|
Article 3-1
|
The lead underwriter shall organize an underwriting syndicate and handle allocation with consideration to the needs of the particular case, and in handling such matters shall not be influenced by the issuing company.
|
|
Article 4-1
|
In the underwriting of securities on a firm commitment basis, except where prescribed by other laws and regulations, an underwriter shall act as prescribed by the following provisions with respect to the proportion of securities held for its own account; provided, however, that for any shares purchased for its own account that remain unsubscribed at the closure of the underwriting period, these restrictions shall not apply:
1. In an underwriting case involving cash capital increase, convertible corporate bonds, ordinary corporate bonds not handled by negotiated sale, financial bonds not handled by negotiated sale, and Taiwan depositary receipts for listed or over-the-counter (OTC) companies, the underwriter shall hold for its own account from 5 percent to 15 percent of the total number of units underwritten;
2. In the underwriting of a cash capital increase for a company that is neither listed nor OTC-traded, the underwriter may hold for its own account a proportion not to exceed 15 percent of the total number of units underwritten;
3. In an underwriting case involving preferred shares, preferred shares with warrants, or corporate bonds with warrants for public companies, the underwriter may hold for its own account a proportion not to exceed 15 percent of the total number of units underwritten;
4. In an underwriting case involving a secondary distribution of beneficial securities by a trustee institution or a secondary distribution of asset-backed securities by a special purpose company that is not undertaken through negotiated sale, purchases on own account shall not exceed fifteen percent of the total amount underwritten.
5. In an underwriting case where an offering of real estate asset trust beneficial securities by a trustee institution is not undertaken through negotiated sale, purchases on own account shall not exceed fifteen percent of the total amount underwritten.
In the underwriting cases contemplated under the preceding paragraph, for issues undertaken entirely by book building, each underwriter shall hold for its own account not more than 10 percent of the total number of units underwritten.
Where a public company carrying out a cash capital increase encounters waiver of subscription rights by an existing shareholder in accordance with the provisions of Article 267, paragraph 3 of the Company Act, and the authority with jurisdiction over such existing shareholder consents to incorporation of [the corresponding units] into the public underwriting, the portion thus incorporated into the public underwriting shall be excluded when calculating the "total number of units underwritten" set out in paragraph 1, subparagraph 1.
In an underwriting case where an initial public offering (IPO) is carried out by a public company on the stock exchange or an OTC market, if the securities underwriter carries out the underwriting through public sale to outside parties, it shall first set aside 1,000 common shares from the offering for subscription by the Securities and Futures Investors Protection Center.
Except for underwriting cases involving an OTC company transferring its listing to a stock exchange, or for underwriting cases for which there are other acts and regulations that provide otherwise, if an underwriting case involving an initial listing of shares in common stock on a stock exchange or OTC market is carried out on a firm commitment basis, the lead underwriter shall stipulate with the issuing company that the issuing company is to coordinate with its shareholders to provide issued shares in common stock (the number thereof to be set at a certain percentage of the total volume of shares to be sold publicly to outside parties in the current underwriting case) to the lead underwriter for the purpose of exercising overallotment during the underwriting period. The related procedures shall be carried out in accordance with the Chinese Securities Association Directions Governing the Underwriting Procedures to be Followed by Underwriters in Conducting an Initial Listing on a Stock Exchange or
Over-the-Counter Market.
|
|
Article 6
|
In the underwriting of an IPO on the stock exchange or an OTC market involving issued shares or cash capital increase through a new share issue, and in the underwriting of a cash capital increase by a company already listed on a stock exchange or an OTC market in which all shares are put up for underwritten distribution, where underwriting is not carried out using the book building method, the shares shall be offered through competitive auction; provided, however, that this provision does not apply to a public enterprise or to any other party that applies for an initial listing of shares on a stock exchange or an OTC market in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Regulations for Review of Securities Listings, or in accordance with the provisions of the GreTai Securities Market Supplemental Directions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing, or in accordance with other
acts or regulations.
In the underwriting of convertible corporate bonds or corporate bonds with warrants, and in a secondary distribution carried out in accordance with the provisions of Article 22 paragraph 3 of the Securities and Exchange Act (hereinafter, "secondary distribution"), the securities may be offered through competitive auction.
|
|
Article 7
|
In the underwriting of securities issued through competitive auction as prescribed in the preceding article, except where the issuer is a government-owned enterprise or another party for which there are other acts or regulations that provide otherwise, underwriting of that portion of the offering put up for public sale to outside parties shall be handled in accordance with the following provisions:
1. In an underwriting case involving an initial listing of shares on a stock exchange or an OTC market, the shares may be offered either entirely through competitive auction, or through a combination of competitive auction and public subscription. However, the portion allocated through public subscription shall not exceed 20 percent of the total number of shares underwritten.
