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Taiwan Securities Association Regulations Governing Underwriting and Resale of Securities by Securities Firms(2005.08.29) |
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Article 5-1
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An underwriter [intending to] underwrite securities shall publish an underwriting notice for two consecutive days in daily newspapers, and [in so doing] shall act in accordance with the Taiwan Securities Association Guidelines Governing the Particulars to be Recorded by Securities Underwriters in Securities Underwriting Announcements.
And underwriter [intending to] underwrite securities shall publish a prospectus on its website, and shall provide prospectuses upon the request of investors.
And underwriter [intending to] underwrite securities shall publish a prospectus on its website, and shall provide prospectuses upon the request of investors.
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Article 33
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When the portion [of an offering] that is put up for public sale is not entirely underwritten by competitive bidding, after registering the underwriting contract with the Taiwan Securities Association, the underwriter shall carry out the following:
1. Day One: Publish an underwriting notice, and begin mailing notifications of award and payment notices (to be formatted per Attachment 3);
2. Day Four: Refund bid deposits (per Article 12 paragraph 2) to unsuccessful and disqualified bidders;
3. Delivery of company prospectuses and matters relevant to payment shall be undertaken simultaneously with the public subscription.
Matters relevant to payment in subparagraph 3 of the preceding paragraph above shall be undertaken by the method designated by the underwriter. The deadline for payment shall be identical to that applying to public subscribers with respect to the forwarding of subscription payment to their bank, as set forth under Article 53 paragraph 1 subparagraph 2.
Matters relevant to payment in subparagraph 3 of the preceding paragraph above shall be undertaken by the method designated by the underwriter. The deadline for payment shall be identical to that by which awardees in public subscription, as specified by Article 53 paragraph 1 subparagraph 7, must make payment for subscribed securities to the designated bank.
If either of the dates set forth in paragraph 1 subparagraphs 1 and 2 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 Taiwan 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 in 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.
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Article 42
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If the portion of an offering put up for public sale is underwritten partly by book building and partly by public subscription as prescribed by Articles 21 and Article 22 (excepting underwriting as prescribed by the preceding Article), after the underwriting contract has been registered with the Taiwan Securities Association, the following matters shall be carried out:
1. Day One: Publicly release a book building allocation announcement (an underwriting notice shall be concurrently published at this time) and begin mailing subscription notifies, prospectuses, and notices of payment due (formatted per Attachment 4), or subscription forms and notices of payment due (formatted per Attachments 5, 5-1, 5-2, and 5-3, respectively), or Taiwan Depositary Receipt notices of payment due (formatted per Attachment 6); and
2. Payment period: The payment deadline shall be identical to that applying to subscribers with respect to the forwarding to the designated bank of subscription payment, subscription processing fee, and the lottery winner notification fee to their bank, as set forth under Article 53 paragraph 1 subparagraph 2.
If any of the dates set forth under 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 Taiwan Securities Association.
Between the time a bidder commits to the purchase of securities and the commencement of the payment period as set forth in paragraph 1 subparagraph 2, the underwriter may request that the subscriber pay a book building bid deposit of the full amount or part of the amount of the purchase price of said securities. 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 the book building bid deposit. 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.
When the underwriter referred to in the preceding paragraph accepts a book building bid deposit from a subscriber, it shall follow the requirements as prescribed by Article 12 paragraph 4.
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Article 53
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For an offering by public subscription, the underwriter shall, after registering the underwriting contract with the Taiwan Securities Association, observe the following schedule in handling matters relating to subscription, pre-withheld payments, and lottery winner notification:
1. Day One: Publish an underwriting notice and commence subscription;
2. Day Four: Subscription period closes. Deadline for subscriber's payment of subscription fee, subscription payment, and lottery winner notification fee to the designated bank;
3. Day Five: Date of withholding of subscription processing fee, subscription payment, and lottery winner notification fee. Broker's bank undertakes matters regarding withholding of subscribers' subscription processing fees, subscription payment, and lottery winner notification fee;
4. Day Six: Date of public lottery drawing. The TSEC undertakes drawing. TSEC produces and sends report of winner information to each broker. TSEC compiles and reports the information to the lead underwriter for provision to subscribers for their review;
5. Day Seven:
(1) Date of settlement of subscription processing fees, subscription payments, and lottery winner notification fees.
(2) Broker makes no-interest refund of pre-withheld subscription payments and postage fees to non-lottery winners; the subscription processing fees of non-lottery winners are not returned.
(3) Underwriter shall send lottery winner notifications and prospectuses (or subscription forms) to lottery winners via express registered mail.
The subscriber shall, on any given day during the subscription period between 09:00 and 14:00, fill-in a subscription form (formatted as in Attachment 7) at the business premises of the broker or entrust the broker by phone to fill in such a form, or shall, during the subscription period before 14:00 on the day of the deadline, fill in and submit a subscription form via the Internet.
Every day during the subscription period until the deadline, the broker shall compile up until the previous day and place the subscription information in the trading room as a reference for subscribers or for voice or computer query.
If any of the dates set forth in paragraph 1 subparagraphs 2, 3, 4, and 5 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 Taiwan Securities Association.
The Taiwan Securities Association shall prescribe the standard for the lottery winner notification fee. A securities firm shall be responsible for compensation for any loss to the lottery winner resulting from problems in service of the lottery winner announcement; provided, however, that this provision shall not apply where the securities firm was not negligent.
The procedures related to the allocation of securities by public subscription by securities firms as prescribed by paragraph 1 shall be separately prescribed by the Taiwan Securities Association. If the number of shares subscribed does not exceed the number of shares to be sold, all qualified subscribers shall be deemed lottery winners, and a public lottery shall be unnecessary.
