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Article 7
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Upon the occurrence of any one of the following events, the FSC may reject an issuer's filing for registration for offering and issuance of securities:
- The attesting CPA issues a disclaimer of opinion or an adverse opinion in the audit report.
- The attesting CPA issues a qualified opinion in the audit report and such opinion has an impact on the fair presentation of the financial reports.
- The Case Review Form prepared by the issuer, reviewed by the attesting CPA, and provided by the securities underwriter reveals any violation of laws or regulations or articles of incorporation of the issuer and such violation has impacts on the offering and issuance of securities.
- The legal opinion issued by a lawyer indicates that there exists violation of law or regulations and such violation has impacts on the offering and issuance of securities.
- The evaluation report from the underwriter fails to specify the feasibility, necessity, and reasonability of the plan for the current offering and issuance.
- The issuer files an application again under paragraph 2 of the preceding article within 3 months after receipt of notice from the FSC in which the FSC has rejected the issuer's application, has voided or revoked the application, or the issuer has withdrawn its registration filing or application made under these Regulations. These restrictions may not apply, however, to the issuance of new shares in connection with merger, issuance of new shares in connection with receiving transfer of shares of another company, or issuance of new shares in connection with an acquisition or demerger conducted in accordance with related laws.
- An issuer files for registration of a cash capital increase or an issue of corporate bonds, and the aggregated amount directly or indirectly invested in the mainland China area violates the regulations of the Investment Commission, Ministry of Economic Affairs. However, the aforesaid restriction need not apply where the funds are to be used in purchase of domestic property, plant and equipment and promise has been undertaken to refrain from increasing investment in mainland China.
- There has been a material failure by an exchange-listed, OTC-listed, or emerging stock company to establish a remuneration committee pursuant to Article 14-6, paragraph 1 of the Act or material failure to comply with laws or regulations applicable thereto.
- The issuer fails to adopt an electronic means as one of the methods for exercising voting power pursuant to the proviso of Article 177-1, paragraph 1 of the Company Act.
- There has been a material violation or failure to perform the undertakings made upon application for listing in the stock exchange market or OTC market.
- The FSC finds that there has been a material violation of relevant laws or regulations.
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Article 22
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In the event the issuer meets all the following conditions simultaneously, it may submit the Shelf Registration Statement for Issuing Corporate Bonds (Attachment 15), provide all information required therein, along with all required documents to the FSC for effective registration. In addition, it shall complete the issuance within the scheduled issuance period.
- Its stocks have been listed in the stock exchange market or traded in the business places of securities firms for a combined period of 3 years or more. However, this provision does not apply under the following circumstances:
- Where the issuer is a government-owned enterprise.
- Where the issuer is a financial holding company conforming to Article 4 paragraph 4 of the Financial Holding Company Act providing that the subsidiary bank, subsidiary insurance company, or subsidiary securities firm be listed or its shares be traded in the business places of securities firms for a total of 3 years.
- In the fiscal year it files for registration and the preceding 2 fiscal years, it has not had any disposition imposed on it by the FSC under Article 178 of the Act for any violation of the Act or relevant laws or regulations.
- In the fiscal year it files for registration and the preceding 2 fiscal years, there has been no occurrence of rejection, or withdrawal by the FSC with regard to the offering and issuance of securities. However, this restriction need not apply to the case where, following the date of receiving the notice of effective registration, the issuance has not been fully subscribed and payment thereof has not been fully collected in cash and hence the case has been rejected or revoked by the FSC.
- In the fiscal year it files for registration and the preceding 2 fiscal years, the cash capital increase or corporate bond issuance plans effectively registered with the FSC have been implemented in accordance with the schedules and no material changes have occurred.
- In the fiscal year it files for registration and the preceding 2 fiscal years, the CPAs retained by the issuer have not received a warning or more severe sanction for their handling of securities offering and issuance.
- In the fiscal year it files for registration and the preceding 2 fiscal years, the lead underwriter retained by the issuer has not been punished in accordance with Article 66, subparagraph 2 of the Act to discharge its director, supervisor, or manager or with more severe sanctions in connection with handling of securities offering and issuance.
Paragraph 2 of Article 12, Articles 15, 16, and 20, and paragraphs 2 and 4 of the preceding article shall apply mutatis mutandis to the issuer that registers with the FSC in accordance with the preceding paragraph.
The scheduled issuance period referred to in paragraph 1 may not exceed 2 years counting from the date of effective registration. The issuer shall set the said period at the time of registering with the FSC.
Where an issuer issues corporate bonds during the scheduled issuance period, it shall consign an underwriter to underwrite the issuance on a firm commitment basis.
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