2. In the underwriting of an offering of convertible bonds, and in the underwriting of a cash capital increase by a company already listed on the stock exchange or an OTC market in which all shares are put up for underwritten distribution, all units shall be offered through competitive auction.
3. In an underwriting case involving the offering of corporate bonds with warrants or an underwriting case involving a secondary distribution, the units may be offered either entirely through competitive auction, or through a combination of competitive auction and public subscription.
|
|
Article 8
|
In the underwriting of securities offered through competitive auction, the lead underwriter shall first prepare documentation determining the particulars listed in the subparagraphs below. After being signed or sealed by the lead underwriter and co-underwriters and the issuer of the securities, said documentation shall be reported to the Chinese Securities Association:
1. the total number of underwritten units, number of units expected to be sold via overallotment, number of units held by the underwriter for its own account as prescribed by Article 4-1, the number of units offered by competitive auction, and minimum bidding unit;
2. the minimum offering price as resolved by negotiation with the issuer;
3. the firm-commitment fee or best-efforts underwriting fee, as resolved by negotiation with the issuer;
4. the unit size of lots offered through public subscription;
5. the names of the members of the underwriting syndicate, and the amount of securities apportioned to each, as specified by Article 7;
6. except for the initial listing of shares on a stock exchange or an OTC market, the method of allocating among the members of the underwriting syndicate any units that remain unsubscribed after conclusion of competitive auction; and
7. the date(s) of competitive auction and the time(s) for submitting and opening bids, as agreed in consultation with the Chinese Securities Association.
The upper limit for the minimum offering price in subparagraph 2 of the preceding paragraph shall, in an underwriting case involving an initial listing on a stock exchange or an OTC market, be the figure obtained by using the method of calculation reported to the Taiwan Stock Exchange Corporation (TSEC) or the GreTai Securities Market (GTSM); in the underwriting of a cash capital increase by a company already listed on a stock exchange or an OTC market in which all shares are put up for underwritten distribution, [it] shall not be lower than 90 percent of (1) the closing common share price on the business day prior to the offer through competitive auction, or (2) the simple average of closing common share prices over either the three or five business days prior to the offer through competitive auction, factoring out bonus shares issued as stock dividend (or treasury shares canceled in connection with a capital reduction).
In the underwriting of convertible corporate bonds and corporate bonds with warrants by competitive auction, the minimum offering price, as negotiated pursuant to paragraph 1 subparagraph 2, shall not exceed the par value of said securities.
In the event that unsubscribed units as specified in paragraph 1 subparagraph 6 are allocated by the underwriting syndicate to a specified party through negotiated sale, only the parties listed in Article 35 shall participate in said placement, and those listed in Article 36 shall not participate.
|
|
Article 9
|
A lead underwriter of securities shall make public announcement for two consecutive days in daily newspapers on the first and second days on which public bids are accepted. The content of said announcement shall be reported in hardcopy and electronic media to the Chinese Securities Association, and shall include the items in the following subparagraphs:
1. name of the security;
2. name, address, and telephone number of the underwriters;
3. method, time period, and site of the bidding;
4. date, time, and site of the opening of the bids;
5. minimum offering price and minimum bidding unit;
6. total quantity of securities to be put up for underwritten distribution; number of units expected to be sold via overallotment; total number of units retained for their own accounts by the underwriters; the total number of units being offered for competitive auction, and the amount of the bid deposit (the amount of the bid deposit shall not be less than 20 percent of the amount of the bid);
7. the maximum quantity of securities that shall be allocated to an individual bidder;
8. parties from which competitive auction bids will be accepted;
9. matters relating to the refund of bid deposits (in the event the total number of securities bid for in valid bids is insufficient to cover all the securities offered through competitive auction in an underwriting case involving the initial listing of shares on a stock exchange or an OTC market);
10. matters relating to the collection of bid processing fees by securities underwriters in accordance with Article 12;
11. any statutory restrictions upon holding percentages as may be set forth in other laws or regulations with respect to the industry to which the issuer belongs (please list these on the bid form); and
12. other supplemental items that must be disclosed in order to safeguard the public interest and investors.
The maximum quantity that each participant shall receive, as referred to in subparagraph 7 of the preceding paragraph, shall not exceed 10 percent of the portion of the offering put up for public sale to outside parties.
