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Relevant Laws

Title：Regulations Governing the Offering and Issuance of Securities by Foreign Issuers (2023.12.29)
Article 5     Where a foreign issuer registers a planned offering and issuance with the FSC by duly filing all required documents, the registration will automatically become effective after 12 full business days from the day on which the filing documents were received by the FSC and any FSC-designated agencies, unless the effective registration period of 20 days set out in Article 5-1 applies. However, the effective registration period shall be 7 business days if the foreign issuer is conducting one of the cases listed in subparagraphs 1 to 6 below; the effective registration period shall be 3 business days if the foreign issuer is conducting a case listed in subparagraph 7 below:
  1. A case of a primary exchange (or OTC) listed company or emerging stock company publicly offering and issuing overseas straight corporate bonds, or issuing employee stock warrants or new restricted employee shares.
  2. A case of a foreign issuer that has already duly issued stock and files, through the TWSE or TPEx, a primary exchange listing or primary OTC listing contract with the FSC for its stock, and subsequently conducts a public sale of new shares issued to effect a cash capital increase before the initial exchange listing or OTC listing.
  3. A case of a TIB primary listed company that is applying to be reclassified as a primary exchange listed company under Chapter III of the Listing Review Rules and will issue new shares for cash capital increase.
  4. A case of a foreign issuer that files, through the TWSE or TPEx, an exchange listing or OTC listing contract with the FSC for its sponsored issuance of TDRs, and subsequently conducts a public sale of TDRs before the initial exchange listing or OTC listing.
  5. A case of a secondary exchange (or OTC) listed company that makes a domestic secondary public offering of stock or sponsored issuance of TDRs using shares that have already been issued and are held by shareholders.
  6. A case of an emerging stock company issuing new shares for a cash capital increase without conducting a public issue.
  7. A case of a foreign issuer publicly offering and issuing domestic straight corporate bonds.
    The FSC may suspend an effective registration where the registration materials submitted by a foreign issuer are not complete or have not been completely filled out, or where it is necessary to do so in order to safeguard the public interest.
    Where a foreign issuer submits incomplete registration materials or fails to fill out its registration materials completely and acts on its own to rectify such insufficiency before the FSC issues notification of the suspension of effective registration, the registration shall become effective after the effective registration period specified in paragraph 1 herein has elapsed from the day on which the materials rectifying the insufficiency were received by the FSC and any FSC-designated agencies.
    Where a foreign issuer registers the offering and issuance of depositary receipts or stocks and a subsequent change in the issue price prompts it to submit amended registration materials to the FSC and any FSC-designated agencies prior to the occurrence of effective registration, the registration will still become effective within the effective registration time period set forth under paragraph 1, and the provisions of the preceding paragraph shall not apply.
    After receiving notice of suspension of effective registration, a foreign issuer may submit further materials to rectify the cause of suspension; if the FSC does not then reject the registration or notify the registrant to effect further rectification, the registration shall become effective after the effective registration period specified in paragraph 1 herein has elapsed from the day on which the rectified registration materials are received by the FSC and any FSC-designated agencies.
    After the FSC suspends an effective registration, if the foreign issuer fails, within 12 business days from the day on which it receives a letter notifying it of said suspension, to act in accordance with the provisions of the preceding paragraph to apply for lifting the suspension, or it applies for lifting of the suspension but the cause of suspension has not been eliminated, the FSC may reject the registration.
Article 8     When a primary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1 to 3, or an emerging stock company conducts a case under Article 6, paragraph 1, subparagraphs 3 or 6, the FSC may reject the filing if any of the following circumstances exist:
  1. The present plan for the offering and issuance of securities is unfeasible, unnecessary, or unreasonable.
  2. Any of the following circumstances has existed with respect to any previous plan for offering and issuance or private placement of securities, and the circumstance has not been corrected:
    1. Without just cause, the process of implementation has been seriously delayed, and the implementation has not yet been completed.
    2. Without just cause, the plan has undergone material change or failed to produce reasonable benefit. However, in the event more than 3 years have passed from the completion date of the plan until the filing date, such restriction does not apply.
