the fiscal year of the application for listing and in the most recent fiscal year shall not exceed 50 percent of its operating revenue; its principal raw materials or principal products or total amount of purchases [obtained from its parent company] during such periods shall not exceed 70 percent of its purchases. However, this restriction shall not apply where the cause is characteristics of its business, market demand and supply conditions, government policy, or any other reasonable causes.
  6. If the stock of the parent company is already traded on the TWSE (or the TPEx), at the time of its application for TWSE listing, the pro forma operating revenue or net 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 two fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.
     When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interest of the shareholders of the parent.
Article 20      An investment holding company applying for listing of its stock may apply only as a professional investment company and only with the purpose of controlling the business operations of other companies, and shall be approved for the listing of its stock if it meets the requirements of the following subparagraphs:
  1. Years of incorporation: Three full years have elapsed following registration of incorporation, or the years of actual operation of any of its held companies exceed three years.
  2. Equity: The net worth on the financial reports for the most recent quarter reaches NT$1 billion or more.
  3. Profitability: The ratio of profit before tax to net worth as stated on the financial report for each of the most recent two fiscal years reaches three percent or higher.
  4. Dispersion of share ownership: The standard of Article 4, subparagraph 4 is met.
  5. The company does not engage in any business other than investment.
  6. The company shall have two or more held companies, and the held companies may not be professional investment companies and may not hold shares of the applicant company.
  7. At least 70 percent of the net operating income in the financial reports shall come from the held companies.
  8. The sum total of the book value of its investment in the held companies shall equal 50 percent or more of each of its investments accounted for using equity method and net worth, as stated in the parent company only financial report.
  9. The company has not engaged in any borrowing or lending of funds with a non-financial institution.
  10. The ratio of total equity to total assets in the financial report for the most recent fiscal year shall reach one-third or more.
  11. In the event of an issuer listed in the food industry or whose income from catering business occupies at least 50% of its total operating revenue in the last fiscal year, at least one of the held companies that it holds shall comply with Article 4, paragraph 1, subparagraph 5.
     A held company shall mean any of the following:
  1. An invested company of which an investment holding company directly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  2. An invested company of which an investment holding company through its subsidiaries indirectly holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  3. An invested company of which an investment holding company directly, and indirectly through its subsidiaries, holds more than 50 percent of the issued voting shares or has made a capital contribution of more than 50 percent.
  4. A company of which an investment holding company directly or indirectly elects or appoints more than half of the directors for the board of directors.
     If an investment holding company applying for listing of its stock has a net worth on the financial reports for the most recent quarter reaching NT$800 million or more, and its held company or companies contribute 50 percent of its total operating revenues, and the central competent authority for the relevant industry has provided an unequivocal opinion stating that such company or companies are technology enterprises or cultural and creative enterprises with market potential, it may be exempted from the application of paragraph 1, subparagraphs 1 and 3.
     If the held company is required to be a professional investment company because the investment holding company has invested via a third location, it may be exempted from application of the provision of paragraph 1, subparagraph 6 that a held company may not be a professional investment company.
     Notwithstanding that an investment holding company applying for the listing of its stock meets the listing criteria set forth in these Rules, the TWSE shall disagree to its listing if the circumstance in Article 9, paragraph 1, subparagraph 8 applies to any of its held companies, and the TWSE may disagree to its listing if any of the circumstances in Article 9, paragraph 1, subparagraphs 1, 3, 4, 6, or 12 applies to any of its held companies and the TWSE deems the listing inappropriate.
     A held company more than 70 percent of whose shares are held by an investment holding company that is already domestically listed on the TWSE (or TPEx) may not apply for domestic TWSE listing.
Article 28-1     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. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  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 net worth is NT$600 million or higher.
    2. At the time of listing, market capitalization is NT$1.6 billion or higher.
  4. Its cumulative profit before tax for the most recent three fiscal years is NT$250 million or higher, and its profit 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. An issuer listed in the food industry or whose income from catering business occupies at least 50% of its total operating revenue in the last fiscal year shall comply with the following:
    1. Establish a laboratory to engage in self-inspection.
    2. Deliver the raw materials, semi-finished products and finished products whose inspection is outsourced, to a laboratory or inspection institution certified or accredited by the Ministry of Health and Welfare, Taiwan Accreditation Foundation or an institution engaged by the Ministry of Health and Welfare, for inspection.
    3. Request a reasonable opinion from an independent specialist on its food safety monitoring plan, inspection cycle, items for inspection etc.
