These Procedures are promulgated pursuant to Article 2 of the Securities Listing Contract signed between this Corporation and listed companies.
"Material information" of listed companies in these Procedures means the following matters:
1. Dishonor of a negotiable instrument due to insufficient deposits and notation of settlement subsequent to dishonor of a negotiable instrument, refusal of a financial institution to honor a transaction, or other loss of credit of a listed company or a responsible person, parent company, or subsidiary thereof, or a material change in shareholding of the parent company; or, after dishonor of a negotiable instrument of a listed company due to insufficient deposits or refusal of a financial institution to honor a transaction of a listed company, any alteration of trading method, suspension of trading, or delisting of the stock thereof, and the status of any application to restore the original conditions.
2. Any material effect on company finances or business resulting from any litigious or non-litigious matter, administrative disposition, contentious administrative procedure, or motion for provisional attachment or provisional injunction, or compulsory execution thereof, with respect to a listed company or a responsible person thereof.
3. Any material effect on company finances or business resulting from any serious decrease in output or complete or partial suspension of work, leasing out of a company plant or principal equipment, or pledge or mortgage of all or a principal portion of a company's assets.
4. Any event set forth in Paragraph 1 of Article 185 of the Company Act.
5. Reorganization or bankruptcy procedure of a listed company or parent or subsidiary thereof, and any and all events occurring in the course of such procedure, including any petition made to a court and any notice given or ruling handed down by a court, or any ruling prohibiting transfer of shares or any precautionary measure ordered by a court under relevant laws such as the Company Act or the Bankruptcy Act, or any material change in any of the above matters.
6. Change in chairman, general manager, a juristic-person director or supervisor or representative thereof, an independent director, or a natural-person director or supervisor, or change in one-third or more of directors.
7. Change of certified public accountant (CPA) for any reason other than internal adjustments within the certifying accounting firm.
8. Change of company spokesperson, acting spokesperson, financial officer, accounting officer, research and development officer, or internal audit officer.
9. Change in accounting year.
10. Any material effect on company finances or business resulting from any signing, amendment, termination, or rescission of an important memorandum of understanding, a plan for a strategic alliance or other business cooperation , or an important contract, change in any material respect of a business plan, completion of development of a new product, or successful development and formal entry into the full-scale production stage of an experimental product.
11. Resolution by the board of directors to carry out a capital reduction, merger or consolidation, spin-off, acquisition, exchange or conversion of shares or transfer of shares from another, dissolution, issue of new stock for capital increase, issue of corporate bonds, issue of employee stock option certificates, issue of other securities, private placement of securities, participation in the establishment of or conversion into a financial holding company or investment holding company or subsidiary thereof, or any material change in any of the above matters; or failure by companies participating in a merger, consolidation, spin-off, acquisition, or transfer of shares from another, to convene on the same day and pass resolutions by their boards of directors or shareholders' meetings, or inability to convene a subsequent shareholders' meeting of a company participating in a merger, consolidation, spin-off, acquisition, or transfer of shares from another, or veto by either side of the proposal for merger, consolidation, spin-off, acquisition, or transfer of shares from another; or resolution of the board of directors to cancel a merger or consolidation during the implementation of the merger or consolidation plan following the initial board resolution in favor of the merger or consolidation.
12. Date of any investor/press conference to be convened by the company; related financial or business information.
13. Resolution by the board of directors to publish financial forecast information, inapplicability of such financial forecast information, or correction or updating of such financial forecast information, or a discrepancy, by a company that has published complete financial forecasts, between the self-assessed income before tax publicly announced and reported within one month after the close of the fiscal year and the most recently publicly announced and reported financial forecasts, where such discrepancy is 20 percent or more and of an amount reaching NT$30 million and 0.5 percent of paid-in capital, or a discrepancy between the income before tax in the financial report publicly announced and filed for a given fiscal year and the self-assessed income before tax for the preceding fiscal year publicly announced and reported within one month after the close of that fiscal year, where such discrepancy is 20 percent or more and of an amount reaching NT$30 million and 0.5 percent of paid-in capital.
14. Resolution by the board of directors to distribute dividends or a change in dividend distributions by a resolution of the board of directors or a shareholders' meeting, or resolution of a record date for dividend distribution.
15. Resolution by the board of directors or a shareholders' meeting to directly or indirectly carry out an investment plan of an amount reaching not less than 20 percent of the company's paid-in capital or NT$1 billion, or any material change in any of the above matters.