In the section specifying the parties from which competitive auction bids are allowed to be accepted (as set forth under subparagraph 8 of the preceding paragraph), the announcement shall print the provisions of Articles 35 and 36.
|
|
Article 13
|
A bid form to which any of the following circumstances applies is invalid and will be disqualified from the tender without refund of the bid processing fee:
1. The bid price is lower than the minimum offering price as prescribed by Article 8 paragraph 1 subparagraph 2;
2. The quantity of securities bid for is lower than the minimum bidding unit;
3. The bid has been neither signed nor affixed with seal;
4. Either the bid price or the bid quantity has been changed, and the change has not been authenticated by application of a seal, or the data is not legible;
5. Either the bid deposit has not been paid in full or the bid processing fee has not been paid;
6. The bid form does not indicate a bank account number for the repayment of bid deposits to those submitting unsuccessful bids;
7. In a previous tender, the bidder has failed to fulfill obligations related to the payment for securities; or
8. The identity of the bidder violates the requirements set forth under Articles 35 and 36.
The per-share (or per-lot) bid price shall be expressed in units no smaller than one cent; decimal figures smaller than one cent shall be rounded up or down.
Bid quantity shall be expressed in units of one thousand shares (or in lots).
In an initial listing on the stock exchange or an OTC market, or where a company already listed on the stock market or an OTC carries out a cash capital increase or underwrites convertible corporate bonds or corporate bonds with warrants by competitive auction, the underwriter shall indicate on the bid form that the bidder is to fill in his central depository account number. A bid form that fails to provide said account number is invalid and will be disqualified from the tender without refund of the bid processing fee.
|
|
Article 16
|
With the exception of a secondary distribution, a cash capital increase through a new share issue carried out for the purpose of an initial listing on a stock exchange or OTC market, or a cash capital increase by a listed or OTC company, when the underwriting of securities is undertaken entirely by competitive auction and the total number of securities awarded by tender reaches the full amount available for allocation, the price at which the security opens on its first day of listing and the price paid by the underwriter for units retained for its own account shall be computed as the weighted average of the bid price of all successful bids. Decimals beyond cents shall be rounded up or down.
|
|
Article 17-1
|
An underwriting case involving cash capital increase through a competitive auction of new shares issued for the purpose of carrying out an initial listing on a stock exchange or OTC market, or an underwriting case in which a company already listed on a stock exchange or an OTC market conducts a cash capital increase through a competitive auction, shall be handled through uniform price clearing, whereby the TSEC, in opening the bids, adds up the cumulative total of the bid quantities, starting with the highest-priced bid and working its way down until the entire offering has been cleared, with the lowest price necessary to sell all securities offered through competitive auction taken as the uniform clearing price. If the total number of securities bid for in valid bids is insufficient to cover the all the securities offered through competitive auction, then the minimum offering price, as prescribed by Article 8 paragraph 1 subparagraph 2, shall serve as the uniform clearing price.
Those bidding at or above the uniform clearing price are awardees, and in all cases their bids will be cleared at the uniform clearing price.
If the total number of securities bid for in valid bids exceeds the number of securities offered through competitive auction, then those submitting bids at the uniform clearing price shall be awarded securities in random order, generated by computer, until all securities offered through competitive auction have been awarded.
The quantity of securities awarded to any single bidder shall not exceed the proportion set forth under Article 9 paragraph 2. Where an award does exceed this proportion, the quantity in excess shall be select at random by computer and subtracted from the award.
The uniform clearing price shall serve as: the offering price for those units of a security retained by the underwriter for its own account in connection with a cash capital increase carried out by a company already listed on a stock exchange or an OTC market, and for units that remain unsubscribed after conclusion of competitive auction; the subscription price for those units allocated through public subscription; the price at which a security opens on its first day of listing in the case of underwriting through competitive auction of an initial listing on a stock exchange or an OTC market involving cash capital increase through a new share issue; and the price of securities sold upon the exercise of an overallotment.
In addition to complying with paragraph 4 of this Article, the underwriter shall also handle the results of the opening of bids in compliance with all other relevant laws and regulations, and shall provide all relevant data as prescribed by the TSEC and the Chinese Securities Association.
|
|
Article 18
|
Except for cases involving the initial listing of shares on a stock exchange or OTC market, in the underwriting of securities by competitive auction, if the total number of securities bid for is insufficient to cover the number of securities offered through competitive auction, then the minimum offering price, as prescribed by Article 8 paragraph 1 subparagraph 2, shall serve as the offering price for those securities that remain unallocated after competitive auction and those securities retained by the underwriter for its own account, and as the subscription price for those securities allocated through public subscription. Units that remain unsubscribed after conclusion of competitive auction shall be allocated as prescribed by Article 8 paragraph 1 subparagraph 6.
