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Taiwan Securities Association Rules Governing Underwriting and Resale of Securities by Securities Firms(2006.04.21) |
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Article 5-1
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An underwriter [intending to] underwrite securities shall publish an underwriting announcement in daily newspapers, and [in so doing] shall act in accordance with the Taiwan Securities Association Rules Governing the Particulars to be Recorded by Securities Underwriters in Securities Underwriting Announcements.
An 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 9
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A lead underwriter of securities shall publish a competitive auction announcement in daily newspapers on the first day on which public bids are accepted. The content of said announcement shall be reported in hardcopy and electronic media to the Taiwan 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.
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Article 11
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In an underwriting by competitive auction, the underwriter shall administer bidding and auctioning in accordance with the following schedule:
1. Day One: Commencement of the tender;
2. Day Three: Closure of the tender (where day four falls on a weekend, closure of the tender shall be postponed by one day); and
3. Tenders shall be opened on the fourth business day subsequent to the closure of the tender.
Those submitting bids in accordance with the provisions of subparagraphs 1 and 2 of the preceding paragraph shall submit their bids directly at the place of business of the underwriter.
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 24
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In the underwriting of securities by book building, the underwriter shall publish a book building announcement in daily newspapers on the first day on which book building bids are accepted. The content of said announcement shall be reported in hardcopy and electronic media to the Taiwan 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, and the number of units for allocation by book building as a proportion of the total number of securities put up for public sale;
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. matters relating to the collection of book building processing fees by securities underwriters in accordance with Article 26;
5. name, address, and telephone number of the underwriters;
6. the probable range of the offering price;
7. object of subscription, and the method, time period, and site for undertaking subscription;
8. parties to which securities will be allocated through book building; and
9. 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.
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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, bid deposits, and postage expense for lottery winner notification:
1. Day One: Publish an underwriting announcement and commence subscription;
2. Day Three: Subscription period closes. Deadline for subscriber's payment of subscription processing fee, subscription payment, and postage expense for lottery winner notification to the designated bank;
3. Day Four: Date of withholding of subscription processing fee, subscription payment, and postage expense for lottery winner notification. Broker's bank undertakes matters regarding withholding of subscribers' subscription processing fees, subscription payment, and postage expense for lottery winner notification;
4. Day Five: 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 Six:
(1) Date of settlement of subscription processing fees, subscription payments, and postage expense for lottery winner notifications.
(2) Broker makes no-interest refund of bid deposits 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 postage expense for lottery winner notification. 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 units subscribed does not exceed the number of units 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 55
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The lead underwriter shall be responsible for publishing an underwriting announcement. A broker shall make said underwriting announcement and subscription forms available to investors for free upon request at it business premises, and may download the underwriting announcement from the Taiwan Securities Association website or photocopy it from a newspaper. The subscription form declaration may be photocopied or printed in equivalent dimensions by investors for the purpose of undertaking subscription.
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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, payment of bid deposits, 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 Seven: Deadline for placement with specific party;
2. Day Eight:
(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 Nine:
(1) Complete compilation of shareholders' (creditors') register;
(2) Issuer transfers share payment certificates to the Central Depository;
4. Day Ten: Listing of securities on the stock exchange or an OTC market is publicly announced.
5. Day Eleven:
(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, payment of bid deposits, 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 Seven: Deadline for placement with specific party;
2. Day Eight:
(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 Nine:
(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 Ten: Listing of shares on the stock exchange or an OTC market is publicly announced.
5. Day Eleven;
(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, payment of bid deposits, 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 Seven: Deadline for placing with a specific party;
2. Day Eight: Underwriter carries out underwriting on standby commitment basis.
3. Day Nine: Bearer of securities transfers them to Central Depository; and
4. Day Ten: 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 85-2
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After the conclusion of the underwriting period, the securities underwriter that conducted the underwriting of securities shall store data relating to subscriptions, allocations, payments, and specific persons in an electronic medium, to be maintained in custody for at least five years for reference purposes.
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