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Article 5
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When, from the date of the balance sheets of the latest financial reports submitted by the issuer to the date when the registration becomes effective, an event occurs that has a material impact on shareholders' equity or securities prices, as provided in Article 36, paragraph 3, subparagraph 2 of the Act, the issuer shall disclose the event to the public and report to the FSC within 2 days after its occurrence. In addition, the issuer shall provide to the FSC an expert opinion on the occurrence based on the nature of the event involved and the evaluation from the attesting certified public accountant (CPA) regarding the impact of the event on the financial reports.
From the receipt date of the registration documents by the FSC and FSC-designated institutions until the registration becomes effective, except for information revealed in accordance with acts and regulations, the issuer may not state or reveal any forecasted financial or business information to any specified or unspecified person.
If the issuer externally disseminates any information not in conformance with the registration documents, it shall correct the relevant documents and submit them to the FSC.
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Article 6
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An issuer registering to offer and issue securities shall submit a prospectus.
Given any of the following circumstances when the issuer files for registration, the issuer shall ask the lead securities underwriter for an evaluation and ask a lawyer to review the relevant legal issues. They shall respectively provide an evaluation report and a legal opinion in accordance with regulatory requirements:
- The filing for registration for issuance of new shares for cash, new shares in connection with merger, new shares in connection with receiving transfer of shares of another company, or new shares in connection with an acquisition or demerger conducted in accordance with laws, is made by an exchange-listed or OTC-listed company.
- An emerging stock company carries out a cash capital increase through a new share issue and allocates a certain percentage of the newly issued shares to a public offering.
- After the TWSE has filed an issuer's TIB listing contract with the FSC, the issuer carries out a cash capital increase through an issue of new shares to be sold in the public offering prior to initial listing.
- A company whose stock is neither listed on a stock exchange (hereinafter referred to as "unlisted") nor traded in the business places of securities firms, conducts an issuance of new shares for cash and allocates a certain percentage of the aggregate new shares to be publicly offered in accordance with Article 18.
- The offering is used to establish a company.
- Corporate bonds with equity characteristics are to be offered publicly through a securities underwriter.
If the securities firm meets the financial and business requirements set by the FSC, it can be exempted from the requirement that the lead underwriter must issue an evaluation report.
The legal opinion in paragraph 2, and concluding opinions of the evaluation report, shall be provided in the prospectus.
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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 9
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After the registration of a planned offering and issuance of securities has become effective, the issuer shall act in accordance with the following regulations:
- Within 30 days after receipt of notice indicating that the registration has become effective, the issuer shall act in accordance with Article 252 or Article 273 of the Company Act. However, an issuer filing for registration of an issue of straight corporate bonds shall act in accordance with the TPEx Review Rules and the Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds ("TPEx Rules for International Bonds").
- With exception of the issuance of new shares in connection with merger, issuance of new shares in connection with receiving transfer of shares of another company, issuance of new shares in connection with acquisition or demerger conducted in accordance with related laws, issuance of straight corporate bonds, issuance of employee stock option certificates, and issuance of new restricted employee shares, an issuer shall retain a financial institution to collect payments and deposit them in the designated account opened by the issuer, and shall, prior to collecting payments, respectively enter into a payment collection agreement with the retained financial institution and an agreement for deposit in the designated account with the bank thereof, and within 2 days from the signing of such agreements shall enter the name of the financial institution and the date of the agreement into the website specified by the FSC for reporting of information. The collection of payments and deposit thereof in a designated account may not be handled by the same business unit in a bank. The financial institution of the designated account shall only allow an issuer to withdraw or use the money after the financial institution has received all the money due. Within 2 days after receipt of all the money due, the issuer shall enter the information on full collection of the proceeds into the website specified by the FSC for reporting of information.
- Except where otherwise provided for by the FSC, within 30 days after the receipt of the approval letter for permission of incorporation or the amendment registration certificate of issuing new shares from the Ministry of Economic Affairs, the issuer of public offering shall have the securities certified in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies. The securities shall be delivered to subscribers or placees and a public announcement shall be made prior to the delivery; provided that in case where physical securities are not printed, certification of stocks and corporate bonds shall be exempt in accordance with the Regulations Governing Certification of Corporate Stock and Bond Issues by Public Companies.