Except for the underwriting of a secondary distribution or of a capital increase by listed or OTC companies involving a cash capital increase, the price at which the security opens on its first day of listing shall be the offering price set forth under the preceding paragraph.
In an underwriting case involving an initial listing of shares on a stock exchange or an OTC market conducted by competitive auction, if the total number of securities bid for in valid bids is insufficient to cover the all the securities put up through the competitive auction in question, then the auction shall be repeated. However, a single auction can only be conducted three times. If a competitive auction is being repeated, this fact must be noted when the auction is reported to the FSC in accordance with Articles 8 and 9.
|
|
Article 21
|
In the underwriting of an IPO on the stock exchange or an OTC market involving issued shares or cash capital increase through a new share issue, that portion of the offering put up for public sale to outside parties may be allocated either entirely through the book building method, or through a combination of competitive auction and public subscription. However, the portion offered through public subscription shall not exceed 20 percent of the total number of shares underwritten; provided, that this provision does not apply to a public enterprise, nor does it apply to any other party that applies for an IPO of shares on a stock exchange or an OTC market in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Regulations for Review of Securities Listings, or in accordance with the provisions of the GreTai Securities Market Supplemental Directions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing,
or in accordance with other acts or regulations.
|
|
Article 23
|
A lead underwriter underwriting securities by book building shall first carry out the matters listed in the following subparagraphs. All relevant agreements shall be signed or sealed by the lead underwriter, each co-underwriter, and the issuer (issuing institution), and reported to the Chinese Securities Association:
1. formation of the underwriting syndicate by solicitation of co-underwriters;
2. determination of the total quantity of securities to be offered by book building, and the number of units expected to be sold via overallotment;
3. estimation of the probable range of the offering price, as determined in consultation with the issuer (issuing institution);
4. determination of the firm-commitment fee or best-efforts underwriting fee, as determined in consultation with the issuer (issuing institution); and
5. determination of the lot size, in the event that the securities will be offered by public subscription.
|
|
Article 24
|
In the underwriting of securities by book building, the underwriter shall make a public book building announcement in daily newspapers for two consecutive days on the first and second days on which book building bids are accepted. The content of said announcement shall be reported in hardcopy and electronic media to the Chinese Securities Association, and shall include the items in the following subparagraphs:
1. name of the security;
2. total number of underwritten units, number of units expected to be sold via overallotment, number of units retained by the underwriters for their own accounts, the number of units for public sale, the number of units for allocation by book building as a proportion of the total number of securities put up for public sale, and the number of units reserved for non-syndicate natural person customers;
3. where underwriters collect a book building bid deposit in accordance with the provisions of Article 40, Article 41, or Article 42: the collection method, who is required to pay it, the amount, and conditions under which the deposit may be confiscated;
4. where the lead underwriter accepts bids from non-syndicate natural person customers in accordance with the provisions of Article 26, the announcement shall note the principle by which the lead underwriter determines how much it expects to allocate to such customers;
5. matters relating to the refund of bid deposits (in the event the total number of securities bid for in valid bids is insufficient to cover all the securities offered through competitive auction in an underwriting case involving the initial listing of shares on a stock exchange or an OTC market);
6. matters relating to the collection of book building processing fees by securities underwriters in accordance with Article 26;
7. name, address, and telephone number of the underwriters;
8. the probable range of the offering price;
9. object of subscription, and the method, time period, and site for undertaking subscription;
10. parties to which securities will be allocated through book building; and
11. other supplemental items that must be disclosed in order to safeguard the public interest and investors.
In the section specifying the parties from whom bids are allowed to be accepted (as set forth under the preceding paragraph), the announcement shall print the provisions of Articles 35 and 36.
|
|
Article 25
|
After registering (or applying for approval) with the FSC for a public offering and issuance of securities, the underwriting syndicate may provide investors with prospectuses and other relevant materials of the issuing company (issuing institution), begin handling book building bids, and convene public meetings to familiarize investors with the offering.
|
|
Article 26
|
Investors bidding in a book building process shall fill in a book building bid form produced in the prescribed format (see Attachment 2) and submit said form to the underwriter for handling.
The underwriting syndicate may hire a securities broker to accept book building bids for processing as referred to in the preceding paragraph.
