Taiwan Stock Exchange - Rules & Regulations Directory

History

Title:
Taiwan Stock Exchange Corporation Procedures for Press Conferences Concerning Material Information of Listed Companies(2008.08.22)

Article 1 
These Procedures are promulgated pursuant to Article 2 of the Securities Listing Contract signed between this Corporation and listed companies and Article 2 of the Foreign Stock Listing Contract signed between this Corporation and primary-listed companies.

Article 2 
The term "listed company" as used in these Procedures means listed companies and primary-listed companies as specified in Article 43 of the Operating Rules of this Corporation; "Material information" in "press conferences concerning material information" as used in these Procedures means the following particulars provided by a listed company of its own initiative or investigated and verified at the initiative of this Corporation:
1. Dishonor of a negotiable instrument due to insufficient deposits, refusal by a financial institution to honor a transaction, or other loss of credit of a listed company or parent company or subsidiary thereof.
2. Any serious effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, or contentious administrative procedure with respect to a listed company or a responsible person thereof.
3. Serious decrease in output or complete stoppage of work.
4. Any event set forth in Paragraph 1 of Article 185 of the Company Act of the Republic of China.
5. Resolution by the board of directors of a listed company or parent or subsidiary thereof to petition a court for bankruptcy or reorganization, or a petition by a third party to a court for bankruptcy or reorganization; or a court ruling prohibiting transfer of the company's shares pursuant to relevant laws and regulations.
6. Signing or rescission of an important memorandum of understanding or strategic alliance or plan for business cooperation with another company or important contract, or change to important content of a business plan, or completion of development of a new product.
7. Resolution by the board of directors for capital reduction, merger or consolidation, cancellation of merger or consolidation, spin-off, acquisition, acquisition of shares, dissolution, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or acquisition of shares, or veto of the proposal for merger, consolidation, spin-off, acquisition, or acquisition of shares; provided, this shall not apply to cases under Article 18, Paragraph 6 of the Business Mergers and Acquisitions Act, where the merged/acquired enterprise is a company not listed on an exchange, or OTC market and has paid-in capital of less than NT$1 billion, or a merger/acquisition conducted in accordance with Article 19 of the Business Mergers and Acquisitions Act.
8. Occurrence of a material event of internal control-related malpractice, non arms-length transaction, or defalcation of assets.
9. Finalization of negotiation results of a negotiation meeting called between the listed company and a creditor bank.
10. (This subparagraph is deleted.)
11. (This subparagraph is deleted.)
12. Transactions between the listed company and related parties: acquisition or disposal of investments in securities, real property and other fixed assets, or creditor rights of financial institutions, where the monetary amount of the individual transaction, or of cumulative transactions with a same trading counterpart within one year, reaches 20 percent of the company's paid-in capital or not less than NT$300 million; acquisition or disposal of real property for operating use by construction enterprises, where the monetary amount of the individual transaction, or of cumulative transactions with a same trading counterpart within one year, reaches 20 percent of the company's paid-in capital or not less than NT$500 million.
13. (This subparagraph is deleted.)
14. Occurrence of a disaster, group protest, strike, environmental pollution event resulting in a disposition by a competent authority, where the anticipated insurance-indemnified loss exceeds 20 percent of the company's paid-in capital or NT$300 million or more.
15. (This subparagraph is deleted.)
16. Any mass media reportage or information provided by investors that would be sufficient to affect the market price of the listed company's securities.
17. (This subparagraph is deleted.)
18. (This subparagraph is deleted.)
19. Voidance of the permit of a financial holding company by the competent authority thereof, or penalization of a financial holding company by the competent authority thereof because of a violation of any applicable law or regulation, or loss by a financial holding company of statutory controlling shareholding in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
20. (This subparagraph is deleted.)
21. (This subparagraph is deleted.)
22. Resolution by the board of directors or a shareholders' meeting to apply for termination of listing for trading of its securities.
23. (This subparagraph is deleted.)
24. Where a listed company holds more than 70 percent of the total issued shares or total capital of a listed (or OTC) subsidiary thereof; or where 70 percent of the total issued shares or total capital of a listed company is held by another listed (or OTC) company.
25. Any other circumstance with a material effect on shareholders' equity or securities prices, or other major policy resolutions of the board of directors of the company.
Where any circumstance in any subparagraph of Paragraph 1 applies to any non-exchange-listed (and non-OTC-listed) major subsidiary of a listed company, it shall be deemed material information of the listed company. The term “major subsidiary” means any and all subsidiary(ies) of the listed company as defined according to generally accepted accounting principles to which any of the following circumstances has applied in each of the most recent two fiscal years (with the information being based on the annual financial reports audited and attested by a certified public accountant), or any subsidiary that the certified public accountant deems to have a material effect on the financial report of an audited company:
(1) Where 30 percent or more of the listed company's operating revenue is derived from the single subsidiary.
(2) Where 50 percent or more of the listed company's major materials or major commodities, in terms of its quantities or total dollar purchase amounts thereof, is derived from the single subsidiary.
(3) Where 50 percent or more of the listed company's total output value (including from self-production, contracting, and outsourcing) is derived from the single subsidiary.
(4) Where the listed company's dollar amount of original investment in the single subsidiary reaches 40 percent of the listed company's capital stock stated on its financial report and also NT$300 million or more.
(5) Where the aggregate dollar amount of the listed company's monetary loans and guarantees and endorsements to the single subsidiary reaches 40 percent of its net worth and also NT$300 million or more.
(6) Where a single subsidiary's profit/(loss) before tax accounts for 50 percent of the listed company's profit/(loss) before tax on its consolidated financial statements and also NT$300 million or more.
The existence of any circumstance set forth in any subparagraph of paragraph 1 in respect of any non-exchange-listed (and non-OTC-listed) held company or subsidiary of a listed company that is an investment holding company, holding company, or financial holding company, or in respect of a listed company that is a subsidiary of a non-exchange-listed (and non-OTC-listed) domestic parent company, shall be deemed material information of the listed company. Subsidiary of a financial holding company means a subsidiary as defined in Article 4, subparagraph 4, items 1 to 3 of the Financial Holding Company Act, or any other subsidiary that the certified public accountant of the financial holding company deems to have a material effect on the financial report.