- Before issuing corporate bonds, the issuer shall enter into a contract with a centralized securities depository enterprise, agreeing therein to provide information related to the issue, and to lend its cooperation when asked to help with cancellation of the previous owner, repayment of principal, and payment of interest.
- Before the utilization plan of the cash capital increase or corporate bond issuance is completed, the company having cash capital increase or issuing corporate bonds shall disclose the progress of the said plan in its annual report. In the case of the issuance of corporate bonds, within 2 days of the completion of the funds offering and prior to the tenth day of each month during the issuance period of the corporate bonds, information related to the issuance of the corporate bonds shall be input into the website specified by the FSC for reporting of information.
- Within 10 days after the end of each quarter, the quarterly report on the plan for cash capital increase or corporate bond issuance and capital utilization shall be posted to the website specified by the FSC for reporting of information in accordance with FSC regulations.
- Where an exchange-listed or OTC-listed company conducts a cash capital increase or corporate bond issuance, it shall contact the original underwriter or the attesting CPA to comment on the reasonableness of the progress made regarding capital utilization and of the purposes for unused capital, and on whether there has been any deviation from the capital utilization plan, and within 10 days after the end of each quarter shall post this information together with the information referred to in the preceding subparagraph to the information reporting website specified by the FSC.
- Listed or OTC companies issuing new shares in connection with a merger, issuing new shares in connection with receiving transfer of shares of another company, or issuing new shares in connection with acquisition or demerger conducted in accordance with related laws, shall, within 10 days after the end of each quarter during the first year after completion and registration of the merger, receipt of transfer of shares of another company, or acquisition or demerger, ask the original lead underwriter to provide an assessment opinion as to whether any of the aspects of the merger would have an effect on the finances, business, and shareholders' equity of the issuer, and input the same into the website specified by the FSC for reporting of information.
- In the event of a change to an item or monetary amount of a particular item in the plan for cash capital increase or corporate bond issuance, thus causing the total amount required for the original item to either decrease or increase by an amount equivalent to 20 percent or more of the funds to be raised, the company shall amend the plan and, within 2 days after the amendment has been ratified by resolution of the board of directors, make a public announcement and submit the amendment to a shareholders' meeting for ratification; if the corporate bonds are denominated in a foreign currency, the funds raised thereby shall either be retained as foreign currency, or the entire amount converted into New Taiwan Dollars via an FX swap or cross currency swap (CCS) for use; otherwise, it shall apply for the approval of the Central Bank. If the company is an exchange-listed or OTC-listed company, upon such amendment and thereafter within 10 days after the end of each quarter, the listed or OTC company shall contact the original underwriter to comment on the reasonableness of the progress made regarding capital utilization and of the purposes for unused capital, and key in the aforesaid change and comment in combination with information as referred to in subparagraph 6 into the website specified by the FSC for reporting of information.
- For corporate bonds issued in foreign-currency denominations, the collection of, payment of interest on, and repayment of principal for, funds raised thereby and, where the circumstances set forth in Article 11, paragraph 4 exist, the return of payment, shall be conducted by a designated bank through a foreign exchange deposit account using the book-entry transfer method.
- For corporate bonds issued in foreign-currency denominations, a separate Statement of Changes in the Outstanding Balance of Issued Foreign-Currency Denominated Corporate Bonds (Table 34) shall be filed on the information reporting website specified by the FSC on the 20th day of each month for the data as of the 15th of that month, and by the 5th day of each month for the data as of the end of the previous month; such Statements shall also be filed with the Central Bank.
In the event the issuer conducts a shelf registration to issue corporate bonds, any change to the filed material for the first issuance of corporate bonds occurring within the scheduled issuance date shall be reported to the FSC and be put in public announcement.
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Article 13
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For an issuer conducting any of the case types listed below, registration shall become effective 20 business days from the date on which the FSC and FSC-designated institutions receive its registration form for the issuance of new shares:
- Establishment by offering.
