Taiwan Stock Exchange - Rules & Regulations Directory

Amendments

Title:
Securities and Exchange Act(2015.07.01)

Article 20-1
    When the essential content of the financial reports or relevant financial or business documents referred to in paragraph 2 of the preceding article, or financial reports filed or publicly disclosed pursuant to Article 36, paragraph 1 contain misrepresentations or nondisclosures, the persons under the following subparagraphs shall bear liability for damages suffered by the bona fide purchasers, sellers, or holders of securities issued by the issuer:
  1. The issuer and its responsible persons.
  2. Employees of the issuer who placed their signatures or seals on the financial report or the financial or business document in question.
    With the exception of the issuer, a person under any paragraph of the preceding subparagraph shall not be liable for damages when he or she can demonstrate that they exercised all due diligence and had legitimate cause to believe that the reports or documents contained no misrepresentations or nondisclosures.
    A CPA who performs attestation of the financial reports or financial and business documents referred to in paragraph 1 shall be liable for the occurrence of any damages as set forth in paragraph 1 that arise out of misconduct, violation or negligence in connection with the performance of his or her duties as CPA.
    In respect of the liability of a CPA under the preceding paragraph, a good-faith buyer, seller, or holder of securities may petition a court to requisition the CPA's working papers, and further, to review or make copies of the same. The CPA and the accounting firm may not refuse such action.
    With the exception of the issuer, when the negligence of a person under any subparagraph of paragraph 1 or under paragraph 3 results in the occurrence of the damages set forth in paragraph 1, each such person shall bear liability for damages in proportion to their degree of responsibility.
The provisions of paragraph 4 of the preceding Article shall apply mutatis mutandis to paragraph 1.

Article 43-1
    Any person who acquires, either individually or jointly with other persons, more than ten percent of the total issued shares of a public company shall file a statement with the Competent Authority within ten days after such acquisition, stating the purpose and the sources of funds for the purchase of shares and any other matters required to be disclosed by the Competent Authority; such persons shall file timely amendment when there are changes in the matters reported.
    Any public tender offer to purchase the securities of a public company bypassing the centralized securities exchange market or the over-the-counter market may be conducted only after it has been reported to the Competent Authority and publicly announced, except under the following circumstances:
  1. The number of securities proposed for public tender offer by the offeror plus the total number of securities of the public company already obtained by the offeror and its related parties do not exceed five percent of the total number of voting shares issued by the public company.
  2. The securities purchased by the offeror through the public tender offer are securities of a company of which the offeror holds more than 50 percent of the issued voting shares.
  3. Other circumstances in conformity with the regulations prescribed by the Competent Authority.
    Any person who independently or jointly with another person(s) proposes to acquire a certain percentage of the total issued shares of a public company or of the beneficial securities of a real estate investment trust under the Real Estate Securitization Act shall make the acquisition by means of a public tender offer, unless certain conditions are satisfied.
    The scope, conditions, period, related parties, and particulars for filing and public announcement in connection with purchases of securities pursuant to paragraph 2, and the "certain percentage" and "conditions" in connection with the acquisition of a certain percentage of the total issued shares of a public company under the preceding paragraph shall be prescribed by the Competent Authority.
    Any person who will make a public tender offer to purchase the beneficial securities of a real estate investment trust under the Real Estate Securitization Act may conduct the public tender offer only after filing with the Competent Authority and making a public announcement. The scope, conditions, period, related parties, and particulars for filing and public announcement in connection with purchases of real estate securitization beneficial securities, and the "certain percentage" and "conditions" in connection with the acquisition of beneficial securities of a real estate investment trust under paragraph 3 shall be prescribed by the Competent Authority.

Article 43-3
    From the date of filing and public announcement until the date of lapse of the public tender offer period, the public tender offeror and its related parties shall not, through a centralized securities exchange, over-the-counter market, any other market, or by any other means, purchase the same type of securities of the public company or beneficial securities of the real estate investment trust under the Real Estate Securitization Act.
    A public tender offeror that violates the preceding paragraph shall be liable to the tenderer for damages up to the amount of the difference between the price paid for the securities purchased through other means and the price under the public tender offer, multiplied by the number of shares subscribed.