16. A change by resolution of the board of directors in a plan for capital increase by cash or offering of corporate bonds after such plan has become effective upon registration, or a change by resolution of the board of directors in a plan for private placement of securities after passage of the plan by a resolution of the board of directors or a shareholders' meeting.
17. Resolution of the board of directors on the date for convening a shareholders' meeting or special shareholders' meeting, the cause or subjects of such a meeting, or the date of suspension of changes to entries in the shareholders' roster
18. Important resolution of a shareholders' meeting or special shareholders' meeting.
19. The company experiences any material event of internal control fraud, non arms-length transaction, or defalcation of assets.
20. Acquisition or disposal of assets by the listed company, or a subsidiary thereof whose shares have not been publicly issued domestically, where within the applicable scope of assets under Article 3 of the Regulations Governing Acquisition or Disposal of Assets by Public Companies adopted by the Competent Authority and moreover in the presence of any of the circumstances set forth in Article 30 or 31 [of said Regulations] as requiring public announcement and reporting, with the exceptions of merger, consolidation, spin-off, acquisition, and transfer of shares from another, with respect to which a public announcement is to be made under Article 2, Paragraph 1, Subparagraph 11, of these Procedures, and of derivatives trading for which the information is reported on a monthly basis.
Where a listed company under the preceding paragraph acquires or disposes of any domestic open-end fund including stock or bond funds, public announcement and reporting is not necessary, unless it is a privately placed fund; public announcement and reporting is required in the event of any unrealized losses on derivatives trading amounting to 3 percent or more of shareholders equity.
21. Resolution by the board of directors (or a shareholders' meeting) to permit a managerial officer (or director) to engage in competitive conduct, or knowledge by the company that a managerial officer is operating the same kind of business independently or on behalf of another person, or a director is involved in conduct within the company's scope of business independently or on behalf of another person, and the investment or business engaged in is a mainland China area enterprise, and there has been any failure to duly obtain permission from the board of directors (or a shareholders' meeting), or there is any material change in any of the above matters.
22. Endorsements and guarantees by the listed company and subsidiaries thereof whose shares have not been publicly issued domestically, in an amount reaching a level set forth in the subparagraphs of Paragraph 1 of Article 25 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the Competent Authority; or total endorsements and guarantees by a listed company itself in favor of enterprises in the same group reaching 50 percent or more of the company's net worth on its financial statements for the most recent period.
23. Monetary loans to other persons by the listed company and subsidiaries thereof whose shares have not been publicly issued domestically, in an amount reaching a level set forth in the subparagraphs of Paragraph 1 of Article 22 of the Regulations Governing Loans of Funds and Endorsements and Guarantees by Public Companies promulgated by the Competent Authority.
24. Acquisition or disposal of privately placed securities by a listed company or a subsidiary thereof.
25. Suspension in whole or in part of business transactions between the company and a major purchaser or supplier, where such purchaser or supplier accounted for 10 percent or more of the company's total amount of sales or purchases in the most recent fiscal year.
26. Occurrence of a disaster, group protest, strike, environmental pollution event, or any other material event, where the company incurs a material loss, or where a relevant authority orders suspension of work, suspension of business, termination of business, or revokes or voids a permit pertaining to pollution, or imposes administrative fines reaching NT$100,000 or more.
27. Finalization of negotiation results of a negotiation meeting called between the company and a creditor bank.
28. Dishonor of a negotiable instrument, filing for bankruptcy or reorganization, or any other similar circumstance, on the part of a related party of the company or principal debtor to the company or a joint and several guarantor of a principal debtor; or inability by a principal obligor, in favor of whom the company has made an endorsement or guarantee, to settle a matured negotiable instrument, loan, or other obligation.
29. Any re-filing and public announcement of the regular annually filed internal control system statement of a listed company due to any change in the content thereof; or obtaining of the Internal Control Special Audit Report for the special audit of internal controls conducted by the CPA.
30. Failure by a listed company to make a public announcement or a filing within a prescribed time limit; an error or omission in a financial report prepared by a listed company, with respect to which Article 6 of the Enforcement Rules to the Securities and Exchange Act requires a correction to and further a restatement of the financial report; a certified public accountant (CPA) issues an audit or review report containing an opinion other than an unqualified or modified unqualified opinion on a publicly announced and filed annual or semiannual financial report, except in cases where the CPA issues a qualified audit or review report for the reason of annual amortization of losses, as permitted by law, or for the reason that an amount of long-term equity investment and profit/loss thereupon presented in the first-quarter, third-quarter, or semiannual financial report is calculated on the basis of financial statements of the investee company that have not been audited or reviewed by a CPA.