- Any one of the types of share issuance set forth under Article 6, paragraph 2, subparagraph 1 or 4, where the circumstances in any one of the following items exist:
- An issuance conducted in accordance with Article 6, paragraph 2 has been previously rejected, disapproved or revoked by the FSC. However, this restriction need not apply where the case had been rejected or revoked by the FSC because the issuance had not been fully subscribed and payment therefore had not been fully collected in cash since the effective registration or upon arrival of notification of approval.
- The issuer has been sanctioned two or more times by the FSC in accordance with Article 178 of the Act for violating the Act or other relevant acts and regulations during the fiscal year when the registration was filed or during the previous fiscal year.
- The profits or net profits before tax of the issuer show losses in the recent 2 consecutive years or the latest financial reports indicate that the net asset value per share is lower than its par value.
- The issuer is required to allocate special reserve for its non-arm's length transactions and such requirement is not lifted yet.
- During the year of registration or the previous 2 years, an event set forth under Article 185 of the Company Act has occurred or a portion of the operations or R&D results is transferred to another company. However, if the operating revenue or assets value of those transferred items or the expenses accumulated for R&D does not exceed 10 percent of the operating revenue or assets value or R&D expenses shown on the financial reports of the previous year respectively, such restriction does not apply.
- A change to one-third or more of directors has occurred in the year of registration or the previous 2 years and any one of the following events takes place, provided that this rule does not apply if more than half of the issuer's directors are controlled by the original major shareholders before and after such change:
- The submitted financial reports indicates an addition to the principal products (meaning that the operating revenue resulting from the products accounts for 20 percent or more of the operating revenue) and that the total operating revenue or operating income from the added principal products accounts for 50 percent or more of the same respective categories of that year. However, the difference between the operating revenue for the preceding and following periods did not reach 50 percent or more therefore the principal products may not be counted.
- The submitted financial reports indicates that the issuer has acquired an on-going or completed construction project and the operating revenue or operating income from that project has reached 30 percent of the same respective categories of that year.
- The submitted financial reports indicates that the issuer has received transfer of a portion of the operations or R&D results of another company other than an affiliated company and that the operating revenue or operating income from that partial operations or R&D result has reached 30 percent of the same respective categories of that year.
- The securities underwriter, at the time the issuer files for registration, has received cumulatively 5 or more demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association.
Except for an issuer filing for registration pursuant to the provisions of the preceding paragraph, the registration of an issuer that files to issue new shares shall become effective 12 business days after the date on which the FSC and FSC-designated institutions receive its registration form. However, for an issuer other than those in the financial holding, banking, bills finance, credit card, or insurance businesses that conducts any of the matters listed below, the effective registration period shall be shortened to 7 business days:
- An emerging-stock company, or company that is neither listed on an exchange nor traded on an OTC market, issues new shares for a cash capital increase, and does not allocate a certain percentage of the newly issued shares to a public offering.
- An emerging-stock company, or company that is neither listed on an exchange nor traded on an OTC market, issues new shares in connection with merger, or issues new shares in connection with an acquisition or demerger conducted in accordance with related laws.
- An issuer issues new shares for cash capital increase for the purpose of public sale in connection with initial listing on the stock exchange or OTC market.
- A TIB-listed company applying to be reclassified as a company under Chapter II of the Listing Review Rules issues new shares for cash capital increase; either an OTC-listed company has applied to transfer its listing to a stock exchange listing or an exchange-listed company has applied to transfer its listing to an OTC listing, and the Taiwan Stock Exchange or the Taipei Exchange has filed the exchange listing or OTC listing with the FSC, and the company is now carrying out a cash capital increase in order to achieve compliance with standards governing dispersion of equity ownership.
Where an issuer issues new shares in connection with receiving transfer of shares of another company, and files for effective registration with the FSC on the same day, that registration becomes effective 12 days from the date on which the FSC and FSC-designated institutions receive the registration application.
Paragraph 1, subparagraph 2 does not apply to cases of 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 acquisition or demerger conducted in accordance with related laws.
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