Article 155
    The following actions with regard to securities publicly listed on a stock exchange shall be prohibited:
  1. To order or report a trade on a centralized securities exchange market and to fail to perform settlement after the transaction is made, where such act is sufficient to affect the market order.
  2. (Deleted)
  3. To conspire with other parties in a scheme such that the first party buys or sells designated securities at an agreed price, while the second party sells or buys from the first party in same transaction, with the intent to inflate or deflate the trading prices of said securities on the centralized securities exchange market.
  4. To continuously buy at high prices or sell at low prices designated securities for his own account or under the names of other parties with the intent to inflate or deflate the trading prices on said securities traded on the centralized securities exchange market, when there is a likelihood that market prices or market order will be affected.
  5. To continuously order or report a series of trades under one's own account or under the names of other parties, and to complete the corresponding transactions with the intent of creating an impression on the centralized securities exchange market of brisk trading in a particular security.
  6. To spread rumors or false information with the intent to influence the trading prices of designated securities traded on the centralized securities exchange market.
  7. To perform directly or indirectly any other manipulative acts to influence the trading prices of securities traded on the centralized securities exchange market.
    The provisions of the preceding paragraph shall apply mutatis mutandis to transactions conducted on the over-the-counter markets.
    Persons who violate the preceding two paragraphs shall be held liable to compensate the damages suffered by the bona fide purchasers or sellers of the said securities.
    The provisions of paragraph 4 of Article 20 of this Act shall apply mutatis mutandis to the preceding paragraph.

Article 156
    Given the occurrence of any of the following events, the Competent Authority may issue an order suspending the trading of designated securities completely or partially, or restricting the trade by brokers and dealers in such securities, when there is a likelihood that the event will affect the market trading order or be prejudicial to the public interest:
  1. the company issuing the securities becomes involved in litigation or other non-litigious matters which is sufficient to result in its dissolution, or changes in its corporate organization, capital, business plan, financial condition, or suspension of production.
  2. the company issuing the securities becomes involved in major disasters, signed major agreements, confronted with special circumstances, initiated major changes in its business plan, or had its checks dishonored, the result of which is sufficient to result in a significant material change in the financial condition of the company.
  3. the company issuing the securities engages in deceptive, dishonest, or illegal practices, the result of which is sufficient to affect the prices of its securities.
  4. the market price of the securities has undergone continuous, major rises or declines, resulting in abnormal fluctuations in the prices of other securities.
  5. the company issuing the securities is involved in the occurrence of any material public hazard or food or drug safety event.
  6. other events of material significance.

