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Article 12
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During formal review of financial reports, if the TWSE discovers that a financial report was not submitted pursuant to the regulations, an incomplete set of documents was filed, or the CPA produced an audit report not with an unqualified opinion or review report not with unqualified conclusions, affecting the fair presentation of the financial report to the extent that a restatement is required, or that the company's internal control system has significant deficiencies; or if, during the formal examination of a financial forecast, it is found that incomplete information was submitted or incomplete information was publicly released, or the date of public disclosure and filing or the date of preparation exceeded the deadline, or the CPA produced a non-standard audit opinion, the TWSE shall formulate a concrete method of handling or suggestions for handling the matter for inclusion in its related report to the competent authority.
After reviewing a financial report, the TWSE shall explicitly express a review conclusion and an opinion on a concrete method of handling. If any case is found in which there are material deficiencies or omissions, the TWSE shall handle the matter pursuant to the Securities and Exchange Act, or, where there is a necessity to request the assistance of relevant agencies, the TWSE shall attach its review report with the given case, formulate an opinion on its handling, and report to the competent authority, or request that the competent authority transfer the case to the specific competent authority for the target industry for further investigation and handling.
If common deficiencies are found during the review of financial reports, the TWSE may issue a circular letter to TWSE primary listed companies as a reference for improvement and forward a copy to the competent authority.
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Article 24
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If any of the following material events occurs to a TWSE primary listed company, the TWSE shall conduct verification and public disclosure operations following its Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities. The TWSE shall analyze and collect relevant information on the material event, and when necessary prepare an analysis report:
- Finances
- The TWSE primary listed company's financial statements for the current period show serious loss, such that the equity attributable to owners of the parent is lower than the share capital stated in the financial report.
In the case of shares having no par value or a par value other than NT$10, the "share capital" refers to the sum of the share capital plus capital reserves minus, the original issue premium. - The CPA issues an audit report not with an unqualified opinion or a review report not with unqualified conclusions, and the circumstances are material.
- The TWSE primary listed company or its parent company or any of its subsidiaries has experienced a loss of creditworthiness.
- A principal debtor of the listed company has filed for bankruptcy or experienced any other similar event, or a principal debtor in favor of whom the company has made an endorsement or guarantee is unable to settle a debt or obligation when due.
- From financial information submitted by the TWSE primary listed company it is found that the company has provided any endorsement or guarantee for a company with which it does not do business, or that it has provided company assets as collateral for loan borrowings of another person.
- The cumulative actual amounts of expenditures and construction progress in connection with a cash capital increase or issuance of corporate bonds both lag behind projected amounts by 25 percent or more.
- Assets (excluding all types of domestic stocks and open-end bond funds) acquired or disposed of by the TWSE primary listed company or its subsidiaries reach 20 percent or more of the share capital stated in the company's financial report, or NT$300 million or more.
In the case of shares having no par value or a par value other than NT$10, 10 percent of the equity attributable to owners of the parent shall be used for calculation instead of the aforesaid 20 percent of share capital. - The amount of open interest in derivatives held for trading purposes in the current month shows a month-on-month increase of 10 percent or more of the share capital stated in the financial report, or the combined amount of realized and unrealized losses shows a month-on-month increase of NT$100 million or more. In the case of shares having no par value or a par value other than NT$10, 5 percent of the equity attributable to owners of the parent shall be used for calculation instead of the aforesaid 10 percent of share capital.
- There is a high year-on-year rate of increase or decline in operating revenue in the current month from the same month of the previous year or a high month-on-month changing rate in operating revenue in the current month from the previous month, or a high year-on-year rate of increase or decline in cumulative operating revenue as of the current month, with no reasonable cause for the change; or there is a material revision of the operating revenue of the current period or any previous period.
- There is a high year-on-year rate of increase or decline in cumulative operating revenue during a certain period, and in a direction opposite to that of the industry to which the company belongs.
- Business
- The financial statements of the TWSE primary listed company for the current period indicate a serious reduction in production, or a suspension of manufacturing operations in whole or in part, resulting in serious loss, and it is predicted that the circumstance cannot be improved within a short time.
- Any of the TWSE primary listed company's plants or major facilities has been rented out, or all or a substantial part of the company's major assets have been pledged, such that there is a likelihood of operational difficulties or suspension of operations.
- The company enters into an important contract, changes major content in its business plan, completes the development of a new product, acquires another enterprise, or signs or rescinds a cooperation plan with another company, resulting in an adverse effect on the company's finances or business.
- Any instance of major disaster, protest, strike, or environmental pollution occurs to the TWSE primary listed company and it is predicted that the business operations cannot be restored within a short time, or the predicted losses exceed 20 percent of the share capital stated on the financial report. In the case of shares having no par value or a par value other than NT$10, 10 percent of shareholders' equity shall be used for calculation instead of the aforesaid 20 percent of share capital.
- A change in management rights or material change in the scope of business.
- Other
- Elections for directors/supervisors of the TWSE primary listed company cannot be held as scheduled, or one-half or more of the original directors or supervisors cannot exercise their official powers.
- A serious deficiency occurs in any stock-related operations of the TWSE primary listed company (such as fraud by company insiders), affecting market order.
- Any matter involving litigious or non-litigious proceedings, an administrative disposition, or contentious administrative proceedings, with a material effect on the TWSE primary listed company's financial or business operations.
- The company enters into an important contract, changes important content in its business plan, or rescinds a cooperation plan with another company, with an adverse impact on the company's finances or business operations.
- Reorganization or bankruptcy proceedings of the TWSE primary listed company, its parent company, or any of its subsidiaries, and any events that occur in the course of such proceedings, including any application made by the company, any petition made by an interested party and known to the company, any notification or ruling made by a court, or any other matters related to reorganization or bankruptcy proceedings duly conducted in accordance with laws and regulations.
- A report is made by the Surveillance Department of the TWSE in accordance with the Procedures for Trading Index Early Warning Notification.
- The TWSE primary listed company issues any material information, or the press/media report any event with a material effect on the company's operations.
- There is a material irregularity in a transaction between the TWSE primary listed company and a related party.
- The TWSE primary listed company enters material information into the TWSE's Market Observation Post System, and its average closing stock price for the three days following the entry differs by 14 percent or more from the average closing stock price for the three days preceding the entry.
- A material irregularity is found in the internal control system of the TWSE primary listed company in an audit.
- An independent director's office that the TWSE primary listed company establishes in accordance with regulatory requirement becomes vacant for any reason other than illness, death, or other force majeure event, resulting in an insufficient number of independent directors, or as a result the company has no independent director with a household registration in Taiwan.
- A circumstance arises in which the primary listed company has no agent for litigious and non-litigious matters in Taiwan.
- Change of the company's financial officer, accounting officer, internal audit officer, research and development officer, or CPA, where the change is not an internal adjustment of an accounting firm.
- The competent authority or the TWSE otherwise deems necessary.
When any material event occurs to a TWSE primary listed company, the TWSE may require that the TWSE primary listed company, or its CPA, lead underwriter, agent for litigious and non-litigious matters in Taiwan, or independent director(s) give explanatory information on specified matters, and in consideration of the actual situation, may require the TWSE primary listed company to submit a regulatory filing of the explanatory matters on the TWSE-designated information reporting website or require the TWSE primary listed company to hold an informational press conference.
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