A securities underwriter handling bids may refuse a bid if there has been a violation of the law or of these Regulations, or if there is any suspicion of such violations.
In the underwriting of an offering where the portion put up for public sale is allocated entirely by book building as prescribed by Article 40, or partly by book building and partly by public subscription, the underwriter shall indicate on the book building bid form that the applicant is required to fill in his central depository account number.
In an underwriting case involving an initial offering of shares on a stock exchange or an OTC market in which all shares are allocated through book building, the lead underwriter may reserve up to 20 percent of the total number of underwritten shares for allocation to non-syndicate natural person customers; provided, that the restrictions set forth under Articles 27 and 36 shall still apply, and a book building deposit must be collected.
When a securities underwriter accepts a book building bid for processing, it may collect a book building processing fee from the bidder, acting in accordance with the Chinese Securities Association Regulations Governing Securities Underwriters' Allocation of Securities by Book Building.
|
|
Article 28
|
By submitting a book building bid form to a securities underwriter, an investor is merely expressing the desire to subscribe; likewise, by processing the book building bid form, the underwriter is merely seeking to establish the desire of the investor to subscribe; thus, neither party is bound by the content of the book building bid form. However, in the event that the securities underwriter collects a book building bid deposit as prescribed by Article 40, 41, or 42, failure by the bidder or subscriber to fulfill his payment obligation within a required time limit shall be handled as prescribed by Article 40, 41, or 42.
After gauging market demand through the bidding process, the lead underwriter shall negotiate the actual offering price with the issuing company (issuing institution) or holder of the securities in question, and a uniform offering price shall be applied to the entire issue.
The actual offering price as negotiated pursuant to the preceding paragraph shall not fall outside the estimated probable range of the offering price as set forth under paragraph 23, subparagraph 3.
In an underwriting case involving an initial offering of shares on a stock exchange or an OTC market in which all shares are allocated through book building, if the total number of securities bid for in valid book building bids is insufficient to cover all the securities offered through the book building process in question, then the book building process shall be repeated. However, a single book building process can only be conducted three times. If a book building process is being repeated, this fact must be noted when the book building process is reported to the FSC in accordance with Articles 23 and 24.
|
|
Article 30
|
Unless the determination of the offering price for underwritten securities is undertaken as prescribed in Section One or Two, a reference price shall be determined in accordance with another reasonable pricing method. Thereupon the underwriter shall resolve the offering price by negotiations with the issuing company (issuing institution) or the holder of said securities.
|
|
Article 31
|
An underwriting case involving the offering of ordinary corporate bonds, financial bonds, real estate asset trust beneficial securities; the secondary distribution of beneficial securities by a trustee institution; or the secondary distribution of asset-backed securities or corporate bonds with warrants by a special-purpose company, may be undertaken entirely or partly by negotiated sale. The offering price shall be determined as prescribed by Article 30.
The underwriting of call (put) warrants shall be undertaken entirely by negotiated sale.
An underwriting case involving a secondary distribution by a public enterprise may be undertaken entirely or partially by negotiated sale if shares are released to the general public. The method of allocation shall be determined by negotiations between the underwriter and the government agency that regulates the government-owned enterprise in question.
In an underwriting case involving an initial listing of shares in common stock on a stock exchange or OTC market through competitive auction, if an overallotment is exercised, those shares allocated via overallotment shall be sold by means of negotiated sale at an offering price determined in accordance with the provisions of Article 16, 17, or 17-1.
In an underwriting case involving a public enterprise (or any other party acting in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Regulations for Review of Securities Listings, or in accordance with the provisions of the GreTai Securities Market Supplemental Directions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing) that conducts an initial offering of shares in common stock on a stock exchange or an OTC market and allocates the entire amount of said shares through public subscription, if an overallotment is exercised, the overallotment may be handled by means of negotiated sale. The offering price shall be the same as that applying to shares allocated through public subscription.
|
|
Article 32
|
Except when permission is granted by the competent authority for the securities industry, in an underwriting case involving the negotiated sale of ordinary corporate bonds or financial bonds, not more than 50 percent of the total number of securities shall be allocated to an individual subscriber. Not more than 20 percent of the total number of securities offered may be allocated to an individual subscriber in cases involving real estate asset trust beneficial securities, a secondary distribution of beneficial securities by a trustee institution, or a secondary distribution of asset-backed securities by a special-purpose company. In a case involving call (put) warrants or corporate bonds with warrants, not more than 10 percent of the total number of securities shall be allocated to an individual subscriber.
