| Title： |
Supplementary Provisions to the Taiwan Stock Exchange Corporation Rules for Review of Securities Listings(2021.03.31) |
| Date： |
|
|
Article 1
|
These Supplementary Provisions are promulgated pursuant to Article 41, Paragraph 1 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings ("the Rules").
|
|
Article 6-2
|
The term "market value" as used in Articles 4, 28-1, and 29 of the Rules refers to the value of the number of shares to be issued for listing as identified in the written application for listing, multiplied by the following stock price, whichever is lower:
- the offering price as mutually agreed with the securities underwriter; or
- for stocks registered as emerging stocks for over-the-counter trading, the average closing price on the 30th, 90th or 120th business day prior to the first day of listing, whichever is lower.
In the case where a company whose stock is already listed and traded on the GreTai Securities Market applies for the listing or for the primary listing of its stock, the market value shall be the value of the number of shares to be issued for listing as identified in the written application for listing, multiplied by the average closing price on the 30th, 90th or 120th business day prior to the first day of listing or primary listing, whichever is lower.
The term "total issue amount" as used in Article 8, paragraphs 1 and 2, Article 14, paragraph 2, subparagraph 1, Article 28-12, paragraph 2, and Article 29, paragraph 1, subparagraph 2 of the Rules refers to the product of the par value multiplied by the number of shares issued of the same type of stock if the issuing company issues par-value stocks; the product of the price of the same issue multiplied by the number of shares issued of the same type of stock if the issuing company issues non-par-value stocks; and the sum of all products if stocks are issued in installments.
|
|
Article 17-1
|
The term "to allocate a percentage" as used in Article 11, paragraph 1 of the Rules shall mean:
- The first time a public company applies to list its stock on the TWSE, it shall allocate to an underwriter for public sale at least 10 percent of the shares it is planning to list, provided that where this would require the allocation of 20 million shares or more for underwriting, the company may allocate a minimum of 20 million shares for public sale.
- Where a public company has traded its stock on the TPEx as emerging stock for less than 2 years, the number of shares it provided for subscription by the recommending securities firm for such emerging stock may be deducted from the number of shares it provides for underwriting hereunder, provided that the deduction shall not exceed 30 percent of the shares provided for underwriting hereunder.
The "percentage" in Article 36 of the Rules may be lower than neither 3% of the total shares to be listed nor 500,000 shares, and is limited to shares of publicly offered and issued common stock.
The "percentage" in Article 40 of the Rules shall apply mutatis mutandis to paragraph 1, subparagraph 1 of the Article.
|
|
Article 17-2
|
The "transfers of equity conducted… for purposes of reducing its shareholding ratio in the company applying for listing" as in Article 9, paragraph 1, subparagraph 11, Article 28-8, paragraph 1, subparagraph 7, and Article 31, paragraph 1, subparagraph 10 of the Rules and “transfers of shares … for purposes of reducing the parent company's shareholding in the subsidiary” as in Article 19, paragraph 2, Article 28-6, paragraph 2, and Article 33, paragraph 2 of the Rules include the sale of equity interests and the waiver of pre-emptive rights to new shares in a cash capital increase in favor of subscription by other specific persons.
The phrase "have damaged shareholders' equity", as used in Article 9, paragraph 1, subparagraph 11, Article 28-8, paragraph 1, subparagraph 7, and Article 31, paragraph 1, subparagraph 10 of the Rules, and the phrase "detrimental to the rights and interests of the shareholders of the parent" in Article 19, paragraph 2, Article 28-6, paragraph 2, and Article 33, paragraph 2 of the Rules, mean a transfer of equity interests that clearly involves an unreasonable circumstance with respect to the assignee or the trading price of the sale, the issue price of a cash capital increase through a new share issue, or the waiver of pre-emptive rights to new shares in a cash capital increase in favor of subscription by other specific persons, thereby profiting specific persons and creating the likelihood of damage to the rights and interests of the shareholders of the TWSE (or TPEx) listed company.
|
|
Article 22
|
The term "principal business or products" as used in Article 18, paragraph 1, subparagraph 1, Article 28-5, paragraph 1, subparagraph 1, and Article 32, paragraph 1, subparagraph 1 of the Rules shall mean those items which account for 30 percent or more of total operating revenues in the 2 most recent fiscal years. Judgments regarding the term "mutual competition" shall be made on the basis of an overall assessment of factors such as the type of enterprise, the substitutability of products, the extent of product differentiation in the future, the business plan, and target customers. The term "independent operational decision-making ability" means that not one-third or more of the directors of the applicant company are also directors of other companies within the same group enterprise.