    3. The securities offering and issuance plan has undergone material change, but the change has not yet been reported to a shareholders' meeting for approval.
    4. The company has failed in the most recent fiscal year to scrupulously observe the provisions of Article 10, paragraph 1, subparagraphs 2 to 6, and paragraph 3.
  3. Any previous private placement of securities did not conform to Articles 43-6 to 43-8 of the Act or the provisions of the Directions for Public Companies Conducting Private Placements of Securities, where the circumstances are serious.
  4. Any important content of the present plan for the offering and issuance of securities (such as issuance rules, source of funds, or particulars of the plan) has not been placed on the agenda of a board meeting or shareholders meeting and adopted by resolution at such a meeting.
  5. The company has lent a large amount of money to another party for purposes other than financing needs arising from a business transaction with another company or business firm, and has not yet rectified the situation.
  6. The company has entered into a non-arm's-length transaction of material significance, and has not yet rectified the situation.
  7. The company is filing for registration of a cash capital increase or issue of corporate bonds, but holds liquid financial asset investments, idle assets, or investment property, with no plan to actively dispose of or develop such holdings, and they amount to either: (1) 40 percent or more of the equity attributable to owners of the parent in the most recent financial reports audited and attested, or reviewed, by a CPA, or (2) 60 percent of the total amount of funds to be raised through the cash capital increase or corporate bond issuance. However, this provision does not apply if the funds to be raised will be used to purchase real estate, plants, or equipment or used for merger of a company that is not engaged primarily in the business of trading of securities, and furthermore there is a concrete fund raising plan evidencing the need to raise the funds.
  8. Proceeds from the cash capital increase or corporate bond issuance plan are to be used to invest in a company engaged primarily in the business of trading of securities, or to establish a securities firm or a securities service enterprise.
  9. The company has failed to prepare its financial statements in accordance with relevant acts or regulations and with applicable accounting principles, where the circumstances are of material significance.
  10. Any circumstance in violation of Article 4, paragraph 3.
  11. The internal control system is materially deficient in design or implementation.
  12. The company's share price fluctuated abnormally during the month prior to the date of filing.
  13. The foreign issuer or its current chairperson, general manager, or de facto responsible person has received a sentence of imprisonment for a fixed term or a more severe punishment from a court in the past 3 years due to violation of laws governing business and industry or due to a crime involving breach of faith such as corruption, malfeasance, fraud, breach of fiduciary duty, or embezzlement, or has an obligation for damages arising from a violation of securities laws or regulations and has failed to duly perform the obligation.
  14. Collateral has been provided for a loan of any third party in violation of Article 5 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, the circumstances are serious, and there has been no improvement.
  15. There is an issuance of new shares in connection with a merger, or an issuance of new shares in connection with receiving transfer of shares of another company, or an issuance of new shares in connection with an acquisition or demerger conducted in accordance with related laws, and any of the following circumstances exists:
    1. There has been a material violation of the provisions of Chapter 2, Section 5 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies.
    2. The received or acquired shares are not newly issued shares of the other company, non-current equity investment held by it, or previously issued shares held by the shareholders of the other company.
    3. The ownership rights over the received shares or the acquired business or assets are encumbered or limited in such a way that restrictions on the trading rights are imposed.
    4. An audit report with unqualified opinion was not issued by a CPA for the most recent annual financial report of a merged target company; provided, that this provision does not apply where an audit report with qualified opinion was issued together with an unqualified opinion on the balance sheet.
  16. An event set out in Article 5-1, paragraph 1, subparagraph 6 occurs, and any of the following circumstances exists:
    1. A filing for issuance of new shares for cash, and any director or supervisor, or shareholder who holds shares over 10 percent of the total issued shares of the issuer, fails to undertake to place a certain percentage of their shares under the custody of a centralized securities depository enterprise.