31. Mass media reportage or provision of information by investors sufficient to affect the market status of a listed company's securities.
32. Insufficient centralized custody ratio after a listed company has placed stocks in centralized custody pursuant to regulations and prior to expiry of the custody period, as the result of withdrawal, due to a court execution order or some other reason, of stocks of personnel whose stocks had been placed in centralized custody.
33. Occurrence of any of the changes in shareholding set forth in Paragraphs 1 or 2 of Article 369-8 of the Company Act and receipt of notice of the same.
34. A provisional injunction ruling suspending one of the directors or supervisors of the company from the exercise of powers or a provisional injunction ruling suspending a director from the exercise of powers, making it impossible for the board of directors to exercise its powers.
35. Any matter required to be publicly announced and reported pursuant to the Regulations Governing Share Repurchase by Listed and OTC Companies promulgated by official letter of the Competent Authority.
36. Where capital amendment registration has been carried out due to capital reduction: the effect of the capital reduction on the company financial report (including any discrepancy between the amount of paid-in capital and the number of shares outstanding and the effect on net worth per share) and planned share conversion operations, and any subsequent failure to execute such share conversion plan.
37. Issuance of an undertaking by a company applying for listing for the first time and subsequently inability to perform the undertaking; failure to carry out remedial procedures within three months of the day of the aforesaid occurrence.
38. Any matter required to be publicly announced and reported pursuant to the Regulations Governing Tender Offers for Purchase of the Securities of a Public Company promulgated by official letter of the Competent Authority.
39. 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 provision of the Financial Holding Company Act, or loss by a financial holding company of controlling shareholding (as defined in Subparagraph 1 of Article 4 of the Financial Holding Company Act) in a subsidiary thereof, where the competent authority has ordered remediation within a certain time limit.
41. Increase or decrease in the number of held companies of an investment holding company.
42. Resolution by the board of directors or a shareholders' meeting of a listed company to apply for termination of listing for trading of its securities, or any material change in such a matter.
44. Expression of objection by an independent director of a listed company to any policy resolution of the board of directors.
45. Forfeiture by the directors and supervisors as a whole of subscription rights to shares in a number reaching one-half or more of subscribable shares upon cash capital increase of a listed company, and opening of the shares for subscription by a specific person or persons through negotiation.
46. 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.
47. If a listed company issues securities overseas, the making of any adjustment for differences in the overseas financial report due to inconsistency in the accounting principles applied in the two places with respect to financial information reported for any period in the place of overseas listing.
48. Any other material policy resolution of the board of directors or other event having a material effect on shareholders' equity or securities prices of the listed company or an affiliated company thereof.
If an "other loss of credit" in Subparagraph 1 of the preceding paragraph is inability to redeem issued matured ordinary corporate bonds, convertible corporate bonds, corporate bonds with warrants, or corporate bonds privately placed under Paragraph 2 of Article 248 of the Company Act, the monetary amount and quantity unredeemed and status of negotiations with creditors as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until redemption has been completed in full. If dishonor of negotiable instruments due to insufficient deposits has occurred and remediation has not yet been made after this Corporation has rendered a disposition of altered trading method or suspension of trading, the date of dishonor, number, monetary amount, and correspondent bank(s) of any dishonored negotiable instrument(s) not yet notated as settled as of the end of the preceding month, cash budget statement for the current month, and status of execution of the cash budget statement for the preceding month shall be input by the 10th day of each month until remediation has been carried out.
With respect to a resolution by the board of directors to carry out a merger or consolidation, spin-off, acquisition, or transfer of shares from another as referred to in subparagraph 11 of [Paragraph 1], if the counterparty is a foreign company, the listed company shall promptly, completely, and accurately input information related to the resolution for, process of, and method of the merger or consolidation, acquisition, or transfer of shares from another, of the foreign business.
Under the circumstances in Subparagraph 32 of Paragraph 1, in addition to complying with the requirements set forth in Article 3, the listed company shall, by the day next following the expiry of the time limit of which the company is notified by letter of this Corporation for replacing shares withdrawn from custody, input the amount of shares replaced and date of replacement.
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 subsidiary 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 significant 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 a listed company's major materials or major commodities, in terms of its quantities or 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 capital stock stated on the listed company's financial report and also NT$300 million or more.
(5) Where the aggregate dollar amount of the 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.
Where any circumstance in any subparagraph of Paragraph 1 applies to any non-exchange-listed (and non-OTC-listed) held company or subsidiary of a listed company that is an investment holding company or financial holding company, it shall be deemed material information of the listed company. Subsidiary 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.