Article 178
    A person who commits any of the following offenses shall be punished with an administrative fine of not less than NT$240,000 and not more than NT$2.4 million:
  1. Violation of the provisions of Article 22-2, paragraph 1 or 2, Article 26-1, Article 141, Article 144, Article 145, paragraph 2, Article 147, or Article 152; or Article 141, Article 144, Article 145, paragraph 2, or Article 147 as applied mutatis mutandis under Article 165-1 or 165-2; or Article 22-2, paragraph 1 or 2 as applied mutatis mutandis under Article 165-1.
  2. Violation of the provisions of Article 14, paragraph 3, Article 14-1, paragraph 1 or 3, Article 14-2, paragraph 1 or 5, Article 14-3, Article 14-4, paragraph 1 or 2, Article 14-5, paragraph 1 or 2, Article 21-1, paragraph 5, Article 25, paragraph 1, 2, or 4, Article 26-3, paragraph 1 or 7, Article 31, paragraph 1, Article 36, paragraph 5 or 7, Article 41, Article 43-1, paragraph 1, Article 43-4, paragraph 1, Article 43-6, paragraphs 5 to 7, Article 58, Article 61, Article 69, paragraph 1, Article 79, or Article 159; or Article 14, paragraph 3, Article 31, paragraph 1, Article 36, paragraph 5, Article 43-4, paragraph 1, or Article 61, as applied mutatis mutandis under Article 165-1 or 165-2; or Article 14-1, paragraph 1 or 3, Article 14-2, paragraph 1 or 5, Article 14-3, Article 14-4, paragraph 1 or 2, Article 14-5, paragraph 1 or 2, Article 25, paragraph 1, 2, or 4, Article 26-3, paragraph 1 or 7, Article 36, paragraph 7, Article 41, Article 43-1, paragraph 1, Article 43-6, paragraphs 5 to 7, as applied mutatis mutandis under Article 165-1.
  3. An issuer or public tender offeror or a related party thereof, a securities firm or a principal thereof, a securities dealers association, a stock exchange, or any other enterprise referred to in paragraph 1 of Article 18 fails to submit account books, forms/statements, documents, or other reference or report materials within the time period specified in this Act or in an order issued by the Competent Authority pursuant to this Act, or any of the above parties refuses, impedes, or evades an examination carried out by the Competent Authority.
  4. If any issuer, public tender offeror, securities firm, securities dealers association, stock exchange, or any other enterprise referred to in Article 18, paragraph 1 fails to comply with relevant rules in the preparation, submission, public announcement, maintenance, or storage of the account books, forms/statements, vouchers, financial reports or other relevant business documents as required by this Act, or as required by orders issued by the Competent Authority pursuant to this Act.
  5. Violation of rules prescribed by the Competent Authority in accordance with Article 25-1 regarding the qualifications of proxy solicitors, proxy agents, or those handling proxy solicitation matters, the methods of solicitation or acquisition of proxy forms, corporate compliance matters in connection with the convening of shareholder meetings, or refusal to comply with a requirement by the Competent Authority for provision of information, or Article 25-1 as applied mutatis mutandis under Article 165-1.
  6. Violation of the shareholding percentage requirements of directors and supervisors of publicly issued companies prescribed by the Competent Authority in accordance with paragraph 2 of Article 26, and provisions regarding notifications and auditing in the enforcement rules for auditing the shareholdings thereto.
  7. Violation of the provisions of Article 26-3, paragraph 8 by failing to formulate rules for the conduct of directors meetings, or violating the regulations prescribed by the Competent Authority pursuant to the same article and paragraph governing the content of deliberations, procedures, matters to be recorded in the meeting minutes, and public announcement, or violation of the rules issued by the Competent Authority pursuant to Article 36-1 regarding the scope, working procedures, required public announcements, and required filings for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, endorsements or guarantees for others, and disclosure of financial forecast information, or violation of Article 26-3, paragraph 8 or Article 36-1 as applied mutatis mutandis under Article 165-1.
  8. Violation of the provisions of Article 28-2, paragraphs 2 or 4 to 7 or the matters prescribed by the Competent Authority in accordance with Article 28-2, paragraph 3 regarding procedures, prices, volumes, methods, methods of transfer, and matters that must be filed and publicly announced in relation to repurchase of shares, or violation of Article 28-2, paragraphs 2 to 7 as applied mutatis mutandis under Article 165-1.
  9. Violation of the provisions of Article 43-2, paragraph 1, Article 43-3, paragraph 1, or Article 43-5, paragraph 1, or regulations prescribed by the Competent Authority in accordance with Article 43-1, paragraphs 4 or 5 regarding the scope, conditions, period, related parties, and particulars for filing and public announcement in connection with purchases of securities, or violation of Article 43-1, paragraph 4, Article 43-2, paragraph 1, Article 43-3, paragraph 1, or Article 43-5, paragraph 1, as applied mutatis mutandis under Article 165-1 or 165-2.
    Where a person who has committed any of the offenses referred to in subparagraphs 2 through 7 of the preceding paragraph, the Competent Authority shall, in addition to imposing an administrative fine, order the person to comply within a prescribed time period; where the person fails to comply within the specified period, the Competent Authority may order a new period for compliance and impose additional administrative fines of not less than NT$480,000 and not more than NT$4.8 million for each successive failure to comply until corrective action has been taken.
    A reward shall be offered for the report of a violation of Article 25-1 that leads to successful discovery of a violation; regulations governing such reward shall be prescribed by the Competent Authority.
    When a foreign company is the issuer, any violation of paragraph 1, subparagraphs 3 or 4 by the foreign company shall be punished under paragraphs 1 and 2.

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