    2. A filing for issuance of corporate bonds with equity characteristics, for which the issuance rules do not specify that the offerees are required, from the issuance date of the corporate bonds, to place the corporate bonds and any subsequently converted or subscribed shares under the custody of the centralized securities depository enterprise for 1 year.
  17. A subscriber, or an ultimate source of subscription, of the present offering and issuance of overseas securities is a related party of the foreign issuer. The term "related party" is as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
  18. The securities underwriter, at the time the foreign issuer files for registration, has received cumulatively 10 demerit points in the most recent year from the FSC, TWSE, TPEx, and Taiwan Securities Association, and three months have not elapsed since the date when the demerit points cumulatively reached 10 points. However, this restriction does not apply to an issue of new shares for cash capital increase that are to be sold in the public sale prior to an initial exchange or OTC listing.
  19. As the FSC otherwise deems necessary to protect the public interest.
    The term "engaged primarily in the business of trading of securities" as referred to in subparagraphs 7 and 8 of the preceding paragraph shall mean—with respect to a company merged by the issuer, or a company in which the issuer has directly invested, or in which a subsidiary of the issuer has invested under the equity method—that the merged or invested company's cash, together with cash equivalents, financial assets listed under current assets, and holdings of securities issued by the issuer account for 50 percent or more of the total assets value of such company, and the revenue or profit/loss respectively from trading or holding of the aforesaid assets account for 50 percent or more of the revenue or profit/loss of such company.
    When a foreign issuer conducts a case under Article 5, paragraph 1, subparagraph 2 or 3, the provisions of subparagraph 7 of paragraph 1 need not apply; if the underwriter evaluation report clearly states the feasibility of the capital allocations and the reasonableness of the expected benefits of the present plan for offering and issuance of securities, then the provisions regarding the necessity of the plan, as set out in subparagraph 6 of paragraph 1 of the preceding article and in subparagraph 1 of paragraph 1 of this article, need not apply.
    When a primary exchange (or OTC) listed company issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, the provisions of subparagraphs 2, 5, 12, and 13 of paragraph 1 need not apply.
    When a primary exchange (or OTC) listed company issuing overseas straight corporate bonds has engaged a securities underwriter to publicly underwrite the bonds, the provisions of paragraph 1, subparagraph 12 need not apply.
    When a secondary exchange (or OTC) listed company conducts a case under Article 6, paragraph 1, subparagraphs 1, 4, or 5, the subparagraphs of paragraph 1 hereof shall apply mutatis mutandis. However, if it is issuing new shares or sponsoring issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it may be exempted from the mutatis mutandis application of subparagraphs 2, 5, 12, and 13 of paragraph 1.
Article 9     The FSC may void or revoke an effective registration for the offering and issuance of securities granted to a foreign issuer where any of the following circumstances is discovered:
  1. Where, in a case in which the foreign issuer has filed for registration of an issue of domestic straight corporate bonds, the offering period exceeds the prescribed period under the Taipei Exchange Rules Governing the Review of Foreign Securities for Trading on the TPEx and the Taipei Exchange Rules Governing Management of Foreign Currency Denominated International Bonds.
  2. Where, in a case other than one falling under the preceding paragraph, the securities have not been fully subscribed and the cash proceeds therefrom have not been fully collected within 3 months from the date on which the notification of effective registration from the FSC is received; provided that the FSC may grant an extension of 3 months upon application therefor with legitimate reasons and provided further that such extension shall be limited to one.
  3. Where the particulars registered are in violation of laws and regulations, or there are any misrepresentations or false statements contained in the application.
  4. Where the foreign issuer has failed to apply to the TWSE or TPEx, respectively, for exchange listing or OTC listing or for emerging stock registration, for TDRs, or for domestically offered and issued stocks, or bonds, or where the securities fail to meet exchange (or OTC) listing criteria.
  5. Where the foreign issuer fails to complete the exchange listing or OTC listing or emerging stock registration for its initial public issuance of stock within 6 months from the date on which the notification of effective registration from the FSC has been received.