If the securities referred to in the preceding paragraph are divided into different classes for issuance, the total volume of an underwritten offering shall be calculated as the total volume of a given single class of securities after the issue has been separated into different tranches.
In an underwriting case conducted in accordance with the provisions of Article 31, paragraph 4, the number of shares actually allocated to any individual subscriber shall not exceed ten percent of the combined total of underwritten shares put up for sale in the current competitive auction plus shares allocated via overallotment.
|
|
Article 34
|
When the portion [of an offering] that is put up for public sale to outside parties is entirely underwritten by competitive bidding, after registering the underwriting contract with the Chinese Securities Association, the underwriter shall carry out the following:
1. Day One: Publish an underwriting notice and begin mailing notifications of award, prospectuses, and payment due notices;
2. Day Four: Begin refunding bid deposits (per Article 12 paragraph 2) to unsuccessful and disqualified subscribers; payment period commences;
3. Day Seven: Payment deadline; issuer applies to the TSEC or the GTSM for a securities listing on the stock exchange or an OTC market;
4. Day Eight: Complete compilation of related registers;
5. Day Nine: Announcement of securities listing on the stock exchange or an OTC market.
6. Day Ten: Securities are issued and listed on the stock exchange or an OTC market.
In a secondary distribution, the procedures set forth in subparagraphs 4, 5, and 6 under the preceding paragraph, which are connected with application for listing of securities on a stock exchange or an OTC market, need not be carried out.
Where any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be moved forward by one day next following the given day, and the dates that follow shall be moved forward accordingly.
The dates specified under paragraph 1 may be changed if necessary by applying for approval with the Chinese Securities Association.
The payment referred to in paragraph 1 subparagraph 3 shall be the purchase price for the securities, less the bid deposit as prescribed by Article 12 paragraph 2. In the event that the awardee fails to fulfill his payment obligation within the specified time period, the underwriter may confiscate the bid deposit, and shall subscribe on its own account, at the price offered to said awardee, to the units that were to have been allocated to said awardee.
|
|
Article 39
|
The underwriter shall keep information relating to ordinary bids for a period of thirty days after the opening of the bids. Bidding materials for disqualified bids and awardees shall be stored for a period of one year after the opening of the bids. However, if the FSC or the Chinese Securities Association deems it necessary, it may request an extension of the storage period.
A securities underwriter shall require the collecting bank to provide itemized records evidencing payment by subscribers for their securities, and shall keep them on file for five years.
The TSEC shall keep its bid opening records on file for five years after the bid opening.
|
|
Article 40
|
Where a company listed on the stock exchange or an OTC market carries out a cash capital increase in which all shares are put up for underwritten distribution, and all shares put up for public sale are allocated through the book building method, after the price has been set and the underwriting contract has been registered with the Chinese Securities Association, the following matters shall be carried out:
1. Day One: Publish an underwriting notice and begin mailing subscription notices, prospectuses, and notices of payment due (to be formatted per Attachment 4);
2. Day Four: Payment period commences, and book building bid deposits not corresponding to allocated shares are returned to unsuccessful bidders;
3. Day Seven: Payment deadline; issuer applies to the TSEC or the GTSM to list certificates of payment for shares on the stock exchange or an OTC market;
4. Day Eight: Shareholders' register is completed;
5. Day Nine: Issue public announcement concerning listing of certificates of payment for shares on the stock exchange or an OTC market;
6. Day Ten: Certificates of payment for shares are issued and listed on the stock exchange or an OTC market; and
7. (deleted)
If any of the dates set forth in the preceding paragraph falls on a weekend, regular holiday, or bank holiday, it shall be moved forward by one day next following the given day, and the dates that follow shall be moved forward accordingly.
The dates set forth under paragraph 1 may be changed if necessary by applying for approval with the Chinese Securities Association.
Where a company listed on the stock exchange or an OTC market carrying out a cash capital increase uses the book building method to allocate all shares (other than those securities set aside for subscription by the company's employees) that are put up for underwritten distribution and public sale, those shares allocated to the company's employees may be handled in accordance with the provisions of paragraph 1, provided that said employees can comply with the payment period specified in paragraph 1.
Where matters are undertaken in the manner set forth under paragraph 1, shares may be allocated on a priority basis to existing shareholders; provided, however, that the restrictions listed in Articles 27 and 36 shall still apply.
When a bidder submits a book building bid form, the securities underwriter may collect a bid deposit from the bidder of not more than 20 percent of the value of the securities bid for.