After the subscriber has commissioned subscription with a broker, the subscription form shall not be withdrawn or changed.
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Article 56
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A subscriber may use only one broker to subscribe to any given security offered through public subscription, and shall not undertake duplicated subscription [via multiple brokers]. Each subscriber is restricted to subscribing to one lot. The processing fee is NT$20 per subscription. The receiving broker shall notify the subscriber's bank to deduct the fee from the subscriber account on the date prescribed in Article 53.
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Article 58
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A broker shall not undertake subscription for a subscriber to whom any of the following conditions apply. If a broker has already accepted subscription, the subscription shall be cancelled:
1. Has not opened a trading account, electronic transfer custodial account, or central depository account with the broker undertaking consigned subscription;
2. Has not signed a consignment contract with the bank designated by the broker regarding matters related to the deduction of funds regarding the public subscription;
3. Has not undertaken subscription within the allotted time;
4. Has not filled in fully or truthfully the required items in the subscription consignment contract;
5. Has neither signed nor sealed the subscription consignment contract. This provision shall not apply to those who undertake subscription by telephone or Internet;
6. The balance in the subscriber bank account for payment by wire transfer is less than the sum of the subscription processing fees, subscription payment, and lottery winner notification fee; or
7. Has exploitatively or fraudulently used the name of another person.
The broker shall duly verify [whether] the preceding conditions [exist].
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Article 59
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After being consigned to undertake subscription, a broker shall, on a daily basis, input data from the subscription forms into the TSEC's computer system by batch file transmission or terminal key-in. Before the drawing, data from subscriptions where the processing fee, subscription payment, or lottery winner notification fee cannot be deducted on schedule due to insufficient bank funds and data from duplicated subscriptions shall be excluded, and fees already deducted shall not be returned.
On the date of the public lottery, a list of qualified and unqualified subscribers as set forth under the preceding paragraph shall be made available by the TSEC for review at the Taiwan Securities Association, the TSEC, and the business premises of the lead underwriter and brokers (the list at each broker's place of business shall include only the names of subscribers who have subscribed through that particular broker).
Where there has been duplicated subscription as set forth under paragraph 1, the subscriber shall be notified by the underwriter by registered letter within one week of the closure of the offering period.
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Article 62
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For an IPO on the stock exchange or an OTC market involving cash capital increase through a new share issue, or where a company already listed on the stock exchange or traded on an OTC market either carries out a cash capital increase or issues corporate bonds or Taiwan Depositary Receipts that are allocated through public subscription, after subscription, pre-withholding of payment, and lottery winner notification have been completed as prescribed by Article 53 paragraph 1, the securities firms and relevant departments shall undertake listing on the stock exchange or an OTC market, carrying out the following work within the following deadlines:
1. Day Eight: Deadline for placement with specific party;
2. Day Nine:
(1) Underwriter carries out underwriting on standby commitment basis.
(2) Issuer uses share payment certificates to apply with the TSEC or the GTSM for listing on the stock exchange or an OTC market;
3. Day Ten:
(1) Complete compilation of shareholders' (creditors') register;
(2) Issuer transfers share payment certificates to the Central Depository;
4. Day Eleven: Listing of securities on the stock exchange or an OTC market is publicly announced.
5. Day Twelve:
(1) Securities electronically transferred from the Central Depository to the subscriber's central depository account; and
(2) Securities listed on the stock exchange or an OTC market.
If a date set forth in the above subparagraphs falls on a weekend, regular holiday, or bank holiday, the deadline 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 Taiwan Securities Association.
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Article 63
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In the underwriting of an initial listing on the stock exchange or an OTC market using issued shares, where said shares are allocated through public subscription, after subscription, pre-withholding of payment, and lottery winner notification have been completed as prescribed by Article 53 paragraph 1, the securities firms and relevant departments shall undertake the following work within the following times regarding listing on the stock exchange or an OTC market:
1. Day Eight: Deadline for placement with specific party;
2. Day Nine:
(1) Underwriter carries out underwriting on standby commitment basis.
(2) Company applying for listing on the stock exchange or an OTC market applies with the TSEC or the GTSM for listing on the stock exchange or an OTC market;
3. Day Ten:
(1) Complete compilation of shareholders' register;
(2) Company applying for listing on the stock exchange or an OTC market transfers share payment certificates to the Central Depository.
4. Day Eleven: Listing of shares on the stock exchange or an OTC market is publicly announced.
5. Day Twelve;
(1) Securities electronically transferred from the Central Depository to the subscriber's central depository account; and
(2) Shares listed on the stock exchange or an OTC market.
If a date 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 Taiwan Securities Association.
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Article 64
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For a secondary distribution by public subscription, after subscription, pre-withholding of payment, and lottery winner notification have been completed as prescribed by Article 53 paragraph 1, the securities firms and relevant departments shall undertake the following work:
1. Day Eight: Deadline for placing with a specific party;
2. Day Nine: Underwriter carries out underwriting on standby commitment basis.
3. Day Ten: Bearer of securities transfers them to Central Depository; and
4. Day Eleven: Securities electronically transferred by Central Depository to purchaser's central depository account. Purchaser may engage in trading of the securities.
If a date set for 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 Taiwan Securities Association.
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Article 65
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Where a company not listed on the stock exchange or an OTC market allocates shares through public subscription in an offering that involves cash capital increase, after subscription, pre-withholding of payment, and lottery winner notification have been completed as prescribed by Article 53 paragraph 1, the underwriter shall either make placement with a specific party on Day Eight or underwrite on standby commitment basis on Day Nine, and after the securities have been produced by the issuer, the lead underwriter shall, together with the issuer, send the securities to the Central Depository for deposit into the purchaser's central depository account, or may distribute the securities as prescribed mutatis mutandis in Article 75.
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