  6. A serious breach of, or failure to perform, a commitment made at the time securities were offered and issued.
  7. Otherwise for the protection of the public interest, or in the event of a violation of FSC regulations or of a restrictions or prohibitions imposed by the FSC when giving notice of effective registration.

    From the date on which the filing is effectively registered until the date of completion of the securities offering, if the content of any publicly disclosed financial forecast or information released by the foreign issuer is at variance with the filing documents, and where there is a material effect on the price of securities or shareholders' equity, the FSC may revoke or void the effective registration.
    Where an effective registration is obtained by a foreign issuer for the offering and issuance of securities but is subsequently voided or revoked by the FSC pursuant to the provisions of the preceding two paragraphs, securities not yet issued shall not be issued, and in case the proceeds thereof have already been collected, the foreign issuer shall return the proceeds, along with interest computed in accordance with law, within 10 days after receiving the notice of voidance or revocation from the FSC; in case securities have already been issued, the depositary institution shall sell the securities under the custody of the custodian institution and deliver the sales proceeds, after deduction of indispensable fees and expenses, to the holders of securities.
    Where an effective registration is obtained by a foreign issuer for the offering and issuance of bonds or stocks but is subsequently voided or revoked by the FSC pursuant to the provisions of paragraphs 1 or 2 of this Article after the collection of the proceeds, the foreign issuer shall return the proceeds already collected, along with interest computed in accordance with law, through the designated institution within 10 days after receiving the notice of voidance or revocation from the FSC.
Article 10     After a foreign issuer has obtained an effective registration for the domestic offering and issuance of securities, it shall act in accordance with the following provisions:
  1. Except in cases of issuance of new shares or sponsored issuance of TDRs in connection with a merger, acquisition of shares of another company, or acquisition or demerger, issuance of straight corporate bonds, issuance of employee stock warrants, issuance of new restricted employee shares, or sponsored issuance of TDRs for purposes of conversion of convertible corporate bonds or corporate bonds with warrants or performance of warrant obligations, the foreign issuer must retain a financial institution to collect proceeds on its behalf and deposit those proceeds in the segregated account that it has opened. Before beginning to collect proceeds, it shall enter into a payment collection agreement and a payment deposit agreement with the bank that collects proceeds on its behalf and deposits them in the segregated account. Within 2 days from the date on which it enters into those agreements, it shall input the relevant information such as the name of that contracted bank and the date on which the contract was signed into the FSC-designated information reporting website. The collection and deposit in the segregated account of proceeds by that bank may not be handled by the same business unit of that bank. The foreign issuer may draw on those proceeds only after they are collected in full, and must input the data regarding the collection of proceeds in full into the FSC-designated information reporting website within 2 days after the date on which those proceeds are collected in full.
  2. The foreign issuer shall, within 10 days after the end of each quarter, post the funds utilization plan and the quarterly report on the status of funds utilization to the information reporting website specified by the FSC. However, this provision does not apply to a secondary exchange (or OTC) listed company that sponsors an issue of TDRs using shares that have been issued and are held by the shareholders.
  3. In the case of a primary exchange (or OTC) listed company that conducts a cash capital increase or corporate bond issue, or a secondary exchange (or OTC) listed company that conducts a cash capital increase or sponsors an issue of TDRs, it shall on a quarterly basis contact the original lead underwriter or the attesting CPA to issue an evaluation opinion on the reasonableness of the progress made in utilization of the funds and the handling of unused funds and on whether any change to the plan is involved, and shall input this information together with the information referred to in the preceding subparagraph to the information reporting website specified by the FSC.
  4. If there is any change in the items of the fund utilization plan or any adjustment to amounts of individual items, such that the aggregate amount of any decreases in, or the aggregate amount of any increases in, the amount of funds originally required for the individual items reaches 20 percent or more of the total amount of funds to be raised, the issuer shall report the change for approval by the Central Bank. After such approval is obtained, the issuer shall make the amendment to the plan and, within 2 days from the day the amendment is passed by a resolution of the board of directors shall input amendment-related information to the information disclosure website specified by the FSC, and submit the amendment to a shareholders' meeting for ratification. The issuer also shall, at the time of the change and subsequently within 10 days after the end of each quarter, contact the original lead underwriter to issue an evaluation opinion on the reasonableness of the progress made in utilization of the funds and of the purposes for unused funds and shall input this information together with the information referred to in paragraph 2, subparagraph 2 to the information disclosure website specified by the FSC. However, this provision does not apply to a secondary exchange (or OTC) listed company that sponsors an issue of TDRs using shares that have been issued shares and are held by the shareholders.
