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Taiwan Securities Association Regulations Governing Underwriting and Resale of Securities by Securities Firms(2005.05.11) |
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Article 10
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In the underwriting of securities through competitive auction, the underwriting syndicate may provide a company prospectus and relevant materials to investors, and may also convene public meetings to familiarize investors with the offering.
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Article 17-1
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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. In 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, 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 Taiwan Securities Association.
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Article 36
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Underwriters shall refuse bids from the following parties that respond to an offering by competitive auction:
1. an equity-method investee of the issuing company (issuing institution);
2. an investor that has equity-method investments in the issuing company (issuing institution);
3. a company whose chairman or general manager is the same person as the chairman or general manager of the issuing company (issuing institution), or is the spouse thereof, or is a relative thereof within the second degree of kinship;
4. a foundation that has received one-third or more of its paid-in endowment from the issuing company (issuing institution);
5. the issuing company's (issuing institution's) directors, supervisors, general manager, vice general manager(s), assistant general managers, or any officer serving directly under the general manager;
6. the spouse of a director, a supervisor, or the general manager of the issuing company (issuing institution);
7. a relative within the second degree of kinship of a director, a supervisor, or the general manager of the issuing company (issuing institution);
8. a director, supervisor, or employee of the underwriting syndicate, a spouse thereof, or a relative thereof within the second degree of kinship; or
9. any person as set out in the preceding subparagraphs who participates in the offering under the name of another person (i.e. a person who meets the criteria of a de facto related party as defined in Article 2 of the Securities and Exchange Act Enforcement Rules).
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Article 41
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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 Taiwan 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 Taiwan Securities Association.
In an underwriting case handled in accordance with the provisions of Article 21, 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.
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