The book building bid deposits not corresponding to allocated shares as referred to in the above paragraph 1 subparagraph 2 means the book building bid deposits paid by unsuccessful bidders, and bid deposits paid by awardees in excess of the amount required for securities actually allocated to them.
The payment to be made by the bidder as referred to in paragraph 1 subparagraph 2 above shall be the price of the securities subscribed less any book building bid deposit remaining after the bidder has received (or not received) a refund in accordance with the provisions of the preceding paragraph. In the event a bidder does not fulfill his payment obligation within the allotted time, the securities underwriter may confiscate the book building bid deposit and shall retain for its own account said securities at the price offered to the bidder.
An underwriter that collects book building bid deposits as prescribed by paragraph 6 above shall do so as prescribed by Article 12 paragraph 4.
|
|
Article 41
|
Where an underwriting case is handled as prescribed by Article 21, Article 22, and Article 22-1 subparagraph 2, and all units are offered through a book building process, after the price has been set and the underwriting contract has been registered with the Chinese Securities Association, the following matters shall be carried out:
1. Day One: Publish an underwriting notice and begin mailing subscription notices, prospectuses, related subscription notices, and notices of payment due;
2. Day Four: Payment period commences, and book building bid deposits not corresponding to allocated securities;
3. Day Seven: Payment deadline; issuer applies to the TSEC or the GTSM for a securities listing on the stock exchange or an OTC market;
4. Day Eight: Complete compilation of related registers;
5. Day Nine: Announcement of securities listing on the stock exchange or an OTC market.
6. Day Fifteen: Securities are issued and listed on the stock exchange or an OTC market.
In an underwriting carried out as set forth under Article 22 subparagraph 4, the requirements set forth in subparagraphs 4, 5, and 6 above (concerning application to the TSEC or the GTSM for a listing on the stock exchange or an OTC market) shall not apply.
If a date set forth in any of the subparagraphs under paragraph 1 falls on a weekend, regular holiday, or bank holiday, it shall be moved forward by one day next following the given day, and the dates that follow shall be moved forward accordingly.
The dates set forth under paragraph 1 may be changed if necessary by applying for approval with the Chinese Securities Association.
When a non-syndicate natural person customer delivers a book building bid form, the lead underwriter shall collect from the bidder a book building bid deposit of not more than 20 percent of the value of the securities bid for.
The phrase "book building bid deposits not corresponding to allocated securities" in paragraph 1 subparagraph 2 means the book building bid deposits paid by unsuccessful bidders, and bid deposits paid by awardees in excess of the amount required for securities actually allocated to them.
The payment to be made by the bidder as referred to in paragraph 1 subparagraph 2 shall be the price of the securities subscribed to less any book building bid deposit to be refunded (or not refunded) to the bidder in accordance with the provisions of the preceding paragraph. In the event a bidder does not fulfill his payment obligation within the allotted time, the securities underwriter may confiscate the book building bid deposit and shall retain for its own account said securities at the price offered to the bidder.
An underwriter that collects book building bid deposits as prescribed by paragraph 5 shall do so as prescribed by Article 12 paragraph 4.
|
|
Article 45
|
The underwriter shall store for a period of thirty days after allocation information relevant to ordinary book building bids. Information relating to disqualified bids and awardees shall be stored for a period of one year after allocation. However, if the FSC or the Chinese Securities Association deems it necessary, a request may be made for extension of the storage period.
A securities underwriter shall require the collecting bank to provide itemized records evidencing payment by subscribers for their securities, and shall keep them on file for five years.
|
|
Article 52
|
The following offerings shall be undertaken by public subscription:
1. in the underwriting of an offering carried out other than as prescribed in Article 6 paragraph 2, Article 22, Article 22-1 subparagraph 2, or Article 31, or in the underwriting of a cash capital increase by a company listed on the stock exchange or an OTC market in which not all shares are put up for underwritten distribution: the portion put up for public sale that must be offered entirely by public subscription;
2. in the underwriting of an offering as prescribed in Article 7, where the portion put up for public sale is offered partly by competitive auction: any remaining portion that must be offered by public subscription;
3. in the underwriting of an offering as prescribed in Articles 21 and 22, where the portion put up for public sale is offered partly by book building: any remaining portion that must be offered by public subscription;
4. in the underwriting of an offering as prescribed in Article 31 paragraph 1, where a part is offered by negotiated sale: any remaining portion that must be undertaken by public subscription; and
5. an initial offering on a stock exchange or an OTC market (conducted by a public enterprise, or by any other party acting in accordance with other acts or regulations), in which: (1) a public sale to outside parties conducted in connection therewith as required under Article 6 is not undertaken by competitive auction; or (2) a book building process is employed as prescribed under Article 21.