  5. In the case of a primary exchange (or OTC) company that issues new shares in connection with a merger, acquisition of shares of another company, or acquisition or demerger, it shall, within 10 days after the end of each quarter during the first year after completion and registration of the case, contact the original lead underwriter to issue an evaluation opinion on any effect of the merger, acquisition of shares of another company, or acquisition on the finances, business, or shareholders' equity of the issuer, and shall enter the opinion to the information disclosure website specified by the FSC.
  6. In the case of a primary exchange (or OTC) company or emerging stock company that conducts a cash capital increase or issue of corporate bonds, before the utilization plan of the cash capital increase or corporate bond issue is accomplished, the company shall disclose the progress of the plan in its annual report. In the case of a corporate bond issue, within 2 days after the raising of capital has been completed and by the 10th day of each month during the issuance period of the corporate bonds, information relating to the issuance of the corporate bonds shall be input into the information disclosure website specified by the FSC.
  7. When there occurs any material event requiring immediate announcement under the securities laws and regulations of the country where the securities are listed and the rules of the listing securities exchange, the information shall simultaneously be input to the information disclosure website specified by the FSC. This also applies for any event voluntarily announced by the foreign issuer.
  8. For straight corporate bonds denominated in New Taiwan Dollars, the funds raised shall be retained in New Taiwan Dollars, and used in substantive investment in Taiwan, or for other purposes limited solely to the scope approved by the Central Bank. For straight corporate bonds denominated in foreign currency, the funds raised shall be retained as foreign currency, and may not be converted into New Taiwan Dollars for use.
    The funds raised in accordance with the provisions of subparagraph 1 of the preceding paragraph shall be remitted by the lead securities underwriter in accordance with the applicable provisions of the Statute for Regulation of Foreign Exchange.
    A primary exchange (or OTC) listed company or emerging stock company offering and issuing overseas securities, after obtaining effective registration, shall be required mutatis mutandis to do the matters set out in paragraph 1, subparagraphs 2 to 7, and additionally, within 10 days after issuance, upload the prospectus prepared in accordance with the securities laws and regulations of the country where the offering took place to the information disclosure website specified by the FSC. However, this uploading need not be done in the case of issuance of overseas depositary receipts that are for purposes of overseas corporate bond conversion or exercise.
    When a primary exchange (or OTC) listed company or emerging stock company offers and issues overseas securities, if any specific persons or strategic investors subscribe to the securities, the company shall disclose the subscription list as well as individual subscription prices and quantities in the prospectus and shall input them to the information disclosure website specified by the FSC. If it receives a written inquiry from the competent authority for securities of the country in which the securities are listed, it shall report to the FSC within 2 days from the date on which it receives the inquiry and at the same time that it provides the information requested by the inquiry.
    A foreign issuer that domestically issues stock, certificates of payment for shares, bonds, or TDRs issued by a depositary institution shall deliver them by book-entry transfer, and shall not print physical certificates of the securities. However, a foreign issuer that is required to issue the securities in certificated form under the laws or regulations of its country of registration shall have the foreign custodian institution enter into a depository agreement with the central securities depository and confirm the issuance volume before it may issue the securities domestically.
    If securities are delivered by book-entry transfer, the issuance, transfer, or cancellation shall be handled in accordance with the relevant rules of the central securities depository.
    Within 30 days from the date it receives permission for the issuance of new shares from the competent securities registration authority of the country of its registration, a foreign issuer shall deliver the securities to subscribers, and prior to delivery it shall make a public announcement through the information disclosure website specified by the FSC.