Article 3 
A listed company to which any circumstance set forth in any subparagraph in the preceding article applies, or that discovers mass media reportage of any circumstance set forth in any subparagraph of the preceding article or any reportage that diverges from facts, shall complete a "Report to Convene a Press Conference Concerning Material Information" (Attachment 1) specifying the content of the information, and promptly send it to this Corporation for handling. Unless this Corporation deems there to be a necessity to postpone handling, the company shall promptly dispatch a spokesperson or acting spokesperson to personally appear at this Corporation or hold a press conference through video conferencing before the trading day next following the occurrence of the event or the broadcast media report, to provide explanations to the news media. Where foreign laws or regulations impose time constraints concerning material information that a listed company is required to report on behalf of a foreign enterprise
under these Procedures, the listed company may accommodate the time constraints on the foreign enterprise and make the disclosure simultaneously therewith.
The primary-listed company may dispatch a spokesman or acting spokesman, or its litigious or non-litigious agent in the Republic of China, or an independent director, to hold a press conference pursuant to the provisions in the preceding paragraph.
If any of the matters as specified in paragraphs 1, 2, 7, 19, and 22 of the preceding Article, or any matter that this Corporation deems material occurs to the listed company, the listed company shall dispatch the above-mentioned personnel to this Corporation to hold a press conference, and such conference may not be held through video conferencing.
If any circumstance specified in paragraph 1, subparagraph 7 of the preceding Article exists, the listed company shall, in the closest non-trading hours after the resolution is passed by the board of directors, convene a press conference at this Corporation. If there is more than one participating listed company, the companies shall hold the press conference simultaneously. If there are exceptional circumstances such that it is impossible to hold the press conference in a timely manner and this Corporation has been reported to and given approval, the listed company shall immediately input the content or explanations of the information into the Internet information reporting system designated by this Corporation, and promptly make up holding of the press conference.

Article 4 
When this Corporation discovers or mass media report the existence of any material information set forth in Article 2 with respect to a listed company, and such information is verified pursuant to this Corporation Procedures for Verification and Disclosure of Material Information of Listed Companies, this Corporation may complete a Notice for a Press Conference Concerning Material Information (Attachment 2) specifying the source and content of the information, and send it to the listed company to request that it dispatch a spokesperson or acting spokesperson to participate in a news conference by a deadline set by this Corporation, to provide explanations to the news media.

Article 5 
To ensure timeliness, a listed company filling out a report pursuant to Article 2 shall first transmit it by facsimile and then deliver the original report. If after delivery of the original report any discrepancy with the originally facsimiled is discovered, the listed company shall bear the responsibility, and shall publicly announce and explain the discrepancy. A report submitted by a listed company shall be filled out consistently with the facts, and shall be chopped with the chops of the company and its responsible person or manager, to indicate that they take responsibility for it.
When convening a press conference, a representative of a listed company shall state in detail the facts that occurred, the cause, the effect on company finances, the projected monetary amount of such effects, and countermeasures to be taken, and shall prepare relevant written materials. The concrete content required to be explained shall be separately prescribed by this Corporation.
Where any of the circumstances set forth in Article 2, Paragraph 1 applies to a listed company, the company shall input the content of such event into the Internet information reporting system designated by this Corporation on the date of occurrence of the event or the same day as the media reportage, except in the cases of a resolution by the board of directors of a listed company for merger or consolidation, cancellation of merger or consolidation, spin-off, acquisition, acquisition of shares, establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof; or inability to convene a subsequent shareholders' meeting of a company participating in a merger or consolidation spin-off, acquisition, or acquisition of shares; or veto by the shareholders' meeting of the proposal for merger or consolidation spin-off, acquisition, or acquisition of shares, in which cases the listed company shall, at the time of convening the press conference or after the conference, input into the Internet information reporting system designated by this Company the information about the event as required under this Corporation's Procedures for Verification and Disclosure of Material Information of Listed Companies.

Article 6 
To ensure the accuracy of and general access to relevant information, a listed company shall not externally announce any information prior to inputting the content of an event into the Internet information reporting system designated by this Corporation or holding a press conference concerning material information pursuant to these Procedures.

Article 7 
This Corporation may impose a breach penalty of NT$50,000 on a listed company that violates any provision of these Procedures for each individual case of violation; provided, however, that if the cumulative number of penalties within one year reaches two or more (inclusive of the current penalty), a breach penalty of NT$100,000 shall be imposed as the current penalty. Where a listed company that is required to make up some measure, and that is notified to do so by before the trading day next following the notice, still fails to do so by the deadline, a breach penalty of NT$10,000 per day may be imposed until the day the measure is carried out.
If after receiving notice from this Corporation requiring it to hold a press conference, a listed company still fails to do so and the circumstances of the specific case are serious, this Corporation may alter the original trading method, or suspend trading, of the securities of the listed company under Articles 49 or 50 of the Operating Rules.

Article 8 
By the tenth day of each month, this Corporation shall publicly announce at the centralized securities exchange market the status of penalties imposed on listed companies that violated these Procedures the preceding month.

Article 9 
These Procedures shall take force after ratification by the competent authority; the same shall apply to any amendments hereto.

Data Source:Taiwan Stock Exchange - Rules & Regulations Directory
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