6. in an underwriting case involving a public enterprise (or any other party acting in accordance with the provisions of Articles 6 and 6-1 of the Taiwan Stock Exchange Corporation Regulations for Review of Securities Listings, or in accordance with the provisions of the GreTai Securities Market Supplemental Directions for Applications by Private Institutions Participating in Public Infrastructure Projects for Over-the-Counter Listing) that conducts an initial offering of shares on a stock exchange or an OTC market, where the entire amount of said shares are allocated through public subscription: those shares allocated via overallotment, if not allocated by means of negotiated sale, must be allocated through public subscription.
|
|
Article 70
|
Securities firms shall, after the public announcement of the lottery winners, keep records relating to ordinary subscriptions for 30 days and records regarding unqualified subscribers or lottery winners for 90 days. However, the FSC and Chinese Securities Association may extend these times in consideration of the needs at the time.
The TSEC shall keep subscription records on file for five years after the bid opening.
|
|
Article 72
|
Where a securities underwriter allocates securities by negotiated sale, the process shall be completed within the underwriting period.
A securities underwriter shall require the collecting bank to provide itemized records evidencing payment by subscribers for their securities, and shall keep them on file for five years.
A securities underwriter shall keep allocation records on file for five years. However, the FSC and the Chinese Securities Association may, as necessary, extend the time period during which such records are required to be kept on file.
|
|
Article 73
|
For an offering of ordinary corporate bonds, financial bonds, or corporate bonds with warrants, Articles 35 and 36 shall apply mutatis mutandis with respect to the types of persons eligible to make purchase by negotiated sale by the underwriter.
The persons eligible to make purchase by negotiated sale of call (put) warrants shall be as prescribed by the Taiwan Stock Exchange Corporation Criteria Governing Review of Call (Put) Warrant Listings.
In an underwriting case involving real estate asset trust beneficial securities, a secondary distribution of beneficial securities by a trustee institution, or a secondary distribution of asset-backed securities by a special-purpose company, the counterparts in a negotiated sale undertaken by a securities firm shall be governed by the mutatis mutandis application of Articles 35 and 36, provided they shall not be subject to the limitations under subparagraphs 1 through 7 of Article 36.
In an underwriting case involving an initial listing of shares in common stock on a stock exchange or OTC market, if the overallotment is handled by means of negotiated sale, the provisions of Articles 35 and 36 shall apply mutatis mutandis with respect to the parties that a securities underwriter is allowed to engage in the negotiated sale process.
|
|
Article 83
|
If the conditions set forth in Article 58 paragraph 1 subparagraphs 1 through 6 or Article 75 paragraph 1 subparagraph 1 apply to a person participating in the subscription to an offering as prescribed by these Regulations, after the person has been disqualified, subscription payments already deducted/paid shall be refunded; provided, however, that any handling fee and lottery winner notification fee already deducted/paid shall not be refunded.
If a subscriber disqualified pursuant to the preceding paragraph, or a disqualified inheritor, wishes to request a refund of payments already made, the subscriber or inheritor shall furnish an original copy of the subscriber's or inheritor's national ID certificate (a juristic person shall furnish its company registration certificate; a minor less than 14 years of age may instead furnish an original list of current household members and along with the original of his/her statutory agent's national ID certificate), receipt slip from the notice of payment due (subscription form and notices of payment due, however, those allocated shares in the public subscription have no receipt slips from the notice of payment due) and the registered seal impression for the seal used to stamp the notice of payment due (subscription form and notice of payment due) (those allocated shares in the public subscription shall use the registered seal impression for the seal that they used to open their trading account), and
request the original underwriter (in case of those shares in the public subscription, the original broker) to undertake a refund.
|
|
Article 85-2
|
A securities underwriter conducting a book building process, or conducting a negotiated sale in accordance with Article 31 paragraph 4, shall (within ten days from the conclusion of the underwriting period) input itemized allocation records, itemized payment records, and itemized information on specific persons into an electronic medium in the format required by the Chinese Securities Association, place the medium under seal, and submit it to the Chinese Securities Association for recordation.
|
|
Article 86
|
The Chinese Securities Association shall report to a disciplinary committee any violations of acts or regulations or of these Regulations by securities firms. Where the violation is especially serious, the matter may, upon a resolution by the Board of Directors of the Chinese Securities Association, be reported to the FSC.
|