Where the dollar amount of the combined investment in any single enterprise by a listed company and/or any of its subsidiaries as defined according to generally accepted accounting principles exceeds 10 percent of the company's net worth, if such invested single enterprise is not a domestic public company, and there occurs in respect thereof any of the events set out in Article 7, Subparagraphs 1 to 8, of the Securities and Exchange Act Enforcement Rules, the Listed Company shall report on its behalf before the opening of trading hours on the business day next following the day it learns of the occurrence of an above-stated event or of the media reportage of the event.
Where any circumstance in any subparagraph of Paragraph 1 applies to a non-exchange-listed (non-OTC-listed) parent company of a listed subsidiary company thereof, or where any subsidiary of such parent company, as subsidiary is defined according to generally accepted accounting principles, encounters any matter set forth in Paragraph 1 as a matter that must be reported by a company that is a parent or subsidiary, it shall be reported by the listed company. If the parent company is a foreign company, [the listed subsidiary] shall report on its behalf any of the particulars set forth in the following subparagraphs before the opening of trading hours on the business day next following the day it learns of the occurrence or media reportage of such event with respect to the parent company:
(1) Material change in shareholder equity.
(2) Material change in business policy.
(3) Material disaster resulting in serious reduction or complete cessation of production.
(4) Material effect on shareholders' equity or company operations resulting from a change in laws, regulations, or rules of the home country
(5) Mass media reportage about the parent company sufficient to affect securities prices of a listed subsidiary in Taiwan.
(6) Occurrence of any other material event that shall be immediately reported pursuant to law or regulation of the foreign company's home country.
A listed company to which any circumstance set forth in any subparagraph of Paragraph 1 of 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 handle those of such cases conforming to the circumstances set forth in Paragraph 1 of Article 2 of this Corporation's Procedures for Press Conferences Concerning Material Information of Listed Companies in compliance with Article 5 of said Procedures, and shall handle all other such cases by inputting the content or explanations of the information into the Internet information reporting system designated by this Corporation before the commencement of trading hours of the trading day next following the date of occurrence of the event (date of agreement, date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of resolution of the board of directors or a committee established thereby, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; however, for any investment requiring the approval of the Competent Authority, the earliest of the above dates or the date of receipt of approval by the Competent Authority shall apply) or date of the media reportage; provided, where a press release is issued prior thereto, it shall be input at the time of issuance of the press release. 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.
If a listed company that issues securities overseas, during the duration of those securities, experiences any event in the subparagraphs of paragraph 1 of the preceding article, it shall simultaneously input the content or explanations of the information in English into the Internet information reporting system designated by this Corporation; or, if it experiences any material event that requires immediate reporting under the laws or regulations or securities exchange rules of the country of listing, it shall simultaneously input such information into the Internet information reporting system designated by this Corporation, and if it receives any written enquiry from the securities regulatory agency or securities exchange of the country of listing with respect to any matter that has a material effect on shareholder equity or the price of securities, it shall immediately forward a copy of the content of the written enquiry and any response thereto to this Corporation.
Where a listed company convenes on its own initiative or is invited to attend an investor/press conference, if it is necessary for the investor/press conference to be held during the trading hours of the centralized stock exchange, this shall be reported to this Corporation in advance for approval, and before the investor/press conference is convened, the listed company shall, during non-trading hours of the centralized stock exchange, enter the complete financial and business information on the Internet information reporting system designated by this Corporation, and the financial and business information disclosed in the investor/press conference may not go beyond the content of the aforesaid information already reported.
When this Corporation discovers that, or an investor inquires of this Corporation by facsimile (Attachment 1) with attached supporting materials, as to whether any unpublished material information as set forth in Article 2 applies to a listed company, and this Corporation deems necessary, it may complete a "Public Statement Concerning Material Information of a Listed Company - Form (1)" (Attachment 2) specifying the source and content of the information, and make inquiries by facsimile and telephone of the spokesperson or acting spokesperson of the listed company; the listed company shall provide item-by-item explanations of the content of the inquiries, and shall input the explanations into the Internet information reporting system designated by this Corporation within the time limit prescribed by this Corporation.
The "time limit prescribed by this Corporation" in the preceding paragraph means that if a listed company receives a facsimile or telephone inquiry from this Corporation before 12:30 p.m. on a given trading day, it shall input the explanations into the Internet information reporting system designated by this Corporation before the close of trading; if a listed company receives a facsimile or telephone inquiry from this Corporation after 12:30 p.m. on a given trading day, it shall input the explanations into the Internet information reporting system designated by this Corporation before 5 p.m. on the same trading day.
