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Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings(2020.12.08) |
| Date： |
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Article 14
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The term "serious deterioration" as used in Article 9, paragraph 1, subparagraph 7 of the Rules shall mean any of the following circumstances, provided that these circumstances shall not apply when, for the most recent fiscal year, the ratio of the net operating income and profit before tax to share capital of the company applying for stock listing is not lower than 12 percent:
- Operating revenue and net operating income for the most recent fiscal year or the fiscal year in which the application for listing is filed show a marked deterioration relative to other enterprises in the same industry.
- Profit before tax for the most recent fiscal year or the fiscal year in which the application for listing is filed show a marked deterioration relative to other enterprises in the same industry.
- There is continuing negative growth in operating revenues and net operating income for each of the 3 most recent fiscal years.
- There is continuing negative growth in profit before tax for each of the 3 most recent fiscal years.
- The company's products or technology are outdated, and it has no plan for improvement.
The subparagraphs of the preceding paragraph may not apply if the company applying for stock listing in accordance with paragraphs 2 or 3 of Article 4 or Article 5 of the Rules has submitted the explanation of fairness.
For the "other enterprises in the same industry" in paragraph 1, subparagraphs 1 and 2, the securities underwriter shall evaluate and explain the reasonableness of the enterprises sampled for comparison.
The provisions of subparagraphs 3 and 4 of paragraph 1 do not apply to a company already having a concrete improvement plan that is producing positive effects.
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Article 15
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The term "conduct any activities in violation of the principle of good faith" as used in Article 9, paragraph 1, subparagraph 8 of the Rules shall mean any of the following circumstances:
- With respect to the company:
- The bills clearing house announces that a checking account opened by the company applying for listing has been declined, or that checks or negotiable instruments issued by the company with a financial institution as its paying agent were dishonored due to insufficient funds and the records thereof have not yet been cancelled.
- The company has been delinquent in the repayment of any loan extended to it by a financial institution. However, this shall not apply if 3 years has already passed since repayment was completed.
- A criminal sanction has been imposed on the company by a final judgment of violation of the Labor Standards Law, provided that where, within the most recent 2 years, an examination agency has found through re-inspection that the violation has been corrected.
- A final judgment has found the company in violation of the Tax Collection Law.
- The company breaches the warranties and representations made in its application for listing.
- The company has made materially false and misleading representations, violated the law, or lost creditworthiness resulting in injury to the company's interests or the rights and interests of the shareholders or the public.
- With respect to the directors, general manager, or de facto responsible person:
- Any of the circumstances set forth in subparagraphs 1-5 of the preceding paragraph, provided that those subparagraphs shall not apply in the case of delinquency in the repayment of a loan to a financial institution when the delinquency is not of a material nature or when there is a reasonable cause for the delinquency.
- Any commission of a crime under a commercial law such as the Company Act, Banking Act, Insurance Act, Financial Holding Company Act, Securities and Exchange Act, Futures Trading Act, Business Entity Accounting Act, Act Governing Bills Finance Business, or commission of a crime of corruption, malfeasance in office, fraud, breach of fiduciary duty, or embezzlement, for which a sentence of imprisonment for a fixed period or a more severe criminal penalty was handed down by a court judgment.
- Improper acts such as unlawful termination of business of, or material violation of the principle of corporate governance of, another company they are operating.
- Other serious violations of laws or regulations or the principles of good faith.
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Article 27
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As used in Article 27-2, subparagraph 2 and Article 28-8, subparagraph 4 of the Rules, "acted in violation of the principle of good faith" means that any of the following circumstances applies to an applicant company or a company controlled by a foreign issuer applying for TWSE primary listing, or to an incumbent director, supervisor, general manager, or de facto responsible person of the applicant company or controlled company, and the circumstances are material and without reasonable cause:
- Being in arrears in the repayment of any loan extended to it by a financial institution.
- Any commission of a crime under commercial, financial, securities, or tax laws, or commission of a crime of corruption, malfeasance in office, fraud, breach of fiduciary duty, or embezzlement, for which a sentence of imprisonment for a fixed period or a more severe penalty was handed down by a court judgment.
- Having violated the matters declared in the declaration it submitted at the time of application.
- Improper acts such as unlawful termination of business of, or material violation of the principle of corporate governance of, another company they are operating.
- Having been involved in misrepresentation or suffered a loss of credit, causing damage to the interests of the company, the rights and interests of its shareholders, or the public interest.
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Article 28
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The term "serious deterioration" as used in Article 28-8, subparagraph 5 of the Rules shall mean any of the following circumstances, provided that these circumstances shall not apply if the profit before tax of the company applying for stock listing for the most recent fiscal year is not lower than NT$240 million:
- Operating revenue and net operating income for the most recent fiscal year or the fiscal year in which the application for listing is filed show a marked deterioration relative to other enterprises in the same industry.
- Profit before tax for the most recent fiscal year or the fiscal year in which the application for listing is filed show a marked deterioration relative to other enterprises in the same industry.
- There is continuing negative growth in operating revenues and net operating income for each of the 3 most recent fiscal years.
- There is continuing negative growth in profit before tax for each of the 3 most recent fiscal years.
- The company's products or technology are outdated, and it has no plan for improvement.
The subparagraphs of the preceding paragraph may not apply if the company applying for stock listing in accordance with Article 28-1, paragraphs 2, 5 and 6 of the Rules has submitted the explanation of fairness.
For the "other enterprises in the same industry" in paragraph 1, subparagraphs 1 and 2, the securities underwriter shall evaluate and explain the reasonableness of such enterprises sampled for comparison.
The provisions of paragraph 1, subparagraphs 3 and 4 do not apply to a company already having a concrete improvement plan that is producing positive effects.
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