  7. The number of shares planned to be listed and traded shall exceed 50 percent of the total number of its issued shares.
  8. 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 contribute 50 percent of its overall operating revenue, there has been issued an unequivocal opinion by the Ministry of Economic Affairs, Council of Agriculture, Executive Yuan, or a TWSE-designated professional institution, indicating that the company is a technology enterprise or a cultural and creative enterprise with market potential, 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. However, if individuals, juristic persons, groups, or other institutions from the Mainland Area have direct or indirect shareholding or capital contribution exceeding 30 percent in, or effective control over, the foreign issuer, special-case permission shall be obtained from the competent authority.
  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 net worth 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 CPA 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 as stated in the financial reports represents 20 percent or greater of its total operating revenue, or its gross profit from operations 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 two 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 requirement of Article 16, paragraph 1, subparagraph 2 shall be calculated on the basis of the net worth reaching NT$600 million or more.
    "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.
  4. A company of which a foreign issuer directly or indirectly elects or appoints more than half of the directors for the board of directors.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$5 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$5 billion and is better than the previous fiscal year.
  3. Its cash flow from operating activities in the most recent fiscal year is positive.
  4. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    Where a foreign issuer applying for the primary listing of its stock has a market value of NT$6 billion or more and meets the criteria listed below, the TWSE will agree to list its stock:
  1. The issuer meets the conditions set forth in subparagraphs 1 and 2, item 1 of subparagraph 3 and subparagraphs 5 to 8 of the first paragraph.
  2. Its operating revenue in the most recent fiscal year exceeds NT$3 billion and is better than the previous fiscal year.
  3. The net worth on the financial reports for the most recent quarter is not lower than two-thirds of the share capital identified in the financial report.
    The TWSE will agree to list the stock of a foreign issuer applying for the primary listing of its stock who shall meet the conditions in paragraph 1, subparagraph 3, item 2, or whose application is filed in accordance with the fifth paragraph or the preceding paragraph only if the value of the number of the securities to be listed and available for trading multiplied by the offering price for the price at which the security opens on its first day in the initial public offering has met the minimum requirement on the market value applicable to its application, except where its stock is already listed and traded on the GreTai Securities Market.
    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 held company or companies, 70 percent or more of that foreign issuer's net operating income in its consolidated financial statement shall be derived from a controlled company or companies.
Article 28-6     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, 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. If that statement is not prepared in accordance with the applicable regulations governing the preparation of financial reports adopted by the competent authority for the relevant industry, 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, unless the applicant company is applying for listing pursuant to Article 28-1, paragraph 2, 5 or 6, or in the fiscal year of the application for listing and the most recent fiscal year the amount of purchase/sales transactions between it and its parent company is less than 10 percent of its total purchase/sales amount.
  2. As calculated based on the consolidated financial statement submitted pursuant to the preceding subparagraph, the profitability shall meet the requirement in Article 28-1, paragraph 1, subparagraph 4, provided that the aforesaid profitability requirement need not apply where such event is the product of business nature, market demand and supply condition, government policy, or any other reasonable cause.
  3. The total holdings of its shares by the parent company and all of its subsidiaries, and by those companies' directors, supervisors, representatives, and greater than 10 percent shareholders, and by related parties thereof, 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, 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 the net worth.
  4. (deleted)
  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 TPEx), at the time of its application for TWSE listing, the pro forma operating revenue or net 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 two fiscal years. However, this need not apply if the parent company and the subsidiary have different business types, industrial classifications, or product types, and moreover are not mutually competitive, or if it resulted from another reasonable cause.
     When a subsidiary applies for TWSE listing pursuant to the proviso of subparagraph 6 of the preceding paragraph, any transfer of shares within the three years prior to the application for TWSE listing for purposes of reducing the parent company's shareholding in the subsidiary shall have been conducted in a manner in which the pre-emptive subscription right is given to the original shareholders of the parent company or another manner not detrimental to the rights and interests of the shareholders of the parent.
Article 28-13     A foreign issuer that privately places securities may not apply for initial listing of such privately placed securities during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. If, once the period of restriction of transfer has elapsed, the issuer intends to apply for listed trading of the securities, it may file such application only after first supplementally completing public issuance examination and approval procedures with the Competent Authority.