|
|
Article 30
|
Where a foreign issuer applies for primary listing on the Taiwan Innovation Board in accordance with Chapter 4 of the Rules, the “material labor dispute sufficient to affect its normal financial and business operations” as in Article 31, paragraph 1, subparagraph 3 of the Rules shall mean any of the following:
- the occurrence of a serious labor dispute
- the failure to contribute to or pay statutory labor insurance at important operation outlets
- the occurrence of a serious occupational accident due to inadequate safety or health facilities, rendering of a disposition by an administrative authority or court for violation of safety and health related laws and regulations requiring the foreign issuer to suspend its operations in part or in whole, or installation of dangerous machinery or of equipment that have not passed inspection, except where re-inspection conducted by the inspection agency upon application made is passed.
The "material environmental pollution sufficient to affect its normal financial and business operations” as in the same subparagraph shall mean any of the following with respect to the company or its business activity-related venues:
- failure to obtain permits required by laws and regulations for pollution installation, operation, or discharge
- an environmental pollution event resulting in the fiscal year of the listing application or in the most recent fiscal year in the rendering by the environmental protection authority of an administrative disposition imposing successive penalties or requiring rectification within a prescribed time limit, and rectification is not completed
- a public nuisance dispute where the company has no effective pollution control equipment, or is unable to provide records of normal operation and regular maintenance of pollution prevention equipment
- an environmental pollution event in which the environmental protection authority or court orders the company to stop work or to suspend or terminate its operations, or revokes its pollution-related permits
- arbitrary disposal of waste, or failure to store, clean up, or process waste in accordance with regulations, or occurrence of a serious pollution event during the treatment process, causing death, serious physical injury, harm to human health resulting in illness
- manufacturing, processing, or importation by the juristic person of banned or counterfeit environmental agents, for which its responsible person is convicted of the violation by a final and unappealable judgment
The phrase “has not made improvement” in the same subparagraph means the continuance any of the above circumstances after the date the TWSE accepts and handles the company's listing application.
|
|
Article 31
|
Where a foreign issuer applies for primary listing on the Taiwan Innovation Board in accordance with Chapter 4 of the Rules, the failure “to effectively implement its written accounting system, internal control system, or internal audit system” as in Article 31, paragraph 1, subparagraph 5 of the Rules shall mean any of the following:
- where during the year in which the listing application is filed the company fails to establish a sound written accounting system in conformity with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards, or relevant internal system laws and regulations
- where the TWSE finds in accordance with regulations governing listing review procedures that the company fails to operate reasonably under its written accounting, internal control, and internal audit systems
The failure “to prepare financial reports in accordance with relevant laws and regulations and generally accepted accounting principles” as in the same subparagraph means any of the following:
- where a financial report is not prepared in conformity with the regulations issued by the competent authority to govern the preparation of financial reports for the relevant industry, the U.S. Generally Accepted Accounting Principles or International Financial Reporting Standards, and the CPA issues an audit report containing an adverse opinion or disclaimer of opinion, or the CPA issues an audit report containing a qualified opinion affecting the fair presentation of the financial report
- where the competent authority instructs the company by letter to rectify its financial reports and the company fails to do so
- where the TWSE reviews by requisition the audit working papers of the CPA and discovers significant defects therein, so it is impossible to determine whether the financial reports are a fair presentation
|
|
Article 32
|
The conditions where listing is considered inappropriate as in Article 31 of the Rules that are applicable to an application under Chapter 4 of the Rules by a domestic issuer for listing on the Taiwan Innovation Board are governed by Articles 8 to 11, Articles 13 to 15, and Article 17 mutatis mutandis.
The conditions where listing is considered inappropriate as in Article 31 of the Rules that are applicable to an application under Chapter 4 of the Rules by a foreign issuer for primary listing on the Taiwan Innovation Board are governed by Articles 25 to 29 mutatis mutandis.
In the event of a “serious deterioration in its business operation” as in Article 31, subparagraph 6, the application of Articles 14 and 28 mutatis mutandis may be waived if the application for listing or primary listing of securities on the Taiwan Innovation Board is supported by an explanation on reasonableness.
|