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Article 27-1
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In a case involving an initial listing of common shares on a stock exchange or an OTC market, regulations governing the volume of securities that may be allocated to any single bidder are as follows:
1. In a case in which the amount allocated for public subscription is adjusted to 30 percent or less under Article 21-1, the quantity of securities actually allocated to any qualified institutional investor shall not exceed 10 percent of the quantity underwritten by the allocating underwriters, or 100,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 10 percent of the portion of the securities put up for public sale to outside parties in the present offering. In a case in which the amount allocated for public subscription exceeds 30 percent, the quantity of securities actually allocated to any qualified institutional investor shall not exceed 5 percent of the quantity underwritten by the allocating underwriters, or 50,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 5 percent of the portion of the securities put up for public sale to outside parties in the present offering.
2. In a case in which the amount allocated for public subscription is adjusted to 30 percent or less under Article 21-1, the quantity of securities actually allocated to any bidder other than a qualified institutional investor shall not exceed 5 percent of the quantity underwritten by the allocating underwriters, or 50,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 5 percent of the portion of the securities put up for public sale to outside parties in the present offering. In a case in which the amount allocated for public subscription exceeds 30 percent, the quantity of securities actually allocated to any bidder other than a qualified institutional investor shall not exceed 2 percent of the quantity underwritten by the allocating underwriters, or 20,000 shares, whichever is higher, provided that the combined quantity of securities actually allocated by the underwriters to any single bidder shall not exceed 2 percent of the portion of the securities put up for public sale to outside parties in the present offering.
The term "qualified institutional investors" in subparagraph 2 of the preceding paragraph means domestic and foreign institutional investors and foreign institutional investors, including domestic and foreign banks, insurance companies, bills finance companies, fund management companies, government investment institutions, government funds, mutual funds, unit trusts, investment trust enterprises, and trust enterprises.
The maximum combined quantity of securities allocated by an underwriter in accordance with paragraph 1, subparagraph 2 to any company that has underwriting business dealings with that underwriter shall not exceed 20 percent of the quantity of securities underwritten by that underwriter.
The phrase "any company that has underwriting business dealings with that underwriter" in the preceding paragraph means a company for which that underwriter has lead managed an offering within 12 months before the present offering is to be listed on a stock exchange or OTC market, or a company which that underwriter anticipates doing so within the coming three months.
When an underwriter arranges for specified parties to subscribe to undersubscribed shares or shares that subscribers fail to pay for after allotment, it is exempt from the restrictions of paragraph 1, subparagraph 2, but such subscriptions are still not allowed to exceed 10 percent of the quantity of securities underwritten by that underwriter, or 100,000 shares, whichever is higher, and the combined total of all shares allotted by the underwriter to the aforementioned specified parties shall not exceed 10 percent of the portion of the offering that is put up for public sale to outside parties.
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Article 43-1
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When a securities firm conducts an underwriting case involving an initial listing on a stock exchange or an OTC market or an initial offering of Taiwan Depositary Receipts, the parties from whom it is allowed to accept book building bids shall be restricted by the mutatis mutandis application of Articles 35 and 36; in addition, the firm shall refuse bids involving the participation of any of the parties listed in the following subparagraphs, and shall also obtain declarations from bidders affirming that they meet the eligibility requirements for purchasers:
1. An employee of the issuer.
2. A director, supervisor, or managerial officer (or a spouse, son, or daughter thereof) of a company that has underwriting business dealings with an underwriter.
3. A financial holding company to which an underwriter itself belongs, or another subsidiary of such a financial holding company; however, this restriction does not apply to a securities investment trust fund offered by a securities investment trust company belonging to such a financial holding company.
4. A director, supervisor, or managerial officer (or a spouse, son, or daughter thereof) of a financial holding company to which an underwriter itself belongs, or of another subsidiary of such a financial holding company.
5. A de facto related party of the issuer or an underwriter.
6. A party listed in any of the preceding subparagraphs that uses the name of another party to participate in subscription (i.e. a de facto related party that engages in any of the acts set out under Article 2 of the Securities and Exchange Act Enforcement Rules).
When a securities firm, acting on behalf of a company already listed on a stock exchange or an OTC market, conducts an underwriting case involving a cash capital increase or an offering of corporate or financial bonds with equity characteristics, or warrants detached from preferred shares with detachable warrants or detached from corporate bonds with detachable warrants, or a secondary offering of Taiwan Depositary Receipts, the parties from whom it is allowed to accept book building bids shall be restricted by the mutatis mutandis application of the preceding paragraph, provided that it need not be restricted by subparagraphs 1 to 3 of the preceding paragraph.
When a securities firm conducts an underwriting of Taiwan Depositary Receipts, the parties from whom it is allowed to accept book building bids shall comply with the provisions of paragraphs 1 and 2; in addition, the firm shall refuse book building bids involving any participation of the depositary institution, or any director, supervisor, manager, or employee of the depositary institution, or any spouse or child thereof.
For securities allocated by an underwriter but not paid for by the subscribers and subsequently placed with a specified party, the provisions of paragraphs 1 to 3 shall apply mutatis mutandis to the specified party.
When a securities firm conducts an underwriting case involving an initial listing on a stock exchange or an OTC market, it furthermore shall obtain declarations from the bidders affirming their consent for the provision of the book building information (including the remittance bank and account number) to the TWSE and the GTSM for the establishment of files, provided that the information will not be externally disclosed for any purpose other than provision to the TWSE, GTSM, and the competent authority for securities for supervision and auditing purposes.
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