    Securities that are privately placed by a primary listed company and securities subsequently distributed, converted, or subscribed may not be listed during the period of restriction of transfer as set forth in Article 43-8, applied mutatis mutandis under Article 165-1, of the Securities and Exchange Act. Once the period of restriction of transfer has elapsed, the company may file a listing application only after first applying to the TWSE for a letter of approval and, on the basis of that letter, supplementarily completing issuance examination and approval procedures with the Competent Authority. However, the company may be exempted from the requirement of carrying out public sale prior to listing under Article 28-10.
    When applying to the TWSE for a letter of approval under the preceding paragraph, a primary listed company shall meet the standards in each of the following subparagraphs:
  1. The financial reports for the most recent period and the most recent fiscal year show an absence of accumulated deficit.
  2. Its cumulative profit before tax for the most recent three fiscal years is NT$160 million or higher, and its profit before tax for the most recent fiscal year is NT$80 million or higher.
  3. A CPA has audited the consolidated financial reports for the most recent two fiscal years and has signed and issued an audit report containing an unqualified opinion. If an audit report containing other than an unqualified opinion is issued, it does not affect the fairness of presentation of the financial reports.
  4. None of the events set out in Article 28-8, subparagraphs 1, 3, 4, or 8 is present.
  5. The fund utilization plan has been completely executed for the funds obtained from the private placement of securities, and has yielded reasonable benefits; provided, this restriction shall not apply if there is legitimate reason.
  6. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year shall be better than that for the fiscal year before the shareholders meeting resolved on the private placement of securities, providedsuch restriction on profitability does not apply where theaverage of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, better than that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4% or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, the privately placed shares have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
    2. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, the securities have not been transferred, or have been transferred to the holding of non-insider(s) or non related party(ies) of the applicant company.
  7. For an applicant company that had net income after tax and no accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the ratio of profit before tax to year-end share capital for the most recent fiscal year may not be lower than 200 percent of that for the fiscal year before the shareholders meeting resolved on private placement of securities, providedsuch restriction on profitability does not apply where theaverage of the three fiscal years prior to the application is, due to a change in the business cycle of the industry concerned, not lower than 200 percent of that of the fiscal year or three fiscal years before the shareholders meeting resolved on the private placement of securities and reaches 4% or above:
    1. The private placement solely introduced strategic investors, and at the time the company applies for the letter of approval, part or all of the privately placed shares have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    2. The private placement did not introduce strategic investors.
    3. There is a likelihood of an event under Article 7 or 8 of the Regulations Governing the Offering and Issuance of Securities by Foreign Issuers, but the applicant company for a legitimate reason is unable to reasonably correct the situation and unable to conduct the public offering, and is urgently in need of capital, and is granted permission for the private placement by the TWSE, and at the time the company applies for the letter of approval for listing of the privately placed securities, part or all of the securities have been transferred to the holding of insider(s) or related party(ies) of the applicant company.
    4. The conducting of the private placement of securities was not done in accordance with the Directions for Private Placements, where the circumstances were serious.
  8. For an applicant company that had net loss or accumulated deficit for the fiscal year before the shareholders meeting resolved on the private placement of securities, if any of the circumstances listed below exists, then in addition to meeting the profitability requirements of subparagraph 2, the profit before tax for the most recent fiscal year shall be NT$120 million or higher:
    1. Any insider or related party of the company participates in the private placement, and the subscription price does not comply with the percentage requirements set out by the Competent Authority.
    2. The private placement of securities is not carried out in accordance with the Directions for Private Placements, and the circumstances are serious.
  9. Others consistent with the provisions of the Competent Authority.
    In the provisions regarding the ratio of profit before tax to year-end share capital in paragraph 3, subparagraphs 6 and 7, if the stock of a primary listed company has no par value or a par value per share other than NT$10, the calculation shall be of the ratio of profit before tax to the sum of the share capital plus capital surplus, additional paid-in capital.
    Prior to the listing, all privately placed shares held by non-strategic investors, insiders, and related parties as referred to in paragraph 3, subparagraph 7 or 8, shall be placed in central custody with a central securities depository enterprise incorporated with the approval of the Competent Authority. One half of the shares placed in central custody may be withdrawn only after the end of a 6-month period starting from the date of commencement of listed trading; the remaining shares may be withdrawn in full only after the end of a 1-year period starting from the date of commencement of listed trading. The custodial agreement may not be rescinded during the custody period, and the shares in central custody may not be transferred or pledged. The validity of central custody shall not be affected by a change of the identity of the holders of shares in central custody.
    Where the Competent Authority has restricted the listed trading of securities issued by a primary listed company, privately placed securities of the company may not be listed until such restriction has been lifted, even if the period of restriction of transfer of the privately placed shares has elapsed.