An investor making a written inquiry referred to in Paragraph 1 shall fill out his or her true name, personal identification number or uniform invoice number, address, and contact telephone number. This Corporation may use the original inquiry or an abstract thereof to make inquiries of the listed company during regular business hours.
When this Corporation discovers any irregularity in securities trading pursuant to the Rules Governing Implementation of the Stock Market Monitoring System, it may complete a "Public Statement Concerning Material Information of a Listed Company - Form (2)" (Attachment 3), and make inquiries by facsimile and telephone of the spokesperson or acting spokesperson of the listed company. The listed company shall comply with the procedures set forth in Paragraph 1 of the preceding article with respect to the content of the inquiry.
To ensure the accuracy of and general access to the information, a listed company shall not disclose any information to the public before publishing any material information.
Material information published by a listed company shall describe in detail the facts of the event, the cause, the estimated effect on company finances and business, monetary amount of the effect, and countermeasures. The concrete content required to be published shall be separately prescribed by this Corporation.
If a listed company is for any other reason unable to input material information into the Internet information reporting system designated by this Corporation, and publishes the material information through the "Public Statement Concerning Material Information of a Listed Company - Form (3)" (Attachment 4), this Corporation may publicly announce the information pursuant to regulations, or disclose it generally through this Corporation's information transmission system, or take other measures pursuant to this Corporation's Rules Governing Implementation of the Stock Market Monitoring System, and may forward photocopies to all securities brokers to publicly post at their places of business and display them in this Corporation's Public Relations Department for reference by the investor public.
This Corporation may from time to time select listed companies according to the standards for sampling checks set forth below and require them to submit financial and business related materials or photocopies thereof for purposes of verifying material information disclosures and the timeliness, accuracy, and completeness thereof. When necessary, it may also carry out an on-site audit.
1. Standards for sampling checks:
(1) Among securities for which information for attention in trading has been publicly announced, those securities with relatively many cumulative instances thereof in the current month.
(2) Companies that have published very little material information in the current month, or that have published material information of an unusual nature.
(3) Companies that are objects of complaints for failing to publish material information, delaying its publication, or publishing untrue material information.
(4) Obvious severe irregularities in operating conditions.
(5) Any circumstances this Corporation deems to require investigation and verification.
2. Financial and business materials to be submitted:
(1) Minutes of board of directors meetings
(2) Trading certificates, vouchers, books and statements, and related materials.
(3) Relevant materials supporting the content of the material information.
(4) Other materials this Corporation deems need to be provided.
Rules governing the sampling check operations referred to in the preceding paragraph shall be separately prescribed by this Corporation.
If any of the following circumstances applies to a listed company, this Corporation may impose on a case-by-case basis a breach penalty of NT$30,000; 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$50,000 shall be imposed as the current penalty; if this corporation evaluates the violation as having a material impact on shareholder equity or securities prices, a breach penalty of not more than NT$1 million may be imposed. Where a company that is required to make up a disclosure and is notified to do so within two business days from delivery of the notice, still fails to comply by the deadline, a breach penalty of NT$10,000 per day may be imposed until the date of compliance and the information may be generally disclosed through this Corporation's information transmission system.
1. The listed company violates any provision of these Procedures.
2. The listed company arbitrarily publishes unconfirmed news or discloses information that diverges from fact.
3. The listed company fails to submit relevant sampling check materials within the time limit set by this Corporation.
If any circumstance set forth in any subparagraph of the preceding paragraph applies to a listed company, and this Corporation has imposed a per day penalty and the company still fails to comply by the deadline and the circumstances of the particular case are severe, this Corporation may alter the original trading method of the company's listed securities or suspend trading of the securities pursuant to Article 49 and Article 50 of this Corporation's Operating Rules.
A listed company on which a breach penalty is imposed shall pay the penalty to this Corporation's Finance Department within five days from receiving notice from this Corporation.
If any circumstance under Subparagraph 2 of Paragraph 1 is found on the part of a listed company, this Corporation shall compile the relevant information and submit it to the competent authority as a basis for it to take further measures.
By the tenth day of each month, this Corporation shall publicly announce at the centralized securities exchange the circumstances of any penalties imposed for violations of these Procedures by listed companies in the preceding month.
These Procedures shall be in force after approval and recordation by the competent authority; the same shall apply to any amendments hereto.